Cazoo Group Ltd

Greetings. Welcome to Kazoo's fourth quarter and full year 2021 earnings call. At this time, all participants will be in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during today's conference, please press star zero from your telephone keypad. Please note this conference is being recorded. At this time, I'll now turn the conference over to Robert Berg, Director of Investor Relations and Corporate Finance. Mr. Berg, you may now begin.

Good morning, everyone. Thank you for joining today's call and webcast to discuss our Q4 and fiscal year 2021 results. You'll be able to find today's press release and accompanying presentation on our investor relations website at investors.kazu.co.uk. We appreciate everyone joining us today. With me on the call is Alex Chesterman, Founder and Chief Executive Officer, and Stephen Marana, Chief Financial Officer. Before we get started, I would like to remind you of the company's Safe Harbor language, which I'm sure you're all familiar with. Management may make forward-looking statements, including guidance and underlying assumptions. Forward-looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially. For further discussion of risks related to our business, please see the filings of Kazoo Group Limited with the SEC. Now, I will hand over the call to Alex.

Thanks, Rob. Good morning, everyone, and thank you for joining us today. I continue to be Extremely proud of what our team has achieved both since launch and particularly over the last 12 months. 2021 was a landmark year for Kazoo, our second full year of operations and a year in which we made huge strategic strides towards achieving our mission of transforming the car buying and selling experience across the UK and Europe. Along with listing on the NYSE last summer, we achieved a number of our key strategic goals last year, including bringing our UK vehicle reconditioning in-house and launching our own in-house car buying channel, where we now purchase a significant volume of cars directly from consumers. We also launched our subscription service and already have over 10,000 subscribers across Europe. And in December, we launched Cazoo into France and Germany. We continue to put all the strategic building blocks in place to enable us to execute on our ambitious growth plans, whilst also creating significant moats around the business. Whilst we've accomplished an enormous amount in just two years, we're still just at the start of this very exciting journey. We're more excited now than ever about the future opportunity for Kazoo and our ability to capture a 5% or larger market share of the huge £300 billion addressable market that we currently operate in. Our customers love the Kazoo proposition and consistently tell us that they will only consider using us for their next car transaction, which is reflected in our market-leading Trustpilot rating of 4.8 stars, and this continues to give us increased confidence in both our strategy and the growth opportunity. Before we discuss recent trends, I'd like to quickly recap the significant progress we've made in the two years since launch. We spoke about this in detail on the recent fundraising call, so I'll just summarize the key points today. When we launched in December 2019, our mission was and remains to transform the car buying and selling experience across the UK and Europe. As you can see on slide four, in just over two years since then, we've established a market-leading platform, brand, team, and infrastructure, and have already sold over 60,000 retail units in the UK, putting to rest the question of whether consumers are ready to buy a car entirely online. We've built a highly trusted brand across the UK with over 80% national brand awareness. And we now have a world-class team of over 4,500 employees working tirelessly across the group to deliver a materially better car buying and selling experience for our customers. We've started to replicate our success in Europe, having launched in France and Germany at the end of last year, and the recent acquisitions of Swipcar in Spain and BroomBroom in Italy have provided us with strong local teams, infrastructure, capabilities, and relationships, which will expedite our launch into those markets in the coming months. Combined with the UK, those five key markets we're focused on have an addressable market of over £300 billion a year, which we expect to become the largest player in. On slide five, you can see that a significant amount of this progress took place during in 2021. In July, we launched our in-house car buying channel in the UK, where we now buy cars online directly from consumers. It's been performing well ahead of expectations so far and has materially increased our sourcing capabilities and diversified our buying mix, which will have significant long-term benefits to our GPU. We've also recently added service plans to the suite of additional products that we sell at checkout. And that now includes consumer finance, warranties, paint protection, and insurance. And we're very encouraged by the growth in attachment rates that we're seeing on these products. In addition to our used car retail proposition, our new car subscription service is resonating extremely well with consumers. And with over 10,000 active subscribers, we are the leading consumer car subscription business in Europe. Importantly, however, whilst we're driving forward very fast, we continue to maintain extremely high levels of quality and customer service and are incredibly proud of the exceptional feedback that we receive from our customers every day. Our Trustpilot rating of 4.8 stars with 95% of our customers rating us as either excellent or great is the highest of any player in our sector globally. Perhaps the biggest strategic step that we've made over the past 12 months is bringing UK reconditioning in-house. A challenging process for sure, but one that has significant operational and financial advantages. We now have 11 in-house reconditioning sites across the UK and EU, up from just one at this time last year. Our UK vehicle preparation sites can currently recondition over 120,000 cars a year, and we have the potential to double that volume from those existing sites over time once they are optimized. We now operate 21 customer centers across the UK for collection, distribution, and storage and servicing, and have a fleet of over 250 car transporters for deliveries. The investment we've made in our in-house infrastructure will be pivotal to our ability to grow materially over the coming years, whilst maintaining the high-quality experience that our customers love. As a reminder, earlier this year, we also announced the news of our Significant additional $630 million of convertible notes funding, a transaction which was further endorsement of our business and strategy from both new and existing investors who are extremely excited about our progress to date and the huge market opportunity ahead of us. We are now very well funded for the coming years to continue to capitalize on the huge future opportunity I'm about to remind you of. As I said at the start of this call, whilst we've achieved so much in just two years, we're still just at the start of the journey. As you can see on slide six, we're addressing a massive market opportunity. The UK alone has a used car market of around 8 million transactions a year with a value of over £100 billion annually. We're now live in France and Germany and plan to launch into Spain and Italy later this year. This increases our addressable market to around 26 million transactions a year with a value of over 300 billion pounds annually. Not only is this a huge addressable market with one of the lowest digital retail penetrations, but it's also an extremely fragmented market with no dealer having more than a 3% market share. which means that we have a significant opportunity to build a leading brand across Europe in this space. Customers are embracing our offering, and we fully expect to continue to rapidly grow our market share over time. That said, as you can see on the right-hand side of the slide, the market opportunity is so large that with just low single-digit market shares and prudent medium-term GPU targets of 1,500 to 2,000 pounds, we would have an enormous business generating meaningful free cash flows. Our long-term target, however, is to capture a 5% or greater market share with a £3,000 GPU, which is why we are extremely excited about the future growth opportunities. I will now pass over to Stephen, who will run through the details of our 2021 performance and future guidance today. in a little more detail.