Cazoo Group Ltd Stock Price: Quote, Forecast, Splits & News (CZOO)

At close: May 20, 4:00:02 PM EDT

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Mr. Robert Berg A.C.A.

New York Stock Exchange

Cazoo Group Ltd operates as an online car retailer in the United Kingdom and rest of Europe. It allows consumers to purchase, finance, and subscribe to a car through online for delivery or collection. The company was founded in 2018 and is headquartered in London, the United Kingdom. Cazoo Group Ltd is a subsidiary of Cazoo Holdings Limited.

At close: May 20, 4:00:02 PM EDT

Mr. Robert Berg A.C.A.

New York Stock Exchange

Greetings. Welcome to the Kizzoo Q3 2023 Earnings Call.

At this time, all participants are in a listen only mode.

A question and answer session will follow the formal presentation.

As a reminder, this conference is being recorded.

At this time, I would like to hand the call over to Anna

Gaborlova, Head of Investor Relations

Thank you. You may begin.

Good morning, everyone.

Thank you for joining today's call to discuss our results for the Q3 of

You will be able to find today's press release

on our Investor Relations website

We appreciate everyone joining us today.

With me on the call are Alex Jessiman,

Founder and Executive Chairman

Chief Executive Officer

Chief Financial Officer.

Before we get started,

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

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 a further discussion of risks

related to our business,

with the U. S. Securities and Exchange Commission.

Today's call will not be recorded

will not be available for replay.

We kindly ask you not to record it and not to transcribe it.

I will now hand the call over

Morning, everyone, and thanks a lot for joining us today.

I'm very pleased with the results we are reporting today.

And that we have delivered another quarter of meaningful improvement in our profitability.

We achieved a lot over the 1st 9 months of this year,

We restructured our operational footprint

and headcount to better match

scale of our business

And at the same time, we've consistently been driving improvement

in our unit economics

against the backdrop of a deteriorating

economic environment.

Interest rates are much higher than a year ago,

and inflation is persisting far above the 2% target

set by the Bank of England.

Higher cost of living and cost of credit are caused

volatility in demand

At the same time, supply of new cars

has been rising towards levels seen before the COVID pandemic.

This has had the effects of aggravating the misalignment of

and daily depreciation for our stock selection

has been higher than normal market conditions.

Despite all of this, we have continued to focus

and we managed to maintain quarter on quarter improvement in retail GPU.

Reaching a new Kedoo record of 10

The improvement was achieved across several areas.

We took a number of steps which helped to partially mitigate the impact of higher interest

And most significantly,

we focused our web platform optimization efforts

on enhancing customers' digital finance journey

with our finance first approach.

Despite these improvements, our finance attachment rate declined to 49

our record performance of

3.2% in the previous quarter.

And we are implementing a range of actions to target areas such as

with the goal of enhancing our future

a program to enable our delivery specialists

and our kazoo customer centers

to sell ancillary products offline

when we hand over the purchase car to the customer.

This has proved to be a growing source of ancillary revenue for us

helping to increase attachment rates for the products we offer.

And we've made further progress in reducing our reconditioning costs

as we focus on the efficiency of our operations.

And we continue to work on optimizing our car acquisition pricing

by combining our own proprietary data

with third party sources.

And there is still further scope to sustain and grow our retail GPU.

By targeting opportunities

across all these areas,

with particular focus on faster stock turn

as well as further efficiencies in our operations

through digitalization.

In the Q3, we sold 9,500

as our fully online proposition continues to resonate with customers.

And we generated revenues of million.

These results were in line with our focus on unit economics

Retail GPU of £1470

increased by 14% quarter on quarter

and by 2 0 1% year on year.

Average retail GPU for the 1st 9 months of 2023

Gross profit of 11,000,000

increased by million year on year

driven primarily by higher retail GPU

to lower volume of units.

Gross margin improved by 3 50 basis points to

Ancillary revenue per retail unit

sold at GBP 735 increased by 29% year on year

and the finance attachment rate

percentage points improvement year on year.

Growth metrics, however, declined quarter on

quarter due to factors related to higher interest rate

We continued to reduce fixed and variable costs in line with expectation

Our cash position remains strong

with million of cash and cash equivalents

plus approximately 1,000,000 of

self financed inventory

as of September 30, 2020

We announced at September that we had entered into

a transaction support agreement

for certain note holders

and shareholders in connection with the contemplated transaction.

We are updating our cash balance guidance for 2020

to take into account such transaction related costs

which were incurred in the Q3,

and will be incurred in the Q4.

We now expect to finish the year with between GBP 100,000,000

and 1,000,000 of cash and cash equivalents.

And between million and

pounds of self financed

Higher interest rates

high used car prices,

rising insurance premiums,

and the recent spikes in fuel prices

driven by geopolitical conflicts

means higher cost of car ownership customers

Demand for used cars will remain volatile

and against this backdrop are priority

is to continue to deliver better unique

economics per unit sold

And we expect retail unit sales in Q4 2023

and the full year retail sales to Beauty Queen

Total unit sales, including both retail and wholesale,

are expected to amount

to be between 50,052,000 units.

Given that we have averaged £1215

the 1st 9 months of this year

we expect the average retail GPU

be higher than previous guidance.

And we now expect to end the year with average retail GPU approaching 1200

And the exit rate is expected to be around GBP 1400.

Which reflects normal market seasonality

and a challenging economic environment.

We are maintaining our adjusted EBITDA forecast

between negative $100,000,000

and negative million.

remain to further improve

Reduce our fixed cost base,

and extend our cash runway.

As we work towards our goal,

of reaching profitability,

Thank you very much. And we'll now take any questions you might have

Will now be conducting a question and answer session.

Our first questions come from the line of Rajat Gupta with JP

Morgan. Please proceed with your questions.

Great. Thanks for taking the question.

I had a first question just on the

Curious to know if there are more cost savings or

on the SG and A side or more GPU opportunity

at the current level of units,

that you can capture before the company can decide to return to growth again?

And when can we expect the business to return to growth

target return to growth in order to

start scaling the fixed cost eventually.

And then related to the, what kind of macro or company

specific factors we should be watching to determine that timing?

Thanks. I have a quick follow-up.

Thanks so much for the question. So

bit more to do as we

said and referred to in the announcement,

there's a number there are a number of levers across multiple areas

sort of forefront of our mind, the one is

Obviously, the faster we turn over

vehicles, not particularly on the website, but that is the

And then eventually the fulfillment. The faster we do that,

the less the vehicles

still remains a significant lever

Finance and ancillaries has been a success story all the way through.

Just described how it

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