AUTO1 Group (LON:0A9L) reported higher second-quarter unit sales, gross profit and adjusted EBITDA, citing growth in both its merchant and retail businesses alongside lower inventory and continued cost discipline.
Chief Executive Officer Christian Bertermann said the company sold approximately 240,000 vehicles during the quarter, up 20% from a year earlier. Revenue rose 23% to €2.4 billion, while gross profit increased 21% to €281 million. Adjusted EBITDA climbed 38% year over year to €58.6 million, producing an adjusted EBITDA margin of 2.4%, up 30 basis points and the company’s strongest second-quarter margin to date.
Merchant business reaches quarterly records
In AUTO1’s merchant segment, which sells vehicles to partner dealers, unit sales reached 207,000, a second-quarter record and a 17% year-over-year increase. Merchant gross profit rose 17% to €198 million, while gross profit per unit, or GPU, was broadly unchanged at €959 compared with €961 a year earlier.
Merchant adjusted EBITDA rose 28% to a quarterly record of €67 million. The segment’s adjusted EBITDA margin improved 30 basis points to 3.7%.
The number of active buying partners using AUTO1.com increased 22% year over year to 36,300 dealers. Bertermann said average basket size was slightly lower as the company added new dealer partners, while demand per dealer generally increases as dealer cohorts mature.
- Merchant financing portfolio: €317 million, up 20% year over year.
- Merchant sales financed: €370 million, up 13%.
- Vehicles financed: 33,000, up 14%.
- Merchant SG&A per unit: €633, down 4.4% year over year.
Management said merchant growth exceeded its longer-term annual unit growth corridor of 10% to 15%. The company expects a sequential improvement in merchant GPU during the second half, as investments made during the first half to speed trading begin to contribute and inventory levels remain lower.
Autohero retail sales grow 40%
Retail unit sales through the Autohero consumer business rose 40% from a year earlier to 33,400 vehicles. Retail gross profit increased 34% to €82 million, while retail GPU was €2,503.
The retail segment’s adjusted EBITDA margin improved by one percentage point to negative 1.5%, from negative 2.5% in the prior-year quarter. The adjusted EBITDA loss per vehicle narrowed to €266 from €436 a year earlier. Management attributed the improvement primarily to operating leverage, with SG&A improving by €207 per unit year over year.
Bertermann said aided awareness of the Autohero brand reached 36% across its markets at the end of the quarter, an eight-percentage-point increase from a year earlier. Average delivery time was just over 10 days.
Retail marketing cost per unit was €884, as the company continued to invest in building the Autohero brand. Management said it expects retail unit growth in the 20% to 30% range year over year during the second half, with growth lower in the third quarter than in the fourth quarter.
While management continues to target a longer-term retail growth corridor of 20% to 40%, Bertermann said the company is balancing growth against the goal of improving retail profitability and moving toward its milestone target of more than €3,300 in retail GPU.
Inventory reduction and financing structure
Total inventory ended the quarter at €803 million, down €252 million, or 24%, as the company improved trading speed. The inventory asset-backed securities, or ABS, drawings tied to inventory were reduced by €225 million. AUTO1 funded €111 million of its inventory itself, which Wallentin said resulted in a cash release during the quarter.
Management described the current inventory level as a low point and said it expects inventory to grow from this base broadly in line with future unit growth. Bertermann said newer vehicle cohorts sourced through the company’s updated trading system are turning “substantially faster,” though he declined to quantify the improvement in days.
The company carried €1.8 billion of assets across inventory, consumer finance and merchant finance pools, with 84% funded externally and without recourse. AUTO1 had no corporate debt during the second quarter and generated €24 million of cash, ending the period with €676 million in cash.
In early July, AUTO1 completed its third public ABS transaction, FinanceHero 3, backed by German and Austrian consumer car loans. Wallentin said the new six-tranche structure and vertical risk-retention approach reduced the company’s effective cash contribution to 1% for that issuance.
Guidance reaffirmed
AUTO1 confirmed its full-year guidance and said it is targeting the upper end of its ranges. The company expects:
- Merchant units of 815,000 to 865,000.
- Retail units of 125,000 to 135,000.
- Total group units of 940,000 to 1 million.
- Gross profit of €1.1 billion to €1.2 billion.
- Adjusted EBITDA of €250 million to €275 million.
Management said the underlying European used-car market was stable to slightly declining, depending on the country, with high fuel prices and uncertainty around electric-vehicle adoption affecting demand. Bertermann said AUTO1’s growth is therefore driven by market-share gains rather than a broader market tailwind.
About AUTO1 Group (LON:0A9L)
AUTO1 Group SE operates a digital automotive platform for buying and selling used cars online in Europe. It operates AUTO1.com for the sale of used cars to professional car dealers; Autohero.com for sale of used cars to private customers; and wirkaufendeinauto.de, an online platform to sell their used cars to consumers. AUTO1 Group SE was founded in 2012 and is based in Berlin, Germany.
