Greetings, everyone. Welcome to Cazoo's Q3 fiscal year 2022 earnings call. At this time, all participants are in listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note that today's conference is being recorded. At this time, I'll turn the conference over to Alex Chesterman, OBE, Founder and CEO. Mr. Robert Berg, you may now begin. Good morning, everyone. Thank you for joining today's call and webcast to discuss Cazoo's Q3 fiscal year 2022 results. You'll be able to find today's press release on our investor relations website at investors.cazoo.co.uk. We appreciate everyone joining us today. With me on the call is Alex Chesterman, Founder and Chief Executive Officer, Stephen Morana, Chief Financial Officer, and Paul Whitehead, Chief Operating Officer. Before we get started, I would like to remind you of the company's safe harbor language, which I'm sure you're all familiar with. Management may make forward-looking statements, including guidance and underlying assumptions. Forward-looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially. For a further discussion of risks related to our business, please see the filings of Cazoo Group Ltd with the SEC. Now, I'll hand over the call to Alex. Thanks, Robert. Good morning, everyone, and thank you for joining us today. I'd like to start by discussing our Q3 performance, which despite the very tough macroeconomic backdrop, was an extremely positive quarter in all respects. I'll talk about how this performance leaves us firmly on track to reach profitability without the need for any further funding. I'll also spend some time discussing why we remain very confident about achieving our medium and long-term targets. Starting with the Q3. I'm very proud of our performance during the period. While the challenging macroeconomic backdrop for the UK consumer has impacted demand across most retail sectors and our competitors, with many businesses reporting declining demand and sales in recent months, we've bucked the trend and seen record demand with UK retail unit sales growing over 100% year-on-year to 18,889 units as consumers continue to embrace our offering. This led to record UK revenues of GBP 347 million in Q3, up 103% year-on-year. As you can see from our growth rates, we're taking significant market share as our market leading proposition continues to resonate strongly with consumers and the shift to online car buying and selling accelerates. This has and will continue to allow us to grow strongly despite the tough macroeconomic conditions. In under three years since our launch, we've become one of the largest players in the UK used car market, having now sold almost 100,000 vehicles to consumers entirely online. While we've accomplished an enormous amount in terms of our scale in a short period of time, our strong growth rate and market outperformance suggests that we're still just at the start of this exciting journey. Consumers are voting with their orders and their subsequent reviews that the way that we buy and sell cars is the future for the UK used car industry. We're more encouraged than ever about the future opportunity for Cazoo and our ability to capture a 5% or greater market share of the GBP 100 billion per year UK used car market. While our growth and scale positions us as one of the fastest-growing businesses in the UK with revenues of well over GBP 1 billion in just our third year of operation, we continue to keep both eyes on the road to profitability. We remain laser focused on maintaining our strong balance sheet, and we had cash and self-funded inventory of over GBP 450 million at the end of September, and have a clear plan to reach profitability without the requirement for any further external funding. In Q3, we made strong progress on our operating metrics, including our UK retail GPU, which was up 58% compared to Q2 2022, at the same time as reducing our UK SG&A per retail unit by 30% versus Q2. On GPU, we continued to make good progress with a further 179 pounds sequential quarterly improvement driven by continued efficiency gains across buying, reconditioning, and ancillary products, despite the inflationary pressures. As we constantly improve all elements of our operations, I want to call out the particular success we've had with our direct car buying channel, which now represents over 40% of our UK retail sales transactions and has allowed us to benefit from improved pricing and range. This highlights the strong platform and infrastructure we now have in place to buy cars directly from consumers at scale. We also continue to make good progress in improving our reconditioning efficiency. Of particular note this quarter, we made some changes to our reconditioning processes, which allow us to lower the cost per vehicle while ensuring our customer proposition remains market leading. We've also continued to scale our reconditioning capabilities to record levels, allowing us to maintain strong inventory levels despite record sales. Additionally, we've made further progress with our ancillary product sales. We launched monthly payment plans in Q3, where customers can now spread payments for our products over a longer period. While it's still early days, we're very encouraged by the impact this is having on our attachment rates and GPU, and expect further positive impacts from monthly payments and other ancillary product initiatives in the coming quarters. At the same time that our UK retail GPU is increasing steadily quarter-on-quarter, we've seen a material decrease in our UK SG&A cost per unit of over 30% in Q3 as our strong growth, combined with our focus on cost control, is starting to have a notable positive impact on our unit economics. Having successfully implemented our business realignment plan, we're starting to see the benefits and expect to see continued improvement through the remainder of this year and beyond. Our solid Q3 momentum and improvement in profitability comes despite the deteriorating macroeconomic climate. While it's likely that headwinds such as supply chain issues and weaker consumer confidence have negatively impacted our results, our strong performance through this period only serves to show that consumers love our proposition, which provides us with even more confidence on reaching our medium and long-term targets. As a reminder, we're addressing a massive market in the UK with around 8 million used car transactions and a value of over GBP 100 billion annually. Digital penetration remains incredibly low, and the market remains hugely fragmented, giving us the opportunity to build the leading brand in the sector. Much like we've seen year-to-date, we expect to continue to rapidly increase our market share towards 5% and beyond over time. As we've said previously, the UK market opportunity is so large that with just a 3% market share and a prudent medium-term GPU target of GBP 2,000, we would generate gross profits of close to half a billion GBP annually and meaningful free cash flows. With our long-term target of a 5% or greater market share and a GBP 3,000 GPU, the opportunity is even more exciting. Before I hand over to Stephen, who'll run through the details of our Q3 performance in a little more detail, I just want to discuss the strength of our balance sheet, which remains extremely robust with over GBP 450 million of cash and self-funded inventory at the end of September. We've taken decisive actions to increase our GPU and reduce our SG&A costs, and are focused on ensuring our business achieves profitability as soon as possible. Our business realignment plan announced in June, together with our decision in September to withdraw from mainland Europe, has ensured that we have a clear plan to reach profitability without requiring any further external funding. I'll now pass over to Stephen. Thank you, Alex, and good morning, everyone. Before I go through the numbers, I just want to highlight that all the numbers we've discussed in our Q3 release and that I will discuss today relate solely to our UK segment, which as a result of the decision made during the quarter to withdraw from our EU operations, will be how we report going forward. We will report our European segment as discontinued operations in the FY 2022 results. For reference, we have restated Q1 and Q2 this year, as well as Q3 2021, which is hopefully useful to be able to see the UK-only trends. In Q3 2022, we achieved UK revenues of GBP 347 million, which were up 103% year-on-year. Growth was driven primarily by UK retail revenues, which increased over 118% year-on-year, driven by continued strong uptake of our proposition. During Q3, we sold 23,775 cars in the UK, representing 82% year-on-year growth, including 18,889 retail units, representing 100% year-on-year growth. This growth in retail units came despite the challenging macroeconomic climate, as we yet again continued to take significant market share, testament to the strength of our offering. Moving to GPU, as Alex discussed, we've again seen a strong improvement in Q3. We grew by 58% or GBP 179 from GBP 309 in Q2 to GBP 488 in Q3. This improvement came despite ongoing inflationary pressures, and has been a result of our improved buying, reconditioning, and product sales efficiencies, which we are confident will continue into Q4. As a reminder, Q3 2021 GPU was positively impacted by the strong price appreciation of used cars seen in that quarter. We were obviously operating the four European countries as normal until the eighth of September, and from that date began the close process, incurring some of the anticipated wind-down costs this quarter. Going forward, we'd expect cash burn to be significantly lower as we stop all trading and investment activities in the four countries and complete the wind-down process. The current run rate of the UK was less than half of the overall cash burn. I'll now pass back to Alex, who will run through our current trading and outlook. Thanks, Stephen. Despite the weak macroeconomic environment affecting growth among our peers and across all other retail sectors, we've maintained our very strong Q3 momentum into October, where we expect to maintain our growth rate of over 100% year-on-year and to continue to increase our market share. We expect to see continued strong progress through the remainder of Q4, with UK retail unit sales growth continuing at over 100% year-on-year, along with significant further improvements to our UK retail GPU as we continue to optimize our operations, increase the proportion of cars sourced directly from consumers, lower our reconditioning costs, and increase our financing and ancillary revenue streams. As I've said many times, but it's worth stressing again, we continue to expect to reach profitability without the need for any additional external funding. In summary, against a very tough economic backdrop, we've had a very strong quarter of growth, achieving record sales levels, taking significant market share, and we've become one of the biggest players in the market, having sold almost 100,000 cars entirely online in less than three years since our launch. We've also shown further progress towards breakeven with a marked improvement in our unit economics in the period. We remain very well positioned and well-funded to capture the huge market opportunity, and are delighted that we've maintained our strong Q3 momentum into October. We're incredibly excited about the future and extremely confident in our ability to reach our market share ambitions. I'll now pass the call back to the operator who will open up the line for Q&A. Thank you. Ladies and gentlemen, we'll now start the question and answer session and open the call for questions. If you'd like to ask a question, please press star one from your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for questions. Once again, that's star one. Thank you. Thank you. Our first question comes from the line of Rajat Gupta from J.P. Morgan. Please proceed with your question. Hi. Good morning, good afternoon. Thanks for taking the question. Maybe like just to start off with like just broader consumer health and just used car backdrop. Can you give us a sense of your expectation of the industry heading into the later part of the year and into early next year? While Cazoo is starting off a small base and online penetration is still low, and should be able to grow volumes and market share even in declining market. Just curious as to your expectations for the overall environment as new vehicle supply improves, but just the consumer backdrop probably takes a further step down before normalizing. Are you concerned at all about pricing power and just ability to hit the 2023 GPU targets? Thanks. I will follow up. Thanks. Good morning, Rajat. So clearly the UK consumer and beyond the UK is facing a challenging time. We are very encouraged by the performance in Q3 and the performance so far into Q4, given the various challenges in the market. If you look at supply, there are supply challenges obviously driven by the knock-on effect of supply chain issues in the new car market, which have gone on for now well over two years and are affecting supply in the used car market. Of course, you've got demand challenges as a result of both elevated pricing, consumer confidence, inflationary pressures, et cetera. So despite all of that, we are growing very significantly 100% year-on-year, 20% growth quarter-on-quarter. This isn't a new phenomenon with the consumer. This has been going on for some months now. We're already seeing that. We're seeing that in the behavior of consumers gravitating towards lower priced cars, generally, less value. The opportunity for us in the future in a normalized market with normalized supply, normalized demand, normalized pricing, the opportunity is very significant. As we look into Q4 and beyond into next year, our model and our budget takes account of the fact that things are unlikely to get better in the short term. In the medium to long term, we expect to perform significantly better than in this difficult market. We still expect very significant growth in unit numbers and sequential improvements in GPU despite those issues going on in the. In the wider market. Got it. Maybe on the SG&A target obviously we're still like a year away from the 1,500 target. If you could give us a little more detail around the progress you've made over the last couple of months in terms of improving headcount leverage particularly from a driver and customer support headcount perspective. Then on advertising, are you seeing any drop off in conversions or funnel metrics as you pull back on brand spend? I'm also curious if you could share any color and benefits of moving to a higher mix of performance marketing. Thanks. Yeah. The SG&A per unit target is one we're very confident in. In the simplest terms, if you think about SG&A per unit, if we simply double the volume of units, we halve the SG&A cost per unit. We've seen a notable decrease over the last couple of quarters in SG&A per unit, down from fully loaded, including group costs, about GBP 5 thousand to under GBP 3.5 thousand in Q3. We see getting that to GBP 1,500 or less by the end of next year as a result of a combination of things. Obviously, the growth in the unit numbers, but also reduction in a number of costs. Obviously, there are two actions we've taken in the last six months. There was the realignment plan towards the end of Q2, where actually a lot of those costs carried into Q3 because it takes some time for that to actually take effect. Then, of course, the withdrawal from Europe, where still we have some of those loaded group costs, and that will continue into Q4. As we go into Q1 next year, we see the full benefits of having completed and got all the costs from pre the realignment plan and all the European costs out of the system. We're very confident in our ability to continue to see that number decline. Got it. Great. Thanks for the color and pass it on. Thanks. Our next question comes from the line of Adam Berlin with UBS. Please proceed with your questions. Yeah. Hi. Just one question from me. Thanks for taking it. Just wanted to confirm, Stephen, that you said that the cash outflow in Q3, only half of that related to the UK business. I think cash position was GBP 400 at the end of Q2, now GBP 308. There's GBP 92 million cash outflow in Q3, of which the UK would just be half of that. Is that a good idea of what of what the Yeah. Front rate cash outflow should be next few quarters? Is that I think when you look at. Yeah. You're not a million miles away with that assumption. Yeah. Looking at cash and cash equivalents in a way dropped just over GBP 110, I think, and the U.K. would have been half of that. On that basis, is the 12,000 units a month, GBP 1,500 GPU still the right basis for break even? Cash flow break even. I think all of that will be looked at over the coming months. Can we get there for less? How do we look at the SG&A line? How do we get more efficient and more effective? I think that was the base assumption. Obviously, we'd like to hope that we can break even at either a lower volume or a lower GPU, but that means finding more efficient and effective ways. As Alex said, we've done a lot. We've built a big infrastructure now. We've got the CCCs, we've got the delivery processes in place. We've built out the refurb centers. The marginal costs on sales are significantly lower. We haven't come back yet and changed on that. The hope is that we can find faster ways of getting to break even or ways of getting there that don't need that kind of GPU. Maybe just one more question on the marketing side. I know in the plan there was talk of dialing back the UK marketing spend a little bit to help you get down the SG&A per unit. Has that happened yet? 'Cause it doesn't seem to be impacting unit growth. Is that still to come or actually are you still delivering unit growth despite spending less on marketing? A lot of that is still to come because as we start to unwind some of the brand spend and move more towards a balance of 50/50 performance brand next year and actually tilt more in favor of performance, beyond that. There's still some further benefit to come in there. you don't think that's going to slow down the growth rate as that brand spend comes off or you- No. If anything, the opposite is true because brand spend, you're buying future. Performance spend is more response-based. It doesn't really have an impact. Given the strong brand awareness we've already built up over the last three years, it's unnecessary for us to continue to spend on brand at that rate. Actually you're moving from a less efficient marketing pound in brand to more efficient in performance. Therefore, you don't see an impact. If you massively reduced absolute spend, then that would impact volume. If you're shifting from non-performance to performance, actually the opposite is true. You drive more volume. You're going to keep the absolute level of marketing spend broadly where it is. It's just a shift. There's not actually a cut in marketing spend that you need to do. There may be a marginal reduction. Right. Next year in overall spend because we don't need to continue spending the same level on brand, but we don't think it materially impacts volume. If you look at our growth versus the overall market, the overall used car market in Q3 was probably down high single digits, low double digits, somewhere between 8% and 12% from various other parties who have reported. We grew 100% year-on-year. We're taking very significant share. We will continue to grow. I don't think we'll grow at 100% year-on-year, but we will certainly continue to grow at over 50% year-on-year next year. That takes us to over 100,000 retail units in the UK next year. Makes us one of the two or three biggest players in the market. As we highlighted, I think it's important to remember this is our third year. We haven't reached even our three-year anniversary yet. The scale of the brand and the infrastructure and the volume that we're delivering, I think is you know important and to be able to grow at those sorts of rates, not off a low base, right? If you look at our unit volumes this year, 65,000-70,000 units, that's not a low base. That is top three player in the U.K. base. To continue to grow at those levels off that. Thanks so much. Really helpful. Our next question is from the line of Saim Hamid with Berenberg. This is you with your question. Hi there. Thanks for taking my question. I guess my first one is just related to something in the 6-K. I think one of your stocking loans seems to have the interest rate of base rate plus 13.9%. I mean, should we just assume this is like a very small amount of your overall stocking loans, not representative at all of our bulk of them? I guess my second- It was a li Okay, cool. My second one, could you maybe provide us an update on where your reconditioning per retail unit is right now? Maybe relative to your longer-term target. I think it was GBP 600, the longer term target. I might have another one after this if that's easy. Yeah. On the stocking loans, that's an anomaly and there are materially lower rates than that. Reconditioning costs we've seen very good progress over the last three or four months with changes to processes, increased efficiency at sites, changing shift patterns, all sorts of things. Of course, because there is a delay from the time that you implement those things to cars being bought, going through the system, being sold. Actually, some of those benefits that we've implemented over the last three months are starting to come through in the numbers now because you sell cars today that you bought a couple of months ago and reconditioned a month or so ago. We are very encouraged by the continued improvements that we're making in that area and expect to see further improvements. That is one of the drivers of the further improvements we expect to see in GPU. If you look at our GPU throughout the course of this year, we have grown it by about GBP 180 per quarter from Q1 to Q2 to Q3. Broadly GBP 60 per month improvement in GPU throughout the entire year so far. We expect that to continue in Q4. We expect to see a further improvement of GBP 150-200 to GPU sequentially from Q3 to Q4. Some of that comes from the improved reconditioning efficiencies, but we still have further to go, and we'll start to see more of that again as we get into next year. Got it. Thanks for that. Maybe just finally. I think you mentioned that supply is gradually improving, but you know clearly the demand environment isn't improving, maybe getting incrementally worse. When we're thinking about pricing for retail units for the remainder and maybe into the early half of next year. I think you've already saw 3% quarter-over-quarter decline in Q3 when I think in the last call you said twice it was going to remain flat from then onwards. Should we kind of use this 3% as a good sort of run rate quarter-over-quarter decline moving forward? or is it going to sort of remain flat from this level onwards? Just anything on that would be quite helpful. Supply is not improving. That's not something that we said. I think supply remains constrained until you know new car supply is back to previous levels and until used car pricing is back to normalized levels. I think that will continue. Pricing is remaining relatively flat. You've got the push-pull of you know the balancing out you know supply and demand issues there. Shortage of supply is driving up pricing. Demand is weighing on pricing and those two things sort of even each other out. We see pricing as remaining relatively flat over the coming months, but that very much depends on you know what happens in the macro environment. Doesn't really make a huge difference to us from a GPU perspective. I think whether pricing is sort of up or down 3% doesn't make a material difference to our numbers. Okay. Thank you. Thank you. As a reminder, if you'd like to ask a question today, you may press star one from your telephone keypad. Our next question comes from the line of Catherine O'Neill with Citi. Please proceed with your question. Great. Thank you. Actually, I have a follow-up on the question you were just discussing about pricing. I think you said pricing is sort of broadly flat at the moment in the market. You don't see any or you don't expect it to impact GPU if it's sort of up or down 3%. I just wondered if you could help us think about to what degree would pricing need to shift, let's say, if demand softens further and supply starts to improve, that it would be more challenging for your GPU. How can you manage that? The second question I've got is on consensus for EBITDA for the year. I think it's looking for about adjusted EBITDA for about -GBP 280 million. I just wondered if you're fairly comfortable with that number given, the sort of run rate around savings in the UK? On pricing and its impact on GPU, because the wholesale market and the retail market pricing largely moves in tandem, there is a slight delay effect. If pricing moves one way or another because you're selling cars you bought between 1 and 3 months ago, there's a month to month impact potentially if pricing moves materially in either direction. But over 1-2 quarters, that impact smooths itself out. Doesn't really have a material impact on GPU. If you look at what happened last year, we saw significant appreciation on pricing in Q3, and then it sort of flattened out. If you average the quarters out, you take that pricing effect out of the number. I think we don't expect a material change there. In terms of group adjusted EBITDA for the year we expect H2 to be significantly better than H1 because of some of the things related to the realignment plan and change to the cost base. That the number you mentioned, I think is for the alignment. Stephen might have something to add there. Yeah. I mean, obviously the EBITDA consensus is for the group, and we're going through a process now of closing down the group, so there's UK only. The UK only will be lower than that. Going forward with everything will just be from a UK perspective once we ground Europe out. Great. Thank you. Thank you. Our next question is a follow-up from the line of Saim Saeed with Berenberg. Please proceed with your questions. Yeah. Sorry. Just one other quick question on wholesale units. I think it's now 20% of the total UK unit mix. Is that sort of good percentage to think about moving forward? I think so. Look, wholesale is not our core business, and it's somewhat a by-product of the retail business. You end up with wholesale cars that you choose not to retail, so you've bought them for a reason other than your core business. They fall generally into one of two categories. You thought you were going to retail them, and then you changed your mind for whatever reason. They're not what you thought they were. Or you bought them through your direct car buying channel because that's the service you're providing to consumers or through part exchange, which is a large driver of the wholesale business. So, it's not. We're not trying to drive for maximum volume in the wholesale business. Those are cars that we largely inherit through either part exchange or the car buying channel. We expect that number to fluctuate between the sort of 20%-30% range I think is a sensible place to look at it. The drop in absolute volume is actually a positive for a couple of reasons. one if you look year-on-year, we have greater reconditioning capabilities now and therefore are able to recondition and retail some of those cars. Whereas at this time last year, we were very constrained on reconditioning. We sent cars to wholesale that we would have otherwise wanted to retail. The other thing is we are getting much better from a data perspective and getting much better at being selective in the cars that we choose to buy from consumers. We want to effectively, whether it's an auction process in a B2B context or if you're buying directly from the consumer, which is an auction process in effect in a B2C context, we're being much more selective about what we choose to win versus trying to buy everything. That absolute number is not a it's a positive if anything, because it reaffirms that we're buying only what we want to buy and we're able to recondition more than we were historically. Great. Thank you. Thank you. Ladies and gentlemen, this concludes today's call. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day. Thanks, everyone.