AUTO1 Group Capital Markets Event 2026

0:00 Hello. Good afternoon, and good morning and good evening to international participants. I'm Philip Reichersdorfer, Group Treasurer here at AUTO1 Group. Welcome to our first AUTO1 Group Capital Markets event. We will start as always with a presentation and then have the opportunity for a question and answer session. The presentation today should take about an hour, and we have scheduled a similar time for Q&A. So, hopefully we'll be wrapping up in about 2 hours from now. If you would like to ask a question, please raise it by the usual Zoom Q&A tool at the bottom of your screen.

0:32 We will then call on you to ask your question directly after the presentation. Before handing over, I must make you aware of the safe harbor provisions at the beginning of this presentation. These will apply to any forward-looking statements made by management during this call today. Today, Christian Bertermann, our co-founder and CEO of AUTO1 Group, and Christian Valenta, our CFO, will provide you with a deep understanding of our retail and merchant segments. It has been 5 years since the IPO, and our business has changed materially. We think now is the right moment to lay out historic financial segments and long-term targets for both our merchant and retail businesses, and we're excited that you're joining us today.

1:15 With that, over to you, Christian. >> Hi, everyone. Thank you, Philip. Welcome to this event. AUTO1 Group is Europe's leading vertically integrated digital automotive platform for buying, selling, and financing used cars. Together with Hakan Koç, we founded AUTO1 in Berlin in 2012. Since then, we have traded more than 6 million cars across 30-plus countries, generating 8.2 billion of revenue in 2025.

1:51 Today, we're going to walk you through the AUTO1 model and what makes it structurally different from any other player in Europe. We'll show you how our two segments, merchant and retail, interact and compound one another. Each making the other stronger over time. We will lay out the long-term financial targets for both segments and explain specific drivers for unit and margin progression on the back of the immense opportunity ahead of us.

2:25 We're building the best way to buy, sell, and finance cars. Our mission shapes everything we do. We didn't grow up in the old-school used car business. We have backgrounds in tech and see a very large, very fragmented, and deeply inefficient market that we can change for the better. Since day one, our approach is to systematize and digitize the industry at scale. That is why we built our C2B buying business, Europe's largest consumer purchasing network and our sourcing engine, to make car selling fast, transparent, and fair.

3:07 It is why we built auto1.com, our merchant platform, and the backbone for B2B buying across Europe. And it's why we launched Autohero in 2020, the first trusted, fully digital car buying experience in Europe. On top of that, we have built market-leading integrated financing products for dealers and consumers alike, because financing is such an integral part of this market. The sequence of how we built the company matters enormously.

3:42 We started with supply, building the consumer sourcing engine first in 2012. One year later, we launched auto1.com, bringing inventory to the dealer side and starting to accumulate the pricing data that sits at the core of our AI pricing models today. Only in 2020 after 8 years of building the foundation we launched Autohero. We invested more than a decade into becoming the European leader in digital car sales.

4:15 AI-powered pricing pan-European logistics, physical car infrastructure, and innovative car financing products. The results speak for themselves. From 230 cars in 2012 we grew to more than 842,000 cars traded last year and a record 249,000 units in Q1 of this year alone. Group gross profit per unit has increased steadily since 2012 and is on a very remarkable track since 2018, increasing every single year.

4:55 We crossed 100 million adjusted group EBITDA for the first time in '24 and almost reached 200 million euro in '25. We are now at the point where we are no longer just building. We are leveraging. We drive volumes and profitability simultaneously. Auto1 Group is one of the most exciting investment opportunities in Europe today. First, we operate in one of the biggest markets of the world.

5:30 Used cars is a massive, highly fragmented industry and the vast majority of customers are unhappy with the current buying and selling experience. Second, our superior vertically integrated business model that sets us clearly apart from the traditional brick and mortar approach in used car trading. Generating superior customer experiences, growth, and profitability at scale. Third, the outstanding customer experience we deliver is winning market share across every customer group we serve.

6:09 Fourth, the pan-European infrastructure that took a decade to build and cannot be replicated is our structural mode. We build in a very scalable way, and we have a proven expansion strategy for every part of our business. And fifth, underlying our business is a very robust financial model based on the advantages of vertical integration that delivers market-leading profitability at scale.

6:39 Let us walk you through each of these now. Over to you, Christian. >> Thank you, and a warm welcome from my side, as well. Let's start with a deep dive into the European used car market and the massive opportunity ahead of us. Europe's used car market is one of the biggest consumer spending categories globally, and for most European families, buying a car is the largest or second largest financial decision they will ever make, depending on if they choose to own their home.

7:13 The used car market is almost twice the size of apparel and four times the size of the electronics market. On a value basis, that is 700 billion euro in annual transaction volume, with 100 billion euro in financing. The 100 billion euro financing pool deserves a particular mention. Every used car transaction is also financing opportunity, and the economic economics of embedded car financing are compelling. At slightly above 3% market share, we are already the largest player in Europe with 97% of this market still ahead of us.

7:52 What makes this market so extraordinarily attractive is the combination of size, fragmentation, stability, and its unhappy customers. There are over 250,000 dealers in Europe, and the top 20 own less than 6% of the market. The main reason is that the traditional brick-and-mortar approach in used car trading has scale limitations. On top of that, Europe is not one market. We have different languages, tax rules, registration regimes, transport networks, and very local demand patterns that form barriers to easily scale Europe-wide.

8:27 European used car volumes are very stable at around 27 to 28 million transactions per year, and have a long-term CAGR of around 2%. The underlying general need for mobility is what drives the size and stability of this market in the long run. A market that is built into the fabric of the everyday European life. Yet, it remains one of the least consolidated, least digitized consumer markets anywhere. And then, maybe most importantly, almost four out of five consumers do not enjoy the car buying experience. They dislike the haggling, the opacity, the lack of trust, and the physical car buying journey, which can be exhausting and frustrating at the same time.

9:10 Now, I'm handing over to Christian to walk you through our superior vertically integrated business model. >> Thank you, Christian. Uh let me first apologize for the slide. Um the truth behind that small font is that the advantages of vertical integration are creating numerous benefits for our customers, so they barely fit on one page. We source directly from consumers across nine European markets to a seamless digital evaluation and funnel combined with our dense network of drop-off branches. As a result, we control our entire supply without being dependent on auctions or third-party wholesalers.

9:54 With our unique approach to car buying, we are creating a superb selection of cars for our buying customers while offering market-leading prices to our selling customers through our European demand generation engine. On pricing, our AI pricing engine is built on over 6 million actual realized transactions accumulated over 14 years. We generate a competitive price for selling within seconds, and our matchmaking technology connects supply to demand across the entire EU efficiently.

10:31 This is how we are realizing best prices for our buyers and sellers, a huge competitive advantage. On logistics, our bespoke logistics network with more than 170 logistics hubs, more than 300 logistics partners, and a dedicated last-mile delivery fleet for Auto Hero is the largest of its kind for cars in Europe. Thanks to it, dealers can receive their fresh purchases incredibly fast both nationally and cross-border, including all paperwork being handled professionally.

11:08 At the same time, the network allows us to offer very fast, convenient, and reliable delivery times for our retail customers. On our physical infrastructure, our physical infrastructure across Europe is a moat 14 years in the making. Today, we operate 12 in-house production centers with a combined refurbishment capacity of over 248,000 vehicles. Every car that goes through the Autohero refurbishment process fulfills the same high quality standard adding to the high trust the Autohero brand stands for today.

11:46 Together with more than 750 drop-off and more than 150 pickup points our physical infrastructure is a unique asset that enables more than 70% of the European population to reach a drop-off point within 15 minutes drive from their home. Our trusted brands are a key component of our vertically integrated model representing the better, superior way to buy, sell, or finance a car. They decrease friction and offer customers peace of mind.

12:20 Our consumer selling brands and our dealer brand auto1.com are based on 14 years trusted transactions with private consumers and dealers alike. Autohero is the fastest growing European auto retail brand with already 35% aided brand awareness. We believe that building an unparalleled brand experience, no matter where our customers can get in contact with our brands is a massive future demand driver. On financing our in-house merchant financing provides dealers with the capital they need to grow their business across eight markets.

12:58 Consumer financing is embedded directly in the Autohero purchase flow and can be completed easily and stress-free in under 5 minutes. Both are funded through our own ABS programs at institutional scale, which means we can pass competitive rates through to our customers, in turn driving conversion on finance transactions. All of these different layers of our vertically integrated model are structural advantages compared to the traditional brick-and-mortar approach in used car trading they directly translate into increased value for our customers.

13:35 We have spent more than a decade to develop our business model and our unique operating approach. Vertical integration gives us control over price, speed, and customer experience, or in other words, every aspect of the transaction in a way no one else can match. Christian will now explain our product and merchant and retail in detail and how they are contributing to our exceptional customer experience.

14:06 >> Thank you, Christian. Let me take you through each of our segments and showcase to you how we create value for our customers. We We are operating two segments on one integrated platform. Autohero is our consumer growth engine, changing the way people buy cars. Carefully selected vehicles from our customer sourcing business go through one of our 12 large industrialized production centers for inspection and reconditioning. They are then listed online on Autohero, extremely convenient to check out, and available with integrated financing and a 21-day return policy.

14:43 We're delivering to the buyer's store on or making the purchase available for nearby pickup quickly. It's an e-commerce like experience applied to one of the largest purchases they will ever make, their new car. The Autohero growth trajectory tells the success of our value proposition. Since launching in 2020, we have grown almost 60% compound annual growth rate. In parallel, GPU has grown from €362 in 2021 to €2,605 in 2025.

15:16 These great results are based on superior value proposition, our operational discipline, and excellent execution from our teams. On the merchant side, we have built the pan-European wholesale market leader for used cars. We source vehicles directly from consumers across nine countries and sell them to one of our more than 54,000 buying dealers spread across more than 30 countries. At the core of the business sits a unique matchmaking engine that, for instance, matches the supply of Volvos in the Nordics with demand in Spain or sourcing Renault in Germany and selling it to France.

15:50 No other used car player does this at our scale. We continue to grow strongly with a 12-year CAGR of roughly 50% since uh 2013. Our unit economics continue to improve steadily with merchant GPU growing to 976 euro in 2025. Autohero, our retail segment, launched in 2020. In 5 years, we have grown to over 100,000 units delivered across nine markets, making it the fastest-growing used car retail brand in Europe.

16:25 Our NPS stands at 69. That is world-class core for any consumer product, let alone for car sales. Aided brand awareness reached 35% in Q1 2026, up nine percentage points year-on-year. Our ambition is simple, to make Autohero the go-to brand when buying a used car. Brand drives organic acquisition. Organic acquisition lowers cost per unit. Lower cost per unit increases contribution margin. That is the compounding flywheel.

16:56 The skills we have built to get here are not easily to replicate. We learned how to source at scale, price at scale, refurbish at scale, and deliver at scale, continuously improving our unit economics on the way. These are the capabilities that will power Autohero to category leadership across Europe. We create value for retail customers in multiple ways. We offer a vast selection of cars listed across Europe at any given time. Every single one has gone through the same rigorous, standardized refurbishment process at one of our own production centers.

17:34 Cars come with a detailed, uniform condition profile, AI-powered damage detection, and 12-month standard warranty. Our scale is structural pricing advantage that compounds further with transactions. The more cars we process, the lower our refurbishment and logistics cost per unit, and the more competitive our pricing becomes. The same logic applies to our seamlessly integrated financing. The bigger we get, the more competitive our financing rates can become. Additionally, AI pricing gets smarter with more data.

18:06 In retail, there's still plenty of potential for improving price precision by a bigger data set. Autohero offers maximum convenience. The entire purchase journey is completed online or on our app without a single phone call if you don't want to make one. Financing is approved in minutes. We deliver to your door within 10 days in one of our iconic glass trucks, or the car is available for pickup at numerous locations across Europe, often as quickly as within 48 hours.

18:37 You enjoy a 21-day full money-back, no-question-asked return policy in case you change your mind. All together, this is the best way of buying a car. Auto1.com is Europe's number one wholesale platform for used cars. Over 54,000 unique buyer buying dealers, 30-plus countries, 50,000 cars available at any given time. These are the results of 14 years of continuous investments in the supply and demand, platform technology, AI pricing, and physical infrastructure.

19:14 Auto1.com is effectively the clearinghouse of the European used car market. As mentioned before, Europe is not a single car market, but over 30 national markets with different price levels, tax regimes, registration systems, and consumer preferences. We have reduced this complexity complexity to a few simple clicks for our dealer partners. With us, they can tap into any country supply. Cars are sold to the dealer in Europe who values it the most with paperwork, logistics, payment, and financing handled by us.

19:48 Every car flows to its highest value use across the continent. The value that we offer our dealer partners is based on three key pillars. We offer the largest EU-wide selection of at great prices. Around 50,000 cars listed daily across 30 plus markets, consistently quality graded, and AI priced in real time. Dealers buy at market value and with full transparency. Prices are adjusted to market conditions in real time based on more than 6 million realized transactions historically.

20:25 As part of the fully digital end-to-end experience, auction bidding, payment, transport, and documentation is all managed centrally in our platform. Dealers can focus on their customers. We handle everything else. Our AI-powered search and recommendation tools help them to find the right cars in no time. Through our in-house merchant financing product, dealers get instant working capital to buy more cars without tying up their own cash. It is the only fully integrated sourcing and financing solution in Europe, and it is a key driver of frequency and loyalty on our platform.

21:01 Over to Christian, who will walk us through how we built the infrastructure to scale, and what our expansion playbooks look like in practice. >> Thank you. We operate [clears throat] the largest European vehicle drop-off and delivery network, seamlessly connected to the biggest logistics infrastructure for cars. With a weight of 1 to 2 metric tons, our goods require a unique logistics chain. This physical network that we own and operate forms a very strong moat, and this is one of our many structural competitive advantages.

21:39 We operate more than 750 branches across Europe, where selling customers drop off their car and papers. 82 of these locations now serve additionally as Autohero pickup points, where retail buyers can collect their Autohero car. This is the buy Autohero co-branding model, which we believe is a powerful first step of bringing our two consumer brands closer together, targeting a seamless customer experience. 77 pickup locations are operated exclusively by Autohero, mostly in areas where the retail delivery volume is already very high.

22:19 Additionally, we operate 12 large production centers that currently run at around 50% utilization. Together, these form our incredibly strong physical moat, more than 10 years in the making. We have a proven playbook for scaling our business. While the drivers are different for scaling supply, merchant, or consumer demand, we possess unique knowledge on how to invest, apply, and monitor each driver.

22:51 These playbooks were developed over years and were optimized with every success and failure we went through. The same also applies to our infrastructure. We successfully scale our logistics network, a number of branches, our production centers, our retail delivery infrastructure in line with the needs of the business at improving unit economics. Every driver and market has a lean rollout playbook that is executed disciplined and precisely when needed.

23:24 Our strong organizational knowledge for scaling input drivers enables us to do both at once. Building quickly while we operate with increasing leverage at scale. Now we come to the heart of today's event, our long-term segment targets and the drivers behind them. For the first time we're disclosing full historic segment financials for both merchant and retail, and we'll explain unit and profit drivers within each segment P&L in detail.

24:00 Let us start with merchant. Merchant is the wholesale market leader, our cash generation engine, and as we will showcase in the next minutes, a business with a very large growth and profitability runway ahead. Across the last decade, three trends make up the development of the merchant business. First, strong unit growth. Units almost multiplied 25 times since 2014, from 29,000 to more than 740,000 cars sold in 2025.

24:39 The business grew every single year with the exception of COVID and the strong profitability push in 2023. Over the years it was tested by very different macro environments and has emerged from each one stronger and more profitable. Second, structurally rising profitability per car. Gross profit per unit grew from 749 euros in '21 to 976 euros in '25. Total gross profit reached 723 million euros in '25 up from 416 million euro in '21.

25:19 Third, a substantial increase of adjusted EBITDA per unit sold. 113 euros in '21, 257 euro in '24, and 320 euro in '25. The profit of every car we trade has almost tripled in 2 years. Let me walk you through 2025 totals on the next slide. Revenue was 6.4 billion in '25 up from 4.2 billion in '21. Gross profit was 723 million euros.

25:55 SG&A was 484 million euro, of which 104 million euro was marketing, 269 million euro operations, and 110 million euro overhead. That results in adjusted EBITDA of 239 million euros for the merchant segment, a 3.7% margin up from 158 million and 3.1% margin in '24. This is an absolute profitability improvement of 51% year-on-year.

26:30 The merchant business has a considerable amount of fixed cost leverage visible on the overhead line with total overhead just growing roughly 3% per annum over the full period from '21. Marketing is getting similarly efficient at scale, a testament of the strong brands and consumer trust we have built within merchant. Let me now translate the historic Merchant financials into per unit terms and show you the massive long-term opportunity.

27:01 Since 2022, we have increased GPU every single year, arriving at a level for gross profit per unit of 976 euro for 2025. In the long term, we are expecting Merchant GPU to reach levels between 1,080 and 1,200 euro per unit. On marketing, we have seen a continuous downward trend over the years, with marketing hitting a level of 141 euro per unit in 2025. In the long term, we're expecting marketing per unit to reach levels between 140 and 110 euro.

27:41 On SG&A in total, >> [clears throat] >> we have observed 653 euro in 2025. We expect SG&A to decrease to between 600 and 480 euro in the long term. And consequently, we're expecting adjusted EBITDA per unit for Merchant of 480 to 720 euro for the long term. A strong future upside and a continuation of the adjusted EBITDA per unit ramp over the last few years.

28:13 We are combining these long-term targets for Merchant unit economics with a growth rate corridor of 10 to 15% per annum. We believe that this corridor represents a prudent target that we feel comfortable achieving. Our goal, of course, is to be on the top end of that range and ideally outperform over time. Let's now go into the details. >> [clears throat] >> Start with units and lay out the total addressable market for Merchant.

28:45 We will first go through the TAM logic for demand and then we'll lay out an equally simple approach on the supply side. We are categorizing the 250,000 dealer pool of Europe into five categories: enterprise, large, medium, small, and local dealerships. Based on our own data and models, we roughly know the share of cars that each type of dealer is looking to buy externally as internal sourcing is typically limited.

29:16 The relevant amounts are indicated in the table column external sourcing demand. In total, these amounts aggregate to 10 million units per annum. This is the amount that, based on our modeling, the total dealer base of Europe is looking to buy from other sources than their own. The current market share that we reached within our with our 2025 merchant volume is around 7% of that, with higher shares in the small, medium, and large segments.

29:51 We believe that we are best positioned to grow that share to between 20 and 25% in the long term and still have 75% of the market to go thereafter. Let's look at the total addressable market from the supply side now. The continental European car park is 190 million vehicles. 24% of car owners are interested in selling over the period of the next 12 months, a rolling indicator. This equates to roughly 45 million cars potentially up for sale.

30:32 Out of this amount based on our own customer data and models, we assume between 20 and 30% of car owners are generally interested in our C2B selling product. This number is a result of several factors. Among them, for instance, the age of the vehicle they own and the preference for comfort in the sales process. Consequently, [clears throat] the resulting TAM for our C2B product is 10 to 15 million units per annum.

31:03 We assume that we can increase our market share to 20 to 25% of that TAM, which roughly equates to 2.5 to 3 million units bought per annum in our long-term outlook. After laying out the TAM logic for both demand and supply, let's zoom in a bit and explain the high-level input drivers for scaling units towards those long-term targets. We'll start with supply.

31:34 Broader marketing reach is a key input driver for us on the supply side. We already have considerable brand strengths with over 60% aided awareness in our largest sourcing markets. This makes it much easier to grow from here. However, unaided awareness is much smaller at [clears throat] only 22% for Europe population weighted. This means there's a lot more investment potential for higher marketing reach in the future. An increase in awareness generally leads to an increase in the number of customers interested in selling via our C2B product.

32:12 As an additional catalyst ahead, we're executing a plan to step-by-step integrate our AutoHero and C2B brands with the goal to fully integrate our C2B brands into AutoHero over a multi-year horizon. We're expecting significant synergies from this one unified brand for buying and selling over time. On top of that, we will continue to expand our branch network. The logic is straightforward and proven many times over.

32:43 The shorter the drive time to one of our drop-off points, the more customers are interested in selling to us. Today, roughly 70% of our customers are within 15 minutes drive time of a branch. We believe that we can shorten this distance further and enable a much larger share of the population to be in close reach by building 1,000 by building two the number of 1,200 to 1,400 branches in the long term.

33:15 That would enable 90% of customers to reach us within 13 minutes of drive time. So far, we have built over 700 branches with a lean, standardized rolled-out playbook. For both drivers, we have more than a decade of experience in building and growing them. Both are supply-side investments fully within our control with returns we can measure precisely. Let's now focus on the input drivers for merchant demand.

33:49 >> [clears throat] >> We have steadily scaled our buying dealer base from 20 dealers in 2012 to 54,000 buying dealers for last year. When we look at our demand base from a cohort point of view, then we can see that the dealers who stick with us are increasing their basket over time in a very stable way. This is the result from investments into three main areas. One, greater investment into sales and platform, better coverage of our dealer base and new platform features drive new dealer acquisition, higher activity, and better conversion.

34:28 More dealer demand also directly increases our pricing power on every car. Two, merchant financing has developed into a key demand driver. Dealers using our floor plan financing solution typically grow their basket with us by 40 to 60%. Financing eases our dealers' working capital constraint and increases loyalty to our platform. Fulfillment, number three, is a similar important driver.

34:59 Every investment in faster, more reliable delivery increases conversion, basket, and retention. Daniel Tenesly, as dealers can turn their inventory faster and can come back and come back for replenishment quicker. An important aspect of these unit drivers is that they reinforce one another. Greater investment in sourcing by broader marketing reach, and our expanding branch network increases the level of supply, and therefore selection on auto1.com.

35:33 Greater selection, together with larger investments into distribution, attract more buying dealers and larger baskets. More demand for more dealers means better prices for sellers, since pan-European demand allows us to pay more than locally in many cases. Higher volumes and better prices enable again more investment in sales, platform, finance, and fulfillment, reinforcing this flywheel effect. This is a genuine network effect in a physical market, which is rare.

36:07 Most marketplaces have network effects, but no operational leverage, because they do not touch the product. Most operators have leverage, but no network effect, because they're local. We have both. Every node of our infrastructure serves both sides of the market, and every car that flows through adds data that improves pricing for the next car we trade. While the flywheel accelerated, merchant GPU increased from 749 euros in '21 to 976 euro in '25.

36:42 We expect merchant GPU of 1,080 to 1,200 euros in the long term. We expect 50 to 100 euros improvement from better trading. Constantly improving trading systems route each car to its highest value channel and buyout. Improved demand forecasting optimizes our selection in real time, indicating needed volumes for specific car type dynamically. Improved AI pricing continues to increase seller and buyer conversion in parallel across 30 markets.

37:21 Every car we trade makes the next trade more informed. Overall, we're expecting a compounding return on our investments into trading, data, and technology. We expect a further 50 to 120 euros of improvement from financing and other products. Every transaction on Auto1.com is an opportunity to attach value, whether it is dealer financing, logistics services, or car and document handling.

37:53 These attached revenues carry robust margins because the transaction, the customer, and the infrastructure already exists. The incremental cost of attaching a financing contract or a transport to an existing trade is minimal. And penetration of these products remains at an early stage. Now, let's go to the cost lines of merchant. Let us start with marketing. We are setting a long-term target of 140 to 110 euro per unit for marketing.

38:27 This target [clears throat] corridor is based on three buckets of drivers that increase marketing efficiency over time. We are expecting the expanding branch network, the additional retail purchases triggered by our quickly expanding retail business, and our industry-leading C2B NPS to contribute to higher selling conversion over time. We believe that our multi-year brand unification plan will unlock substantial synergies between the two brands, and in the case of marketing cost for buying a car, lower the cost of marketing per car purchased further and in line with historic trends.

39:09 We expect retail trade-ins to become a more material source of cars purchased over time, essentially [clears throat] blending down the average marketing cost per car purchased, as they are purchased at near zero marketing cost per car. Let's take a look at the operations line next, so the variable cost of buying and selling a car in merchant. We are expecting operations cost per unit of 350 to 300 euro per unit in our long-term outlook.

39:43 We believe we can improve operations cost per unit by 20 to 70 euro in the long term while we scale the business further. We expect 10 to 50 euro of improvement in operations from one, applying AI process improvements and automation to our physical evaluation process with the goal to shorten the overall evaluation time, and two, higher utilization of our drop-off network capacity over time.

40:14 >> [clears throat] >> Additionally, we're expecting 10 to 20 euro of improvement from further sales and customer service process optimization leading to efficiency gains. The last merchant cost line is overhead. We are expecting overhead cost per unit of 80 to 110 euro in our long-term outlook. The strong reduction is in line with the trend of the past few years in which we have kept investment into overhead rather stable on a total base.

40:47 Drivers of this development are one we took the majority of the investments for building up the central functions already in the past years. Two, going forward the relative growth of investment needed for central functions to continue to perform is limited. And three there's further upside by applying AI and automation technology to central functions. So that completes merchant. Let's now switch to Autohero.

41:18 The structure of this part is very similar to merchant so we're first going to look at the historic disclosure and the long-term segment targets, a view of the TAM and then detail the different GP and cost drivers for the long-term unit economics. >> [clears throat] >> From our start in 2020 to over 100,000 cars delivered last year and Q1 setting another record, Autohero is the fastest growing car retailer in Europe.

41:48 In parallel to unit growth gross profit per quarter has steadily grown to 82 million euros for Q1 26 driven by a very strong ramp of retail GPO. Adjusted EBITDA per unit sold is on a remarkable trajectory as well starting with negative 4,100 euros in 21 based on heavy upfront investment. It is on a strong trajectory towards break even with loss per unit diminishing to -410 euros in 2025.

42:22 This trend is also visible in the adjusted EBITDA margin progression per unit. Starting with -29.3% margin per unit improved to Let's look at these numbers on an absolute basis. Over the 5-year trajectory, our retail revenues tripled to 1.76 billion euros. Retail gross profit reached 268 million euros in 2025, almost 18 times more than in 2021, driven by strong improvements in trading, consumer financing, and the sale of attached products.

43:02 SG&A was 309 million euros in total, of which 92 million was attributable to marketing, 69 million to production, 55 55 million to operations, 9 million euro to consumer financing, 52 million euro to logistics, 34 million euro to overhead. Adjusted EBITDA was -42 million euros, a -2.4% margin.

43:32 Let's look at these values on a per unit basis and frame the massive long-term opportunity for retail. Since 2021, we have increased GPU every single year substantially, with 25 GPU reaching 2,638 euro. In the long term, we're expecting retail GPU to reach levels between 3,880 and 4,470 euro per unit. On marketing, we've generally seen a strong downward trend versus the 2022 and 21 numbers, and have observed a level of 650 to 900 euro over the last 3 years.

44:10 In the long term, we're expecting marketing per unit to reach levels between 710 and 540 euro per unit. One thing to point out here is that we are including the marketing cost for buying retail cars in this value as indicated in the table. For total SG&A per unit, we saw values of around 3,000 euro for the last 3 years. We expect total SG&A per unit This includes marketing now >> [clears throat] >> of 2,430 to 2,060 euro in the long term.

44:46 Consequently, we're expecting adjusted EBITDA per unit for retail of 1,450 to 2,410 in the long term. A strong future upside and a continuation of the adjusted EBITDA per unit track of the last few years. We're combining these long-term targets for retail unit economics with a growth rate corridor of 20 to 40% per annum. We believe that this corridor, similarly to merchant represents a prudent target that we feel comfortable achieving.

45:23 Our goal is, of course, to be on the top end of that range and ideally outperform over time. Now, let's turn to the AutoHero total addressable market. We [clears throat] believe that 15 million units per annum are directly addressable with the current market footprint that AutoHero has. We expect another 5 million used car transactions from the C2C market to be addressable over time as we generally observe a trend of decreasing C2C shares.

45:56 Our biggest market, Germany, for instance, shows that trend nicely in recent years with C2C shares falling from 41% to 24% over the course of a decade. The reason for this trend is that consumers are increasingly choosing what dealers provide. Trusted selection, warranty, financing, and convenience. Autohero is best positioned to capture this huge overall demand pool offering the most trust and convenience at the best price Europe-wide.

46:29 Now, let's look at the different drivers of retail long-term unit economics starting with trade GPU. Trade GPU increased from 346 euro in '21 to 1,866 euro in '25. We expect a trade GPU of 2,400 to 2,680 euro in the long term. We expect 290 to 450 euro of improvement from better sourcing driven by a bigger retail database resulting in higher pricing precision precision and lower error rates. More data can improve pricing materially as already demonstrated in the merchant segment.

47:15 We also expect the share of trade-ins to increase strongly with more scale and believe that enabling cross-border sourcing is a positive trade GPU driver in the long run. We [clears throat] expect to add 240 to 360 euros per unit from better trading. Optimizing selection with more scale, more precise demand forecasting, improved trading systems, new platform features, rising brand recognition combined with positive word of mouth, and faster delivery are all strong positive drivers for trade GPU over time.

47:56 Now, over to Christian Valentin for details on GPU finance. Thank you, Christian. So, consumer financing has become a key value driver in the retail segment. We started by attaching external bank financing and earning a referral commission, as the kickback line on this page. Then we built our own captive finance business and the GPU per car stepped up considerably from just 12 euros of internal interest per unit in 2021 to 210 euros in 2025. An 18-fold increase in 4 years.

48:31 The reason we can capture that margin, rather than collect a referral fee, is that our own product is simply better for the customer. And a better product is what lead and lets us keep the economics. Financing is embedded directly in the Autohero flow, approved in minutes, with terms built around the specific car and customer, because we own both sides of that transaction. That converts better and that's why the captive lines keeps taking share from the referral line year after year.

49:00 Our captive markets today are Germany, Austria and Spain. The long-term outlook is 870 to 1,100 euros of finance GPU per retail unit, four to five times the 2025 captive finance levels. We get there on three levers, rolling up from three markets toward all nine Autohero markets, increasing attachment within those markets, and letting the blown book mature, because financing income is earned over the life of each loan. So, today's origination build a stock of recurring high margin revenue that compounds for years.

49:38 Strategically, financing changes what Autohero is. A car sale is a transaction. A multi-year financing relationship is a customer. It deepens retention, drives potential trade-ups, the next purchase, and turns out to hearing to relationship-driven business fueled by data and knowledge. This is one of our largest value pools in our retail model, and it's already proven market by market. Let me now take you through the levers underneath our long-term GPU finance target of 870 to 1,100 euros.

50:13 And what to expect on each of the business as the business scales. I won't pretend this slide is simple, and that's partially the point. The complexity you see here mirrors the complexity of the roll-out itself. Building a captive finance business across market is genuinely hard operationally and structurally. But that difficulty is exactly why it's defensible. Let's talk with the attachment. Group-wide, we're around 40% in Q1. In our captive markets, we already exceed 50%, while internal external only markets run at 20 to 51%. So, the group figure is the blend of high internal attachment and lower external markets.

50:54 Spain is the latest proof that the model travels. It has ramped up according to plan over the past year, and is now trending higher very quickly with over 20% of customers now taking our internal internal financing offer. Our long-term target is 50 to 60% attachment rate across the platform. On how the book grows. Think of it as a sizing tool. Auto hearing units times attachment times the average loan, that gives you the annual originations, the new lending we write in a year.

51:26 Then you have to multiply that by our origination to AUM multiplier, you get the total loan book outstanding. That multiplier was almost 1.4 times in Q1, and moves towards 2 and 1/2 to 3 times long-term as the business matures. Put plainly, we're earning on this year's new loans plus all the still loans from prior years. Net interest margin then tells you what you actually earn on the book, 5% today. Austria at 5.2, Spain at 5.8 with a long-term range of 5 to 7%.

52:03 Now risk, this is a low risk by design. The Q1 cost of credit was 1.2% with a long-term expected range of 1 to 2%. The structural reason it it stays low is twofold. First, we know the asset and the customer better than any bank could because we bought the car, we inspected it, refurbished it, and priced it. And that same data continuously sharpens our scoring and underwriting. So, the book is expected to get better as it grows.

52:33 Second, we are the dispositional channel for the collateral. When a loan defaults, the car car come back to our own remarketing engine, so we expect our loss given default to be structurally lower than a generic lenders. Then the two separate deficiency stores. One is operating cost. OPEX per loan is 74 euros today and heading toward 50 at scale, driven by platform automation. The other is capital. The business is structurally capital light.

53:06 Through our securitization program, our own equity in the portfolio steps down with each generation of our securitization structure from 16% in the warehouse to 5% in our outstanding finance year two structure to 1 and 1/2% in our just announced finance year three, enabled by vertical risk retention. As that structure rolls across the book, we expect the whole portfolio to settle in at 1 to 2% in the 1 to 2% range long-term, trending toward the 1 and 1/2% that we expect finance year three to deliver.

53:41 Each of these levers is already working in our captive markets, which underpins our 870 to 1,100 euro long-term GP outlook. Now, back to you, Christian. >> Thank you, Christian. The third driver of retail GPU is GPU other products. We're expecting GPU other products of 610 to 680 euro in the long term.

54:11 We're expecting 160 to 210 euro of improvement from higher attach rates from our premium warranty products and an increase of warranty duration. Additionally, we expect a launch of our subscription model for warranties and improved bundling of warranty and financing services as long-term contributors. We're expecting 60 to 80 euro of GPU other products increase from smarter selling of second wheel sets in Europe and 20 euro additional contribution from various other attached products like registration, insurance, or maintenance.

54:54 Let's now switch to the cost lines of the retail long-term P&L and start with marketing. We are expecting a combined marketing cost per unit for retail of 710 to 540 euro in the long term. This value includes the marketing investment needed for retail selling and the market spend needed for retail buying. We see three main drivers to reach this level over time. One, we believe that our plan to establish Autohero as a selling brand will turn the existing C2B marketing funnel into a low-cost buyer pool over time.

55:32 Additionally, we're expecting a higher share of repeat buyers over time, lowering overall marketing cost per car. Two, we're expecting our brand strength to compound over time, lowering overall cost per unit in retail. Brand, once built, is a durable demand generator that does not need paid acquisition. Together with increasing consumer readiness to buy cars online, our brand audience itself grows every year, which increases the return on every euro spent in brand.

56:08 On top of that, our industry-leading NPS reinforces trust and word of mouth, reducing the share of customers acquired through paid advertising over time. We're expecting that our growing retail customer base deepens our advertising insights into segments, preferences, and needs as a third lever, unlocking sharper targeting, messaging, and execution, and in turn lowering retail marketing cost per unit over time.

56:44 Now, let's go to production cost. We define production cost here as the combination of two components, the cost of materials, parts, and external refurbishment work recognized in COGS, and the SG&A portion covering labor and production center costs for work done in-house. One thing is worth noting. As we bring more production in-house, costs shift from COGS to SG&A over time.

57:16 You can see this in the chart. However, the total comes down, and that's the important message here. We are expecting a production cost of 930 to 870 euro in the long term. We're expecting 10 to 30 euro of improvement in COGS through optimized spare parts procurement and a further lowering of the share of external work. We're expecting 120 to 160 euro of improvement in SG&A production through AI-powered workforce planning, a complete rollout of our proprietary car audit inspection technology, lean process improvements and structurally lower mechanical complexity with growing EV shares.

58:07 For logistics, we're expecting 340 to 290 euro of logistics cost per unit in our long-term outlook. This [clears throat] number includes payroll and other OPEX for logistics. We expect 170 to 220 euro of improvements through one, the densification of our production and pickup center footprint, reducing driving distances by up to 1/3 and generally shorter distances mean lower transport cost per car, faster delivery times and more satisfied customers.

58:46 Two, synergy effects of combined flows and dedicated fleets between inbound and outbound logistics at scale. And three, higher utilization of pickup locations with growing scale. Now, let's look at the operations cost per unit line. We're expecting 450 to 330 euro of operations cost per unit in our long-term outlook. We're expecting 80 to 160 euro of improvement in retail sales and customer service by applying AI process automation, for instance, using agents in non-business hours.

59:29 We're expecting 20 to 60 euro of improvement in purchase operations to higher utilization and purchase process improvements. These are the same drivers we have outlined above for the purchase purchase portion of the merchant operations piece. The final cost line is retail overhead. We're expecting 130 to 100 euro of retail overhead cost per unit in our long-term outlook.

59:59 We are expecting an overhead cost per unit reduction of 200 to 230 euro per unit in the long term. The strong reduction is in line with the trend of the past 4 years in which we have kept investment into overhead stable on a total basis while scaling units strongly. Similarly to merchant, drivers of this development are we already took the majority of the investments for building up the central functions in the past years.

60:32 Going forward, the relative growth of investment needed for central functions to continue to perform is limited and there's further upside by applying AI and automation technology to central functions. Let's close the auto-euro section with an important effect to know about. The speed at which we grow retail is a headwind to short-term unit economics as a high share of SG&A per unit cost occurs roughly 60 to 80 days before the before the corresponding revenue and gross profit is realized.

61:13 In other words, sourcing, marketing, production, inbound logistics, and the purchasing part of operations cost occur in the P&L when we buy and recondition and recondition our fresh cars. On top of that, a portion of the sales marketing builds up demand that lies in the future. These customers are customers that started to be in the market for buying a car, but will take weeks and months for the final decision. Put together, this means the faster we grow, the more of these costs we carry for cars not yet sold. And the bigger the short-term headwind to unit economics will get.

61:54 In numbers, this means growing at a 20% rate per annum is a roughly €250 per unit headwind. 30% means around €350 and 40% around €450. As a rule of thumb, every additional 10% of growth adds about €100 of short-term headwind. We generally believe it makes sense to grow faster given where we are right now. And given that we're expecting a major step in all of the drivers out 94 when we approach the critical threshold of 1% retail market share.

62:32 We expect that critical threshold to be somewhere between 250,000 and 300,000 retail transactions per year. This is a perfect segue for our milestone group targets. While we so far laid out long-term targets for both segments and the corresponding drivers in detail, we also want to give you a better sense for what the business will look like on the path towards these long-term targets, which we call milestone targets.

63:05 We are not linking them to any specific year, but to the number of units that we think will enable these levels of unit economics per segment. When we will reach these will ultimately be driven by the sequence of growth rates over the coming years. So, while this is not formal guidance, this is roughly where we expect to be as a milestone on the path towards those long-run targets.

63:35 You can see here there's a range of growth rates and no specific date, but it should be helpful as you think about the trajectory to help build your models. Based on a merchant growth corridor of 10 to 15% annually, our milestone target for merchant is 1.2 million units per year at a GPU of 1,025 euros or above delivering 400 plus euros of adjusted EBITDA per unit.

64:07 Based on a retail growth corridor of 20 to 40% annually, the milestone target for retail is 300,000 units per year at a GPU of 3,300 euros or above delivering 800 plus euros of adjusted EBITDA per unit. The group milestone target roughly corresponds to the low end of our 5 to 9% margin target while the low end of our long-term targets would be within that 5 to 9% range and the high end of the long-term targets would exceed that range.

64:47 But we think giving you goals in absolute euros is more useful for models than percentages. And while we absolutely stand by our prior percentage targets going forward, now that we offer a lot more disclosure, we think keeping the focus on your targets makes it simpler for everyone. After 14 years of investment into our vertically integrated business model, we have established an unmatched platform that maximizes value for car buyers and sellers across Europe.

65:21 We are incredibly excited to continue our journey towards these targets outlined today and with that unlock the massive potential in one of the world's largest and most fragmented markets. Thank you very much for your attention. We will now go over to the Q&A section of this event. >> Thank you and if you could just have the read out of how to ask questions and unmute yourself.

65:55 >> Before we begin with the Q&A portion of today's call, I'd like to go over a few brief technical points. If you haven't already done so, please submit your question using the Q&A tool located at the bottom of your Zoom screen. Philip will call on participants in turn. Once your name is announced, I will unmute your line and end of end of the floor to you. Kindly ensure that your microphone is enabled and that you're ready to speak when when prompted. Thank you.

66:24 >> Yeah. Thank you and actually we'll start with five questions that we got from Joe Barnet Lamb from UBS. Unfortunately, I think he always seems to have technical issues with the Zoom tool. So, I'm just going to ask the questions on his behalf. The first one would be the timing on targets. What is the timeline for the milestone and long-term targets? If we apply a midpoint of the growth target corridor to 2025 units, this would imply you will achieve your milestone targets in 2029.

66:56 So, should we think about 2029 as the target year for the milestone targets? How about long-term? We are then having a question on cash conversion. The guidance you have given us obviously helpful, but there's nothing disclosed with regards on cash flow cash conversion. Over the long term, what cash conversion are you targeting and what are the building blocks? And we're then coming to the I guess auto retail market in general. There's a decent amount of debate around the auto retail market at present. Can you help us understand in your volume targets what you assume for the underlying market?

67:34 Uh I think then back to our business production capacity and CapEx. If you sum your production capacity on slide 20, it's roughly 250k. Obviously, your milestone target is 300k. Can you talk about expectations for production facilities going forward? And also pick drop-off locations and how that plays into CapEx. And finally on customer penetration, I think especially in the merchant segment, when you look at slide 27 and your share of external dealer sourcing, it's obviously a bell curve from smallest to largest customers.

68:06 Is that a natural shape you expect to remain or are there product gaps and other specific blockers that are currently impeding your penetration from the smallest and largest customers? I think Christian uh Yeah, we can pass this over to you. >> Yeah, >> [clears throat] >> thank you, Philip. Um Thank you, Joe. Um maybe we should also um you know where to start um answering some of the questions directly, Philip, and then maybe we do like two at a time or so because at some point, you know, um um it gets uh too much to write down.

68:44 Maybe it's simpler. But yeah, timeline on target, I think um yeah, that's pretty much um uh something that I uh yeah, referenced at the um end of the presentation. So, we're not giving um any specific timelines in number of year um for the milestone or for the long-term targets. However, we have given uh you a growth rate corridor um which uh I think uh you can definitely work with. So, assuming a um yeah, the low end or the high end or something in between will get you to a specific year.

69:26 Um and we believe that this is the best way how to um yeah, represent um an answer um this question. Um I think that were like the first two pretty much, yeah? So, again, we're operating with annual growth rate corridor assumptions here, which are yeah, in the case of merchant not too far apart and in the case of uh retail, that the spread is a bit bigger. You know where we are currently um in terms of growth rate, so yeah, you can uh pick uh you can pick pretty much like a a growth rate assumption here um that you find um relevant.

70:10 On the cash conversion, I think that's best for um Christian Valentin to answer. >> Thank you. Now, so we've we introduced two pages on on cash in the appendix and we will be introduce those as well in the in the version that is on the web page. So, we just wanted to do that. Uh in summary, since we turned adjusted EBITDA positive, we have generated a cumulative 367 million of adjusted EBITDA, as you can see on this page here and generated 104 million of free cash flow. So, that's a conversion of of almost 30%, so 28%.

70:48 So, in the long term, as growth normalize, we see this increasing to 40 to 50%. And I I I'll actually think we will come back to this page when we get questions on ABS structures and cash flow, but let's let's pause that for now. >> On the development of the auto retail market, um I mean we've yeah, shown you a couple of numbers on the market volumes um in the slide deck. Um we expect um that uh over time the market will return back to its long-term CAGR of 2% from current levels. Um we do not see yeah, any like major disruption um uh affecting volumes here. So, yeah, based on our models, I mean, we could work with a stable market from here, but we think it's going to uh also our long-term, you know, the assumptions we laid out on the TAM on the different >> ones are based on the current working uh on the on the current market size numbers.

72:00 So, um we could work with a stable market from here, but we think that the market will return to its long-term CAGR of 2%. And on production um capacity um and uh CapEx, so uh for the and I think your question was on the on the milestone, um we uh assume that we will have around 20 uh production centers.

72:30 So, we're going to then build yeah, roughly eight, nine, 10, something like uh this and uh yeah, the uh CapEx needed for each center is somewhere between 2 and 4 million euros. As a reminder, we're working here with you know, brownfield and not greenfield opportunities. So, this means we're converting existing facilities um which is a low-cost approach and yeah, it's working fine.

73:08 >> And then at the end of the day, briefly want to talk about the customer distribution on page 27. >> Yeah, can you repeat that question? Maybe that was >> So, I think the question is basically whether we will continue to focus on the medium-shape medium-sized customers, and are there any special barriers for us to work with the largest or the smallest customers? And Maria, maybe we can move to page 27. >> Yeah, that would be nice.

73:45 >> I think it's the next one. >> The next one, yeah. Or the one before. Well, no, the one after that one, I think. With the merchant groups, right? >> Yeah. >> No, I think you need to go back a little. This one. I think this one is the the one in question. Yeah, I mean, we have higher market shares in those small, medium, and uh large uh groups because these are just making up the bulk of the volume, right? So, um that's why we are concentrated more on those.

74:26 We think um enterprise customers are an interesting segment, but um yeah, we would need to yeah, adjust and invest and develop kind of our yeah, Auto 1 sales platform um a bit different for them. So, this has been something that was on the yeah, what it is on the table, but it's not something that we at the moment prioritize given how much Yeah, growth uh potential we have in in the large, medium, and small. So, we would think that the structure of those shares that you currently see here only grow in line of with in line with the current distribution. Yeah. So, if we double it, then we'll double it but relative from the value where it is today.

75:20 >> Thank you. And thank you, Joe. Thanks for the questions. And we will now move to Andrew Ross from Berenberg, please. And I think Andrew, you had about six questions or so, so maybe we can split them into three blocks of two. >> Hi guys. Can you hear me okay? >> Yes. >> Yes. >> So, while you give me a chance to have one sanity after those five, I'll keep it to three. Um uh can you give us a sense of the phasing of the improvement in EBITDA per unit that you're talking about between 2025 and the milestone year, whatever that is? Is there kind of a back-end weighting to it as you scale across investment you've made into brand marketing and into the customer and connectivity? That'd be helpful to understand. And then I guess that leads into question two. Can you tell us what level of units um you would expect a retailer would break even on a EBITDA basis um uh on under IFRS? Second question.

76:15 I mean, the third question um was to come back to that slide in the appendix on the cash conversion. Um I I can't see that yet on the website. It would be quite helpful to go through that in more detail. So, kind of hear you that the answer is a conversion of 40 to 50% from from EBITDA into free cash flow. But can you walk us through in more detail the CAPEX [clears throat] and then I guess particularly the working capital and how much capital you're expecting to absorb as you scale inventory, receivables, and then I guess something going the other way on payables, that would be helpful to understand in more detail. Thank you.

76:47 >> Okay, so block number one, um Andrew, so the phasing of improving um unit economics from where we are today um and to the milestone target. So, um as indicated in the script, we would think there's stronger progression on each of those drivers the closer we're getting to um the critical threshold. Um so, somewhere between 250 and 300,000 units, we would expect to get uh a majority um um of the improvements. Um yeah, this is what I would uh say as a as a trend, yeah. So, uh I we as we approach those units, we're getting stronger ramp of um all of the drivers outlined above. And before that before that, we'll also um see improvements, but um of a yeah, lower absolute um improvement. And And the reason, for instance, if you think about in logistics is just that we need to have to like approach a certain density of the transaction network, yeah. So, logistics I think is an easy example to understand that, you know, now at 100,000 units and then at 2.5 to 3x of those units, the the driving distance is just smaller and there's more potential to bundle um uh uh yeah, inbound and outbound fleets and that leads to this ramp and uh and reduction of the delivery uh and logistics cost per unit. And that's something that then is yeah, really like kicking in as a as a stronger lever, um, the more dense it gets. So, it's not a linear improvement. I think that's what I'm pointing out here. Um, yeah, what level of unit um, will we be break even in Autohero?

78:58 I think if you look at the numbers, you can see that we're pretty close. Um, if you uh, calculate in the the the headwind to short-term unit economics and the growth rate for 2025, then uh, you can assume not growing would actually uh, be uh, on an adjusted EBIT uh, EBITDA break even already. Uh, however, we choose to grow because of exactly of the answer to question one.

79:29 And uh, yeah, if you look at the trajectory, then yeah, we have been on a constantly improving track and I would say we're close, but again, it depends also on a level of growth and yeah, we try to um, maximize growth under the uh, the side target of overall group profitability. Yeah, so that's what we're trying to manage in the best possible way.

79:59 And uh, yeah, I hope this answers your question. >> So, let's let's move to the uh, more on the cash question. So, this is related to to both our operational cash flow and then the ABS structures and the net debt. So, so I think this will be a slightly long-winded answer, but I want to do this because we received a lot of questions historically from various um, levels of knowledge. So, I'll I'll try to go through it in a structured way.

80:34 So, first of all, I think most importantly, we are cash flow positive and our projections, we self-fund our growth. So, so that's the takeaway. So, just to to illustrate that point, we ended 2022 with slightly less than 550 million cash or so on the balance sheet. We had 652 million cash on the balance sheet at the end of Q1 '26. We raised no debt other than the ABS funding against our assets and no equity in that period. So, that is 110 million cash generation from 2023 to Q1 '26 on top of what we invested into very strong growth in our business and expansion, particularly in our capital finance activities.

81:17 So, now to the to I'll go through the the facts of the explanation. We have three types of ABS structures for inventory, merchant finance, and consumer finance receivables. So, one, non-recourse funding if funding from the ABS facilities collateralized by assets. So, receivables uh, and inventory. So, those you see on the balance sheet. And non-recourse means that the corporate entity of AutoZone is not liable for credit losses. Uh, that is lenders cannot force an event of default on AutoZone if the underlying assets underperform or lose significant value.

81:53 So, these structures are funded by banks and public investors who like the risk of cars and also in the auto financing secured by cars. Three, there's no need to use cash to repay or put any more cash into these ABS structures. The underlying receivables on the cars being sold are what pays the banks and investors with interest. So, if needed, the debt is self-liquidating against specific inventory and financings and receivables. The structures have been successfully tested in the toughest of environments, meaning COVID, and we've been riding through that with with style.

82:29 So, therefore, very logically, this non-recourse non-recourse debt is not part of one, corporate net debt, or two, the cash flow we need to fund as we grow. This is also supported by the rating agencies. For large US car dealers, we have no rated peers in Europe, by the way. They always exclude inventory financing from debt ratios as they view it as working capital like item. So, the agencies also strip out captive finance assets and liabilities from the corporate credit ratios under a captive finance policies.

83:03 So, this is This is the difficulty here now that I'm going to say. So, the The economic reality is what I've described now, and it's not as obvious in the accounting for a couple of reasons. So, one, we consolidate these structures chiefly because we control the servicing of the underlying assets we would absolutely want to do because we see better credit performance if we control the contact with our clients. So, the accounting rules do not reflect the economic risk of the setup given we only risk that what what was put into these structures originally at the inception.

83:35 And under IFRS, we show any increase in assets like inventory or captive finance as a cash outflow in operating cash flow, while the related ABS funding is shown in cash from financing. Hence, the impression is that we are cash flow negative from IFRS perspective. From an economical and a management point of view, and hopefully also your view, the assets and the funding are directly linked. So, as out to one corporate and shareholders, we will only fund the net proportion of these assets which have not been funded by the banks or ABS investors.

84:07 Hence, we focus on something we call out to one managed cash flow. It looks at the net movement of the assets and AB ABS facilities. On this basis, we've been cash flow positive since at least 2023. And you Taking the example that I had in the beginning proves that point. So three conclusions on this. So we're doing this in a capital light way. We only invest cash at the inception into the equity of the structures. The large majority, depending on which structure we talk about, is 80 to 99% depending on if it's a the for example the finance year three structure that's in the market now will be a vertically risk retention so that's up to 99%.

84:52 And it's funded by the banks and external investors. So there's no further claims on us than the assets in that specific SPV. Conclusion number two, we are cash flow positive and we self-fund our growth as these are evergreen ABS structures and they scale with the business growth. And three, accounting rules do not show the economic reality of the business as we forced to consolidate them even though we control the service though we hold because we control the servicing of the assets.

85:22 So that's just the the facts of the matter and the conclusions from them. So we are in order to simplify this for for you and for people that follow us, we're publishing managed cash flow with the results on a web page on a quarterly basis. We will also include more explanatory slides in the earnings presentations. We have already started that so please look out for information there that will go into more details. In addition, we're also considering a having a modeling session in the future to explain these technical questions in a more structured way. So today was very much about the the segments and giving you that segment detail. And we'll consider to go back to these 10 more technical modeling topics as well.

86:09 So with that I I I think Philip, if I missed something that you think is relevant then please add on. >> Um, I mean I think it's very good uh and I hope uh easy to follow uh introduction to the topic for everybody. And maybe just uh two comments. I mean, one, this is actually not new disclosure. So, if you actually followed our webpage, we were always publishing this Excel spreadsheet with the quarterly earnings numbers, which included this Auto 1 non-IFRS cash flow. It's also normally contained in the highlight section of the financial report that we're publishing each quarter.

86:46 Uh but I think going forward, it's something we will also take into the earnings presentation to really uh make sure that everybody understands the point and sees uh our view on cash flow. And I think the other thing just to mention, because I actually don't think a lot of you realize this is just how also operationally we are linking the asset side and the ABS fundings. So, this is not a case where we just uh every 2 weeks or so collect our information and then go to the banks and uh get an advance rate. But we literally uh if we have to pay for a car that we're purchasing today, we actually tell the funding SPV in the morning, "Look, uh this is the cars we're paying for today, and this is the cars for which we got paid yesterday. And so, this is the net change that we need to fund today."

87:38 So, it's fully integrated. And then, for example, if a merchant selects to use merchant finance, we literally on the same day just have a transfer of money from the merchant finance ABS structure to the inventory ABS structure. So, again, that runs fully automated and fully integrated. And this is why we are really focused on uh saying, "Look, those two always belong together." And I think uh one of the challenges we always have from a tech and structured finance perspective is to make sure that as we develop new products, we always keep that pipeline of making sure that as we generate the assets we immediately also raise the refinancing and operate in this really efficient and kept light manner. And that is what I think hopefully everybody will kind of agree that looking at this Auto1 cash flow and the net changes in the inventory and capital finance assets makes much more sense than uh looking at the assets separately up in the up in the operating cash flow and then the ABS funding down in the finance cash flow.

88:41 But I think this is really the point about uh why I think we are so comfortable in our ability to self-fund the business and uh I think just don't really often understand a lot of the questions about when will you be free cash flow positive because my perspective we have been free for cash flow positive for 2 and 1/2 years. >> Well, in other words, IFRS was not built for used car dealers. >> Yeah. Uh after that uh long discussion explanation, I think James, you had James Tate from Goldman Sachs had two questions.

89:15 >> Were these all questions from Andrew? Or did you have more? >> I think he said he only had three because the other questions I think had been answered. >> Okay. >> I think we had one on on the CapEx as well. I mean, we historically have guided to 20 to 25 basis points and that has proven to be quite generous historically so we never really got on there. So, that ties with the number that Christian gave in absolute terms as well.

89:45 >> And so, that was meant to be 20 to 25 basis points of revenue or about 20 to 25 million probably this year. >> Yes. >> Uh James? >> Great. Yeah, thanks for looping and thanks for the presentation. Um I've got three questions, please. I guess firstly and following up slightly from Andrew's question on retail EBITDA per unit, could you give give color on where you think you'll end up this year or where you're trending so far through 2026 in terms of retail EBITDA per unit compared to the minus 400 euros in 2025.

90:16 That'd be really helpful. Secondly, in terms of the SG&A lines for the retail business, noticed operations and production costs per unit have gradually increased over the last couple years. I guess firstly, what's driven this and then you've outlined how these costs decrease over the long term, but in the nearer term do you expect these to have peaked in 2025 or is there further investment required here to drive growth? And then lastly, Christian, towards the end you mentioned that strategically you think it's best to drive faster retail units growth. So is it fair to assume that retail units should continue to grow towards the top end of the 20 to 40% corridor over the next couple years?

90:53 Thank you. >> Um yeah, thank you. Um James for these questions. So um I totally can understand the curiosity of retail GP uh uh of retail EBITDA per unit for for this year. Um we're going to disclose that. Um I think what we can say so far that I mean Q1 was a was a very good development.

91:24 Um but um as also coming back to your your third question, right? We try to balance growth and profitability to the best way possible on the way to the milestone target. So this uh growth rate corridor that we have given, 20 to 40%, um if you yeah, look back at the last couple of quarters, um we definitely have seen uh increased reach rates within that corridor, also north of the top end of the corridor. So we try to best balance um profitability and growth as we go forward. And um Mhm, yeah. Also, as indicated in the script definitely, we would want to be on the high end of that um high end of that corridor, but at the same time, we also want to see some okay to good progression on the EBITDA per unit in order to make the full group EBITDA per unit growth. In that sense, now that we have the full disclosure, um we can also say that obviously, the uh um preference for uh growth in Autohero that cost them more um has a negative short-term headwind as illustrated also depends on the profitability and cash generation from the merchant business. Yeah, so let's say like if if we're advancing there faster in EBITDA, then we can also let retail grow faster. And the other way around, now in Q1, uh merchant GPU was, as explained, a little bit down. So, then this um yeah, introduces also like a bit of a side condition um where we say, "Okay, um how much can we grow on retail given the EBITDA?" So, this is kind of all the variables that we try to manage in the best possible way. We're leaning towards the higher end um of that growth corridor um and because we strongly believe that we will see um su- substantial improvements on retail unit economics the closer we get to the critical market threshold uh market share threshold of, you know, 250, 300,000 units um per year. So, I think it's too early to to uh uh uh think about um retail EBITDA for the year, but we uh expect that we are continue our our progress that we have been showing now for the last couple of years um and balance it nicely with the growth. On the SG&A production cost side, maybe we can quickly go there um Maria. I think the point that you asked Can we go to the slide, please?

94:29 um Maria. Uh yeah, this one. Um I think the point that you asked uh was really the SG&A production portion per unit that it's slightly increased um in 2025. So, overall, we can explain this again. The blue part that you see and the blue part with COGS production per unit in '21 and in '22, that is essentially the ramp-up of the internal refurbishment capacities. Yeah, anything externally um how we did it at the beginning in '21, I think also in the um quarterly um reports for those years, you can really see that we reported on the um that we reported on the uh internal versus external shares and how we progressed on reducing the external and increasing internal share. Pretty much, this is the financial story behind building the internal refurbishment capacities. So, the blue uh dark blue bar uh going down, and then um we started to um yeah, increase our SG&A production per unit, which includes then strongly payroll, but also uh, you know, overhead cost of a production center and these are total capacity, the on top capacity that we find uh, in rent and in facility.

96:07 Um, and this portion has increased slightly in 2025 um, because of lower utilization. So, we built up more capacities towards the end of the year um, that we are now utilizing um, in a better way. And um, then uh, a special effect inside that is also that yeah, there's temporary workers that um, we are um, from time to time needed to use over the last couple of years, which are uh, really expensive, much more expensive than our core personnel in case we did not we were not able to hire enough capacity fast and that's something that I think we've uh, are in the process of managing much better, but that explains kind of these numbers. So, important part for us is that we have arrived um, on uh, levels that uh, we consider very good versus 21 and 22 uh, and we're seeing further upside, but not even that much further upside because yeah, ultimately it's a process, it's a quality standard that we think 100 to 30 to 190 euro are possible um, uh, for the full block.

97:29 I hope this answers your question. >> Great. Thank you, James. And uh, with that uh, Wolfgang Specht from Berenberg. Wolfgang, how are you? >> Yes, hello. Good afternoon. Uh, thanks for taking my question. I have two if I may. Um first um on the refurbishment and you explained. Um can you give us an idea if you have to do extra investments not only at the centers but also on the drop-off locations to get a better diagnostic of the cars and let's say keep the keep the weak cars out of the system.

98:14 Um and second point uh your largest driver for gross profit per unit is definitely retail finance. Um how do you expect to cope with competition from retail banks that have been really weak in this discipline over the last years but uh uh supported by AI tools and and better front ends maybe retail financing could get attractive for a couple of um your customers as well. How do you want to to keep um customers in your system?

98:50 >> Yeah. Let me take the first question. Um So, within our current evaluation process um we're not expecting incremental investments that we need to do or let's say uh material investments that would be you know changing any of the numbers that we just set out in targets. We're not expecting that we need to materially invest in our drop-off network to increase the quality of our cars. So, every retail uh or that we are buying for retail or that is as the um yeah target channel retail is being checked at the production centers very thoroughly with all the equipment needed. So, this is where we have it. There's a small share of cars that we sort out. Uh But overall for us, this is the more efficient way of dealing with that problem.

99:51 So those cars would then be reevaluated and sold back to merchant. Um And this is the Yeah, this is mostly more efficient solution versus Yeah, having many production centers times 700. We have tried this and we know that this is the more optimized and streamlined workflow. Second question, competition from retail banks. >> Yes, thank you, Volker.

100:22 So you're correct that that this is an important value driver and I think the the answer is that we see that when we use external bank One, first of all, it's it's it's a protected sale, so to speak. So this is up to hero units that we sell. So we don't let anybody finance that specific car. So if somebody wants to buy a car, and it goes back to the the superior retail experience that we have, which is driving our growth as well. So when we are selling it, we see that the the our internal so captive finance solution is much better product. So this is driven from both being better embedded and quicker to approve. That drives higher attachment rates and that's not possible for an external bank to replicate in our system.

101:14 So I think we're we're comfortable that we can offer better product without any buying the car without finance and then going financing it somewhere else. So we certainly believe that the attachment rates that we have in the captive markets in Germany, Austria, and now growing in in Spain as well, is indicative of the future potential because it's reflecting a better product. >> Thanks a lot. >> Uh, anything but that's Missla Nazir from Deutsche Bank.

101:49 >> Thank you. Um, and thank you for the very helpful presentation as well. I have three questions from my end. First is on used car pricing. Could you kindly tell us what sort of assumptions for used car pricing over time you are incorporating when considering these absolute long-term targets that you're giving us? In other words, if the average prices of used cars go up, is that incorporated in the the range of the EBITDA that you've eventually given for each segment and vice versa? Some color there would be great. Um, my second question is on your milestone 300 300,000 Autohero car target. Does this include launching in new geographies and moving into different subsegments of um, the consumer-facing used car sales that you're doing? In other words, maybe lower-priced used cars or is it with the current sales trajectory of used cars that you're selling? And lastly, similarly, to reach the merchant uh, milestone volume target, will you have to start buying cars from new markets or will the nine sort of sourcing markets that you currently have be sufficient?

102:54 Thank you. >> Yeah, thank you, Missla. Three very good questions. So, um, yeah, we we generally see a a trend of, you know, rising used car prices um, over time. Um, that depends on how the new car cohorts are developing, but we deliberately um, have baked that in uh, the uh, long-term targets. So, um, I think it's very hard to really uh, map out kind of how the used car prices will develop over every single year um, that we have modeled behind. So, that's why we chose to make it simpler for everyone.

103:39 And the answer to your question is yes, we have incorporated any price trends. So, it's not like that. Now, if used car prices are increasing more than we would expect our milestone or our long-term GPU targets to increase further. We want to make sure that um yeah, we keep things simple um for everyone involved and and and try to um yeah, get the ASP um out of the equation. Um on the milestone targets, um we're not assuming any new geographies for retail. Um we're also not assuming any new geographies on the sourcing side for merchant. Um we might want to experiment with cheaper used cars in retail, but with actually very young used cars. Um or also um yeah, with uh yeah, with different uh uh forms of, you know, owning the car, which might be subscription, but um that's something that so far is only an idea and is also not baked into the target so like as a requirement. So, for the targets, it's really um uh the current business setup um and its long-term profitability potential.

105:02 >> Thank you, very helpful. >> Thanks. And then Marcus Diebel from JP Morgan. >> Yeah, hi everyone. Um just two questions left. Um one question again on those targets. Uh Christian, um I appreciate you obviously don't don't guide for for certain years and it's it's okay. Just to really understand that this these growth rates, 20 to 40% and 10 to 15% growth. These are not K guys. I.E. if you reach the milestone target 1.2 million cars, you feel comfortable uh that inversion that on that number you're still growing at 10 to 15% and then similar um in retail once we reach 300,000 cars, you're comfortable to grow that number still by 20 to 40%. It reads like this and maybe it's just too simple question, but I just wanted to to clarify this.

105:52 And then maybe the second question um um is more specific is on the GPU in other in the uh retail business um a lot of um growth comes from premium warranty. Could you just tell me a little bit more how it works because you incur clearly the the fees for the premium warranty at the beginning and the cost come in later. How do you actually reflect that in the GPU numbers? Just a more technical question, I guess. Just these two that the rest has been answered. So thank thank you.

106:30 >> Um so on the uh K car growth rate question, so yes, that's uh indeed more how we mean it. Like uh you just said it. So we also um assume that after reaching the waypoint that these growth corridors are still um valid. So um while I think some you know market participants will assume slightly declining growth rates typically for any business over time.

107:05 Um so we we stand uh behind those corridors and think um they are uh intact for the waypoint uh or will remain also um the same from for the waypoint and then also beyond. Um And uh yeah, on the uh very specific uh uh uh GPU other questions, so obviously this is a bundle of products that we're selling here, um but specifically to um warranty uh provisions, we are to my knowledge, but uh please uh uh Christian and uh Philip uh chip in. To my knowledge, um they are pretty much a uh uh yeah, a recognition of the revenue over time, and also provisions uh uh over time. So, uh they are being booked as, you know, cohorts, and um the revenue, but then also the assumed uh cost and all provisions for the future cost of those warranties are directly booked in there.

108:23 Um but maybe >> That's correct. >> Philip, do you want to answer that? You want to answer that? >> I wanted to make sure both is pro rata, but that sounds like it. Okay. >> it is. >> So, I think the important answer is the gross profit contribution is not just the revenue, but it's also the provision for the expected claims that you need to pay out. >> Yeah. Okay, thank you. And then clearly you have those the others in there as well, so second set of wheels, registration, insurance, maintenance, that sort of thing.

108:52 >> Yeah. >> Yeah, okay, thank you. >> And then uh we got Murat Lamidi. >> Uh yes, good afternoon, and uh thank you for for taking my question. So, I have two questions. Uh the first one is on on the internal financing. So, on the slide uh where you show the the attach rate, which is 40%. Just want to make sure that the 40% is on the on these market when where you offer the internal financing and and not on on all markets.

109:30 Um are there any market where where you have restrictions in terms of offering uh the the direct financing? Um and also a a question on on how the the finance GPU when it when it it's accounted internally is accounted for is it the net present value of the future net interest margin or is it the current year net interest margin? So, that that would be my first question. >> Okay, that's very simply uh Murad, I think on the first question, the tile that we're showing with the attachment rates, as we said, that 40% is actually external or internal financing across all markets.

110:13 So, that just shows the fundamental demand for the products. So, 40% of all our customers are already financing today. And then we're kind of showing that, for example, in Germany and Austria, we're having the internal product actually achieving above that total level. Kind of like as a proof point for our ambition of 50 to 60% in the long-term attachment rate on financing. And then if you're looking at the external only markets, uh they're ranging from 20% to actually also over 50% uh in one of the Nordic markets.

110:47 >> And then we're looking to to clearly replace the external with internal given that we will uh capture the full profit pool. >> Yeah. And then the net interest margin or the gross profit contribution that we're having, that is the actual net interest realized in the period on the actual complete loan book. So, we're not just having some net present value booking of forward looking. And that is why we're saying, look, if you actually build up that loan book, uh that obviously then generates an annuity stream over the next uh 5 to 8 years.

111:24 >> Okay, very very clear, thank you. So So I have a second topic, uh which is the the the strategy of integrating C2B with retail more and more going forward. Uh can can you please elaborate on how how this will help the business grow faster or deliver higher margin or or being more efficient? Thank you. >> I mean, in a nutshell, uh Maritz, there there's a lot of uh uh customers in our sales funnel also interested in buying a car.

111:57 Um Uh when they are evaluating their car, so let's say like 1 to uh 1 month to 6 to 8 weeks before they are actually then finally occurring with their sale. So, let's say we have a a lot of customers on the C2B side or a lot of customers, potential customers, evaluating their car while they're in the market for um their new car. So, they typically tend to solve that problem or that new car first because they don't want to be without car, and then thereafter they are um yeah, finding the best uh selling solution um for the residual car if the dealer did not take their old car as a trade-in. So, there's a a a big pool of customers that maybe, you know, synergy level one, um that are interested in buying a car when they are already in the process of finding out the value of their old car. So, now all of these sessions and uh uh yeah, traffic at the moment happens on C2B. And of course if it was happening on Autohero under the side condition that Autohero stands for both and that customers in Europe actually understand um that Autohero can also buy cars, then there's a lot of future um synergy. Similar synergy we see in the physical space. So we have 700 branches plus that we operate and they're all branded with the C2B branding and the C2B brand is very strong.

113:41 Uh however, if it was an integrated or at some point then uh full Autohero branding, then we would also get the uh benefit uh of additional awareness coming from the physical uh representation of the brand onto the sales funnel. So yeah, it's just better um if um everything were to happen under one brand. However, um the C2B brands that we have, they're high-performance uh conversion machines if you want so.

114:19 So this means that we will um uh address this and execute this very carefully over time. The synergy potential that we see is expressed by the combined long-term reduction for both marketing numbers in the long-term targets for each segment. >> Okay, thank you very much. Very clear. >> Thank you. >> Well, that actually brings us to the end of the question list as well. So uh I guess just on time as well. So uh I think Christian Christian, thank you very much. Uh I think that's a very insightful but also I think for everybody quite heavy session. So I think there's a lot to digest obviously.

115:03 Uh Maria, myself, and Fatima, we're available if you have any questions or issues. I think we also got quite a full schedule of conferences and meetings coming up over the next 2 weeks, so I'll probably see quite a lot of you in any case. Uh Otherwise, we got the Q2 and first half numbers then coming up at the end of July. So, yeah. Thank you very much for participating, for listening in. I hope uh this was a useful and interesting session. And thank you, Christian Christian and Maria for all your support.

115:35 >> much, everyone. Um yeah, I think indeed it was uh uh very useful and and helpful session. Um we hope that uh we have made it a bit simpler for you uh and everyone else out there tomorrow at the one. Um yeah, we're absolutely excited to continue to march to these long-term targets. But, uh now, without further talking, let's close the session. Thank you very much. See you soon.

116:05 >> Thank you, everyone.