Cazoo(US:CZOO)2022-04-07 16:32Financial Data and Key Metrics Changes - In 2021, the company achieved group revenues of £668 million, representing over 300% year-on-year growth, primarily driven by UK retail revenues which increased by 234% [21] - The company sold 49,853 cars in 2021, a 233% year-on-year growth, including 34,731 retail units, which is a 187% increase year-on-year [21] - UK retail gross profit per unit (GPU) improved to £427 in 2021 from a loss of £229 in the prior year [22] Business Line Data and Key Metrics Changes - The in-house car buying channel launched in July 2021 has significantly increased sourcing capabilities and diversified the buying mix, leading to an increase in available inventory to over 6,000 cars, up from 2,000 in October [21][11] - The subscription service has over 10,000 active subscribers, making the company the leading consumer car subscription business in Europe [13] - The company now operates 11 in-house reconditioning sites across the UK and EU, up from just one a year ago, with the capacity to recondition over 120,000 cars annually [14][15] Market Data and Key Metrics Changes - The addressable market across the UK and Europe is estimated at over £300 billion annually, with the UK alone having a used car market of around 8 million transactions worth over £100 billion [17] - The company aims to capture a market share of 5% or larger in this fragmented market, where no dealer has more than a 3% market share [18] Company Strategy and Development Direction - The company is focused on transforming the car buying and selling experience across the UK and Europe, with strategic goals including bringing vehicle reconditioning in-house and expanding into new markets [5][10] - The company plans to launch into Spain and Italy later in the year, having already established a presence in France and Germany [17] - The long-term target is to achieve a GPU of £2,000, with potential to expand to £3,000 if consumer financing is brought in-house [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to weather potential macroeconomic downturns, citing the resilience of the used car market during recessions [36][38] - The company anticipates continued growth in market share and revenue, with a target of around 100,000 retail units sold in 2022, driving total revenues towards £2 billion [30] Other Important Information - The company raised $630 million from the issuance of convertible notes, providing significant funding to capitalize on growth opportunities [31] - The company has established a strong brand presence with over 80% national brand awareness in the UK and a Trustpilot rating of 4.8 stars [9][7] Q&A Session Summary Question: Contingency planning for inflation and potential recession - Management believes inflation will not materially impact GPU, and used cars typically perform well in recessionary environments [36][38] Question: Fixed vs variable cost components - A significant portion of spending is on marketing, with some flexibility in variable costs [39][40] Question: Retail unit sales growth expectations - Management indicated that retail unit sales are expected to grow quarter-on-quarter, with a strong outlook for the second half of the year [58] Question: Competitive dynamics in the market - The competitive landscape remains largely unchanged, with the company focusing on capturing market share from offline dealers [62] Question: Impact of interest rates on the business model - Interest rates have a minor impact on stocking loans, and higher rates may increase consumer finance attachment rates [63] Question: Breakdown of GPU components - Management does not provide a specific breakdown but expects non-metal components to be higher initially, with metal growth expected in the second half of the year [67]