Auto1 Group U/Adr

Hello, good afternoon and good morning and good evening to international participants. Welcome to the O2One Group second quarter 2025 results presentation. I'm Philip Reikersdorfer, Group Treasurer. As always, I'm joined today by Christian Bertermann, our co-founder and CEO, and Markus Boser, our CFO. We will start with the presentation, followed by questions and answers. If you would like to ask a question, please raise it via the usual Zoom Q&A tool at the bottom of your screen. We will then call on you to ask a question directly after the presentation. Before I hand over, I must make you aware of the safe harbor provisions at the beginning of this presentation here. These will apply to any forward-looking statements made by management today. And now over to you, Christian.

Hi, everyone. Thank you, Philip, for this introduction. Welcome to this AutoOne Group Q2 earnings call, everyone. Q2 was a very strong quarter for AutoOne. We sold 200,000 vehicles in total. That represents 21% year-on-year growth. Cross-profit surged by 33%. year-on-year to 231 million euro. That is an increase of 58 million euro compared to Q2 of last year. Group gross profit per unit also increased climbing 10% year-on-year to 1148 euro. This is up from 1041 euro in Q2 of last year. We doubled our adjusted EBITDA from 21 million Euro last year to 42 million this year, while our adjusted EBITDA margin increased by 70 basis points to 2.1% year on year. These results are driven by the advantages of our vertically integrated business model, which is fueling sustained growth across both our retail and merchant segments. We have very strong momentum, and we will keep our focus on delivering exceptional value to our customers to drive further market share gains. As some of you might know, we are pursuing a value-first approach for any business we do, ensuring we focus on all the elements that create meaningful value for our customers. Value in our business can mean higher selling prices, lower buy prices, lower processing costs, greater selection, greater convenience, highly motivated staff, increased trust, fast and reliable delivery, and competitive financing. We are convinced that our vertically integrated business model and the power of our digital trading platform uniquely position us to create the best products and solutions in the industry, setting us apart from competition and up for continued success in the European newscom market. Now let's deep dive into the numbers and start with our merchant segment. In merchant, we delivered strong results in the second quarter, achieving double-digit growth across all key metrics. We sold 177,000 units to our merchant partners in total, representing a 19% year-on-year increase. Merchant cross-profit in Q2 was 170 million euro, rising 24% year-on-year. Merchant cross-profit per unit also showed strong growth, reaching 961 euro up from 918 euro in Q2 of last year. For the first six months of 25, total merchant sold units reached 359,000. This is an increase of 64,000 vehicles compared to the same period last year. Gross profit increased by 84 million euro compared to H1 of last year. A record number of 29,800 merchants purchased from us in the second quarter. This is a new quarterly high. This represents an 18% year-on-year increase compared to Q2 of last year when 25,200 partners bought from us. The average basket size slightly increased with merchants purchasing an average of six vehicles in Q2. We continue to be very focused on the key drivers of value creation for our merchant customers. Gathering and acting on partner feedback is fundamental to understanding their needs and identifying ways we can support them even better. In-person events are a vital part of this engagement. In Q2, we hosted events in Germany, Spain, and Portugal, for instance, bringing together over 100 selected dealers to hear their feedback firsthand. We are always very excited to speak with our partners and aim to tailor our product and services perfectly for them, enabling them to continuously grow together with us. On the supply side, We continued our expansion of our purchasing branch network across Europe for the future growth of our business. We opened 40 new branches in the second quarter, growing our sourcing footprint substantially year on year. For our merchants, this means increased vehicle selection and availability, strengthening the quality of our offering. We will continue to invest into the density of our network in the months and quarters ahead. Also on Auto One Merchant Financing, we continue to deliver great results. Created as the most convenient financing solution for used car dealers, we provide eligible partners with an instant credit line integrated directly into our platform. This allows them to finance vehicles with just one click. Auto One Financing is fast, it's transparent, and it's designed to grow the business of our partner dealers significantly. In Q2, we financed a total of 328 million euro of merchant sales. This is an increase of 79% compared to the previous year. The number of units financed grew by 71% year-on-year to 29,000 units in Q2. Our portfolio balance almost doubled from 134 million euro in Q2 of 24 to 264 million euro of this year. We are working on rolling out merchant financing to more markets and more partners constantly. Let's move to retail, where we also had a great quarter. Autohero is gaining more traction faster, and we are happy about the significant and parallel progress we make in units sold, gross profit, and GPU. Archie Hero delivered record 23,800 units compared to 17,700 in Q2 of last year. This is an increase of 35% year-on-year and 1,800 units more than in Q1 of this year. Retail gross profit climbed to a quarterly record of €61 million, growing significantly by 67% year-on-year. Retail GPU was €2,538 in Q2. This represents an increase of 22% compared to Q2 of last year. And it also represents a steady progress towards our long-term retail GPU target of €3,000. For the first half of the year, gross profit increased by €47 million and GPU increased by €535 compared to H1 of last year. Convenience is one of the key drivers of customer satisfaction in retail. So we continue to optimize for speed, aiming to hand over car store customers as fast as possible. And for the first time ever, we achieved an average delivery time of under 10 days. We successfully reduced the average delivery time from 12.3 days in Q2 of last year to 9.4 in Q2 of this year. That is a 24% decrease year on year. And we added eight additional Express Hubs in Q2. Total, we now have 45 Express Hubs across all Autohero markets where cars are available within 72 hours. In late Q2, we successfully rolled out our in-house consumer financing solution for Autohero customers in Spain. This launch underscores our commitment to providing the best financing options to our clients. making car ownership even more accessible and convenient. With Spain now joining Germany and Austria, our best-in-class internal financing is available in three out of nine markets and enables customers to purchase and finance their cars in minutes. By integrating financing directly into the customer journey, we deliver a seamless, a transparent, and highly competitive experience that differentiates us from traditional banks. Early feedback from Spain has been very positive and we're confident this will drive further growth and enhance customer satisfaction across our platform. Let me close with our view on long-term goals. Our unique vertically integrated business model is providing the foundation for our future growth and margin expansion. We aim to capture a market share of 10% of European USECA transactions in the long term and combine this volume with a 5% to 9% adjusted EBITDA margin, depending on the relative size of the merchant and the retail business. In order to steadily grow market share, we are investing into a number of initiatives at the same time. Some of them, like our increased investment into the Auto Euro brand, We present strategic multi-quarter investments that strengthen our market position and drive long-term value and margin expansion. While we're already seeing positive momentum, we expect the full impact of these efforts to become increasingly evident in the months and quarters ahead as our platform continues to scale. I'll now hand over to Markus for a detailed financial update. Thanks, Christian.

Q2 was again a very strong quarter with €1.97 billion of revenues, our highest consolidated quarterly revenue ever achieved, representing 30% growth year-on-year, a consequence of 21% unit growth year-on-year and an 8% ASP growth through a combination of general ASP increases as well as a mixed shift as Autohero becomes a larger part of our business. Through a combination of GPU growth and OpEx leverage in both of our segments, our year-on-year profitability grew faster than the top line, with our gross profit growing 33% and adjusted EBITDA more than doubling to 42.3 million. Our EBITDA margin also grew circa 50% year on year, reflecting a slight increase in our gross profit margin from 11.4 to 11.7%, but mainly a consequence of greater operational leverage through a combination of improved auto hero profitability, as well as increased units over a broadly stable HQ cost base. Let's turn to our usual quarterly bridge to adjusted EBITDA. Gross profit declined by about 5 million euros as the expected consequence of Easter and additional Q2 holidays, many of which fell on a Thursday, meant that we had fewer working day equivalents relative to Q1. Increased OPEX in Q2 is the result of selective investments into growth to exploit the incredible opportunity we see to accelerate market share gains in this massive fragmented market. These increases were partially offset by improved per unit economics and improved leverage of our HQ costs, which are declining as a percentage of total OPEX. Marketing grew 2.8 million quarter-on-quarter, with over 100% of this growth coming from Autohero, as marketing for WKDA, i.e. purchasing our cars, declined slightly quarter-on-quarter, showing both the benefits of scale and the success of our branch opening strategy, where we are able to amortize our marketing costs more effectively by being closer to the customer. We believe that similar dynamics will occur in AutoHero over time as that business scales up. Internal logistics increased by 1.4 million, primarily driven by our increased purchasing of units. Payroll increased by almost 8 million as part of our planned increases to support our ongoing growth. The main areas of staffing growth, as previously communicated, were in purchasing branch staff, refurbishment in AutoHero, and Auto1 sales. We continue to maintain a strong balance sheet with our cash rising circa 17 million euros quarter over quarter. This increase was driven by the strong cash generation of our car trading products before inventory movements. We also successfully managed to refinance almost the full increase in inventory and captive finance assets this quarter, demonstrating the efficiency of our integrated platform. We upsized both our merchant and consumer finance facilities to enable further growth and new market entries in both products. Our inventory growth represents an investment into anticipated continued growth in our auto hero business, where we generally need to build up inventory circa a quarter beforehand, as well as to be prepared for early July sales in our merchant business. Lastly, we also built up our captive finance assets with the merchant finance portfolio growing about 6 million euros and the consumer finance business growing circa 45 million euros. Finally, to guidance. We are increasing our expected 2025 merchant units to 680,000 to 720,000 units from 650,000 to 700,000 units, equalling 14% year-on-year growth at the midpoint, and our expected 2025 retail units to 92,000 to 97,000 units from 85,000 to 95,000 units, equalling 27% year-on-year growth at the midpoint. We expect that we can maintain this increased growth in retail at around the current GPU of slightly above 2,500 euros. So an improvement over the slightly below 2,500 euros that I mentioned in the Q1 earnings call. With respect to merchant GPU, while we continue to be confident in the long-term upside, our 2025 guidance assumes that it will be around the current level for the full year. Together, this leads us to increase our gross profit range to 890 to 940 million euros, up from our 845 to 905 million previous guidance. We increase our adjusted EBITDA range to a full year range of 160 to 190 million euros up from 150 to 180 million, reflecting the increased forecasted units and gross profit while continuing to invest in our growth. This is the second time this year that we have improved our gross profit and adjusted EBITDA guidance. We're very happy with our Q2 results. Our growth and market share gains demonstrate the power of our vertically integrated strategy and believe we are well on track to achieve our long-term market share and margin expectations. I'd now like to open up for questions.