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Operator: Ladies and gentlemen, good morning and good afternoon. Welcome to Renault Group's Q3 2025 revenue presentation. This conference call is broadcast live and recorded. It will be made available in replay on our website. I will now hand over to Duncan Minto, Renault Group's CFO, to begin the presentation, which will be followed by a Q&A session. Duncan, the floor is yours.
Duncan Minto: Thanks, Ron. Good morning, good afternoon, everyone, and thanks for joining us today. I'm pleased to be with you here to present our Q3 revenue and the sales performance. So in Q3 2025, Renault Group revenue amounted to EUR 11.4 billion, up 6.8%. At constant exchange rates, it was up at 8.5%. Automotive revenue stood at EUR 9.8 billion, up 5% or 6.8% at constant exchange rates. Mobility Services amounted to EUR 23 million, up EUR 9 million compared to the same period last year. Mobilize Financial Services continued strong growth with revenue up 18.4% to EUR 1.6 billion. So as usual, let's drill down into the automotive revenue evolution. Automotive revenue stood at EUR 9.8 billion in Q3. That was up 6.8%, as I said, at constant exchange rates with a negative ForEx impact of 1.8 points. This impact was driven mainly by the devaluation of the Argentinian peso, the Turkish lira, the Brazilian real and the Korean won. The second part, the volume effect was a strong positive by 3.2 points in the quarter as the 9.8% growth in group registrations was partly offset by a higher destocking of the independent dealer network over the quarter in Q3 2025 against Q3 2024, but we'll come back to this in a second. Looking first at the registrations, the 9.8% growth worldwide in Q3 translated to more than 529,000 registrations. I think the point to note is international sales were up 14.9% and European sales up 7.5%. In Europe, passenger car sales grew by 10.9%, outperforming a market up 7.5%. LCV sales have shown a meaningful improvement sequentially for us, but yet remains 7.1% below the Q3 2024. Overall, all brands were up, which is quite remarkable, Renault, Dacia and Alpine, certainly a highlight in the current auto industry context. Renault Group continued its acceleration on electrification. Renault Group's electrified vehicle mix in Q3 grew by 10.8 points to reach 44% of its sales. The Renault Group EV sales more than doubled, reaching 13.5% of sales and HEV sales grew by a strong 25%. Looking at the Renault brand, electrified vehicles accounted for 60% of the brand sales, up nearly 10 points compared to last year. Renault's EV sales surged by 85%, thanks to Renault 5, the B segment EV leader in Europe, and Scenic the C segment EV leader in France. The EV mix reached more than 20% of Q3 sales, up 8.7 points. Hybrid sales rose off a strong base by 4.4%, thanks to Symbioz, the best-selling Renault hybrid to reach 37.9% of brand sales in total. Renault was the second brand for hybrid sales in Europe. Dacia's hybrid sales more than doubled, now accounting for nearly 21% of its Q3 sales, up 9.1 points compared to Q3 2024, thanks to Duster and Bigster. As regards to our commercial policy, we kept our focus on value over volume. In Q3, retail sales accounted for 63.8% of group sales in the 5 main European countries. This is 20 points above the market average. Sandero, Duster and Clio in the top 10 retail sales in Europe and residual values remain globally stable for both Renault and Dacia brands at the end of September 25 compared to last year. I'll remind you, there's a 5 to 11-point positive gap above our main competitors in the 5 main European markets for passenger cars. Quick zoom on the Renault brand. Continued progression in Q3 '25. Global sales were up 6.6% at just over 361,000 units. In Europe, the brand grew by 1.8%, thanks to a 5.5% PC growth and an LCV performance, as I said, showing signs of recovery, but still down. Growth was especially high in Germany and in Spain. And Clio is the second best-selling car across all channels in Europe. In international markets, Renault grew in its strategic regions, posting a 14.2% increase overall. In Latin America, the brand rose by 6.8%, thanks to Kardian, and further momentum is expected from the upcoming launch of Boreal in Brazil in November. In South Korea, Grand Clio supported the brand's growth by 54.7% year-on-year. And in Morocco, Renault achieved 42.6% growth with 9,258 vehicles sold, again, supported by Kardian's success. Turning to Dacia. Worldwide, sales were up 16.2% with 165,000 vehicles sold. The brand posted solid growth in most European markets with outstanding performance in Germany, Spain, Belgium, Luxembourg. Bigster is the second best-selling C-SUV in Europe on the retail market with 22,353 units sold during Q3, and more than 55,000 orders taken since launch. Sandero remains the best-selling vehicle in Europe. All distribution channels combined with 66,233 units sold in Q3 and over 218,000 sold since January. Year-to-date, in terms of standing in the European market, Dacia gained 1 place and ranked second on the European podium for retail sales. Turning to Alpine. We recorded more than 2,300 registrations in Q3 with now both A290 and the A110. A290 is now available in most of the brands countries with 1,845,000 registrations over the period. Since its launch in the U.K. this summer, the U.K. registered a strong start of sales for A290. A110 maintained a solid momentum with 500 registrations. The orders of the current generation of A110 will close in the coming months before of the next generation, which will be 100% electric. And lastly, Alpine will soon open orders for the A390 its new electric sports fastback, which will be out at the end of the year. So that's the zoom on the brands. I'd like to move to the inventories on the next slide. Total inventories, this is the sum of group and independent dealers. At the end of September, stood at 538,000 units, up just 8,000 units versus June. The inventory increase at group level is partly offset by a destocking of independent dealers in line with the regular seasonal patterns. Looking at the impact on our volume bucket and the revenue, this quarter, destocking at independent dealers was minus 98,000 units, you can see on the slide, stronger than the destocking effect experienced in the same quarter last year, which was only 72,000 units. And therefore, this impacted negatively a volume effect in the walk down of revenue. We continue to implement a strict discipline in the management of our total inventories. We did slightly adjust our production output in Q3, as we do traditionally, and we'll continue to do so in Q4, if needed. This will be done while maintaining a high utilization rate of our industrial facilities. Looking forward to Q4, the group expects a restocking independent dealers but one well below that registered in Q4 2024. Let's move on to our sales to partners. This is the next part of the walk down. This has a positive effect of 1.6 points on revenue in Q3 2025, driven by programs with our partners and the impact of the integration of RNAIPL in the consolidation parameter. This was the facility we bought in India. As a remainder -- as a reminder, sorry, on August, we completed the acquisition of this facility. We now have 100% of the Chennai plant previously held at 51% by Nissan. Now let's have a look at the next box, which is price, product mix and geo mix effects. As expected, the price effect was slightly negative in Q3. This is mainly due to a highly challenging environment with continuing and strong commercial pressure, especially noted in Europe. On international sales, the negative currency impacts were partly offset by price increases. But as part of our value over volume policy, we maintain in our pricing approach, a strong focus on residual values which is a key competitive factor for the group's longer-term performance. The product mix effect was positive at plus 0.9%, driven by the performance of both Renault and Dacia models, mostly Bigster and Renault 5, I'd like to note, they delivered on our expectations in terms of mix impact. The lower product mix effect compared to the previous quarters is mostly explained by the annualization impact of the phasing of product launches. When we look back after 1 year, we have Symbioz, Scenic and Duster, which entered in the comparison base this time last year, which naturally reduces the year-on-year impact. Product mix in Q4 should be higher, benefiting from a stronger contribution of Bigster and Renault 5 and the ramp-up of Renault 4. Geographical mix stood at plus 1 point, notably explained by lower sales in Brazil in Q3 2025. This was due to a focus on the most profitable channels, combined with a high comparison base in the previous quarter or the quarter of the previous year. Now let's turn quickly to Mobilize Financial Services. I mentioned the strong growth. The contracts production slightly increased on Q3 2024. But it's the average performing assets that improved by 5.3% at EUR 59.5 billion, mostly thanks to the increase in average selling prices over the last years. All in all, Mobilized Financial Services revenue were up 18.4% to EUR 1.6 billion, mainly driven by both interest rates and the average ticket price I just described. So a review of the revenue done. Let's turn to the outlook for the full year. In 2025, the auto industry as a whole is challenging, but we have built strong fundamentals on which we can leverage. We have a very disciplined inventory management, allowing flexibility in our production base while maintaining the high utilization rates of our plants. Our order intake was a high single-digit growth in Q3, that's year-on-year, with a positive momentum both on passenger cars and on light commercial vehicles. We continue to focus on value over volume. It's a core fundamental embodied by our exposure to the retail channel mix. And I'd say, once again, we are 20 points above the market average. This is an advantage, obviously, as regards the group's margin profile. Finally, in terms of residual value, the strong competitive edge remains. We stand 5 to 11 points above our main competitors in the European markets. Can't forget product. This year was intense in terms of launches and facelifts, and we've already seen the first benefits of Bigster available in both ICE and hybrid. The vehicle was launched in Q2 and is demonstrating day-after-day commercial success. Renault 4 arrived at the end of Q2 with a real launch happening in September, and we've also launched the facelifts of both Espace and Austral. This will not stop here, and we continue in Q4. We have 3 new vehicles for Renault, Renault Kwid E-Tech, Renault Boreal for International. And the new Renault Clio 6 for European markets, which we will see the first deliveries in Q1 2026. And last but not least, the Alpine A390, which will arrive right at the end of the year. These launches will further support the commercial dynamic of the group, which is very positive, as you saw in the Q3 registrations. So looking at the outlook, we confirm our guidance today for 2025 with a group operating margin at around 6.5% and a free cash flow between EUR 1 billion and EUR 1.5 billion. We remain very focused on reducing our costs and continue to work on what we can control. Our top priority is to deliver on our updated full year guidance. And in parallel, as you know, we are working on the next strategic plan, which will be announced in Q1 2026. So this concludes my presentation. Thanks, everyone, to your attention, first of all. And then with Laurent and the team, we are ready to take your questions.
Operator: Thank you, Duncan. And so the first question will come from Jose Asumendi from JPMorgan. Jose. Can you please open your mic.
Jose Asumendi: Thank you, Duncan, very clear. Just 3 quick questions, please. When you look at the free cash flow guidance and your confidence to achieve the free cash flow, I would like to understand what drives the -- a little bit at the lower end and the upper end of that free cash flow guidance. And are there any factors that you're thinking could drive that swing is basically lower end and upper end? Second question, can you give us please an update on where we stand on selling the stake in Nissan and monetizing that asset? And then 3, I believe there's a strong opportunity to have strong product mix positive into 2026. Can you address which vehicles could drive this momentum in '26?
Duncan Minto: Jose, thank you for those. So yes, the free cash flow guidance has a lower and an upper end. Obviously, we have a stronger EBIT in H2 than we did in H1. But I guess the -- more of the volatility within the range, as you can imagine, is working capital. So we had a EUR 900 million negative impact in H1, and we expect a good part of that to unwind and not all of it as we don't want to push the working capital, I think it will unwind a bit this year. We'll also continue to unwind a little bit the working capital in 2026 as well. And as you know, it's very much driven by the steady invoicing process that we need to have throughout the month of December, and also the production levels and the impact of the payables we have on that. So what we've strived to do is adjust production early when needed and not build up stock. So we did that in Q3. And if need to, we'll adjust again in Q4, but it's more the working capital that explains the lower and upper end of our expectations on working capital. The selling stake in Nissan, as you know, there's nothing new here. So still continue on the same strategy we had before in terms of the structure of our shareholding and those held ready for sale. But as you can imagine, the concentration short-term has been left on Nissan to do and execute the turnaround plan, which has started well. And so we will follow up with that as time goes on. In terms of product mix in 2026, does anyone want to comment. I mean, we obviously got a strong Q4 coming, but...
Fabrice Cambolive: No. I think in product mix, we will have a full year for Bigster. We'll have also at the end of the phase-in, phase-out from master with a full lineup, which will help us also. We'll have full year for Symbioz. And I would say more generally, we are -- as you noticed in the presentation of Duncan, we are growing up on this full hybrid lineup, which is quite good in terms of product mix on each segment and for each car.
Operator: And the next question will come from Michael Foundoukidis from ODDO BHF.
Michael Foundoukidis: Yes. Two questions on my side. First, maybe as a follow-up to Jose's question on product mix. Could you tell us about the potential impacts of this, let's say, lower product mix on profitability for H2 if it has one, significant? And maybe a bit of magnitude on the improvement that you expect in Q4. Is it fair to assume, let's say, something between Q3 and Q2 levels? Second question on order intake. You said it's down to 1.6 months, but it's due to higher expected forward sales in Q4. So could you give us some color on absolute figures? Is it flat, lower or maybe higher versus end of June.
Duncan Minto: Okay. So lower Q3, lower impact of model mix in Q3 to like 0.9 points where we're in mid 3.5%, 3.7% in Q1, Q2. There is a strong comparison base in the past, as I said, with the launches that we had last year. What I would like to tell you is that the mix we're expecting coming from, I guess, one of the most key products such as Bigster was spot on where we expected. And I can see those orders in the portfolio, so that will also drive a growth in Q4. I think you're right to say Q4 should be somewhere between what we saw in Q2 and Q3. So I don't have any particular problems with your expectations in that front. In terms of order bank, so we have 1.6 months of sales in bank. As you correctly state, yes, that figure is obviously forward-looking orders we have today divided by forward-looking sales, and it's the forward-looking sales part that's growing. I think we need to remind you that in Q3, our order take was actually up on last year. So that's building. Obviously, we're not -- not all those orders are going straight into the portfolio because we're also delivering. So as you saw, registrations were up 9.8%. The commercial dynamic is strong. So yes, I think you're quite right. We have a forward-looking sales expectation, which is strong of the proven track record we did in Q3, and order take was up over last year, both in passenger cars and in light commercial vehicles, to be honest. So it's high single-digit growth.
Operator: And the next question will come from Thomas Besson from Kepler Cheuvreux.
Thomas Besson: A few questions as well, please. Duncan, can you remind us your target for inventories at year-end? I think you said that would be less restocking than last year, but is there a range target for inventories towards the end, please?
Duncan Minto: Yes. Do you want to question my question, 525 to 550.
Thomas Besson: Yes, if it's okay. Sorry.
Duncan Minto: 525 to 550.
Thomas Besson: 525 to 550. Second question, your BEV share has increased a bit less than I think I was thinking. But at the opposite, I think your hybrid and HEV shares are doing very well. Do you still need to be somewhere between 19% and 20% for BEVs over '25, '26, '27 to comply? Or is the increase of your hybrid and HEV share allowing you to be below that just to get an idea of what you need to achieve in '26, '27 on that front.
Duncan Minto: I think I'd say I'm comfortable on passenger car CAFE compliance over the periods that you're talking about. So the dynamic of sales on EV for us is strong. The hybrids, even Dacia side is doubling. So it's the passenger car side of things, I'm not concerned about in terms of hitting the mix that were required, no major SKU needed. Once again, remind you that LCV is not the case. We provisioned CAFE in H1 to the tune of EUR 98 million. So unless things change in the rules, I don't foresee -- I don't foresee pretty much any of the LCV manufacturers hitting a CAFE compliant over the period. So let's stay positive on the fact that people might react to this, and we may have some positive news on changes to regulations, but we will not count on that. And so we'll plan for the worst.
Thomas Besson: Understood. On the bank, which continues to grow strongly, can you say a few words about 2 things, capital needs eventually and dividend potential for that. And I mean, the French press has reported some management changes there. Could you confirm and indicate whether as a CFO you may become the new boss of that business or whether we should expect a new announcement on that front?
Duncan Minto: In terms of management changes or comments in the press, I won't comment on any individual situations. Let's just say that operations are under control and everything is maintained as normal. In terms of capital needs for the bank, we guided that -- as you're well aware, the dividend from MFS was down this year due to the strong growth in the balance sheet and the requirement to have the capital reserves, both for rating agencies and the ECB, and that should start to rise again to above the average EUR 500 million, EUR 600 million per year, be it probably next year or the year after. So I don't have any particular concerns. Obviously, we've got to clarify the FCA situation and provision in the U.K., we'd provision EUR 90 million for that. So that's the only one thing that we've yet to have clarity on.
Thomas Besson: Okay. Last one on others. Can you just say a few words about what was there this time around, please?
Duncan Minto: Others, we have rebound in Renault Retail Group activity, so the activity of a wholly owned dealer network is the main part of it. We have a little bit of aftersales, but...
Operator: And the next question will come from Henning Cosman from Barclays.
Henning Cosman: Duncan, I was just wondering if you could comment a little bit on how business has been going incrementally since H1. It seems to be getting a little bit tougher in Europe. You had called out that commercial pressure, of course, already at the H1 stage. And now we're seeing some more plant stoppages from some of your competitors, some seem to be attributable to higher inventory of chip shortage. You just mentioned the U.K. redress scheme of course. Perhaps you could comment on light commercial vehicle momentum specifically there if you expect to be on prior year level in Q4. But just overall, maybe how incrementally tougher Europe environment has perhaps affected your confidence level for the full year guidance. Is it the same? Are you almost more confident because you're now closer to the end of the year and have better visibility. If you could just put a little bit context around the incremental trading environment. That's the first question. And second question was just on the dividend. If you could kindly confirm again that you're still planning to increase the absolute euro dividend relative to the EUR 2.20 of last year? And I had the third question on the U.K. redress scheme. I believe you just said you provisioned EUR 70 million for that. If you could just confirm that number. I don't know if I heard that correctly.
Duncan Minto: Okay, Henning. No, I said EUR 90 million maybe so maybe I wasn't clear. EUR 90 million is what we provision for that. And so we will be reviewing that as the details come out in the coming months. Your first question bundled a lot of things together. You talked about commercial pressure in Europe, which is yes, clearly tougher than we thought we had -- we didn't plan that things would get better, but there's certainly more pressure out there. You talked about inventories, but I think maybe you were referring to some of our competitors. So to avoid any entry -- inventory buildup, we did actually trim some of the production schedules during Q3. We like to be reactive on that front. And because of the factory is really turning at a high capacity. It's not so much of an issue for us. You also put in their chip shortage. So I know we've had news from several fronts in the past few days on that, but nothing that's impacting our production schedules as I can see today. I mean we learned a lot during the electronic component shortage in previous years. And in terms of tracking what's going on at first level of suppliers, suppliers supplying suppliers, working on optimizing the stock available within the system or even resourcing, which can take a couple of months. But we're able to manage with the current visibility we have today on that. LCV momentum, so we stayed down previous year. And as I think we discussed together, it was the propulsion, the rear-wheel drive part of the LCV mix on Master, which is coming on now. The order takes up. So when I said high single digits for our order take in Q3, LCV was actually higher than passenger cars. So I think we're building the orders on that. We might actually see all of those deliveries this year, they might come into next year as well and also on the partner business. But -- so while I want to answer your question saying, yes, things are tougher in Europe. Yes, we've seen lots of things from our suppliers. Yes, supply chain is disrupted, not seeing the impact on our production outlook. And once again, our registrations were up 9.8% in the quarter. And we saw strong order intake, high single digit with LCV higher than that. So the confidence is, obviously, as we get closer to the end of the year, and that order book is in hand. Bigster, I know you and I talked about being one of the bigger drivers on H2 profitability versus H1. That was as expected in Q3, and we have the order book in hand to be able to deliver in Q4. Dividend guidance in the past has been about payout ratio. So dividend was -- will be a topic which we will discuss with the Board of Directors, and we will announce in February next year. So no change in dividend policy to date. Did I say EUR 90 million -- sorry, the FCA, I think was the last part of your question, EUR 90 million, not EUR 70 million, sorry.
Operator: And we'll take the next question from Stuart Pearson from Analytics.
Stuart Pearson: So a few just to follow up with Duncan. I mean firstly, just on that competitive situation in Europe on pricing. Just looking at it, is it fair to say that pricing in Western Europe is running something like negative 2% to 3%? And if so, you're aware of the most tense areas of competition. And secondly, just coming back to the emission side, you noticed this week, the Nissan is now pooling with BYD. And just very quickly, does that affect your outlook into '26 at all? Were they ever paying you any kind of polling agreement or any plans to before? Can you perhaps go a little bit more slowly on EV than you otherwise would have done now that you don't have to carry Nissan, who's the furthest away from their targets. So I don't know if that affects you at all. I'm kind of linked to that, plug-in hybrids, I mean, it's not really been a segment that's been particularly important in the European mass market. But obviously, the Chinese not facing tariffs there. In the last few months, they've really pushed right, Cherry, you might have noticed almost 20% of the U.K. plug-in hybrid market in September. So I wonder if you think that could become a more significant segment. If I'm not incorrect. I don't think you have any product offer in that powertrain now. So I wonder how agile you could be to actually bringing those to market if actually that does take off? And then just a final one, if I can. Just as you look ahead to the strategic plan next year. And I guess, Renaulution to overly simplify it, a lot of it was about the product side, there was cost stuff going on as well. But I wonder, looking at Volvo this morning as well, where costs played a significant role in what they delivered. Is it fair to say the next strategic plan can have a much greater focus on cost efficiency than Renaulution. And now you've had your feet under the table for a little while. Do you see significant potential still there at Renault, given that we had a lot done on the cost side in that organization over the last 10, 15 years?
Duncan Minto: Okay. Thanks, Stuart. Pricing, I think if you said Western European markets were down 2% to 3%, I think that's a bit strong, probably less than 2% in terms of negative price impact, I would say. And maybe I'll answer your other questions and then let maybe Fabrice or Katrin comment if they want any further on that.
Fabrice Cambolive: Regarding plug-in hybrid.
Duncan Minto: No, no, on pricing.
Fabrice Cambolive: In terms of pricing, I would say that in terms of pricing, what we see now in Europe is quite stabilization and we are controlling our variable marketing expenses at the same level of what we did in Q3. And this is how we will manage the level of pressure until the end of the year, perhaps we'll find some opportunities even though to increase some prices on some very targeted segments of our countries. It means we are 0 up in terms of pricing strategy. Regarding plug-in hybrid, perhaps I think if you take the plug-in hybrid segment share in Europe at CAA, until the end of August, they are around 8%, 9%. It means it's still a small segment. We have one offer with Rafael, which is a very interesting product because it's a car which is at the same time, a plug-in hybrid and hybrid when the battery is empty, which is -- which means a very low level of consumption. What we see on the small segment is that the customers are more oriented on either full hybrid solution. It means nonpluggable or on EV. And we want to manage our diversity. That's why even though we have the technology, we prefer to focus on one hand, full hybrid. That's what we do commonly between Renault and Dacia and on EV with the launch of the new cars like our R5 and R4. And this allow us to be at a level of share, which is manageable, I would say, versus the future target.
Duncan Minto: So we do have the technology, horse has it. So...
Fabrice Cambolive: If we need, we can decide to push the button. But I would say that at this level, let's focus on our hybrid technology, which is growing a lot and which is a good lever in terms of volumes and profitability. With a good residual value on those cars which is not for sure the case for most of the plug-in hybrid you see in the market.
Duncan Minto: You had a question on CAFE. I don't think we've had any impact of Nissan signing with the BYD in terms of pooling. It wasn't in our plan. So in terms of CAFE compliance, once again, who did -- I think it was to Thomas' question on the passenger car side of things, I'm quite comfortable on the outlook of light commercial vehicles, obviously, a bit of a lost cause of anyone being compliant, I think at this stage in time. Strategic plan. So product was the center of Renaulution and also the positioning of the brands. I think the brands have really grown and have their own unique positioning now. At this point in time, which is another way of looking at it in terms of residual values. Before saying yes, cost will be a part of the next plan. Product will also remain at the center of the next plan. We're very much focused on core business. But I do think we will have work to do on cost as well and efficiency. As time is getting tough, we need to be able to ensure that we control our fixed costs that we maintain that solid breakeven point to ensure that if there are any disruptions in the market that we don't have to take an axe to our product lineup or suddenly change the plans going forward. So we will continue to focus on breakeven point cost reduction and that's what, I guess, leads to the strong return on capital employed that we've had. And variable cost is also stepping up as you've seen this year, we -- I think we said we were just under EUR 400 per unit in H1, and we're seeing a stronger dynamic in H2. And that's something I can confirm today that that's well on track.
Operator: And the next question will come from Stephen Reitman from Bernstein SG.
Stephen Reitman: Yes. I have 2 questions, please. First of all, could you bring us up to speed on the transition to LFP that you're doing on your BEVs? I understand you've already -- have you already launched on them again? And when will you be able to offer LFP offerings on the Renault 5 and Renault 4? And what impact would that you think it would have on pricing, your ability to price those vehicles? And secondly, could you comment on the competitiveness of your Turkey plant, particularly in the light of the further devaluation of lira, particularly regarding exports to Western Europe.
Duncan Minto: Yes. So maybe on -- obviously, the Turkish plant is one of our most efficient plants and devaluation is a short-term gain for exports. Obviously, we do have to pass on some cost increases afterwards for all of the non-Turkish lira sourcing that suppliers have in that. So there's a little bit of a delay on those. On LFP, we have the transition next year. to 2026. So it's pretty much across the whole of the BEV lineup. Fabrice, do you want to say anything about that?
Fabrice Cambolive: We already begun now with the new spring which is giving more competitiveness and more autonomy also for our customers. And we will go on next year with our BEV segment. and Megan also. Duncan, I think this is very interesting because that's a solution which will enable us to gain more cost, better cost, more competitiveness and at the same time, more autonomy for our customers.
Duncan Minto: And just if I may add on the Turkish lira just for the reminder of everyone. So we had a negative impact on the revenue, and it was a positive impact on the margin so far. Moving forward, we do expect the impact of the -- on the margin to be less of a positive because we have increased our sales in Turkey, and this was one of the main drivers in terms of performance on international sales in Q3. So this is something to keep in mind.
Operator: And so the next question will come from Pushkar Tendolkar from HSBC.
Pushkar Tendolkar: So just, Duncan, a couple of questions on -- maybe related to the guidance, but some of the indications that you had provided on the first half call, which probably then feed into your full year guidance as well. One was about the second half volumes being better than the first half. Now that you have -- we have got at least 3 to 4 months forward. How is that looking in terms of progression? The other was about cost savings. The indication was that price mix enrichments versus cost savings would be a net positive for the full year and also for the second half of the year. If you can provide any color on the development on that front. And the third 1 is just a clarification. The EUR 90 million that you mentioned in terms of -- in terms of provisions that will be booked in the second half or that has already been provisioned for in the first half.
Duncan Minto: So FCA has already provisioned in the first half. The second half volumes better than the first half. So I think you've seen the 9.8% registration growth in Q3. So as you say, Q3 is behind us, Q4 ahead and so confirm that will still be the case for the full year. We did trim a little bit of production in Q3, but as we do constantly over time. Cost savings. So I talked about the cost savings, just a couple of seconds ago. In terms of the variable cost, we -- excluding any external factors, which are actually also positive on cost at the moment as maybe come back to the Turkish lira deflation, and also raw materials is a bit of a headwind -- sorry, tailwind as well. But if we exclude any of those, we were trying to go for EUR 400 per unit cost reduction on the variable side, full year. We did slightly less than that in H1. And my expectation was to do more in H2. I confirm that, that's still on track. So we have good visibility, good traction on that front. And then you wrap that into saying price mix enrichment and cost. On H2, we said it would be positive and maybe positive on the full year. As you've seen and as we've discussed, the pricing environment is a little bit worse than we expected. So that's putting pressure on that one, but we're upping cost reduction actions in other areas across fixed costs. The only one thing we had a warranty recall which puts a bit of pressure on that bucket as well. But -- we've upped fixed cost reductions in other areas and the strong dynamic on variable cost is definitely there. So all in all, I think we'll probably be flat positive -- well, flat in H2 and slightly negative for full year. So that's one of the factors that got worse, while our management of the things we can control in terms of costs stepped up. And then volumes, cost savings, EUR 90 million was booked, yes.
Operator: And so the next question will come from Harald Hendrikse from Citi.
Harald Hendrikse: Just 2 slightly longer-term questions. One, you've mentioned a couple of times the negotiations now with the European Commission. Can you just talk a little bit about what you are hoping for or expecting from those talks? Any sort of specific demands or anything that you can give us regarding those negotiations? And then secondly, both with the changes in the CEO, the new CEO changed quite a lot of the headline management in the group. The strategic direction seems to be very much business as usual. What other changes do you think you can identify for us what has changed with the 2 of you at the top of Renault changing this year that you want to identify for us that will help Renault going forward?
Duncan Minto: Okay. Thanks, Harald. On the European Commission, so I think as you would understand in some of my comments, the -- we have a hope short-term that the rules will change on light commercial vehicles because it's a segment which has been a strong profitability base for European manufacturers, and it's really a European business. So while fleets that wanted to go electric and could go electric are already there, and we've got our offer, which is competitive on Kangoo traffic, and we've recently launched on Master. Obviously, we do have, and we've taken a big investment to do a full EV offer with FlexEVan, which we expect will be out towards the latter half of next year. So in terms of putting the product on the market and making the offer available to customers, we're doing it. The demand is not responding in the same way. So I think we need to collectively relook at that. But once again, while I remain positive on the fact that, that will change, we're not counting on it. And so we had to provision in H1 and we will do until the rules change. I won't necessarily comment further on more longer-term. But on the passenger car, I think the sort of wall of 2030 in terms of hitting the CO2 targets. If we have to do it just in 1 year alone will be a challenge for many manufacturers. We were positive -- we positively accepted the sort of bank and borrow scheme over 3 years, which came out for '25, '26, '27. So let's see what happens for the future on those. In terms of CEO, so he obviously came on end of July. He's not someone who's new to the company. He's been here for several years. He built the Renaulution plan with Luca and the team. So we had some new management announcements, which I think are coherent with what we need to do going forward. February is here, obviously, Katrin in terms of CEOs of Renault and Dacia, respectively, but working closer together in terms of coordinating the offer and the lineup and how those 2 brands remain in their strong positioning. That's something, I think, has been a benefit, and we're seeing that in the construction of the midterm plan we're doing right now. I think if I was to focus on one thing, it would maybe come back to -- I don't know who asked the question. It might be Thomas earlier. It was on cost. I mean, it wasn't. But in terms of -- we've seen a very strong new product offer. The brands and they're very clearly and distinctly positioned. We have strong residual values. We are selling well with the bank off of that, that's making our offer competitive. We had a big focus on cost reduction on the EV side with Ampere. So we were striving to get that business down to breakeven this year. We probably won't be far. But I don't think that's the key point. I think the key point is looking between one series of cars and the next to be able to take 40% of the cost base out. There's a little question earlier on LFP, it was Stephen right, I think they said it, but it's -- the battery is a huge element of the cost of the car. And this technology change does allow us to be more competitive in margin than it would on the LC that we have today. But on top of that, I do think we need -- and we will have a heightened focus on fixed costs because we need to protect our breakeven point to ensure we have a continuity in the rollout of our strategy. So I think that would be the focus points. It will be very much a strategic plan, which is controlling CapEx and R&D. We won't be going past 8% in terms of overinvesting, focused on the core business. And in terms of growth outside of Europe, we're starting to see it now. I mean growth in Europe was 7% in Q3, more than double that for international. And we've made the investments necessary in India and with the purchase of RNAIPL. We have Latin America, which we have a Geely partnership, which we've just concluded, and we also have Korea. So it's utilizing the asset base we have to ensure we can foresee growth in the outlook of the plan.
Harald Hendrikse: Duncan, just a quick follow-up, if you don't mind. Just getting questions here on the EV and trying to get to 20%. Just remind us the latest that you were talking about on the EVs, the Renault 4, Renault 5 profitability relative to the range. You're saying Ampere is now very close to breakeven. Obviously, if we start adding volume, that margin will go up further. How do you see that dilution from your perspective?
Duncan Minto: No, certainly, we have -- in terms of -- we've got 3 challenges in terms of growth because, obviously, EV is increasing, and we're not yet at a parity for margin between EV and ICE. Come back to my point, just answering you in terms of variable cost reductions that have to come in over time. So as we will see growth in EV, it's dilutive because that's the case today, and we have to get to those kind of levels of cost reduction before we get to EV parity. The second one, I guess, is you've seen, if I linked to the business we have, which you've seen a growth of in Q3 in terms of partner business. So as we've signed partnerships with our European production base, that's what you're seeing coming off now. But with India, you'll also see revenue grow as we sell more to Nissan as we're producing 2 new vehicles for them, one in '26, one in '27. And we'll also be selling and distributing Geely brand in Brazil. Partner business is great for ROCE because we're not actually putting any additional assets in, but -- we do have a dilutive margin on that compared to the rest of the core business. So there's 3 different challenges in terms of diluted business. International as a whole EV and partner. And the answer to that is cost. And the good news on that is the return on capital employed.
Operator: And the next question will come from Philippe Houchois from Jefferies.
Philippe Houchois: It's Philippe Houchois, Jefferies. A couple of questions for me. I think 1 you already answered, but I want to clarify. So you're now talking about a strong fourth quarter, which explains why the book to sales is a bit lower than we've seen recently. Does that optimism on the fourth quarter include LCVs and potentially LCVs going into positive territory in terms of volume, is my first question. And the other one is, I've seen in the press that France and Spain apparently are against the delaying the 2035 deadline. And I'm just kind of confused right now between what the industry wants to achieve, the governments want to achieve, and if you can comment about where that political decision is coming from a country level and how it is aligned or not with what you're expecting from negotiating with the EU in follow-up with Harald's earlier question. And if you feel there is a common view between the German side and the French side of this industry when it comes to discussing with Brussels?
Duncan Minto: Thanks, Philippe. I'll try to avoid any political battles, but I don't think -- I think you've got the answer to your question and the alignment across Europe between the different countries, but it's not changing in any way our position, and so we were prepared for 2035. The strategy doesn't need to change on our front because of that. My comments earlier were more on some of the shorter-term challenges for CAFE in terms of LCV very short-term. Maybe the 2030 change in LCV, which is a big step down, as you know. So it's maybe more flexibility on that front that I'm expecting. You said that you noted, we'd have a strong Q4 in our discussion today, but we'd expected a strong Q4 when we talked to you back in July as well. So registrations were up 9.8%. And -- so yes, as you quite rightly point out, the order bank as a mass divided by the forward-looking sales looks lower at 1.6%, but the order take being up high single digits in Q3 is confirming our outlook on that.
Philippe Houchois: But would you venture to say LCV could be positive in the fourth quarter? I mean, the Q3 was better than the first half.
Duncan Minto: I don't think so.
Francois Provost: Philippe, in Q4, the LCV market should decrease again after a rebound in Q3, which was mainly explained by easy comps related notably to GSR2 effect and some tax incentives in the Netherlands and probably some tactical push also from some players in the market. In this context, the Renault brand should outperform the market, underpinned by the strong order intake that Duncan just mentioned. And notably on Master because of the improvement in the diversity availability. But we still expect LCV to be in negative territory in Q4 in Europe.
Duncan Minto: Thank you. This concludes our Q3 revenue call. The team remains available if you have any questions. And see you soon. Thank you much. Have a good day.