AUTO1 Group Aktie

Good morning, Hello, and good afternoon, good morning and good evening to international participants. Welcome to the AUTO1 Group Second Quarter 2026 Results Presentation. I'm Philip Reicherstorfer, Group Treasurer. I'm joined today by Christian Bertermann, our Co-Founder and CEO; as well as Christian Wallentin, our CFO.

As always, we will start with the presentation followed by a question-and-answer session. [Operator Instructions] Before I hand over, I must make you aware of the safe harbor provisions at the beginning of the presentation here. These will apply to any forward-looking statements made by management today.

And now over to you, Christian.

Hi, everyone. Thank you, Philip. Welcome to the AUTO1 Group Second Quarter Earnings Call. Our second quarter results were very strong. We delivered increasing operating leverage across the business at scale. We sold 240,000 units at the group level. This is up 20% year-on-year. Total gross profit reached EUR 281 million, an increase of 21% compared to Q2 of last year. And we grew adjusted EBITDA from EUR 42 million in Q2 '25 to EUR 59 million this year, representing an outstanding 38% increase. Our adjusted EBITDA margin climbed to 2.4%. This is 30 basis points higher than last year and the highest Q2 margin we ever achieved.

These great results continue to demonstrate the strength of our value-first strategy and the structural advantages of our vertically integrated business model that we laid out in detail at our Capital Markets event back in June. This is our first quarterly trading update since our CME. So alongside our Q2 results, we have also disclosed the adjusted EBITDA on segment level for the last 4 quarters in this presentation to give everyone a complete set of quarterly profitability data.

Let's start with a deep dive into Merchant performance and segment financials. We sold 207,000 cars to our partner dealers in Q2. This is a new Q2 record and represents a 17% year-on-year unit increase. Merchant gross profit grew to EUR 198 million for Q2, increasing by 17% compared to the previous year. Merchant GPU was EUR 959 for the quarter, stable versus EUR 961 million in Q2 of last year. Merchant adjusted EBITDA surged to EUR 67 million in the second quarter, a new quarterly record. This is EUR 14 million or 28% more compared to Q2 of last year. Adjusted EBITDA margin increased by 30 basis points to 3.7% in Q2 for merchant.

The strong growth in our Merchant segment is driven by constantly rising demand for our B2B offering. This momentum is reflected in yet another record-breaking quarter for the number of merchants buying on AUTO1.com. Our network of active buying partners across Europe reached 36,300 dealers in the second quarter, a 22% increase compared to Q2 of last year. As we continue to expand our buyer base, the average basket is slightly down year-on-year, driven by the strong growth of new dealers. Unit demand per dealer is generally increasing when the dealer cohort ages in time as we also laid out in our Capital Markets event.

Our merchant financing portfolio continues to perform well, growing by 20% year-on-year from EUR 264 million last year to EUR 317 million in the second quarter. We provide eligible partners with an instant credit line integrated directly into our platform. This allows them to finance vehicles with just one click and enables our partners to grow their business significantly with our Floor plan financing solution. We financed EUR 370 million of Merchant sales, a growth of 13% year-on-year. The number of vehicles financed increased to 33,000 units, a 14% increase compared to Q2 of last year.

Overall, we are very happy with the performance of our Merchant segment in the second quarter. We outperformed our long-term unit growth corridor of 10% to 15% by growing 17.1% year-over-year. We slightly increased Merchant GPU quarter-over-quarter, which is a very good result considering the following factors. Q2 seasonality generally puts a small drag on to margins created by an accumulation of holidays during Q2. Macro continued to have a limited but controlled impact on Merchant in Q2. Our results could have been even better in a more stable environment.

We invested into a number of initiatives over the course of H1 with a shared goal of speeding up our trading. These initiatives have been resulting in a short-term GPU drag. We have completed the majority of those investments in H1 and hence are expecting a sequential GPU increase for Merchant in H2, combined with higher capital efficiency already visible today and significantly reduced inventory levels. We expect to grow inventory from its new base today in line with future unit growth rates. This means that the strong Q2 performance on profitability was primarily driven by disciplined cost management.

We lowered our SG&A per unit to EUR 633, a 4.4% decrease compared to Q2 of last year, reflecting economies of scale in our purchasing organization and overhead. Marketing cost per unit were roughly stable quarter-over-quarter.

Overall, we are progressing well towards the Merchant milestone targets with Q2 SG&A just EUR 8 million ahead of the SG&A milestone target. Our goal is to keep that level for Q3 and combine it with a sequential increase on GPU as we expect short-term GPU headwinds to moderate down.

Now let's switch to Retail segment results and financials. Autohero is our consumer growth engine, and we are still barely scratching the surface of its massive long-term opportunity. The structural advantages of our vertically integrated model, including sourcing, pricing, our physical infrastructure and financing continue to compound as retail scales. This is clearly visible in our strong Q2 results. We sold 33,400 vehicles to customers. This is 40% growth compared to Q2 '25 and a testament to the increasing traction of our Autohero brand. Retail gross profit reached EUR 82 million, a 34% increase year-on-year. Retail GPU was EUR 2,503 for the second quarter, a strong result in light of the outstanding unit growth in Q2. Adjusted EBITDA margin of the Retail segment improved significantly compared to Q2 of last year by 1 percentage point from negative 2.5% to negative 1.5% this year, demonstrating operating leverage by managing our cost base more and more efficiently. We remain fully focused on establishing Autohero as the leading used car brand in the European market. The Autohero brand is at the core of our vertically integrated model, setting the standard for a superior way to buy, sell and finance a car.

This brings customers peace of mind while serving as a durable engine for demand as brand equity continues to strengthen. At the end of Q2, aided brand awareness reached 36% across all our markets. That is a new high and an 8 percentage point increase year-over-year. While increasing brand recognition remains a strong driver of demand, the speed and convenience with which we deliver our vehicles to customers is equally important.

Our average delivery time currently stands at just over 10 days and ensuring a seamless end-to-end delivery experience remains a top priority as it underpins our best-in-class customer journey. Zooming out a bit, we are very happy with the retail set of results for the last quarter. We kept growing slightly north of the high end of our long-term growth corridor. We realized that growth while keeping Retail GPU almost flat year-on-year and quarter-on-quarter. We are happy with Retail GPU given that there have been a number of short-term headwinds to it. As laid out in the CME, every 10% of additional growth means a roughly EUR 100 short-term headwind to unit economics, partially affecting GPU. Similar to Merchant, Q2 seasonality generally puts a small drag on to margins created by an accumulation of holidays during Q2. Macro continued to have a limited but controlled impact on Retail GPU in Q2. Our results could have been even better in a more stable environment. We invested into a number of initiatives over the course of H1 with a common goal of speeding up our retail trading and unlocking a bigger step-up in Retail GPUs going forward. These investments into those initiatives have been resulting in a short-term GPU drag. We have completed the majority of those investments in H1 and hence, are expecting a sequential GPU increase for Retail in H2, combined with higher capital efficiency, again, already visible today and significantly reduced inventory levels. We expect to grow inventory from its new base today in line with future unit growth rates. With Retail GPU being flat year-on-year, the EUR 170 improvement on adjusted EBITDA per unit is primarily driven by the EUR 207 improvement of SG&A, demonstrating operating leverage in retail for Q2.

We continue to invest strongly into the Autohero brand with marketing cost per unit of EUR 884 as we are laser-focused on building the leading European used car brand. At the same time, our adjusted EBITDA loss per unit improved significantly from EUR 436 last year to EUR 266 in Q2. Now let me sum up with a short walk-through of our vertical integration strategy, the basis for reaching our milestone and long-term segment targets. For more than a decade, we have invested the leading vertically integrated pan-European used car platform with one objective, maximizing value for everyone in this market. Our investments are focused on key areas, including our AI pricing technology, our unique logistics network, our dense drop-off and pickup network, highly efficient production centers and comprehensive financing facilities.

Together, these capabilities form the backbone of our vertically integrated business model. They shape how we think and how we make decisions at every level of the business. We apply our value first strategy across all our segments, relentlessly focusing on the levers that create value for our customers. While we have executed this approach since day 1, we're continuously sharpening our understanding of what our customers want and expect.

In our business, value can take many forms, higher selling prices, lower buying prices, reduced processing costs, greater selection and convenience, highly motivated staff, increased trust, faster and more reliable delivery or competitive financing. It is this thinking applied at scale that underpins the ambitious long-term targets we have set. We're highly motivated to continue our journey of capturing the massive opportunity in the European used car market as we progress towards 10% market share.

Let me now hand over to Christian Wallentin, who will give you a detailed financial update.

Thank you, Christian, and hi, everyone. Q2 was another quarter of strong growth with further operating leverage in the business. The key message overall is that we saw volume, pricing and cost discipline compounded into a strong 38% adjusted EBITDA growth year-over-year. We sold roughly 240,000 units, up 20% year-on-year. Revenue grew even faster than volume to EUR 2.4 billion for the quarter, up 23%. Gross profit was EUR 281 million, up 21% at a group GPU of EUR 1,174. Operating expenses were EUR 222 million, that is 18% growth against 21% gross profit growth.

This demonstrates our disciplined cost management and the operating leverage of the business. Adjusted EBITDA was EUR 58.6 million, up 38% year-on-year at a margin of 2.4%. That is 30 basis points better than Q2 last year and the strongest second quarter margin we have ever delivered. Overall, we pay very close attention to the capital deployed in our business, and we have changed the presentation here so that you can separate total assets from the parts we fund ourselves.

Starting with how we think about these facilities. We view our ABS structures across inventory, consumer finance and Merchant finance as evergreen working capital financing. We grow them with the asset base and reduce them only when the assets reduce. This quarter, the inventory closed at EUR 803 million. Given the improvement in trading speed that Christian described, we reduced total inventory by EUR 252 million or 24%, and we reduced the linked inventory ABS draws by EUR 225 million as a consequence. This means that we funded only EUR 111 million of EUR 803 million of inventory ourselves, leading to a cash release in the quarter. Consumer Finance, total assets grew to EUR 700 million, of which EUR 576 million was externally funded. Both the ABS funded portion and our own portion increased. Our own funding was EUR 124 million. I want to flag one point of timing here. With the closing of FinanceHero 3 imminent at quarter end, there was no reason to optimize ABS consumer funding in the final days of June.

For Merchant Finance, the portfolio reduced slightly to EUR 317 million, of which EUR 259 million was ABS funded. The reduction is mainly faster repayment by our Merchant partners, which we read as a positive signal on the health of the dealer market. We optimized funding nonetheless, taking our own funded portion down to EUR 58 million.

Taken all together, we carried EUR 1.8 billion of assets across the 3 pools and funded 84% of that externally and without recourse. This demonstrates our approach to utilizing our ABS structures as a key driver in keeping our business capital-light and efficient as we continue to scale. We had no corporate debt during Q2. This page is our self-funded growth model working in practice. Capital-light funded from the cash we generate, becoming more profitable as we scale. To be precise on what that means, the assets are largely funded externally, as I've just described.

But the business funds itself is the growth from the cash we generate with no external funding raised. On the left-hand side, you can see that we generated EUR 24 million of cash in the quarter, taking total cash to EUR 676 million. On the right-hand side, we have outlined the AUTO1 cash flow we use to assess business performance and cash flows. This is aligned with the view we've set out at the Capital Markets event that we publish every quarter on our web page. It shows the earnings generation of the business and our net investments into our 3 asset pools: Inventory, Consumer finance and Merchant finance. Under IFRS, the gross asset change sits in operating cash flow and separately, the ABS funding and financing cash flow. These facilities are working capital in character, the assets and the funding move together. So we manage them that way, and we present them that way on this page. The bridge itself is straightforward.

Adjusted EBITDA contributed EUR 59 million. Cash items below the adjusted EBITDA line, for example, capital expenditure, tax and general working capital changes were an outflow of EUR 29 million. The changes across our 3 funded asset pools used EUR 6 million net with the inventory reduction releasing cash and the consumer loan book absorbing it.

That takes us to the EUR 24 million of cash generated in the quarter. As I indicated earlier, the consumer finance outflow was a timing effect. It has unwound with the closing of FinanceHero 3 after the quarter close. In early July, we priced our third public ABS transaction, FinanceHero 3. The transaction backed by German and Austrian consumer car loans originated by Autohero was met with very strong demand. What makes this transaction particularly significant is the evolution of our structure. For the first time, we introduced a 6-tranche capital structure, and we adopted vertical risk retention, which means holding 5% across every tranche and then refinancing the retention through a repo facility.

The effect is that we now retain 1% effective cash contribution. At the Capital Markets event, we said vertical risk retention should take that to an average of 1% to 2% in our public ABS structures over time. FinanceHero 3 lands at the bottom of that range at the first issuance under this new structure.

Now to full year guidance. The first half of the year has developed as we planned, strong unit growth and cost discipline. On that basis, we're confirming our full year guidance across all metrics. We're targeting the top end of our ranges. We expect Merchant units in the range of 815,000 to 865,000. We expect for Autohero units, we expect 125,000 to 135,000 units. We, therefore, expect 940,000 to 1 million total units. We expect gross profit of EUR 1.1 billion to EUR 1.2 billion -- based on continued strong SG&A management, we expect adjusted EBITDA of EUR 250 million to EUR 275 million.

In Merchant, we expect sequential improvement in GPU driven by faster trading speed, combined with unit growth at the top end of our 10% to 15% growth corridor for the second half of 2026. In Autohero, our focus for the remaining part of the year will be on continued growth and increased GPU levels, moving faster towards a milestone profitability target. During the second half, we're likely to see year-on-year growth for Retail in the 20% to 30% range of our long-term growth corridor. We have exercised strong cost discipline in the first half of 2026 and expect to continue to operate at current levels of SG&A per unit for the rest of the year.

Putting these strong performance parameters together, we expect to complete the year towards the top end of the guidance ranges. To wrap up the presentation, Q2 was another quarter of strong growth, cost discipline and profitability. We also materially increased our trading speed. As outlined, we expect it to come through on GPU increases in the second half of the year. Our vertically integrated business model continues to deliver a highly differentiated customer offering, driving operating leverage while steadily progressing towards our long-term targets.

With that, I'd like to open up now for questions.

Before we begin the Q&A portion of today's call, I'd like to go over a few technical points. [Operator Instructions].

Philip,I think you are on mute.

Sorry, Thank you. Sorry about that. Thank you for that. I was going to actually start with 2 questions from [ Joseph Barnet-Lamb ] at UBS, which she e-mailed to me, and then we'll go into the general Q&A session.

So the first question is, clearly, there's a trade-off between GPU and growth. But at the same time, the new inventory management system seems to be structurally set to aid GPU. At a given level of growth, how many euros on GPU is the new inventory management system worth versus the old?

Yes. Thank you for the first question. I mean, as you outlined in this written question,[ Joe ], I mean, it is a constant trade-off between the 20% to 40% growth corridor that we laid out and the GPU track that were onwards. We cannot quantify the exact GPU lift or -- I mean, we will not comment on it. I think we could, but we will not comment on it. But yes, it works in that sense, negatively correlated, right? So there's this headwind that we laid out on the CME, like growing faster just makes us invest up, makes us invest into more inventory into production capacity, et cetera, that is roughly quantified at overall unit economics of EUR 100 for every 10% growth.

But yes, then we are expecting a faster track on the GPU going forward when having now reconfigured with the new trading system. So -- and then an important point is we are sticking also when we are looking at the year-end guidance and the Autohero unit growth expectation that we have for the year.

We're landing pretty much at the high end of the growth corridor that we just outlined. We outlined 20% to 40%. And then we're going to hit somewhere close between 130,000 and 135,000 units, and we're going to be at the high end of that growth corridor for the full year, while we are now concentrating on GPU improvements to be -- to create a good track towards the GPU milestone target that we outlined. And the H2 reduction in growth where we're expecting 20% to 30% from the 40% does not mean that we are in any way stepping back from the growth corridor that we just outlined on the CME.

So the 20% to 40%, they stand for the years to come. We will be targeting the high end of that, but we will balance it versus the profitability improvement track because we want to create Autohero as a much more profitable business going forward. And overall, we can say that with respect to Retail, everything is going according to plan.

Thank you, Christian. That actually also answered the second question, which was whether we could get back towards the upper half of that growth corridor in 2027.

Yes, totally. I mean, totally. In order to speed up the trading, we invested into a number of these initiatives, one being the new trading algorithm that we're rolling out. We're rolling that out, obviously, not from 0 to 100% day on day, right? Like we're phasing it in. We're seeing -- we're managing, we're tracking it carefully that it does exactly what it does. And that's why there's a certain transition time. The first effect that you will see is lower inventory. This is what we're seeing right now. The second effect that we will see is faster turn speeds that are then ultimately realizing higher GPUs. And this is something that, yes, we are expecting to see for Q3. And so far, I can only say that the start of Q3 has been good.

Good. Great. So with that then, I think we have a few questions from Marcus Diebel at JPMorgan.

If you can just go back to the inventory, Christian, I understand, obviously, there are a lot of improvements, but is that really the story of a 24% decline in the inventory? If you can just elaborate a little bit more and maybe help us to understand whether we are now at a sort of like stabilizing level going into Q3. It would be helpful maybe related to this, you obviously put out Slide 18, which is very helpful. The AUTO1 funded inventory went from EUR 138 million to EUR 111 -- is that then just slightly the working capital effect on inventory, just to understand that better.

And then next to inventory, a second question. Obviously, you spend more on marketing, which clearly is fine. What some data should suggest that paid search is getting much more in focus over organic search, A, is that right? Would you say that you focus a lot more on this and the share of paid search goes up in the mix? And if so, why is that the case given that you obviously spend more and more on brand advertising, TV adverts and so on?

Yes. No, I think very good question. Thank you, Marcus. So yes, on the inventory, I think we covered a lot of the -- like the Autohero dynamic with respect to GPU from the inventory we have now. I see, I think very much see the low point of the inventory. And from here on, we're expecting it to grow in line with the unit growth levels. So yes, in that sense, I think the best assumption is to assume like a linear growth from here where we build it up. So the system that we have now carefully rolled out over the course of H1, changes the mix and the profitability and the incoming profitability of the cars and different clusters that we are buying.

In that sense, it's very much effective on selection, and it requires fast return speeds. And yes, we are seeing that effect, yes, very good effect in my point of view on the absolute inventory, but you can now then assume going forward that we will grow this in line with units/revenue. Does this answer your question? Or do you have any?

Yes. Yes.

So Low point inventory.

That's how we think about it. And then Christian on Slide 18.

Yes. No, we do think about this as working capital of the business. So the inventory is -- when it shrinks, then it releases cash. Normally, clearly, going forward, we will expect to invest the margin on this, so the net funded based on this. And clearly, we have a large facility to support that growth when we've reset the trading speeds.

Yes. Just to understand, obviously, lower inventory obviously means cash inflow, but it would be just on the EUR 138 million minus EUR 111 million -- so just a smaller effect, just to understand it.

Yes. There's some allowances in there as well. So it's not all cash. So there's slight deviation between cash and the balance sheet items as well.

You're right. So the delta is like we funded EUR 138 million in Q1, and now this number stands at EUR 111 million. So the delta is what we have received as cash, correct?

Yes. I mean just subject to, as Christian said, there's obviously always some allowance movements which are already in the P&L, which are reflected in the adjusted EBITDA portion of the cash flow and then not in the net funding position, but that's kind of...

I couldn't fully reconcile, okay?

Yes. It's because some of those allowances flow through above the adjusted EBITDA line already in that cash flow chart.

Okay. Yes. And then just on search.

On marketing. So I mean, we -- our primary focus is brand marketing, as you correctly stated. So there might be deviations depending on what type of data that you look at between the level of paid versus organic that we get. But yes, generally, like brand is the more valuable traffic, and that's what we focus on. Over the summer period, you see -- you could see like a relative weakening of the share of brand because a lot of people with higher net worth and income they are on holiday and that's potentially what drives this effect.

But yes, this is nothing that we need to worry about. So also in marketing, we're actually quite happy. We're still investing strongly, but we think the goal that we're investing to is a multitude in terms of return versus the amount of funding that we're putting down here.

And with that, Andrew Ross from Barclays.

You’ll be pleased to hear I’ve got more questions about inventory turn. First one is, I guess, a follow-up on [ Joe's ]. I appreciate it may be hard to quantify an absolute GPU number in terms of the improvement. But you must, at this point, have a good idea about how much more quickly you are turning cars that are in those early cohort of cars that went into the new trading system. Can you give us a number in terms of what is the improvement in inventory turn from this trading system? That's the first question.

And then the second question is to narrow down your expectations for retail growth of 20% to 30% in H2 and to talk about Q3 specifically, where I guess you have some visibility at this point because you know how much you sold in July and how much inventory you sit on in terms of the rest of the quarter. So should we think about year-on-year growth in retail units being at the low or higher part of that 20 to 30 range based on what you know today?

Second question.

And then third question is a bit more of a hypothetical one. But I guess you've made a conscious decision to bring down inventory to the magnitude that you have. And now you're at a point where you're going to be below the midpoint of your midterm growth corridor in H2. And I guess the question is why you've done that and why you weren't able to transition the trading platforms and keep growth in the midpoint or above?

Yes. Thank you, Andrew. So you're asking specifically about the number of days that inventory turns now fast and if I can give you that number. And the answer is that I cannot give you that number. But what I can give you is that the fresh cohorts that we're sourcing with the new system that they're turning substantially faster. Now we're ramping up volumes. And yes, the level of speed increase has met slightly exceeded our own expectations.

So we're actually really happy how we started Q3. But sorry, I cannot quantify the exact days. Obviously, we have that, and we're looking at that. But we're looking at it in very different -- in various ways.

And yes, if we look at the trajectory of retail units going forward, and that's, I think, also your final question here. Yes, it absolutely was a conscious decision. As we outlined also in the first call of the year, we continuously balance between the profitability and the growth that we see in Autohero. And what -- yes, what is important for us is that we're staying within the corridor that we outlined, while we are then seeing GPU progress further. Autohero is not yet a profitable business, right? So from time to time, we will push more on the growth rate within the corridor or more on the GPU side because they are, in that sense, antagonistic to each other.

But for H2, we absolutely are convinced that this is the right decision because we want to unlock this GPU track towards the milestone target that we laid out of EUR 3,300 plus GPU faster. So having now reported for Q1 EUR 2,555 then EUR 2,503. So we're bouncing around at EUR 2,500 to EUR 2,000 top value so far Q3 '25, EUR 2,664 level.

And we are aiming at a stronger step-up there. And that does not mean, again, that we, in any way, step back from the 20% to 40% growth corridor that we laid out in the CME for the years to come.

So you can count on that growth corridor. And yes, pretty much it's the GPU. The GPU is the reason why we're doing this.

If I could just press you on some more detail on Q3 and your expectations there. Are you thinking closer to 20% or closer to 30% year-on-year growth.

So I think implied in our guidance, right, and the commentary that Christian said is like an implied number for the H2 Autohero units. And we think that the year-on-year growth rate for Q3 will be lower than in Q4.

Thank you, Andrew. And with that, over to James Tate from Goldman Sachs.

I got a couple more questions. I guess, firstly, could you just help unpack the impact to GPU from the reduction in inventory through Q2? Could you help us understand the scale of the negative impact and some of the moving parts there?

And I guess, secondly, just following up, you mentioned that Autohero units growth could reaccelerate in 2027. Does that require another step-up in marketing per unit to deliver that reacceleration? And I guess, strategically, based on your current planning, are you targeting an acceleration from that mid-20s growth implied for H2?

Yes. And James, let me understand like your first question in detail. So when you say like what's the negative impact from the GPU on -- you mean on full profitability? Or like how should I understand it exactly?

So I think my understanding is the reduction in inventory through Q2 was a headwind to GPUs across Autohero and Merchant. So just understanding sort of the scale of the negative impact from the inventory change in the quarter.

Which is another way of asking like what could it happen? I mean, look, I think we've -- in Merchant, I think the high point of the GPUs that we reached was Q1 '25, if I'm not mistaken, Philip correct me if I'm wrong, but which was, I think, at around 990 or 991 level. 990. Yes, I think this was kind of the best results that we have ever seen. And yes, I think somewhere between where we have been -- yes. So this is maybe an indication of potential.

However, if we look at what you guys are in Visible Alpha expecting for GPUs in Q3 and Q4, then we think this is a sensible number. And similar commentary on Retail. So Retail high point, I think, was Q3 '25 at 2,664. And yes, I think we will not see the full potential unfold in Q3, but we'll see some of that potential unfold, and then we'll see a continued track going forward.

And if we talk about marketing cost per unit, then yes, to achieve higher levels of growth, we would not assume that we need to spend more than what we're currently spending per unit, we would -- this is like a decent amount of investment per unit, and this will also be good for higher growth rates in '27.

And thanks, James. And with that, over to Nizla Naizer from Deutsche Bank.

Great. I guess I have 3 more questions. There's a lot of talk about the new inventory management system, Christian. But could you maybe tell us what changed from the previous trading system to now? Like what are you doing differently to see the benefits that you then expect in H2? That would be question one.

And question 2 is, could you remind us what happened to the underlying used car market in Europe? Because one of the questions we get is, how is AUTO1 growing so fast? And is it really them taking market share? So maybe could you give us some color as to what's happening to the underlying market and how you've been able to gain that share?

And the third question is on Merchant marketing per unit, which was up around 8%, while total SG&A was down 4%. Could you remind us what's driving the Merchant marketing cost per unit? And would it stay at these sort of levels? Or is there any opportunity to bring it down further on a per unit basis going forward?

Yes. Thank you, Nizla. Very good questions. So yes, what exactly does the new trading? -- the amount of cars that we're getting offered, right? And yes, we're getting a substantial amount of cars offered to buy getting every -- to buy every single day. This is a substantial volume. So we can choose -- our system can choose what prices to offer and how much margin each of those cars is making.

And then we can also look at how many cars of a certain type do we think are optimal for filling the demand that we see on this car and the profitability of that cluster. And yes, this is an algorithmic trading system, and we're continuously optimizing that system with the goal, you can think of it like a software algorithm or like an AI algorithm that tries to optimize then the next level depending on what criteria and targets we give it.

And we try to optimize, obviously, the share of cars that we then finally end up buying versus the profitability of those cars, right? And that's what it does. So it shifts margin requirements and it shifts prices and it changes the speed requirements on certain price clusters in a better way than the one that we have running. And obviously, we are only changing because I mean, this is a EUR 10 billion business. We're obviously changing that only slowly to balance out -- to balance the opportunity versus the risk of errors. And this is what we have done over the course of H1 and which is now pretty much complete. And we're very happy with how it goes. And now after we completed H1, we can say that everything went exactly according to plan.

The used car market in general is yes, in a stable to slight decline depending on the market. I think this is where we are at. So it's not that in these growth numbers, we're getting any tailwind from the market growth at the moment. The market growth at the moment is impacted by the high fuel prices and also by electric adoption and uncertainty. Do I buy this generation of electric vehicle or do I wait for the next one? And we are absolutely taking market share, probably one of the strongest market share gains also in the last quarter with respect to the total used car market numbers. So we continue to gain in market share. We've only given an annual update on the market share because only at the end of the year, all of these countries that we're working in have finalized the numbers.

And on marketing per unit on the Merchant side is why does it go up a little bit? I mean when we're going to create the next level of growth in brand marketing and also performance for Merchant, which is all -- which is the marketing for our B2B buying brands mostly, then we are always -- and then we are reading that performance data and then we're optimizing on that. And that is like a progress where on some of the initiatives, you will only see clearly 6 weeks after investing or 8 weeks after investing, then you still need to consider the macro.

So in other words, the EUR 147, which is a little bit up Q2 versus Q2 '25 is something that is a totally normal course of business while we build the next level of supply growth. There is definitely a couple of euros, maybe EUR 3, EUR 4 in there with respect to macro. -- because obviously, some people, and that's also visible in the market, numbers are postponing their purchase of the next car or they wait. And if you look at the EUR 147, then yes, it's an increase year-on-year, but it's just EUR 7 offf the high end of the long-term target that we think is a steady-state target. Obviously, there's some upside on the low end with EUR 110. But also in C2B marketing, we're actually very happy with the progress we made in Q2.

Thank you,Nizla. Thank you, Christian. I think that brings us also to the end of the Q&A. I mean, otherwise, I think a lot of you have calls booked otherwise, Obviously, post August, we will be in London at the DB Communications and TMT Conference. We will then be at the Goldman Sachs Communacopia Conference. And then Christian Bertermann will actually be in Munich for the large conference there at the end of September.

So hopefully, see you all around, and have a good summer if I don't speak to you later today.

Thank you so much, everyone, and thank you for your interest in AUTO1 Group. Take care.

Thank you, everyone.

Welcome to our first AUTO1 Group Capital Markets event. We will start as always with the 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 will be wrapping up in about 2 hours from now. [Operator Instructions].

Before I hand 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 Wallentin, 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. 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 Koc, we founded AUTO1 in Berlin in 2012. Since then, we have traded more than 6 million cars across 30-plus countries, generating EUR 8.2 billion of revenue in 2025. 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 2 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. 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 1. 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. 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 build the company matters enormously.

We started with supply, building a consumer sourcing engine first in 2012. 1 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, 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. We crossed EUR 100 million adjusted group EBITDA for the first time in '24 and almost reached EUR 200 million 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. 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 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. Fourth, the pan-European infrastructure that took a decade to build and cannot be replicated is our structural moat. We build it 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. 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 own. The used-car market is almost twice the size of apparel and 4x the size of the electronics market.

On a value basis, that is EUR 700 billion in annual transaction volume with EUR 100 billion in financing. The EUR 100 billion financing pool deserves a particular mention. Every used-car transaction is also financing opportunity and the 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. 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 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. European used-car volumes are very stable at around 27 million 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 everyday European life. Yet it remains one of the least consolidated, least digitized consumer markets anywhere.

And then maybe most importantly, almost 4 out of 5 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. Now I'm handing over to Christian to walk you through our superior, vertically integrated business model.

Thank you, Christian. Let me first apologize for the slide. 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 9 European markets through 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.

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. 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 Autohero 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. 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. 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. Our consumer selling brands and our dealer brand, AUTO1.com, are based on 14 years of 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 8 markets. Consumer financing is embedded directly in 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. 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 products in merchant and retail in detail and how they are contributing to our exceptional customer experience.

Thank you, Christian. Let me take you through each of our segments and showcase to how we create value for our customers. We are operating 2 segments on one integrated platform. Autohero is our consumer-growth engine, changing the way people buy cars. Carefully selected vehicles from our consumer-sourcing business go through 1 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. We're delivering to the buyers store and we're making the purchase available nearby pickup quickly. It's an e-commerce like experience applied to one of the largest purchases they will ever make their new car. 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 EUR 362 in 2021 to EUR 2,605 in 2025. These great results are based on a 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 for consumers across 9 countries and sell to 1 of our more than 54,000 buying dealers spread across more than 30 countries. At the core of the business is a unique matchmaking engine that, for instance, matches the supply of Volvos in the Nordics with demand in Spain or sourcing [ BMW ] in Germany and selling it to France.

No other used-car player does this at our scale. We continue to grow strongly with a 12-year CAGR of roughly 50% since 2013, and our unit economics continue to improve steadily with Merchant GPU growing to EUR 976 in 2025. Autohero, our retail segment launched in 2020. In 5 years, we have grown to over 100,000 units delivered across 9 markets, making it the fastest-growing used-car retail brand in Europe. Our NPS stands at 69. That is world-class score for any consumer product, let alone for car sales.

Aided brand awareness reached 35% in Q1 2026, up 9 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. 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 our 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. 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. In retail, there's still plenty of potential for improving price-precision by a bigger dataset. 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 delivered to your door within 10 days in one of our iconic glass trucks or the cars available for pickup at numerous locations across Europe, often as quickly as within 48 hours. You enjoy a 21-day full money back, no question asked return policy in case you change your mind. Altogether, this is the best way of buying a car. AUTO1.com is Europe's #1 wholesale platform for used cars, over 54,000 unique buying dealers, 30-plus countries, 50,000 cars available at any given time.

These are the results of 14 years of continuous investments into supply and demand, platform technology, AI pricing, and physical infrastructure. AUTO1.com is effectively the clearinghouse of the European used car markets. 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 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. Every car flows to its highest value use across the continent. The value that we offer our dealer partners is based on 3 key pillars. We offer the largest EU-wide selection 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.

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 funding solution in Europe, and it is a key driver of frequency and loyalty on our platform. 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 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 is one of our many structural competitive advantages.

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 2 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.

Additionally, we operate 12 large production centers that currently run at around 50% utilization. Together, these form are incredibly strong physical mode 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. 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 scaled our logistics network, the number of branches, our production centers, our retail delivery infrastructure in line with the needs of the business and improving unit economics. Every driver and market has a lean rollout playbook that is executed disciplined and precisely when needed. 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 historical segment financials for both Merchant and Retail and we'll explain unit and profit drivers within each segment P&L in detail. 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, 3 trends make up the development of the Merchant business. First, strong unit growth. Units almost multiplied 25x since 2014 from 29,000 to more than 740,000 cars sold in 2025.

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 EUR 749 in '21 to EUR 976 in '25. Total gross profit reached EUR 723 million in '25, up from EUR 416 million in '21. Third, a substantial increase of adjusted EBITDA per unit sold, EUR 113 in '21, EUR 257 in '24 and EUR 320 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 EUR 6.4 billion in '25, up from EUR 4.2 billion in '21. Gross profit was EUR 723 million. SG&A was EUR 484 million, of which EUR 104 million was marketing, EUR 269 million operations, and EUR 110 million overhead. That results in adjusted EBITDA of EUR 239 million for the Merchant segment, a 3.7% margin, up from EUR 158 million and 3.1% margin in '24. This is an absolute profitability improvement of 51% year-on-year.

The merchant business has a considerable amount of fixed-cost leverage visible in 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. Since 2022, we have increased GPU every single year, arriving at a level for gross profit per unit of EUR 976 for 2025. In the long term, we are expecting Merchant GPU to reach levels between EUR 1,080 and EUR 1,200 per unit.

On marketing, we have seen a continuous downward trend over the years with marketing hitting a level of EUR 141 per unit in '25. In the long term, we're expecting marketing per unit to reach levels between EUR 140 and EUR 110. On SG&A in total, we have observed EUR 653 in '25. We expect SG&A to decrease to between EUR 600 and EUR 480 in the long term. And consequently, we're expecting adjusted EBITDA per unit for merchant of EUR 480 to EUR 720 for the long term, a strong future upside and a continuation of the adjusted EBITDA per unit ramp over the last few years.

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. We will start with units and lay out the total addressable market for merchant. We will first go through the TAM logic for demand, and then we'll lay out an equally simple approach for the supply side.

We are categorizing the 250,000 dealer pool of Europe into 5 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. 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 small, medium, and large segments. 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 on 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. 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, the resulting TAM for our C2B product is 10 million to 15 million units per annum.

We assume that we can increase our market share to 20% to 25% of that TAM, which roughly equates to 2.5 million 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. Broader marketing reach is a key input driver for us on the supply side. We already have considerable brand strength 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 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. 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. 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 a number of 1,200 to 1,400 branches in the long term.

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 rollout 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. 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 3 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. 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. Every investment in faster, more reliable delivery increases conversion, basket and retention simultaneously as dealers can turn their inventory faster and can 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. 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 the physical market, which is rare. 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 are 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 EUR 749 in '21 to EUR 976 in '25. We expect Merchant GPU of EUR 1,080 to EUR 1,200 in the long-term. We expect EUR 50 to EUR 100 improvement from better trading. Constantly improving trading systems route each car to its highest-value channel and buyer.

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. 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 EUR 50 to EUR 120 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. 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 EUR 140 to EUR 110 per unit for marketing. This target corridor is based on 3 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 2 brands and in the case of marketing costs for buying a car, lower the cost of marketing per car purchased further, and in line with historic trends. We expect retail trade-ins to become a more material source of cars purchased over time, essentially blending down the average marketing cost per car purchased, as they are purchased at near-0 marketing cost per car. Let's take a look at the operations line next, so the variable cost of buying and selling a car and merchant.

We are expecting operations cost per unit of EUR 350 to EUR 300 per unit in our long-term outlook. We believe we can improve operations cost-per-unit by EUR 20 to EUR 70 in the long term while we scale the business further. We expect EUR 10 to EUR 50 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.

Additionally, we're expecting EUR 10 to EUR 20 of improvement from further sales and customer service process optimizations, leading to efficiency gains. The last Merchant cost line is overhead. We are expecting overhead cost per unit of EUR 80 to EUR 110 in our long-term outlook. The strong reduction is in line with the trend of the past 3 years in which we have kept investment into overhead rather stable on a total base. 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. 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 GPU and cost drivers for the long-term unit economics. 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.

In parallel to unit growth, gross profit for quarter has steadily grown to EUR 82 million for Q1 '26, driven by a very strong ramp of retail GPU. Adjusted EBITDA per unit sold is on a remarkable trajectory as well, starting with negative EUR 4,100 in '21 based on heavy upfront investment. It is on a strong trajectory towards breakeven with loss per unit diminishing to negative EUR 410 in '25. This trend is also visible in the adjusted EBITDA margin progression per unit. Starting with negative 29.3%, margin per unit improved to negative 2.4% in 2025.

Let's look at these numbers on an absolute basis. Over the 5-year trajectory, our retail revenues tripled to EUR 1.76 billion. Retail gross profit reached EUR 268 million in '25, almost 18x more than in '21, driven by strong improvements in trading, consumer financing, and the sale of attached products. SG&A was EUR 309 million in total, of which EUR 92 million was attributable to marketing, EUR 69 million to production, EUR 55 million to operations, EUR 9 million to consumer financing, EUR 52 million to logistics, EUR 34 million to overhead.

Adjusted EBITDA was negative EUR 42 million, a minus 2.4% margin. Let's look at these values on a per-unit basis and frame the massive, long-term opportunity for retail. Since '21, we have increased GPU every single year substantially, with '25 GPU reaching EUR 2,638. In the long term, we are expecting retail GPU to reach levels between EUR 3,880 and EUR 4,470 per unit. On marketing, we have generally seen a strong downward trend versus the 2022 and '21 numbers and have observed a level of EUR 650 to EUR 900 over the last 3 years.

In the long term, we are expecting marketing per-unit to reach levels between EUR 710 and EUR 540 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 EUR 3,000 for the last 3 years. We expect total SG&A per unit -- this includes marketing now of EUR 2,430 to EUR 2,060 in the long term.

Consequently, we're expecting adjusted EBITDA per unit for retail of EUR 1,450 to EUR 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 are 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. 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 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. 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.

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

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 expect to add EUR 240 to EUR 360 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.

Now over to Christian Wallentin 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. That's the kickback line on this page. Then we built our own captive finance business and the GPU per car stepped up considerably from just EUR 12 of internal interest per unit in 2021 to EUR 210 in 2025, an 18-fold increase in 4 years. The reason we can capture that margin rather than collect the 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 it's why the captive lines keeps taking share from the referral line year after year. Our captive markets today are Germany, Austria and Spain. The long-term outlook is EUR 870 to EUR 1,100 of finance GPU per retail unit, 4x to 5x the 2025 captive finance levels. We get there on 3 levers: rolling up from 3 markets toward all 9 Autohero markets, increasing attachment within those markets and letting the loan 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. And strategically, financing changes what Autohero is. A car sale is a transaction, a multiyear financing relationship is a customer. It deepens retention, drives potential trade-ups, the next purchase and turns Autohero into a 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 EUR 870 to EUR 1,100 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 rollout 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 start with the attachment. Group-wide, we are 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. Spain is the latest proof that the model travels. It has ramped according to plan over the past year and is now trending higher very quickly with over 20% of customers now taking our 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. Autohero units times attachment times the average loan that gives you the annual originations, the new lending we write in a year. Then you have to multiply that by our origination to AUM multiplier, you get the total loan book outstanding. That multiplier was almost 1.4x in Q1 and moves towards 2.5x to 3x long term as the business matures. Put plainly, we're earning on this year's new loans plus all the still outstanding 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%. And our 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 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. Second, we are the disposal channel for the collateral. When the loan defaults, the car come back to our own remarketing engine, so we expect our loss given default to be structurally lower than a generic lenders. Then there are 2 separate efficiency stories. One is operating cost. OpEx per loan is EUR 74 today and heading towards EUR 50 at scale, driven by platform automation. The other is capital.

The business is structurally capital light. 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 FinanceHero 2 structure to 1.5% in our just announced FinanceHero 3 enabled by vertical risk retention. As that structure rolls across the book, we expect the whole portfolio to settle in at in the 1% to 2% range long term, trending towards the 1.5% that we expect FinanceHero 3 to deliver. Each of these levers is already working in our captive markets, which underpins our EUR 870 to EUR 1,100 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 EUR 610 to EUR 680 in the long term. We're expecting EUR 160 to EUR 210 of improvement from higher attach rates from our premium warranty products and an increase of warranty duration. Additionally, we expect the launch of our subscription model for warranties and improved bundling of warranty and financing services as long-term contributors.

We're expecting EUR 60 to EUR 80 of GPU other products increase from smart cross-selling of second wheel sets in Europe and EUR 20 additional contribution from various other attached products like registration, insurance, or maintenance. 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 EUR 710 to EUR 540 in the long term. This value includes the marketing investment needed for retail selling and the market spend needed for retail buying. We see 3 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. Additionally, we are 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 return on every euro spent in brand.

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.

Now let's go to production costs. We define production costs here as the combination of 2 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, cost shift from COGS to SG&A over time. 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 EUR 930 to EUR 870 in the long term.

We're expecting EUR 10 to EUR 30 of improvement in COGS to optimize spare parts procurement and a further lowering of the share of external work. We're expecting EUR 120 to EUR 160 of improvement in SG&A production through AI-powered workforce planning, the complete rollout of our proprietary car audit inspection technology, lean process improvements and structurally lower mechanical complexity with growing EV shares.

For logistics, we are expecting EUR 340 to EUR 290 of logistics cost per unit in our long-term outlook. This number includes payroll and other OpEx for logistics. We expect EUR 170 to EUR 220 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. 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 EUR 450 to EUR 330 of operations cost per unit in our long-term outlook. We're expecting EUR 80 to EUR 160 of improvement in retail sales and customer service by applying AI process automation, for instance, using agents in non-business hours. We're expecting EUR 20 to EUR 60 of improvement in purchase operations through higher utilization and purchase process improvements. These are the same drivers we have outlined above for the purchase portion of the merchant operations piece.

The final cost line is retail overhead. We're expecting EUR 130 to EUR 100 of retail overhead cost per unit in our long-term outlook. We are expecting an overhead cost per unit reduction of EUR 200 to EUR 230 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.

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 Autohero 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 corresponding revenue and gross profit is realized.

In other words, sourcing, marketing, production, inbound logistics and the purchasing part of operations costs occur in the P&L when we buy on reconditioning 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.

In numbers, this means Growing at a 20% rate per annum is a roughly EUR 250 per unit headwind. 30% means around EUR 350 and 40% around EUR 450. As a rule of thumb, every additional 10% of growth adds about EUR 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 outlined before when we approach the critical threshold of 1% retail market share. 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. 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. You can see here there is a range of growth rates and no specific date, but this 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 EUR 1,025 or above, delivering EUR 400-plus of adjusted EBITDA per unit.

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 EUR 3,300 or above, delivering EUR 800-plus 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. 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 euro 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. 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.

[Operator Instructions]

Thank you. And actually, we'll start with 5 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 target. What is the time line 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.

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 is obviously helpful, but there's nothing disclosed with regards on cash conversion. Over the long term, what cash conversion are you targeting? And what are the building blocks? We are 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?

I think then back to our business production capacity and CapEx. If we sum your production capacity on Slide 20, it's roughly 250,000. Obviously, your milestone target is 300,000. 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 we look at Slide 27 and your share of external dealer sourcing, it's obviously bell curve from smallest to largest customers. 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, over to you.

Yes. Thank you, Philip. Thank you, Joe. Maybe we should also try to start answering some of the questions directly, Philip, and then maybe we do like 2 at a time or so at some point. I guess it's too much to write down, maybe simpler. But yes, time line on target, I think, yes, that's pretty much something that I referenced at the end of the presentation. So we're not giving any specific time lines in number of years for the milestone or for the long-term targets. However, we have given you a growth rate corridor, which I think you can definitely work with. So assuming the low end or the high end or something in between, we'll get you to a specific year.

And we believe that this is the best way how to represent an answer this question. I think that we're like the first 2 pretty much. So again, we're operating with annual growth rate corridor assumptions here, which are in the case of merchant, not too far apart. In the case of retail, the spread is a bit bigger. You know where we are currently in terms of growth rate. So yes, you can pick pretty much like a growth rate assumption here that you find relevant. On the cash conversion, I think that's best for Christian Wallentin to answer.

Thank you. So we introduced 2 pages on cash in the appendix, and we will introduce those as well in the version that is on the web page. So we just wanted to do that. In summary, since we turned adjusted EBITDA positive, we have generated a cumulative EUR 367 million of adjusted EBITDA, as you can see on this page here, and generated EUR 104 million of free cash flow. So that's a conversion of almost 30%, so 28%. So in the long term, as growth normalized, we see this increasing to 40% to 50%. And I actually think we will come back to this page when we get questions on ABS structures and cash flow, but let's pause that for now.

On the development of the auto retail market, I mean, we've shown you a couple of numbers on the market volumes in the slide deck. We expect that over time, the market will return back to its long-term CAGR of 2% from current levels. We do not see any like major disruption affecting volumes here. So yes, based on our models, I mean, we could work with a stable market from here, but we think it's going to also our long-term, the assumptions we laid out on the TAM on the different ones are based on the current working -- on the current market size numbers.

So 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 capacity and CapEx. So for the -- and I think your question was on the milestone. We assume that we will have around 20 production centers. So we're going to then build roughly EUR 8 million, EUR 9 million, EUR 10 million, something like this. And yes, the CapEx needed for each center is somewhere between EUR 2 million and EUR 4 million. As a reminder, we're working here with brownfield and not greenfield opportunities. So this means we're converting existing facilities, which is a low-cost approach. And yes, it's working fine.

And then I don't know whether you briefly want to talk about the customer distribution on Page 27.

Yes. Can you repeat that question? Maybe.

So I think the question is basically whether we will continue to focus on the medium-sized customers? And are there any special barriers for us to work with the largest of the smallest customers? Maria maybe we can move to Page 27. I think it's the next one.

The next one or the one before -- no, the one after that one, I think, with the merchant groups, right? No, I think you need to go back a little. I think this one is the question. Yes. I mean we have higher market shares in small, medium, and large groups because these are just making up the bulk of the volume, right? So that's why we are concentrated more on those. We think Enterprise customers are an interesting segment, but yes, we would need to adjust and invest and develop our AUTO1 sales platform a bit different for them.

So this has been something that was on the -- what it is on the table, but it's not something that we, at the moment, prioritize given how much growth potential we have in the Large, Medium and Small. So we would think that the structure of those shares that you currently see here grow in line with the current distribution. So, if we double it, then we'll double it, but relative from the value where it is today.

And we will now move to Andrew Ross from Barclays. And I think, Andrew, you had about 6 questions or so. So maybe we can split them into 3 blocks of 2.

Instead of those 5, I'll keep it to 3. 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, whenever 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 fulfillment capability? That would be helpful to understand. And I guess that leads into question 2, can you tell us what level of units you would expect that retail will breakeven on an EBITDA basis under IFRS? Second question.

And then the third question was to come back to that slide in the appendix on the cash conversion. I can't see that yet on the website. It would be quite helpful to go through that in more detail. So kind of the answer is a conversion of 40% to 50% from EBITDA into free cash flow. But can you walk us through in more detail the CapEx and, I guess, particularly the working capital and how much capital you're expecting to absorb this kind of inventory, receivables, I guess, going the other way on payables, that would be helpful to understand in more detail.

Okay. So Block #1, Andrew, so the phasing of improving unit-economics from where we are today and to the Milestone Target. So as indicated in the script, we would think there's a stronger progression on each of those drivers, the closer we're getting to the critical threshold. So somewhere between 250,000 and 300,000 units, we would expect to get a majority of the improvements. Yes, this is what I would say as a trend.

So as we approach those units, we're getting stronger ramp of all of the drivers outlined above. And before that, we'll also see improvements, but of a lower absolute improvement. And the reason, for instance, if you think about in logistics, it is just that we need to like approach a certain density of the transaction network. So logistics, I think, is an easy example to understand that now at 100,000 units, and then at 2.5x -- 2x, 3x of those units, the driving distance is just smaller.

And there is more potential to bundle the inbound and outbound fleets, and that leads to this ramp and reduction of the delivery and logistics cost per unit. And that's something that then is really like kicking in as a stronger lever, the more dense it gets. So it's not a linear improvement. I think that's what I am pointing out here. Yes, at what level unit will we be break-even in Autohero? I think if you look at the numbers, you can see that we're pretty close.

If you calculate in the headwind to short-term unit economics and the growth rate for 2025, then you can assume not growing, we would actually be on an Adjusted EBITDA break-even already. However, we choose to grow because it's exactly of the answer to question one. And yes, if you look at the trajectory, then we have been on a constantly improving track. And I would say we're close. But again, it depends also on the level of growth. And we try to maximize growth under the side target of overall Group profitability. So that's what we're trying to manage in the best possible way. And yes, I hope this answers your question.

So let's move to the -- more on the cash question. So this is related to both our operational cash flow and then the ABS structures and the net debt. 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 levels of knowledge. So I'll try to go through it in a structured way. So first of all, I think most importantly, we are cash flow-positive and our projections, we self-fund our growth. So that's the takeaway.

So just to illustrate that point, we ended 2022 with slightly less than EUR 550 million cash or so on the balance sheet. We had EUR 652 million cash on the balance sheet at the end of Q1 '26. So we raised no debt other than the ABS funding against our assets and no equity in that period. So that is EUR 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.

So now to the -- so I'll go through the facts of the explanation. We have 3 types of ABS structures for inventory, merchant finance, and consumer finance receivables. So one, nonrecourse funding from the ABS facilities collateralized by assets, so receivables and the inventory. So those you see on the balance sheet and nonrecourse means that the corporate entity of AUTO1 is not live of credit losses.

And that is lenders cannot force an event of default on AUTO1 if the underlying assets underperform or lose significant value. 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 and the cars being sold or what paid the banks and investors with interest.

So if needed, the debt is self-liquidating against specific inventory and financing receivables. The structures have been successfully tested in the toughest environment, meaning COVID and been riding through that with stride. So therefore, very logically, this non-recourse debt is not part of, 1, Corporate Net Debt or, 2, the cash flow we need to fund as we grow.

This is also supported by the rating agencies for large U.S. 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 stripped out captive finance assets and liabilities from the corporate credit ratios under the captive finance policies. So this is the difficulty here now that I'm going to say so. The economic reality is what I described now, and it's not as obvious in accounting for a couple of reasons.

So, 1, we consolidate these structures chiefly because we control the servicing of the underlying assets we 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 only risk that what was put into these structures originally at inception. 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 an 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 AUTO1 corporate and shareholders, we will only fund the net proportion of these assets, which have not been funded by the banks or ABS investors. Hence, we focus on something we call AUTO1 Managed Cash Flow. It looks at the net movement of the assets and ABS facilities. On this basis, we've been cash-flow positive since at least 2023.

And the example that I had in the beginning proves that point. So 3 conclusions on this. So we're doing this in a capital-light way. We only invest cash at 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 the -- for example, the FinanceHero 3 structure that's in the market now will be vertically risk retention. So that's up to 99% is funded by the banks and external investors.

So there's no further claims on us than the assets in that specific SPV. Conclusion #2, 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 -- because we control the servicing of the assets. So that's just the facts of the matter and the conclusions from them.

So we are, in order to simplify this for you and for people that follow us, we're publishing managed cash flow with the results on a webpage on a quarterly basis. We will also include more explanatory slides in the earnings presentation. We have already started that. So please look out for information there that will go into more details.

In addition, we're also considering having a modelling session in the future to explain these technical questions in a more structured way. So today was very much about the segments and giving you that segment detail, and we'll consider to go back to these more technical modeling topics as well. So with that, I think, Philip, if I missed something that you think is relevant and please add on.

I think it's a very good, I hope easy-to-follow, introduction to the topic for everybody. And maybe just 2 comments. I mean, one, this is actually a new disclosure. So if you actually followed our webpage, we were always publishing this Excel spreadsheet with the quarterly earnings numbers, which included this AUTO1 non-IFRS cash flow. It's also normally contained in the Highlights section of the financial report we are publishing each quarter.

But I think going forward, it's something we will also take into the earnings presentation to really make sure that everybody understands the point and sees 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 every 2 weeks or so, collect our information and then go to the banks and get an advance rate.

But we literally -- if we have to pay for a car that we are purchasing today, we actually tell the funding SPV in the morning, look, this is the cars we are 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. 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 saying, look, those 2 always belong together.

And I think 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 capital-light manner. And that is why I think, hopefully, everybody will kind of agree that looking at this AUTO1 Cash Flow and the net changes in the inventory and captive-finance assets makes much more sense than looking at the assets separately up in the Operating Cash Flow and then the ABS funding down in the Finance Cash Flow.

But I think this is really the point about why I think we are so comfortable in our ability to self-fund the business. And I think just don't really often understand a lot of the questions about when will you be free-cash-flow positive because, from our perspective, we have been free-cash-flow positive for 2.5 years.

In other words, IFRS was not built for used car dealers.

Yes. After that long discussion explanation, I think James, you had -- James Tate from Goldman Sachs had 2 questions.

Well, these are all questions from me, Andrew? Or did he have more?

I think he said he only had 3 because the other questions, I think, had been answered.

Okay. I think we had one 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.

And so that was meant to be 20 to 25 basis points of revenue or about EUR 20 million to EUR 25 million probably this year?

I've got 3 questions, please. I guess, firstly, and following up slightly from Andrew's question on Retail EBITDA per unit. Could you give some 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 EUR 400 in 2025? That would 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 of years. I guess, firstly, what's driven this?

And then you've outlined how these costs decrease over the long term. But in the near 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 unit 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 of years?

Yes. Thank you, James, for these questions. So I totally can understand the curiosity of Retail GP of retail EBITDA per unit for this year. We're going to disclose that. I think what we can say so far that, I mean, Q1 was a very good development. But as also coming back to 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 growth rate corridor that we have given 20% to 40%. If you look back at the last couple of quarters, we definitely have seen increased reach rates within that corridor, also north of the top end of the corridor.

So we try to best balance profitability and growth as we go forward. And yes, also, as indicated in the script, definitely, we would want to be in the 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's EBITDA per unit growth. So in that sense, now that we have the full disclosure, we can also say that, obviously, the preference for growth in Autohero that cost them more as a negative short-term headwind, as illustrated also depends on the profitability and cash generation from the merchant business, yes.

So let's say, like if we're advancing there, faster and better, then we can also let Retail grow faster and the other way around. Now in Q1, Merchant GPU was, as explained, a little bit down. So then this introduces also like a bit of a side condition where we say, okay, how much can we grow in Retail 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 of that growth corridor and because we strongly believe that we will see substantial improvements on Retail unit economics, the closer we get to the critical market threshold -- market share threshold of 250,000 to 300,000 units per year.

So I think it's too early to think about Retail EBITDA for the year, but we expect that we are continue our progress that we have been showing now for the last couple of years and balance it nicely with the growth. On the SG&A production cost side, maybe we can quickly go there. Maria, I think the point that you asked -- can we go to the slide, please? Maria?

Yes, this one. I think the point that you asked was really the SG&A production portion per unit that it slightly increased 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. Anything externally, how we did it at the beginning in '21, I think also in the quarterly reports for those years, you can really see that we reported on the 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 dark blue bar going down. And then we started to increase our SG&A production per unit, which includes a strongly payroll, but also overhead cost of a production center and the total capacity, the on-top capacity that we found in rent and in facility. And this portion has increased slightly in 2025 because of lower utilization. So we built up more capacities towards the end of the year that we are now utilizing in a better way.

And then a special effect inside that is also that there's temporary workers that we are -- from time to time needed to use over the last couple of years, which are 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 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 on levels that we consider very good versus '21 and '22, and we're seeing further upside, but not even that much further upside because, ultimately, it's a process, it's a quality standard that we think EUR 30 to EUR 190 are possible for the full block. I hope this answers your question.

Thank you, James. And with that, Wolfgang Specht from Berenberg.

I have 2, if I may. First, on the refurbishment and you explained, 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 weak cars out of the system? And second point, your largest driver for gross profit per unit is definitely Retail finance. How do you expect to cope with competition from retail banks that have been really weak in this discipline over the last years, but supported by AI tools and better front-ends, maybe retail financing could get attractive for a couple of your customers as well? How do you want to keep customers in your system?

Yes. Let me take the first question. So within our current evaluation process, we're not expecting incremental investments that we need to do or let's say, material investments that will be 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 car that we are buying for Retail or that has the 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. But overall, for us, this is the more efficient way of dealing with that problem. So those cars will then be reevaluated and sold back to Merchant. And this is the -- this is for the more efficient solution versus having many production centers, 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, Wolfgang. So you're correct that this is an important value driver. And I think the answer is that we see that when we use external bank, first of all, it's a protected sale, so to speak. So these are Autohero units that we sell. So we don't let anybody finance that specific car. So if somebody wants to buy a car, and this comes back to the superior Retail experience that we have, which is driving our growth as well. So when we are selling it, we see that the -- our internal, so captive finance solution is a much better product.

So this is driven from both being better embedded and quicker to approve. And that drives higher attachment rates, and that's not possible for an external bank to replicate in our system. So I think we're comfortable that we can offer a 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 Spain as well is indicative of the future potential because it's reflecting a better product.

And I think with that, Nizla Naizer from Deutsche Bank.

I have 3 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 range of the EBITDA that you've eventually given for each segment and vice versa? Some color there would be great. My second question is on your milestone 300,000 Autohero car target.

Does this include launching in new geographies and moving into different subsegments of the consumer-facing used car sales that you're doing? In other words, maybe lower-priced used cars? Or is it with the current trajectory of used cars that you're selling? And lastly, similarly, to reach the merchant Milestone volume target, will you have to start buying cars from new markets? Or will the 9 sourcing markets that you currently have be sufficient?

Yes. Thank you, Nizla. Three very good questions. So yes, we generally see a trend of rising used-car prices over time. That depends on how the new car cohorts are developing, but we deliberately have baked that in the long-term targets. So I think it's very hard to really map out kind of how the used-car prices will develop over every single year that we have modeled behind. So that's why we chose to make it simpler for everyone. 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 that we would expect our milestones or our long-term GPU targets to increase further. We want to make sure that we keep things simple for everyone involved and try to get the ASP part of the equation. On the milestone targets, we're not assuming any new geographies for Retail. We're also not assuming any new geographies on the sourcing side for Merchant.

We might want to experiment with cheaper used cars in Retail, but with actually very young used cars, or also with different forms of owning the car, which might be subscription, but that's something that so far is only an idea and is also not baked into the targets as a requirement. So for the targets, it's really the current business setup and its long-term profitability potential.

And then Marcus Diebel from JPMorgan.

Just 2 questions left. One question again on those targets. Christian, I appreciate you obviously don't guide for certain years, and that's okay. Just to really understand that these growth rates, 20% to 40% and 10% to 15% growth, these are not CAGRs, i.e., if you reach the milestone target of 1.2 million cars, you feel comfortable that in version, that on that number, you're still growing at 10% to 15%. And then similar in Retail, once you reach 300,000 cars, you're comfortable to grow that number still by 20% to 40%. It reads like this, and maybe it's too simple question, but I just wanted to clarify this.

And then maybe the second question, is more specific is on the GPU and other in the Retail business. A lot of growth comes from premium warranty. Could you just tell me a little bit more how it works because you incur clearly 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 2, the rest has been answered.

So on the CAGR growth rate question, so yes, that's indeed more how we mean it, like you just said it. So we also assume that after reaching the waypoint that these growth corridors are still valid. So while I think some market participants will assume slightly declining growth rates typically for any business over time. So we stand behind those corridors and think they are intact for the waypoint or will remain also the same for the waypoint and then also beyond. And yes, on the very specific GPU other questions.

So obviously, this is a bundle of products that we're selling here. But specifically to warranty provisions, we are, to my knowledge, but please, Christian and Philip chip in. To my knowledge, they are pretty much a recognition of the revenue over time and also provisions over time. So they are being booked as cohorts, and the revenue, but then also the assumed cost or provisions for the future cost of those warranties, are directly booked in there, but maybe Philip...

That's correct.

No, no. It's clear. I want to make sure both is pro rata, but that sounds like it's okay.

Yes. Yes.

So I think the important answer is the gross profit contribution it's not just the revenue, but it's also the provision for the expected claims that we need to pay out.

And then clearly, you have other in there as well. So second set of wheels, registration, insurance, maintenance, that sort of thing.

And then we got Mourad Lahmidi.

So I have 2 questions. The first one is on the internal financing. So on the slide where you show the attachment rate, which is 40%. I just want to make sure that the 40% is on this market where you offer the internal financing and not on all markets. Are there any markets where you have restrictions in terms of offering the direct financing? And also a question on how the finance GPU, when 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 would be my first question.

Okay. Just very simply, Mourad, I think on the first question, the tile that we are showing with the attachment rates, as we said, 40% is actually external or internal financing across all markets. So that just shows the fundamental demand for the product. So 40% of all our customers are refinancing 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 we're looking at the external-only markets, they're ranging from 20% to actually also over 50% in one of the Nordic markets. And then...

We're looking to clearly replace the external with internal, given that we will capture the full profit pool.

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 or forward-looking. And that is why we're saying that if you actually build up that loan book, that obviously then generates an annuity stream over the next 5 to 8 years.

So I have a second topic, which is the strategy of integrating C2B with retail more and more going forward. Can you please elaborate on how this will help the business grow faster or deliver higher margin or being more efficient?

I mean in a nutshell, Mourad, there's a lot of customers in our sales funnel also interested in buying a car when they are evaluating their car, let's say, like 1 month to 6 to 8 weeks before they are actually then finally occurring with their sale. So let's say, we have 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 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 finding the best-selling solution for the residual car if the dealer did not take their old car as a trade-in.

So there's a big pool of customers that may be at synergy level 1 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 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 that Autohero can also buy cars, then this is a lot of future synergies. 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. However, if it was an integrated or at some point then full Autohero branding, then we will also get the benefit of additional awareness coming from the physical representation of the brand onto the sales funnel. So yes, it's just better if everything were to happen under one brand.

However, the C2B brands that we have, they are high-performance conversion machines, if you want to. So this means that we will 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.

Well, that actually brings us to the end of the question list as well. So I guess just on time as well. So I think Christian and Christian, thank you very much. I think this is very insightful, but also I think for already quite heavy session. So I think there's a lot to digest. Obviously, Maria, myself and the team, we are 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. Otherwise, we got the Q2 and first half numbers then coming up at the end of July. So thank you very much for participating, for listening in. I hope this was a useful and interesting session. And thank you, Christian, Christian and Maria for your time.

Thank you so much, everyone. Yes, I think indeed, it was a very useful and helpful session. We hope that we have made it a bit simpler for you and everyone else out there to model AUTO1. Yes, we're absolutely excited to continue to march to these long-term targets. But now without further talking, let's close the session. Thank you very much. See you soon.

Thank you, everyone.

Hello, good afternoon, and good morning or good evening to international participants. Welcome to the AUTO1 Group First Quarter 2026 Results Presentation. I'm Philip Reicherstorfer, Group Treasurer. I'm joined today, as always, by Christian Bertermann, our Co-Founder and CEO; as well as Christian Wallentin, our new CFO, on his first full earnings call.

We will start with the presentation, followed by a questions and answer session. If you would like to ask a question, please raise it by the usual Zoom Q&A tool at the bottom of your screen. We will then call on you to ask your question directly after the presentation. Also, as a quick reminder, before we start, our AGM [ portal will open ] our IR webpage this Friday, May 15, 2026, and you can submit your votes. If you or your governance teams have questions or comments on any agenda points, please feel free to contact Maria or myself.

Before I hand over, I must make you aware of the safe harbor provisions at the beginning of the presentation here. These will apply to any forward-looking statements made by management today. And now over to you, Christian.

Hi, everyone. Thank you, Philip. Welcome to the AUTO1 Group first quarter '26 earnings call. Q1 was a record quarter. We sold 249,000 group units across the Retail and Merchant segment, a new company record, growing 22% year-on-year. Total gross profit reached also a new high of EUR 289 million, up 22% year-on-year. We achieved adjusted EBITDA of EUR 60 million for the quarter. This is EUR 2 million more than in Q1 of last year and EUR 15 million more quarter-on-quarter.

Group GPU was slightly up year-on-year, a result of the higher Autohero unit share. The results overall are a testament to our value-first strategy, the excellent work of our teams, and the structural advantages of our vertically integrated business model. In Q1, we realized operating leverage from the investments into additional capacity executed in Q4, primarily driven by higher utilization for the newly added capacity, total OpEx per unit reduced by EUR 82 quarter-on-quarter to EUR 923, the best OpEx per unit value we have realized for the last 4 quarters. Together with a slightly increased group GPU, we also reached the best adjusted EBITDA per unit of the last 4 quarters with EUR 241. Against the background of our strongly scaling Retail business, which traditionally carries bigger absolute OpEx per unit than Merchant, this is a particularly strong outcome.

Let's dive into the Merchant segment's performance. We made excellent progress in our Merchant business in the first quarter. We sold record 216,000 units to our partner dealers, crossing the 200,000 quarterly units sold mark in Merchant for the first time. This is an increase of 19% year-on-year. Merchant gross profit grew to EUR 207 million, up 15% year-on-year. GPU was EUR 957 for the quarter, a slight reduction of around 3% compared with Q1 '25, a result of the already discussed severe weather impact in January.

Our network of active buying partners across Europe grew to 36,200 partners. This is 6,800 more compared to Q1 of last year and an increase of 23%. Our Merchant offering continues to be in strong demand, driven by the superior value of our selection, paired with highly attractive financing options. The average quarterly basket slightly reduced year-on-year as we currently prioritize dealer market share over basket development.

AUTO1 Merchant financing continues to be an important growth driver for us. In Q1, we financed a total of EUR 330 million of Merchant sales. This is an increase of 22% compared to the previous year. The number of units financed grew by 19% year-on-year to 35,800 units in Q1. Our portfolio balance grew from EUR 258 million in Q1 of last year to a new high of EUR 322 million this year. This is an increase of 25% compared to Q1 last year. We are continuing the rollout of our financing products to additional markets and partners with Italy next in line and expected to launch in Q2.

Let's switch to Retail. Taking a look back since launching Autohero in 2020, we have seen remarkable growth across the business for both units sold and gross profit. In parallel, we have realized constantly improving unit economics. We are really excited about the long-term opportunity in Autohero, changing the way people buy and finance cars. Driven by the advantages of our unique vertically integrated business model, we will be offering an even bigger, high-quality selection of used cars at great prices, paired with the most convenient customer journey in the used car market. Many of these structural advantages have started to kick in over the last couple of quarters, but we're barely scratching the surface at the moment when we compare with their long-term potential and critical mass.

In Q1, Autohero's growth rate surged to 48% year-on-year, delivering 32,500 units, a new quarterly record. Retail gross profit reached EUR 82 million, a 47% increase year-on-year. Retail GPU was EUR 2,555 for the first quarter. We are pleased to see that we can maintain a stable Retail GPU year-on-year while we accelerate our growth rate further to a new high. While we're focused on scaling quickly right now, we remain fully committed to growing Retail GPU over the long term.

Aided brand awareness reached 35% across all markets at the end of Q1, up 9 percentage points year-on-year, and 2 points higher than at the end of '25. We're currently launching brand ambassador campaigns with well-known public personalities in Germany, France, Italy, and Spain to ensure even more customers discover the highly differentiated and exceptional Autohero customer experience.

We also see a major opportunity to accelerate Autohero's growth by leveraging our established B2B purchasing brands and setting the stage for an integrated, trusted customer journey. That's why we're introducing [ Buy Autohero ] cobranding at branches that now serve as purchasing drop-off and Retail pickup locations. With this approach, we are able to deliver a seamless trade-in experience, bringing together the best of both worlds for our selling and buying customers. At the end of Q1, we had 82 cobranded locations and 77 Autohero pickup locations across Europe.

Let's close with a look at our long-term goals. By leveraging our proprietary pricing technology, our unmatched physical infrastructure, and our outstanding trading capabilities, we continue to create the best products and solutions in the industry. Our products deliver outstanding value for our Merchant partners and consumers alike as we offer them better prices, lower costs, more choice, greater convenience, highly motivated staff, increased trust, fast delivery, and competitive financing. All of those elements together create the superiority of our vertically integrated business model, the engine behind our growth and profitability track record.

We accelerated our market share growth, reaching a record 3.1% market share in Europe at the end of '25, which was a 50 basis point increase and a key step towards our 10% long-term target. We increased our adjusted EBITDA margin to 2.5% in Q1, a 40 basis points increase compared to Q4 of '25. We continue to be thrilled by the immense long-term opportunity in both Merchant and Retail, given the EUR 700 billion size of the European used car market.

In other news, 5 years after our IPO, we will host our first Capital Markets event on Wednesday, June 17, at 3:00 p.m. Central European Time, which is 9:00 a.m. Eastern Time. We invite you to join us for a live webcast in which we will present historic segment financials and lay out long-term targets for both our Merchant and Retail businesses. We're excited to provide you with a deeper understanding of each segment, and we very much look forward to welcoming you. The registration link to the event will be available in the IR section of our AUTO1 Group website right after this call.

With that, let me hand over to Christian for a detailed financial update.

Thank you, Christian, and hi, everyone. Q1 was a record quarter. So group sales and gross profit grew by 22%, adjusted EBITDA was at EUR 60 million, up EUR 15 million over Q4. We grew Merchant units with 19%, and we had record growth in Retail units of 48%. We believe that this is a testament to our strong customer offering, driving strong growth throughout both of our segments.

In Q1, we drove greater operational efficiency compared to Q4. We achieved 17% quarter-over-quarter growth in adjusted EBITDA per unit. We did this by increasing payroll utilization and also managing per-unit marketing investments. These results highlight the operating leverage as we grow the business going forward. Our strong unit sales and operating leverage drove Q1 results with adjusted EBITDA growth of 32% compared with Q4. We grew gross profit by roughly EUR 33 million in the quarter. As discussed in February's Q4 call, severe weather in January temporarily lowered Merchant GPU by 3% for the quarter.

As Christian noted, we prioritized Retail unit growth during the quarter to reach critical mass faster in the business while sustaining our Retail GPU. Operationally, we increased utilization and actively managed core OpEx, reducing the per-unit marketing investment versus Q4 substantially as we kept absolute marketing spend stable. Finally, higher unit volumes drove up internal logistics, while increased payroll reflects ongoing investments in key growth areas.

Our balance sheet and cash position remained very strong. We ended the quarter with EUR 652 million in total cash, an increase of EUR 48 million from year end and 0 corporate debt. We had inventory stable over the quarter. This highlights our faster trading speeds as we successfully grew in sales. On the financing side, captive finance assets increased by almost EUR 90 million. We utilized committed securitization lines to refinance EUR 71 million of these additions. As a result, our captive finance cash flow -- cash outflow was around EUR 19 million. In Q2, we expect normal working capital patterns to reverse some of Q1's overall EUR 48 million strong cash inflow.

Now looking ahead, we are confirming our guidance previously communicated. So for the full year, we expect the total units sold to reach between 940,000 units and 1 million group units, consisting of 815,000 to 865,000 Merchant units and 125,000 to 135,000 Autohero units. We expect an absolute adjusted EBITDA of EUR 250 million to EUR 265 (sic) [ EUR 275 ] million and a gross profit of EUR 1.1 billion to EUR 1.2 billion. Given our Q1 performance and run rate, especially in units, we are targeting the top end of our guidance range. While early data indicates the potential Autohero volumes to exceed the current guidance range, we're striving to best balance unit growth and profitability going forward.

To wrap up the formal presentation, Q1 was a record quarter. Our vertically integrated business model enabled us to deliver a highly differentiated customer offering, which continued to drive outsized market share gains in both our Retail and Merchant segments. And this quarter marked another important step towards our long-term financial model of 10% market share at 5% to 9% adjusted EBITDA margin. As highlighted by Christian, we look very much forward to diving into the details of our segments, their historical performance and long-term targets with you at our Capital Markets event on June 17.

With that, I'd like to open up for questions.

[Operator Instructions]

Thank you. And we will start with James Tate from Goldman.

Our first question comes from James Tate.

James Tate from Goldman. I've got 3 questions, please. I guess, firstly, the acceleration in Autohero unit sales to almost 50% was really strong in Q1. But have you seen any deceleration so far through Q2? And maybe how should we think about the cadence of growth through the year, given you mentioned finding that balance between growth and profitability and the guidance? But even the top end of guidance implies quite a sharp deceleration to less than 30% for Q2 to Q4.

Secondly, on the slightly weaker Merchant GPU, you mentioned the impact of the adverse weather in January led to maybe greater discounting. So is it fair to say that February and March GPUs were in line with the EUR 975 guided for the full year and that trend has continued through Q2?

And thirdly, on OpEx per unit, that improved quarter-on-quarter in Q1 and is in line with what you implied by the full-year guidance. Given Autohero marketing costs per car should come down through the year, could we see improvements in OpEx per unit? Or are there other investments offsetting this?

Thank you, James, for those questions. So yes, indeed, we're very happy with the acceleration of Autohero units to the 47%. And we are expecting, if we talk absolute increases, quarter-on-quarter, so sequential increases on the units, the overall Q1 performance can mean in certain scenarios that we will be able to beat the upper end of our unit guidance. However, this is a little bit too early to tell. So we're very happy with the Autohero results in Q1. There are likely scenarios where we can beat the upper end of the unit target, but for us, this is too early to say right now. However, you can expect inside the current guidance, a slight to substantial increase sequentially in absolute units quarter-on-quarter. Does that clarify the first question?

Yes, that's helpful.

Yes. So Merchant GPU, yes, indeed saw some slight reduction -- I mean, 3% reduction versus Q1 of last year. And, yes, 80%, 90% of that effect was the weather. We are expecting a sequential increase of Merchant GPU for the quarters to come. So let's say, Q2, a slight increase. I mean, we're in the middle of Q2. So this is a pure expectation right now, but this is like how we see things, so slight increase and then stronger increase in H2.

Christian, on the Merchant GPU, we saw -- James -- improvement during the quarter. So we started lower and then ended higher. So just confirming what you said.

Yes. So the intra-Q1 walk was indeed, yes. So January was the weakest and March the highest out of the 3 months, but that was a typical seasonal pattern. It was just way more pronounced and way more pressure on the Merchant GPU because of the slow start, and that was overall manufactured in the current one.

And on the third question, so OpEx per unit overall. So yes, there's a lot of things in there, right? So we're expecting to see improved marketing costs in Retail over the coming quarters. But as we haven't split out the segments yet, and we're talking about total OpEx per unit for the group, then we are expecting to stay in the seasonal pattern. So this means we are expecting a slight increase in OpEx per unit for Q2, then a reduction for Q3, and then back up for Q4 in line with the typical patterns that we see.

However, we're aiming to achieve relatively better values year-on-year like we have now started with the ramp. So it's not yet [ probably ] with the track on Q1. So we're not able to beat the Q1 OpEx per unit. But given Autohero's scaling, that is also, I think, not a realistic scenario. However, for the quarters to come, we would like to get better in the year-on-year absolute euro comparison when you compare OpEx per unit in the quarters. Does this answer your question?

Yes, I think so. Just trying to understand if Autohero EBITDA per unit is improving through the quarters through the year, and what's offsetting that at the group level?

I mean, it's also just the absolute higher amount of Retail units, right? So OpEx per unit in Autohero is, yes, I think more than like roughly 3x or more. So if we are changing dynamics and we're getting a higher Retail unit share, then this is one effect in the overall OpEx per unit. But I think, yes, this will all become a bit easier once we give the segment disclosure.

Next question comes from Andrew Ross.

Two from me, please. First one is to ask about the inventory levels in Retail right now. It looks, by looking at the number of cars on the Autohero site, there are fewer cars listed today than there were a few weeks ago. And so you could conclude that you've been clearing through some inventory. My question is how to interpret that? Like should we be assuming that you guys built inventory at the end of last year? Now you're turning through it more effectively, which I guess is good for your unit economics. But you still have enough inventory to grow units quickly from here? Or has there been a deliberate calibration of the inventory in the context of the uncertain macro? But it would be helpful to get comfort that you're [ sat on ] enough inventory to keep growing those Retail units in that 40% zone through the end of the quarter and going forward? That's the first question.

And the second one is one about the annual report, which we haven't had a chance to ask you about since it came out. But one of the things that was in there was that the impairments on your Merchant receivables stepped up quite a bit in 2025. And I was hoping if you could give us some color as to the drivers of why it stepped up and your comfort levels as to the credit that you're holding on the books as you scale that Merchant receivable business.

Thank you, Andrew. So I will take the first question and Christian the second. On the inventory Retail, I think the observation in general is correct. So what's happening there is that we are in the process of rolling out a version 2 of our Autohero trade system. That version 2 is geared towards higher inventory turns and higher inventory efficiency. So it does not have anything to do with macro, Iran, or anything else. So it includes a renewed stocking algorithm that, in many cases, reduces inventory size and cluster structure with the aim to trade faster. And we're in the process of rolling that out. And, yes, we're really excited about that because it might lead to a higher efficiency. But, yes, we now need to see this in action. Nevertheless, we remain fully committed on our unit and gross profit guide for Autohero.

And on the second question, on the Merchant finance, we recognized, as you noted, the credit payments of EUR 11.8 million in '25. This is net of recoveries. And this was due to -- this was a one-off in underwriting. We rolled out one market and where local process and dealer behavior encouraged a very high level sold-out-of-trust cars. So we've taken the learnings from this, and we did this over 1 or 2 months last summer in Q3. And this has now been integrated in the new underwriting and the credit monitoring on this. So we've seen that this is coming down significantly since then. So it's a legacy issue that we fixed in our underwriting. So we see that we have a net interest margin around 7.5% or so on the Merchant finance. And for '25, including this, it was clearly still profitable and an attractive business and a support to the demand from the Merchant base.

That's helpful. If I could follow up on the first question. So it sounds like the interpretation is you're just improving the stock turn of Merchant, which I guess means -- sorry, of Retail, which means you're probably buying fewer cars this quarter, relatively speaking, to your unit growth than you might have done in previous quarters. And I'm guessing that must be therefore good for your SG&A per unit because you don't incur the purchasing costs. So how do I then square that with your guidance for the SG&A per unit for the whole group might be a bit higher in Q2 than it was in Q1? And I hear you, there's a negative mix effect from more Retail units, but I would have thought the dynamics that are going on in Retail would be quite positive to the unit economics.

Yes. I think -- I mean, there's a couple of drivers or many drivers at work when we come down to OpEx per unit. We're expecting overall for total units, a slight decline on absolute volumes Q1 to Q2. And there is probably like a, yes, this is a lower Merchant units and a bit higher Autohero units. But overall, this creates obviously, an upward drag on the OpEx per unit. There's also a seasonally higher marketing cost in Q2 than in Q1 when you look at [ TV scores ]. And at the same time, we are in the process of rolling out the system. This is now pretty much started since the beginning of the quarter. We are in the middle of it. So it's too early to derive any conclusions at the moment. So we're carefully tracking this. At the moment, it's exactly on plan, but it's too early to draw conclusions for the full quarter.

Can I just clarify one thing, Christian? You said in your Q2 guidance, you said slight increase sequentially in Retail units, right? Not substantial. You said slight increase, just to be clear.

I said slight increase in Retail units and slight reduction in Merchant units.

Thanks, Andrew. And with that, over to Nizla Naizer from Deutsche Bank.

Thank you. I have 2 questions from my end as well. The first is the contribution from the financing product to the Autohero GPU and Merchant GPU. Could you maybe give us some numbers as to how much financing contributed to each? And connected to that, do you expect this share to grow throughout 2026? And how is the health of your finance customer? I understand that last year, there was the one-off learning, but given the current macro climate, has anything changed when you look at the delinquency rates, et cetera? Some color there would be great.

And my second question is, again, you mentioned it briefly, Christian, but like the macro environment, the conflict, et cetera, how is that affecting your Autohero customer behavior and also your Merchant -- the health of the Merchant customer that you're catering to. It would be remiss of us not to ask you this question given the current situation. So some color there would be great.

Yes. So I suggest that Christian take the question on financing and then I go back on the macro one.

We're rolling out both the internal consumer finance and also the Merchant finance. So the contribution from this will increase gradually. So in terms of Merchant finance, it's a smaller long-term potential given that it's a profitable product. But however, it's a demand support for our merchants, so in order to drive units as well. So in that way, it's more limited. And in the consumer finance, it's now becoming a higher proportion of internal finance versus the external finance. So it's adding on quarter-on-quarter for the rollouts that we're doing. And it's about now, say, between EUR 300 and EUR 400 for the internal overall on the GPU contribution. But we have this rolled out. In terms of -- do you want to take the credit risk question, Christian? Should I go for that one?

Yes. I think that's your area.

Yes. So in terms of what we see in credit risk, we've actually seen in Q1 improvements versus '25. And I think this is largely driven by that we're learning a lot as we roll these things -- we roll the internal financing out to more and more markets and more and more clients. And all of that said, so we haven't seen in Q1 so far any negative impact of the macro situation. And that said, clearly, we are really closely monitoring the macro and having our eyes on both new originations and the existing books.

On the macro in general, so we can't really comment on how this will play out on geopolitics because, like anybody else, we don't know. It's a fluid situation. What we can see, the current impact is limited. We have very good ways to measure this. It is there. It is, however, limited and contained, and it is within our guidance.

And with that, over to Mourad Lahmidi from BNP Exane. Mourad?

Yes, hello. Sorry, Philip, I just unmuted myself. Yes, I just want to ask about the used car market across Europe and in the countries where you operate, especially with Aramis this morning highlighting a weak used car market in France, for instance, and in other markets. Have you seen trends that are similar? And has it been a headwind to the business so far?

Thank you for this question. The used car market in general, when we talk about Q1, so as far as we can see in the data, is roughly stable for the markets that we are operating in. So we are estimating this to be at a negative 1.3%, which we consider roughly stable. The January value for the European market and the Feb value was particularly lower and then there was some huge catch-up in March.

So far for April, not all markets have published their data. Some are a little slower. So we're seeing that France has quite a strong impact in April. But as you know, we are trading -- across the continent, we are trading into 30 markets, we're buying in 10-plus markets. So we are currently not seeing the market as a major driver in a negative way for Q1. I think Q2, the dynamics are at the moment playing out. But from what we see, similar to what we said on the question, the macro impact is limited and contained. Could there have been a little bit of a tailwind with higher units and the weather being not so icy at the beginning of the year? Yes, I think our results in Q1 could have been a little bit better.

And I have, if you allow me, a follow-up. When you published the full year results back in February, you talked about the year being back-end loaded in terms of EBITDA generation. Is there any reason for your stance to change on that? Should we expect a much higher EBITDA in the second half versus first half?

I think we -- yes, I would still back that statement back in the full year earnings call. So yes, we expect absolute EBITDA generation will be stronger in H2 than in H1.

Thank you very much. Thank you, everybody, for dialing in. Thank you, Christian and Christian. I think that concludes the Q&A session then. As a quick reminder, we are in London next week on conferences with the UBS on Wednesday and JPMorgan on Thursday. And also, just to confirm, if you go to IR webpage, the registration for the Capital Markets event on June 17 is live. I'm sure that we will probably meet a lot of you later back then. So thank you very much. And again, if you have any other questions, please feel free to get in touch.

Thank you so much, everyone. Goodbye.

Bye-bye.

Hello. Good afternoon, and good morning and good evening to international participants. Welcome to the AUTO1 Group Fourth Quarter and Full Year 2025 Financial Results Presentation. I'm Philip Reicherstorfer, Group Treasurer. I'm joined today by Christian Bertermann, our Co-Founder and CEO; as well as by Christian Wallentin, our new CFO.

We will start as always with the presentation followed by questions and answers. [Operator Instructions] Before I hand 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 today.

And now over to you, Christian.

Thank you, Philip. Hi, everyone. Welcome to the AUTO1 Group Q4 and Full Year '25 Earnings Call. 2025 was a fantastic year for us. We accelerated growth rates across both the Merchant and Retail segment. We achieved the highest EBITDA margin in our 14-year history. These outstanding results are a testament of the value-first strategy that governs our strategic thinking and decision-making. We have been investing for more than a decade to build a leading vertically integrated pan-European used car platform with the goal to maximize value for everyone in this market.

We focused our investments on various areas, notably our AI-powered pricing technology, our unique logistics network, our dense drop-off and pickup network, our production center network and our financing facilities. In each of these areas, we are the leader in the European used car market. While we continue building our infrastructure, we are now leveraging it. We delivered record volumes and record profitability simultaneously, benefiting significantly from the powerful structural advantages of our unique, vertically integrated business model. These advantages are increasing with further scale, forming an undeniable flywheel of improving product value and unit economics in parallel.

Group unit sales reached a new all-time high of 842,000 vehicles last year. This is an increase of 22%. Total gross profit surged by 37% year-on-year to EUR 991 million and Group gross profit per unit also increased significantly, climbing 12% year-on-year to EUR 1,172, up from EUR 1,049 in '24. We delivered our best ever full year adjusted EBITDA of EUR 198 million. This is 81% more than last year. Our adjusted EBITDA margin improved by 70 basis points to 2.4%, demonstrating the substantial operating leverage within our business.

Our vertically integrated business model has inherent structural advantages compared to the traditional brick-and-mortar approach in used car trading. These advantages directly translate into increased value for our customers. We are, for instance, able to generate higher selling prices for our selling customers as we aggregate more demand faster, enabled by our pricing and platform technology. We are also able to process transactions at lower unit costs as logistics costs and miles decrease and residual operating cost per unit decline with higher utilization.

Similarly, we're increasing value in other categories enabled by vertical integration. We can increase selection and convenience faster as our demand scales. We're able to offer lower buying prices for our buying customers helped by lower unit costs and the vast reach of our physical networks and we're able to offer competitive financing rates enabled by our unique financing backbone. We are increasing trust, enabled by our rigorous car quality standards and our highly motivated staff. And all of this together means higher value for our customers. And that, in turn, translates into more demand for our products and services.

Now to one of the market's favorite topics, AI. Let me take a moment to focus on the question, how can AI be effectively applied to the used car market? Let's start with the obvious. Any AI model starts with data. In the used car market, the most important data you can own is pricing data. In contrast to openly available sources like the public Internet or open source code hosting facilities like GitHub, used car pricing data is private. Obtaining this data isn't straightforward. In order to generate, you have to start trading. Even classified platforms that service market aggregators do not own the final transaction price data. They only store asking prices and they lack detailed information on the car's condition.

We, AUTO1 own the largest and most comprehensive pricing data set for the European used car market. And that has always been a key priority from the very beginning. After gathering trading data for 5 years since foundation, so since 2012, we started to build our first data science teams tasked to develop machine learning-based pricing models, roughly '17, '18 with the goal to leverage our proprietary transaction data. Today, these pricing algorithms are one of the strongest elements of our competitive moat. They cannot be replicated without being us or going through the same history of trades.

But data alone isn't enough. With price quotes only, you cannot grow and grab share in this market. You need to back them up with real pricing power or in other words, you require sufficient supply and demand in order to create the same real-time trade system that sits at the heart of AUTO1. We operate the largest European vehicle drop-off and delivery network, seamlessly connected to the biggest logistics infrastructure for used cars. With a weight of 1 to 2 metric tonnes, our goods require a unique logistics chain. The combination of our AI pricing models with our physical network infrastructure enables us to efficiently aggregate supply and demand, always focusing to maximize value for all of our customers.

In short, we own physical networks that form a very strong moat and cannot be conquered by an AI prompt. You also need to be an outstanding trader in our business, and that requires a sufficient balance sheet and smart management of capital. The sheer size of our balance sheet and the efficient management of it through our real-time trade system is another rock-solid element of our competitive moat that simply cannot be replicated by AI software only. One thought becomes more and more clear. If you set out to apply state-of-the-art AI technology to the used car market with the goal to become the long-term market leader, you will create a company like AUTO1.

You can think of AUTO1 as an AI-enabled Amazon for the used car market. We are not a company where AI is being put on top of legacy systems. Rather, AI is rooted deeply in our DNA for over a decade. As I just mentioned, we started AI pricing in 2016, '17. We are a company that leverages this homegrown technology to connect our proprietary pricing intelligence with our unique physical transaction network to handle the complexity of the used car market in the most efficient way.

Okay. Let's continue with a look at the Merchant segment and its performance last year. Merchant, our largest business, performed very strongly last year, achieving new records across all key metrics. Full year unit sales increased by 20% year-on-year to a record 741,000 vehicles. Breaking through the 20% growth level is a strong confirmation of our outstanding execution and the value-first strategy we pursue, particularly given that Merchant is our largest business segment that we started 14 years ago.

In Q4 alone, we sold 190,000 units to our partners, representing an increase of 17% year-on-year. We also achieved our highest ever Merchant gross profit of EUR 723 million for the year. This is EUR 160 million or 28% more than in the year before. Growth in the fourth quarter was also very strong with gross profit landing at EUR 188 million, up 23% from Q4 '24. Merchant GPU was EUR 976 for '25, representing an increase of 7% year-on-year, a result of the steady progress of our pricing algorithms and trading systems, higher Merchant average selling prices and strong Merchant finance execution.

Merchant GPU in Q4 was EUR 986. This is EUR 44 more compared to the same period in '24. In 2025, we achieved a new record number of dealers purchasing on auto1.com. For the ninth consecutive quarter, our network of active partners grew, reaching 33,700 in Q4, an increase of 23% over Q4 '24. For the full year, a record 54,400 partners purchased from us, up 22% compared to the year before. The average basket is roughly flat year-on-year, driven by the strong growth of new dealers.

We also continued our branch network build-out at a high pace with the aim to increase supply capacity fast enough to meet our growing Merchant and Retail demand. We added 178 branches last year, a 32.5% increase year-on-year, bringing our total branch count to 725. We purchased 809,000 cars from consumers with around 16% of our cars purchased for retail. By the end of last year, we operated a quarterly capacity of around 300,000 units, an increase of 38% year-on-year. We supported our growing dealer base strongly with logistics as well. Our network processed 29% more transports to dealers last year at improved speed, building out our physical capacities further and further.

The overall transport share in the Merchant segment increased by 7% to 48% year-on-year, while the transport share of all cars sold cross-border increased even more by 11% to 60%. We are now operating the largest used car logistics network in Europe with more than 1.5 million transports last year and over 170 logistics compounds across the continent. We are also very happy with the progress of our Merchant Financing product in '25. We extended Merchant Financing to Poland and Sweden last year, and it is now available in 8 markets in total. More than 4,400 dealers used our financing product last year, an increase of 47%.

Overall, we increased Merchant sales financed by EUR 580 million, up 74% year-on-year, and we increased financing attach rate by 41% to a new level of 17% overall. We believe that we can increase the Merchant Financing attach rate to a level of 50% in the long term. The number of vehicles financed grew to 124,000 units for the full year, a 73% increase compared to 2024. Merchant Finance in its current form is a great product for our customers as it combines faster transaction speed with maximum buying comfort and increases the capital base of our dealers, letting them grow together with us.

However, we believe our current product offering is only the first step. We aim to add more geographies later in the year, and we're obsessed with the question on how we can support our vast dealer base with additional financial products going forward.

Let's now look at Retail results. Our long-term unit and gross profit track record in Retail is a strong confirmation of our vertically integrated Retail business strategy and the structural advantages that play out more and more as we increase scale. No other public auto retailer in the EU grew faster last year than us. And while our Retail market share grew strongly by 36.35% with 0.44% of the total market, we have an almost infinitely long runway ahead of us.

However, our new scale already drives vertical advantages in a variety of areas from pricing models and inventory algorithms to delivery time, warranty attach rates, production center efficiencies, logistics speed and cost and the strength of the Autohero brand. We continue to be absolutely thrilled by the long-term opportunity we have with Autohero. For the full year, Autohero delivered excellent results. We made outstanding progress across units sold, gross profit and GPU. Our Retail segment achieved a major milestone last year. delivering a record 101,500 units and surpassing the 100,000 unit mark for the first time in Autohero's history.

This represents a 36% year-on-year increase compared to 74,400 units in '24. In the fourth quarter, Retail continued its strong momentum, growing 40% with 28,700 units sold versus 20,600 in Q4 of the year before. Retail gross profit also reached a new all-time high of EUR 268 million for the full year, a significant 65% increase year-on-year. Retail GPU climbed to EUR 2,605 for the full year, up 20% year-on-year and set a new quarterly record of EUR 2,632 in Q4. These great results strengthen our confidence in reaching our long-term retail GPU target of EUR 3,000.

We are also laser-focused on our goal to make Autohero the leading European used car brand. Our brand awareness grew strongly last year, especially from the second to the fourth quarter when we stepped up investments. By the end of last year, aided brand awareness was 33% across all markets. This is an increase of 7 percentage points compared to the beginning of '24. Our strong NPS of around 70 helps us to build more scale faster as our existing customer base serves as a future demand multiplier. We also continue to set new standards for efficiency and transparency through our proprietary AI-powered damage detection technology.

In Q4 of last year, we successfully scaled our in-house AUTO1 car audit technology to 5 major production centers across Germany, Spain, France and Italy. Our CAT AI technology leverages deep learning models trained exclusively on our proprietary data set of real and diverse car images to deliver highly accurate and detailed inspections for each vehicle. Delivering seamless fulfillment remains a top priority for us as it's an important component of our superior customer experience. In the fourth quarter, we achieved a delivery time of 10 days. This is 13% faster than in Q4 '24.

This result was driven by the expansion of our European fulfillment network, which allows customers to choose between convenient car pickup or home delivery. We are now offering 153 pickup locations across Europe, of which 42% are designed as Express hubs, ensuring cars are ready for our customers within just 72 hours. In the second half of '25, we accelerated our network expansion by leveraging more of our existing purchasing branches as combined pickup and drop-off locations. This strategic move allows us to bring our brands and services closer together, delivering enhanced overall customer experience. We still need to learn much in this area, however, especially how to best optimize the trade-offs between branch space, logistics speed and cost combined with increased Retail purchase conversion.

Let me now finish with a fresh view on our long-term ambition. We continued our strong growth trajectory last year, achieving a record market share of 3.1% in Europe, a 50 basis points increase over the last year and an important next step on the road to our 10% long-term market share target. With 27.5 million used car transactions across the European market, our growth outpaced the overall market growth by far, growing nearly 14x the rate of total used car transactions.

This exceptional performance underscores the strength of our vertically integrated business model and our increasingly strong market position. Despite this important next step towards our long-term market share target, we are still barely scratching the surface of our immense opportunity within the EUR 700 billion European used car market. Also on margin, we made meaningful progress last year, reaching a new record for adjusted EBITDA margin with 2.4%, a 70 basis points improvement compared to 2024, well placed for a long-term adjusted EBITDA margin of 5% to 9%.

To sum up, 2025 was a great year for AUTO1 and beat 2024 on all metrics. New records for units sold in both segments for revenue and gross profit for Retail and Merchant GPUs for adjusted EBITDA margin and absolute EBITDA and consequently also net income. Beyond these results, stands a very talented and experienced team, execution experts with a relentless drive and ambition to always build our business, our platform, our network bigger and better. We continue to be thrilled by the long-term opportunity in both Merchant and Retail in this gigantic market, an opportunity that we continue to seize through our vertically integrated strategy every single year with increasing traction.

With that, I'll hand it over to Christian, who will provide further insights into our financial results.

Thank you, Christian, and a warm hello to everyone joining us today. It's a real pleasure to walk you through our Q4 and full year '25 results and also share in the end how we think about the path ahead for '26. '25, as Christian mentioned, was an exceptional year for AUTO1. We delivered record results across all our key metrics, and we grew market share, further on the scalability and the strength of our model. So if we look at the numbers, for the full year '25, we delivered more than 842,000 Group units. This comprised of 741,000 Merchant units and over 100,000 Autohero units, representing a year-on-year growth of 22% at the Group level.

The Merchant units were up 20% and Autohero units increased by 36%. During the year, our average selling price climbed by around 7% year-over-year. Looking at gross profit, it grew to EUR 991 million, up 37%, while adjusted EBITDA reached EUR 198 million, growing by 81%. This considerable profit expansion well ahead of unit and top line growth is a clear testament to our operating leverage. As our platform scales, incremental volume continues to drive outsized earnings, validating the investments and the strategic decisions that we have made over the recent years.

Focusing on Q4, which is typically our softest trading quarter, we grew Group units by 20% year-over-year, even as December trading conditions slowed down over the holidays, consistent with the normal industry pattern as both dealers and consumers tend to transact less during this period. We closed the year with a Q4 adjusted EBITDA of roughly EUR 45 million. This is a strong result, especially considering our ongoing investments into the Autohero brand, our inventory selection and our expanded purchasing capabilities. These investments into our inventory and organization are foundational for the next phase of our growth, ensuring we stay ahead of market trends and continue to enhance our leadership position.

In '25, we grew gross profit by EUR 266 million. Almost 60% of this growth was volume driven, showing the market appreciation of our platform and model. The remaining 40% came from advances in gross profit per unit, demonstrating the increasing attractiveness of our customer offering we're building and the continuous improvements in the business. Looking at the core OpEx, we made major investments into our brands and team capacity, particularly towards the end of the year to fuel our continued strong growth in preparation for 2026. Internal logistics expenses reflect volume growth across Merchant and Retail.

So in summary, driven by 22% growth in unit and profitability improvements, gross profit grew 37% and adjusted EBITDA grew by 81% to the record level of EUR 198 million. We are pleased to see the strong 25% adjusted EBITDA growth, reflecting both the positive scale effects that we see and the strong -- the strategic investments we're making into the brands and our organization to support future growth.

Moving on to the balance sheet. We are continuously maintaining a strong balance sheet with a stable cash levels of around EUR 600 million and no corporate debt. We continue to build inventory to support the growth with roughly EUR 1 billion at the end of Q4. We funded the growth in inventory through our inventory ABS and also positive trading cash flow during the year. Inventory ABS loan-to-value was 83% at the end of the year. Our captive financing products continue to scale with our overall growth, supporting profitability and our objective to deepen our relationships with our customers and also achieve a higher share of wallet to increase the lifetime value of each customer.

The captive finance business volumes grew almost 50% year-over-year and is increasingly becoming a strong contributor to the current and future profitability. At the moment, consumer finance contributes EUR 500 of GPU in Germany and Austria, and we expect ongoing growth towards our long-term GPU targets. The GPU contribution of Merchant Finance is less pronounced, but we see it as an important demand driver with overall attractive risk-adjusted returns profile, which also contributes to customer stickiness, as Christian mentioned, for the qualified dealers.

Overall, with my background in financial services, I'm spending a lot of time with the team developing our captive finance strategy going forward. We will continue to build this area to drive further profitability across the Merchant and Consumer businesses.

Now to guidance. For the full year 2026, we guide 940,000 to 1 million Group units, comprising of 815,000 to 865,000 Merchant units and 125,000 to 135,000 Autohero units. We expect a gross profit of EUR 1.1 billion to EUR 1.2 billion and an adjusted EBITDA of EUR 250 million to EUR 275 million. At the top of the end of our guidance range, we set the important milestone of 1 million units traded for 2026. We expect that the EUR 50 million to EUR 75 million year-over-year EBITDA improvement to be fueled by unit growth, driving absolute gross profit expansion with Merchant and Retail GPUs broadly flat compared to 2025 to drive growth at pace.

Overall, we are expecting further operating leverage as adjusted EBITDA growth outpaces unit growth. We are absolutely thrilled by the opportunity in front of us and continue to build scale now, expanding our leadership position. A brief word on quarterly trends. We expect adjusted EBITDA distribution between the quarters to be closer to the 2024 precedent, which means that adjusted EBITDA for the second half of the year will be significantly higher than for the first half of '26. As in '25, we expect AUTO1 trading cash flows to be positive in 2026, reflecting the profitability of our model and also reinforcing our ability to self-fund our growth. We expect CapEx to continue to be moderate at around 25 basis points of revenue.

In summary, to round up things, 2025 was a fantastic year for AUTO1 Group, a year in which our model proved itself further, delivering record growth record profitability and significant market share gains. As we look to 2026, we believe our model is becoming increasingly powerful. The flywheel is working. A stronger brand drives more customers, more customers enable better inventory selection and pricing and greater scale drives lower unit costs, improved logistics and fulfillment. We are growing from a position of strength, our balance sheet is robust, and we are geared for continued expansion. We look forward to updating you on the progress as the year progresses.

With that, I'd now like to open up for questions.

[Operator Instructions] Our first question comes from Nizla Naizer.

Can you hear me?

Now we can.

Okay. Excellent. I have a few questions. The first, if you can kind of give us some color on how Q1 is progressing in terms of growth, given in mind -- keeping in mind that you've got a range of growth for the full year. Where does Q1 sort of sit in that range? Some color there would be great. And is there a phasing of investments in 2026 we need to be aware of? You did say that EBITDA in the second half would be higher, but sort of where are the investments going into over the course of the year would be great to know?

And my next question is on the average used car price. Now it was down slightly in 2025 from what we see, but your ASPs were up quite nicely by 7% for the Group. Can you take us through your ability to grow your ASP and your expectations for 2026, both in terms of prices in the market and your own ASP? I'll leave it there for now.

Thank you, Nizla. Yes, your first question was on progress growth because you're saying like, okay, we're operating like a unit growth corridor here for Q1 and how Q1 is going. So we had, I would say, a good start into the year. And we are, from a unit point of view, not expecting to change anything in our growth trajectory for now though there was a little bit of headwind at the beginning, I think, with the winter conditions. But yes, growth-wise, yes, I would say we will continue the latest trends. Phasing of investments, Christian, do you want to take that one?

Absolutely. So I mean, there are 2 different kind of investments. So we have invested a lot into Q4, so brand and operational capacity. So we see that we will run on those investments, so getting utilization higher on the OpEx side. So we will grow into the OpEx that we see from Q4 and go into, as I mentioned, implicitly, the OpEx per unit, we see that trending down from Q4 into the 2026. And then in terms of investments, so CapEx is marginal for us. We got around 25 basis points. So that's 20 -- let's say, that around EUR 20 million or so historically.

And the -- we have grown quite a lot in investments across '25. So expanded production and Retail fulfillment capacity. We invested into the Autohero brand, we'll continue to do. So we will not see as quick investment into branches, et cetera, in the beginning of the year at the very least. So we're using the capacity there. So it will be more towards -- if we see that we're tracking on the growth path that we're in, then we will continue when utilization is slightly higher towards midyear. So we will evaluate this during the year. And on the ASP as well, do you want to take that or should I?

You can also take that.

So the ASP, I think there's a few trends in this. One is that if you look back historically, we've always gradually increased ASPs. So we were trading more older cars historically. We were trading newer and newer cars. So that's one thing. And then we also look -- when we look into the future, our cars are, let's say, 5, 6, 7 years older than the new car prices.

So we're trading the bucket that we are trading. We see that there's a push upwards in ASP for that particular segment of the market when we're moving to also amplified by moving to slightly newer cars as well. So we see, from our point of view, a higher ASP going forward as well. We saw that in '25, it was a 7% increase in ASPs for us.

Maybe to add to that, I mean, the overall group ASP is, on the one hand, pushed by higher Autohero share, right? So Autohero units almost double the ASP than what we trade in the Merchant segment. But then also what Christian referenced, so the overall basket that we're trading, for instance, on Merchant, like yes, it's roughly 10 years and for Autohero it's younger. This basket is having a distribution of different years, right? So some of the 200 -- let's call it, '15 -- we have 2015 average price. But then there is new cars in there from 2024, few only, and there's old cars from 2008.

And as we are progressing through every single year, then we're moving up 1 year in kind of the new registration age of the car. However, when we are tracking the new car prices of the incoming, so the newer the fresher cars that are coming this year, when we track the new car prices along each and every single year that we're trading, we're seeing that the new car price has strongly evolved or simply put from 2015 to now. So new cars have become very much more expensive over the course of the last 10 years.

And those more expensive units, assuming stable residual value, then as a basket effect increasing also the ASPs that we are trading. So we are not depending on 1 year of new car price movement, but we're trading in the basket and the basket is moving up, assuming stable residual value with every single year, which gives us a tailwind on ASPs.

Next question comes from James Tate.

It's James Tate from Goldman Sachs. I've just got a few questions, please. I guess, firstly, on AI. And I think you touched upon well in the presentation about your right to win as AI technology develops with your unique data sets in the presentation. I guess, have you started to see any changes in the competitive landscape or any new entrants into the market looking to compete with your business, whether on the sourcing or Retail side?

Secondly, the continued investments into Autohero marketing and the broader logistics build-out will somewhat weigh on EBITDA margin expansion in 2026. Is it fair to assume that EBITDA margin expansion will accelerate and improve in '27? I guess, essentially, can you help us understand the operating leverage of the business as it scales over the next 1 to 2 years and give us confidence as a path to your long-term EBITDA margin targets?

And lastly, you touched upon some of the headwinds at the start of the year from winter conditions. I guess what is your assumption for broader market volume growth that you embed in your full year units sold guidance?

Yes. Thank you, James. Yes, on the AI, I mean, it's very simple. No, we have not seen any new entrants. And again, yes, I mean, we are at the core, a dealer. As a dealer, you have to move goods, you have to buy them, you have to sell them, you have to have balance sheet. So I think the area that is being attacked by AI, especially like the very distributed large language models with OpenAI and Grok, but then also with Google Gemini.

So on the, let's say, first touch point with the market, customers searching for a car, customers selling -- interested in selling their car, I think it might naturally be shifting a portion of the traffic to those to those AI companies and a little bit away from the classifieds, which is also a similar trend that we have seen with, for instance, Google vehicle ads in the last couple of quarters. So for us, this does not pose any threat at all because we are -- the cars that we're buying, the cars that we are selling, we're selling them because they have great prices.

And when we are -- and because we have a fantastic brand out there and a fantastic service. So it's just the way how the customer finds us unless they go direct to our brands, which is obviously the best way, direct customer acquisition through branding, when we are in the paid advertising space, that might change a little bit, but that would, for us not change a lot because we are present in those spaces as well because of the strength of our brand. And then on the other hand, they will, at some point in the next probably months or quarters, OpenAI already announced that they will go into advertising, have competitive systems to be able to pay for that traffic as well.

So in other words, for us, I think those will develop as an advertising channel, some of that, which does not pose a threat to us. But for the incumbents, the matchmaking incumbents, namely the classifieds, which are enjoying a strong organic traffic at the moment. So we're neither seeing any competitive entrants somewhere. And yes, we are our own competition by now. So it's our ambition that is the competition, and it's all the small and bigger dealers out there where we want to do the best possible job in Retail. And we're not competing with AI prompts at the moment.

Even more so, we are owning the pricing technology that is vital for this market as illustrated in all of the argumentation. And maybe I take the third question as well, which is the market, what do we assume with the market? So yes, market has come down in January because of the slow start. It's catching up in February. Overall, we are -- but that is a weather effect. Nobody can change that. Overall, we are assuming stable volumes or slight growth. We've seen that in the latest full year numbers, a little bit more than 1% growth. So we assume in our forecast stable volumes. And then Christian, maybe you can go and tackle the investment EBITDA margin going forward, long-term path question.

Absolutely. So I think stepping a little bit back on that question, James. So we see the market opportunity ahead of us. And we believe we absolutely have the right model to capture that opportunity. So we clearly want to expand our leadership position and to grow market share in sync with growing profits really. So we're preparing the organization to really grow, right, and doing that in sync with growing profitability.

So with that said, so we think the right priority this year in 2026 is to scale the business decisively, so grow the adjusted EBITDA absolute level while doing so, which is reflected in the guidance. And we absolutely continue to target our long-term EBITDA margin. And we believe that these investments in Autohero scale brings us closer to that target faster.

So I don't want to comment particularly on 2027, but you can look at the last few years, historically, we are expanding the margin as well as the units clearly. So both of those are equally important. And for the '26 guidance, we are finding the right trade-off being pushing that profit expansion with units and then implying stable GPUs as well.

Our next question comes from Marcus Diebel.

Just questions left from my side. Free cash flow for '26, how should we think about free cash flow developments given that we have the EBITDA guidance? Second question, if you can just tell us a bit more about what you see as a weather impact in January? We understand, obviously, we have a full year guidance and clearly the weather has been impacted, but there was a discussion, obviously, this morning. So if you could just tell us what you think the sort of like impact on volumes, in percentage terms roughly you have seen in January just to get -- to understand that?

And then maybe thirdly, if you can tell us a bit more again on your assumptions on Merchant volume growth in '26. What makes you confident in those volumes? What are the underlying assumptions that would be very helpful to just get a little bit more detail how you get to Merchant guidance for '26?

Do I do the free cash flow, question?

Absolutely.

Yes. So we are continuing to -- we did grow with profitable or positive cash flow on the trading cash flow as we call it. So this is then assuming that we will continue to use ABS structures to fund the inventory, so the working capital of our business and equally using the ABS to fund the consumer merchant receivables from our financing. So with that -- with those assumptions explicitly, we see that we continue to have free trading operating cash flow in '26 as well. So we're self-funding the growth that's...

Any sort of like numbers? Is it sort of like similar to EBITDA growth or how should we think about this? Just to get a better understanding sort of like what absolute number we should see?

Well, we're not guiding on it. We're expanding the -- we're growing into the financing business. So we're seeing that the cash has been stable the last few years around the EUR 600 million plus level. So we see that, that will continue. So it's one of the variables that goes into the growth equation, so to speak.

So maybe on the Merchant volumes, Marcus. So yes, we are confident in our Merchant volume growth assumptions. So definitely, if we look at unit guidance, and you've also heard Christian, that we have invested into an increase in capacity, especially in Q4, we want to utilize that capacity, and that means that our aim internally is absolutely go to the high end of the unit guidance, and that's also then subsequently true for the Merchant volume part of the guidance.

And yes, the weather impact of Q1 that we've been briefly touching about, I think it roughly lasted 10 days, especially in the first 10 days. So it was a slow start to the year because of that. However, these effects are baked into our guidance at this point. So yes, I think that's everything we can say to that.

Is it so critical not to give a number on the effect? I think it would be just helpful if we can sort see as an impact. We ask that we have full year numbers and...

It's -- the first quarter is a running quarter, right? And then we don't know how much of that will be caught up. So that's -- I would say, yes, it's 10 days with, let's say, 30% impact on the units, 10 days of the 90 days. That will be my gut feeling, but I don't have a weather calculator at the moment.

I mean, Marcus, as we said this morning, that January performance indicates it's baked into the guidance. And so I don't think you should view this as a major driver coming out. With that, over to Joe Barnet-Lamb from UBS. Joe?

Yes, can you hear me guys?

We can now.

Excellent. Yes. So a few from me. So first one, I think you guided to sort of broadly flat OpEx per car back at 3Q last year. I think at the midpoint of your guidance, it now implies a few percent reduction. Is the slightly improved guide now due to better volumes? And when we consider your OpEx more broadly, what proportion of your OpEx is actually volume driven versus how much is fixed or set separately? That would be the first area of questioning.

Second area of questioning is just a bit around GPU. Obviously, we've seen a lot of GPU expansion in recent years and your guidance for the coming year is effectively for that to cease for the current year. But even between the lines of what you're saying, it's effectively that you're sort of deliberately holding GPU at the current level in order to fuel top line growth. Is that the correct interpretation? And can you just confirm, therefore, that GPU hasn't hit a ceiling, it's effectively being held where it is for growth purposes?

And then the third and final question, I think reported GPU in Autohero is not equal to gross profit divided by the number of cars sold. I think it is the effects of inventory changes due to the capitalization of internal refurbishment costs. But in 4Q '25, that was quite a large impact. It was about EUR 71 million. So can you just talk a little bit about how we should think about that factor going forward?

Yes. Maybe, Christian, you take the first and the third question. I'll take the GPU expansion question.

Yes. So the OpEx, we guided for EUR 940 million in Q3. We invested into the growth of the inventory, which has some implications on the OpEx and also less into the operation capacity to then now increase utilization into 2026. And therefore, we see that the OpEx per unit will go down for the next few quarters. And with regards to variable versus fixed, I think it's -- in the long run, everything is variable, right? I mean, if you really scale, then you need to add increments as well.

But we do see that of the cost that we have added, a lot of that is variable clearly. So we see that we -- the operating leverage is coming through on -- it's a super tactical business, as you know. So the operating leverage is coming from all these small line items. And we see it particularly in the profit growth where we accelerate the revenue growth and the unit growth and the profit level. So we will make sure that, that will continue. And that said, I think the -- keeping the OpEx per unit flat to encourage growth, that's to some degree true because we think that in order to grow, we need to spend some money to do that as well. So we are optimizing the cost base in the short term.

So second question on GPU expansion. Yes, we think these GPU levels that we have reached roughly last year, they are optimal for our growth. We are also able to hit our EBITDA targets also on the high end with it. And while we think there is definitely longer-term continued upside on the GPUs, especially on Retail in line with our EUR 3,000 target, yes, we think that this is a proper reflection of what we think they are at the high growth -- at the high pace that we are going through at the moment. Obviously, yes, there could be upside if we are able to combine the high volume growth with GPUs that are higher. So that's not a potential that I would rule out, but it's not something that we are assuming in the current guidance, neither at the low nor at the high end. And I think the third question, Christian?

Yes, on the inventory. So the capitalized part of the inventory. So this is coming from Autohero, so the value add that we add to the cars in the refurbishment process of those cars. So that will continue to be there clearly. And to which extent it will be, we invested a lot into the inventory in Q4. So it will be there. And then we don't have any guidance on exactly how that will be, but it's that part of the value add in the refurbishment process that's reflected in those 71...

Next question comes from Andrew Ross.

My question is about -- or my 2 questions about the Retail unit economics. In the shareholder letter, you talked about Retail EBITDA being positive pre-marketing costs. I was hoping you could be more specific and tell us what was the Retail EBITDA per car in Q4 or range? And then second question is, can we be completely clear that loss of Retail EBITDA per car has peaked in Q4 and will get better each quarter from here as you start to scale across marketing and other OpEx? And if you could give us a sense as to how the Retail EBITDA per car might look exiting this year embedded within your guidance, that would be very helpful?

So when we -- When we wrote in the letter that Retail unit economics on a segment allocated base for the full year of 2025 are positive before marketing, then that's exactly what we mean. So without allocating the marketing spend, and we consider vast majority of the marketing spend an investment, especially into our brand. We also see that cohort-wise, we roughly get 30%, 40% of the spend directly and 50%, 60% are distributed as a return to later periods, then that is exactly what we mean by that.

So EBITDA positive ex marketing, I would say, slightly positive, while we're not giving out the exact numbers. On top of that, there's roughly a EUR 400 basket of cost items that are -- that need to be carried by the existing -- by the current deliveries given the growth rate that we have seen exit growth rate in Q4 of last year. So if you sum the 2 together, then yes, you're well north of, let's say, EUR 400 on an EBITDA segment allocated base.

Nevertheless, we continue to grow because we think this can be like a 1 million unit business one day. So that's why we continue to grow, and we are configuring the growth in a way that we are constantly Q-on-Q improving the unit economics, sometimes with a slight volatility in there depending on the growth rate, but that we overall are constantly progressing, and we expect those improvements also throughout this year, especially towards the end of the year.

But then as we continue to grow, depending on the growth rates, the growth drag on the per delivered unit economics are higher or lower. Over the long run, we are expecting marketing to come down substantially. If you look at the marketing per unit values that we have in the B2B business, then we're talking currently probably about 5x in Retail. And we have seen similar improvements in C2B over the years as our brand grows stronger. And we also expect that growth drag from the investment into inventories and also production to the other question that was asked to come down over time.

Okay. That's helpful. So just to be clear, having had a couple of quarters of deleverage on an EBITDA per car basis in Retail as you've been investing into brand marketing and production and inventory, that has now stopped in Q4, and we should expect leverage in the next few quarters from here in Retail?

I mean I would have said that if there was deleverage, then there was a very slight deleverage from Q1 to Q2, and then maybe like a little -- very slight deleverage than Q3 to Q4. And yes, now we're going a little bit -- now we expect it to go the other way around. But the overall track, you zoom a bit out, is a track of constant improvements.

Our next question comes from Wolfgang Specht.

Three additional ones from my side. First, on the inventory side, can you give us an idea how the split of units between Retail channel and Merchant channel is roughly? And then on the financing side, you mentioned that the consumer attach rate moved towards 39%. Where do you see, let's say, a feel-well limit before you touch, let's say, or you come close to subprime? And then on -- yes, I'll leave it here. The other question has been answered already.

What did you say on the attachment rates? So do you see the limit of the attachment rates before...

Attach rate for consumer financing.

Yes. Okay. So I think the -- across markets, depending on which market you are because we have different attachment levels depending on that. So 40% to 60%, I would say. So it's reasonable to, on average, let's say, 40% to 50% in some ways, we can say that that's a reasonable average across markets. And then gradually, we want to have more and more internal financing of that clearly.

And I think the other question was on the inventory split. Yes. So I mean, inventory is yes, split it in line with kind of on the one hand, the size of Autohero versus the Merchant business. But then on the other hand, also Autohero has like a much higher share because of the turnover, the longer turnover that Retail has versus Merchant. So at the moment, I would say, roughly 1/3 of the cars that we own are for Retail and 2/3 are for Merchant.

I mean, Wolfgang, obviously, the split between the segments will actually be published in the full year financials coming out in March. Otherwise, thank you very much, everybody, for attending the call. I hope it was helpful. We have a number of calls lined up. I think Christian and Maria will also be in New York in 2 weeks' time meeting a lot of you. So thank you very much. And otherwise, talk to you on the Q1 numbers in May. Thank you very much.

Thank you so much, everyone. Bye.

"

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" Goldman Sachs Group, Inc., Research Division

" Barclays Bank PLC, Research Division

" Deutsche Bank AG, Research Division

" Joh. Berenberg, Gossler & Co. KG, Research Division

Hello. Good afternoon, and good morning and good evening to international participants. Welcome to the AUTO1 Group Third Quarter 2025 Earnings Presentation. I'm Philip Reicherstorfer, Group Treasurer. I'm joined today by Christian Bertermann, our Co-Founder and CEO; as well as Markus Boser, our CFO. I'm also very pleased to welcome Christian Valentine, who will be succeeding Markus and stepping into the role of CFO effective January 1, 2026. 

We will start with the presentation followed as always, by questions and answers. [Operator Instructions] Before I hand over to Christian, I must make you aware of the safe harbor provisions at the beginning of the presentation here. These will apply to any forward-looking statements made by management today. 

And now over to you, Christian.

Thank you, Philip. Hi, everyone. Welcome to this AUTO1 Group Q3 earnings call. Our business performance in the third quarter has been very strong. We sold 219,000 vehicles. This is a new quarterly record and an increase of 24% year-on-year. Total gross profit surged by 38% year-on-year to EUR 258 million. This is EUR 71 million more than in Q3 of last year. We grew adjusted EBITDA from EUR 34 million in Q3 of '24 to EUR 52 million this year, representing a 51% increase. Our adjusted EBITDA margin increased to 2.4%. That is 30 basis points of increase compared to last year and the highest Q3 margin we ever achieved. 

These great results reflect the effectiveness of our strategy, our discipline, and targeted investments in key areas, strong execution, and above all, the dedication of our teams. We are pursuing a value-first strategy across all segments. We are strongly focusing on the drivers that create value for all of our customers. While we have been executing this strategy since our foundation, we constantly take steps forward in understanding our customers' needs, expectations, and priorities even better, resulting in superior demand levels across segments. Value in our business can mean higher selling prices, lower buy prices, lower processing costs, greater selection, greater convenience, highly motivated staff, increased trust, fast and reliable delivery, and competitive financing. 

Let's start our deep dive with the merchant performance update for the third quarter. In Q3, we sold 192,000 vehicles to our partner dealers. This is a new all-time quarterly record and represents a 22% year-on-year unit increase. We also generated a record merchant gross profit of EUR 185 million for Q3, increasing by 29% year-on-year. Merchant GPU was EUR 966, a 6% increase compared to Q3 of last year. We sold 550,000 merchant units in the first 9 months of '25. That is 22% more compared to the same period last year. 

Gross profit increased by EUR 125 million to EUR 535 million compared to the first 9 months of '24, a 31% increase. The strong growth in our Merchant segment is driven by constantly rising demand for our B2B offering. This momentum is reflected in yet another record-breaking quarter for the number of merchants buying on auto1.com. For the first time ever, we surpassed 30,000 active merchant buyers, reaching 31,100 in the third quarter, a 22% increase compared to Q3 of last year. Our average basket size per merchant remained stable year-on-year, with each merchant purchasing an average of 6.2 vehicles per quarter. We are very happy with these strong results while we continue to expand our buyer base further. 

AUTO1 merchant financing delivered another strong quarter as well. We continued the successful rollout of our financing solution for partner dealers, expanding into Poland in Q3 and most recently, launching Sweden just a few weeks ago. Our merchant financing portfolio grew by 60% year-on-year, increasing from EUR 178 million last year to EUR 284 million for the third quarter. We financed EUR 359 million of merchant sales, a growth of 63% year-on-year, and the number of vehicles financed grew to 33,000 units, a 65% increase compared to Q3 of last year. We continue to be very excited about AUTO1 financing and plan to bring it to even more markets and partners in the future. Our sourcing network expansion continues to go very well. 

Two, we opened 42 new branches in the third quarter and closed the quarter with 690 drop-off locations across Europe. Growing our drop-off network increases convenience for our selling customers and increases selection for our partner dealers. Now we will take a look at retail, which had a very strong quarter as well. In the third quarter, our retail business grew strongly in unit sales, in GPU, and in total gross profit. Autohero delivered a record 27,000 units compared to 19,100 in Q3 of last year, an accelerated increase of 42% year-on-year and a reflection of our ambition to build a bigger business faster. We generated the highest ever retail gross profit of EUR 73 million, growing significantly by 68% year-on-year. Retail GPU was EUR 2,664 in Q3, representing an increase of 18% compared to Q3 of last year and setting a new record. Q3 retail GPU was positively impacted by a EUR 2 million one-off benefit. 

In the first 9 months, gross profit increased by EUR 76 million to EUR 190 million, and GPU increased by EUR 490 compared to the same period of last year. If you take a look at production, we continue to expand our production center footprint across Europe in the third quarter. We announced 3 new production centers located in Italy, in Austria, and the Netherlands, bringing our total to 12 centers across 10 different markets. With these facilities, our total production capacity has increased by 38%, rising from 179,000 to 248,000 cars per year at full utilization. Collectively, the 3 new facilities span a total of 184,500 square meters and have a combined annual production capacity of 71,500 cars at full utilization. 

Our new facility in the Netherlands is already operational, and we expect the locations in Austria and Italy to open before the end of this year. Today, approximately 95% of all Autohero cars are refurbished in our own used car production centers. By operating our own facilities, we maintain full control over every step of the process, which remains a key driver for car quality and optimizing unit economics while we support the continued growth of Autohero. 

We are constantly building out our fulfillment network for Autohero across Europe to speed up delivery and increase comfort for our retail customers. We aim to provide our customers with the fastest delivery of their new car at great rates or in many cases, already for free. We aim to build our network in a way that supports this effort as best as possible, supporting pickup or home delivery depending on our customers' preferences. We were able to reduce the average delivery time from just under 12 days in Q3 of last year to 9.5 days this year. That means we delivered 20% faster year-on-year. 

Finally, let's take a look at our long-term goals. Our unique vertically integrated business model is providing the foundation for our future growth and margin expansion. We aim to capture a market share of 10% of the European used car transactions in the long run and combine this volume with 5% to 9% of adjusted EBITDA margin, depending on the relative size of the merchant and the retail business. With total units growing 24% year-on-year and EBITDA margin improving by more than 14% quarter-on-quarter to 2.4%, our Q3 results mark an important further step towards both long-term targets. They are also demonstrating first and early returns of the increased investments we made since Q2 of this year. Most of those investments, however, particularly the increased investment into the Autohero brand building, are strategic multi-quarter investments that strengthen our market position and drive long-term value and margin expansion in the future. We expect the full impact of these efforts to become increasingly evident in the quarters and years ahead as our vertically integrated business continues to scale. 

I'll now hand over to Markus for a detailed financial update.

Thanks, Christian. Q3 represented yet another record for us in terms of units, and with 219,000 units sold, beat our previous quarterly record by over 7% as well as achieving 24% year-on-year growth on a group-wide basis. It also represents the first time that we broke the EUR 2 billion barrier for revenue achieved in a quarter. We're definitely back in growth mode. We achieved this growth with record group GPUs at EUR 1,176, reflecting the mix effect from the higher GPUs in our retail business, as its higher growth at over 42% in units means it becomes a larger portion of our business. We also incurred EUR 206 million in OpEx to support this growth, resulting in adjusted EBITDA of EUR 51.9 million and a net income of EUR 19.2 million.

 If we go through our OpEx quarter-over-quarter, we have been investing to accelerate our growth and increase the moat around our business so that we can grow to a bigger business faster to reap the scale effects once we get there. Gross profit has grown by 38%, the majority of which has been a result of higher units. Over time, higher units also help drive higher GPUs as the more data we receive, the better we can price cars that we see on both the merchant and retail parts of the business. We increased marketing by $7.6 million, of which the overwhelming majority was in Autohero marketing as we invest to create a strong pan-European brand, while the cost of WKDA marketing per purchased car has been steadily declining. 

Likewise, we see positive scale effects across both logistics, with only EUR 1.6 million increase, as well as payroll, with $2.2 million in additional costs despite significant quarter-over-quarter and year-over-year growth. 

Moving to the balance sheet. We maintain a strong balance sheet, increasing cash with no corporate debt. Total cash increased quarter-over-quarter to $628 million as a result of increased profitability and the public securitization of our consumer loans, which we conducted in September. We continue to build inventory to support our growth, with $879 million at the end of Q3. By way of reminder, 80% of the inventory and its growth is financed through our inventory ABS. 

Lastly, we continue to invest in our captive finance assets with quarterly growth of circa $76 million, consisting of $20 million growth in the merchant loan portfolio and $55 million growth in our consumer loan portfolio. The growth in both portfolios are a reflection of the ongoing growth in sales of both our merchant and retail units. In September, we issued our second public securitization, Finance 02 of our consumer portfolio. This was a unique transaction that combined consumer loans from both Germany and Austria, the first-ever public auto ABS combining assets from different countries. This transaction enables us to both increase the loan-to-value on the portfolio as well as achieve a reduction in our net interest margin with a blended spread of 87 basis points. This transaction further represents significant validation of the quality of our consumer loan -- consumer finance portfolio. 

Lastly, we come to guidance. We are increasing our expectation for merchant units from 680,000 to 720,000 to 715,000 to 745,000 units for 2025, representing 19% year-on-year growth at the midpoint, and our expectations of Autohero units from 92,000 to 97,000 units to 96,000 to 100,000 units for the full year, representing 32% year-on-year growth at the midpoint. Together, this results in 811,000 to 845,000 units for the group. We expect that we can maintain this increased growth in retail at a GPU of around 2,500 as Q3 retail GP had a small one-off effect. With respect to merchant GPU, while we continue to be confident in the long-term upside, our 2025 guidance assumes it will be around 950 for Q4. Together, this leads to increase our gross profit range to $940 million to $975 million, up from $890 million to $940 million, our previous guidance. We believe that we will continue our current level of OpEx spend, resulting in an adjusted EBITDA guidance of $180 million to $195 million for the full year, up from $160 million to $190 million guided previously. 

As I've mentioned previously, Q4 is generally the quarter with the highest volatility as dealers tend to slow down their purchases as we approach the end of the year, the extent of which is hard to predict. While we normally make no comment on the forward year until we are in that year, I'd like to make a few comments to frame our thinking for 2026 in light of the extraordinary growth that we've achieved and our previous commentary. Last year at this time, we believe that merchant would grow in the high single digits. And clearly, we've been able to outachieve this. We believe that we can continue to grow merchant in the low to mid-teens over the next year while achieving marginal improvements in GPU year-over-year. 

In Autohero, we aim to achieve 25% to 30% growth next year on our updated 2025 guidance, reflecting the strong growth and progress that we're achieving this year as well as ongoing marginal improvements in GPU. With respect to OpEx, our baseline assumption is that our OpEx per unit will be similar to the circa EUR 940 per unit we achieved in Q2 and Q3, but this may edge higher if we achieve much higher Autohero growth than mentioned. We see an incredible underexploited opportunity in front of us and believe these increased investments, primarily in Autohero marketing, will enable us to achieve our long-term 5% to 9% EBITDA margin expectations as we scale to Autohero faster, enabling us to reach the scale benefits in logistics, tech invest, branding, procurement, and operations. 

In the meantime, we will compensate this additional investment through higher profitable merchant unit growth so that overall, we believe that we can maintain the current consensus adjusted EBITDA expectations for 2026. 

Before we move into the Q&A session, I'd like to take a moment to share a few personal reflections. As you know, this will be my final earnings call as CFO of AUTO1 Group, as I will be stepping down at the end of the year after 10 truly memorable years. It's been an extraordinary journey from our early days as a start-up to becoming a publicly listed company and building a business that is not only financially robust but also incredibly positioned for sustainable, profitable growth in a huge market. I'm deeply grateful for the trust and support I've received from Christian, Hakan, our Supervisory Board, our customers, partners, the entire AUTO1 Group team, and all of you on this call. Thank you for your collaboration and partnership throughout my tenure. Starting January 1, Christian Valentin will be stepping in as CFO. Since early October, we've been working together closely to ensure a seamless transition. 

Christian brings a wealth of financing experience to the team, and I'm genuinely excited to watch both Christians lead AUTO1 Group into its next chapter. Christian Valentin joins us on the call today, and I would now like to hand it over to him for a brief introduction.

Thank you very much, Markus. Hi, everyone. It's a pleasure to join you on this call. I'm truly excited to be part of AUTO1 Group's Management Board and to take up the role of CFO at the beginning of next year. Working alongside Markus and Christian in the past few weeks have only reinforced my enthusiasm for this opportunity. I'm very much impressed by the disciplined forward-thinking way the business is managed, and I'm most importantly, very thrilled by the significant opportunities that lie ahead. With over 20 years of experience in banking and finance, I look forward to contributing to AUTO1's journey and driving growth and profitability together with Christian and the entire team. 

With that, we are very happy to open now the floor for your questions.

[Operator Instructions] Our next question will come from James Tate.

It's James State from Goldman. I've got 2 questions, please. I guess, firstly, you touched upon the strategic shift towards growth over the past couple of quarters, and you've already started to deliver an acceleration in units growth. And the color on next year is very helpful. So you commented on total group OpEx per unit sold being at the same level as Q3. But I guess within the mix, how should we think about Auto segment profitability specifically? Do you expect Autohero EBITDA loss per car to stay stable at current levels or perhaps slightly worsen into next year as you increase reinvestment? And then secondly, on inventory, I noticed that grew EUR 60 million quarter-on-quarter. Could you give some color on which segment drove this growth? Was it more skewed to Autohero merchant? And then last year, you flagged that you're particularly aggressive in purchasing and building inventory in Q4. So should we expect a similar strategy this year?

Marcus, do you want to go ahead on the segment profit--

So as we've talked about in the past, Autohero on an adjusted EBITDA or segment basis is still a loss-making segment. Having said that, we believe that overall, those losses are relatively small in light of the growth opportunity in front of us. We also see improving unit economics, except in marketing, where we continue to invest precisely because we want to grow that business. And really, as we talked about, accelerate the growth of that business as we've been able to do so far. I think going forward, I would say, overall, I think a lot of those improvements in overall unit economics, I think we would expect to continue, which is, I think, why we're happy to have the existing OpEx cost per unit delivered to remain the same even as we grow and have basically kind of given accelerated growth. 

So I think I don't see that dramatically changing. Obviously, the more scale we get, I think the improvements we're going to continue to see and certainly want to see them because we really want to kind of get to the point where we have the scale where we start really seeing dramatic improvements across brand data, ability to use AI, a lot of the logistics items that we've talked about that we can really get the benefit of scale. So we want to invest now so we can see an expansion and an improvement in those unit economics in the coming years. But I think 2026 is going to be one where we're going to see sort of steady OpEx per unit as we've seen for the past 2 quarters. 

I think your second question on inventory. I would say the growth that we've seen kind of into Q2 into Q3 has been more on the retail side than on the merchant side. I think we generally only -- we kind of -- in the half-year report and full year report is I think where you got a full breakdown of it. I think in Q3, we tend not to. But we've really seen as we continue to invest in retail and retail obviously has longer days outstanding, we're growing that relative to merchant much more. I think there was a third question on Q4. Maybe Christian, you want to talk about our Q4 strategy.

Yes. In general, I would say we will follow James, like a similar strategy. I think inventory in merchant is in great shape, especially if we look at the trajectory from Q2 to Q3. And then in retail, we're building up selection for further growth because that needs to go hand-in-hand with this elevated brand build-out and elevated kind of session -- visitor session growth that we see in Autohero.

And now over to Joe Barnet-Lamb from UBS. I think he had a couple of questions. One was how we should think about merchant GPU into Q4 and then into 2026. And then he wanted to know in merchant, he said the upper end of the merchant guidance implies 21% year-over-year growth in merchant cars in 2025? And can we share any color about 2026? Can we deliver double-digit growth in 2026? And then also a question on Autohero GPU, given that we are already at almost EUR 2,700, do we still think that the long-term guidance of EUR 3,000 GPU in Autohero holds?

Yes. Maybe I'll take those. I mean I think my prepared remarks answered all those questions. I would hope so. But -- so I would simply repeat. I think for Q4, we are expecting around about the EUR 950 as we talked about for merchant GPU. I talked about Q4 is always a very volatile quarter because of the kind of dealer behavior as we go into the end of the year. And likewise, we would expect some improvements of that into next year. So I think some -- but more marginal kind of improvements as we go into next year. 

Likewise, can we deliver double-digit growth in merchant? I think, again, I talked about low to mid-teens growth in the merchant business for next year, and believe, yes, we can do that while having some improvement in merchant GPU. Lastly, I think on to our -- if I understood the last question, our long-term guidance of 3,000 very much still holds. Again, as we talked about, I think, into 2026, I believe that we can continue to see marginal improvements in Autohero GPU. But I think all the drivers that we have talked about in the past around really speeding up sales, faster turns, again, more finance, reduced costs, I think all still stand. And I think we feel very comfortable with the EUR 3,000 GPU that we can achieve that.

And with that, Andrew Ross from Barclays.

I've got 3, if that's okay. The first one is to dive a bit more into the extra brand marketing that's been going in the last couple of quarters, and you're assuming it's going to continue. Can you give us like a couple of numbers around the metrics that you track around the payback of that brand marketing to give us comfort that you're definitely getting the returns that you would expect? I don't know how you think about that, but it would be helpful for us to try and quantify that in a bit more detail. And then as you kind of think about that payback model into 2026, what are you kind of assuming continues? Because on the face of it, there seems to be quite a lot of brand investment that's embedded in your outlook for '26, but then only in inverted commerce 25% to 30% unit growth for retail. So just kind of what's the trade-off between those 2 numbers? And how could retail be better, I guess? 

And then the third question is for, I guess, both Markus and Christian Vent. And that is a bigger picture question about the financing of the balance sheet and your attitude to kind of keeping consumer receivables on the balance sheet longer term as that business gets more material versus the option of potentially selling them off to third parties at some point down the road. I would be curious as to how you see that over the medium term. Yes.

Thank you, Andrew. Yes, of course, we're tracking a couple of metrics and cannot go into all details here. But for instance, of course, we're checking brand health stats. So brand awareness, brand consideration, also brand image. So that's one part of it where we are really double checking, are we building the brand into a more known brand into the leading pan-European brand for selling used cars that we strive to be. And at the same time, we're also looking at performance data, which ranges from instance, from sessions that we see on the platform into kind of lead generation, so how many people are interested in a car, obviously looking at the different channels and the non-brand channels, looking at financing shares that people ask for, and then finally get. 

And yes, the level of brand advertising that we're spending here, you can think of, on the one hand, let's say, maybe 40% to 50% of having a more direct effect into the quarter and then 50% to 60% being a multi-quarter cohort payback. And obviously, we're tracking also the cohorts and how they're paying back. But that's why, yes, it's a ramp game. It's building a base. Some customers are deciding quickly, and some others are in the market for 6 to 9 months or even longer. And it's about to build penetration into both of these segments over time. And this is why we feel kind of quite comfortable with the stats that we have given, given that level of investment.

So is there further upside? There might be, but I think it would not make sense to commit to that right now because we need to see the performance as we go. I think maybe I'll start with the second question, which is with respect to our consumer loan strategy. I think we've -- I think, in a sense, always been open to kind of whether we have it on balance sheet or opportunistically look at whether or not there are other structures to have it off balance sheet. I think so far, we're still relatively early in that journey, right? This is only our second public securitization while we continue to also go into some new markets. So I think we've never, in a way, kind of said that we wouldn't want to do the other one, but I think haven't quite seen structural pricing that would really work for us. But maybe, Christian, if you want to say a few words. Obviously, you've only been here for a few weeks. So it's maybe, I would say, a little bit premature to put you on the spot. But clearly, you have a huge amount of experience in the space. So I would think it be good to people your position on it.

Absolutely. So thank you, Markus, and thank you for the question. So I mean, the public securitizations are a robust funding source with a good risk profile as well. And given the pricing of these structures, it's difficult to match as a funding source. So I would see ourselves continuing with this and maybe then building scale quicker for these securitizations and doing them more regularly, but that remains to be seen. But clearly, I mean, in general, I mean, I'm new, so I will review most things and understand many things as we go over the next few quarters. So I don't see any reason to have any news on this. But clearly, I mean, I come from a banking sector, and I like having a diversified funding structure. But no news on that front. I see as a robust funding source.

And with this, over to Nizla Naizer from Deutsche Bank.

Let me start off by saying all the best to you, Markus, and it's been great working with you. So thank you for all your time in the past, and I hope -- wish you all the best. And Christian, looking forward to working with you going forward as well. I have 3 questions from my end. Firstly, could you just maybe give us some color as to how the overall used car market performed in Europe? And when you think of your own business in merchant and retail, were there certain geographies that were performing better than others in terms of growth? Some color there would be great. 

And secondly, I mean, the step-up in your merchant customer numbers is quite meaningful from Q2 to Q3. Was there a push in some geographies over others? Or what really drove that level of growth in the customers that you're seeing on the merchant side? And my last question, I think, Markus, you mentioned that when it came to WKDA marketing, the marketing cost per acquired car has been decreasing quite meaningfully, but you are sourcing more cars. So I just wanted to understand what's helping here. And in this world where people are worried about sort of traffic coming from AI, how are you seeing your sort of online traffic sources evolving? And do you not see this as a risk? Or is it an opportunity? Some color there would be great. Thank you, Nisa.

So yes, in terms of used car market, overall environment, I think we are in a more or less stable environment. And yes, nearly all of the growth that we are realizing here is homemade and drives up the corresponding market share. We will announce our official annual market share then during the next quarterly call, which I think is scheduled for sometime in February. Overall, we see yes, with some variation, pretty much all of our geographies growing. So it's not one market and one area or region in particular that makes up this growth. Obviously, there's some shifts here and there where merchants can substitute certain inventory also through other markets inventory, and then there's certain shift. 

But overall, we're operating a very efficient market platform. And then I think just to correctly understand the second question, it was about the growth in merchant buyers that we have reported. Or did I get this wrong?

Yes, I think the question is we saw a particular push in particular markets or whether that was a fairly universal growth.

Yes. I think similar to my comments around the used car market, we didn't see particular segments where we had over-average growth or other areas where we reduced. So we're investing into all demand basis in all markets. And yes, you can see that this goes fairly well again in Q3. And then on WKDA sourcing cost per unit, Markus, maybe you want to start, and then I can finish.

Yes. I mean I think overall, I mean, I wouldn't -- I mean, you said meaningfully, I think what the point I was trying to make, I mean, they have come down, but almost all or a huge percentage of the increase in marketing is really coming from Autohero. And I think broadly, that reduction, I think, is sort of a validation of our strategy, both in terms of just getting more efficient branch growth and just getting better on the purchasing side, and that will continue to flow through also for things like retail unit economics. Yes. So I think that was the commentary on the reduction of purchase-side spend. Maybe, Christian, you can talk about kind of AI and the impact thereof.

Yes. So I mean, we -- for instance, on the C2B side, we have built out very strong brands, very strong brand awareness over the last decade and more. Nevertheless, I mean, we're also running a high-frequency advertising setup across all the different channels. And we are, for the moment, not seeing that in our setup, AI has any negative impact. Of course, we see, I think, like most of the companies, a little bit lower SEO traffic than what maybe has been there like 3 years ago. But yes, we're able to more than compensate that through other channels. You can see that in the results. 

And for us, it's more an opportunity because also if we speak about selling, but also about, of course, buying cars, then yes, we have the unique chance to position ourselves in the respective AI platforms to the customer. And we are starting to look into how to best do this, which is kind of I would call it, the new SEO that is coming up, and it's something that is in motion, but we're looking into this while we grow the business.

And with that to Wolfgang Specht from Berenberg.

Two additions from my end. First, on your refurbishing capacities, the 248 probably means you got to run 2 or probably 3 shifts in at least some of the centers. Is that right? And then related to that, it would mean you got to work with a broader workforce. Is it possible or, let's say, payable to onboard new mechanics in the amount you need them for the growth next year? And then on bad debt expenses, have there been any changes to the figures you told us recently? Or is it just stable?

Thank you, Wolfgang. Yes, on production, I mean, to go to the full 24 0 produced volume per annum would indeed require, I think, some of the centers to have 2 shifts. I think some of the centers that we operate already have 2 shifts. So it's not something that we experiment new. So we don't have a center that has 3 shifts. 

So we're not operating a night shift, but we're operating a morning and an afternoon shift in some of the centers. And that, yes, has proven to go quite well after some initial learning time, obviously, because it's about the handover of the unfinished cars between the 2 shifts. And yes, as we also continue to express over the, I think, last couple of quarters, this is one of the hardest roles to hire. The mechanics for Europe. I think the team has proven to be able to achieve the high numbers that we need. Do we need more than we currently have? Yes. Would this be a further cost benefit to Autohero if we were able to staff up fully? Yes, because some of the roles are filled with temporary workers at the moment, which are, of course, far more expensive. But I think we are on a good track there. We're learning better and better how to fill up those roles, but this is also one point where Autohero profitability has still a good amount of upside.

And then with respect to bad debt, there hasn't been any changes. So both on the consumer and the merchant side, it's been consistent over the last few quarters.

Thank you, Markus. And that concludes our Q&A session and the earnings call for Q3 2025. I think as most of you know, we have quite an active IR program for the next week. So hopefully, we'll see quite a lot of you in Madrid next week or subsequently in Barcelona or then in Waybridge with Berenberg. So thank you very much, and hopefully, see you soon.

Thank you so much, everyone. Take care. Thank you.

Thank you.