Shares in Auto1 Group have seen a significant decline today following the company’s report of decreased units sold in the second quarter, as well as a downward revision of their sales expectations for the entire year.
As of 0950 GMT, shares were down 9.45% at EUR8.87.
According to Auto1, they sold 141,682 units in the quarter, representing a 15% decrease compared to the previous year. This decline in sales resulted in a 23% drop in revenue, amounting to 1.34 billion euros ($1.47 billion). The company has now revised its sales target for the year to approximately 625,000 units, down from the initial outlook of between 625,000 and 690,000 units.
Although this missed target is disappointing, Citi analysts believe that Auto1 has the potential for profitable unit growth due to the improvement in gross profit per unit, which exceeded consensus expectations by 9%. They further note that the company’s cash-flow projection for 2024 suggests a potential turnaround in adjusted earnings before interest, taxes, depreciation, and amortization.
As for the current year, Auto1 anticipates an adjusted Ebitda loss ranging from EUR50 million to EUR70 million. Previously, they had projected a loss between EUR60 million and EUR90 million. However, UBS analysts suggest that despite the positive Ebitda outlook, it may be overshadowed by the disappointing unit sales and downwardly revised guidance.