Sponsor of Valencia, Real Sociedad, Cazoo exits European markets

Cazoo Group is closing its Europe operations after the conclusion of the strategic review of its EU business.


On August 2, 2022, the Company announced that it was conducting a strategic review of its business in mainland Europe, with the aim of further preserving cash and positioning the Company to achieve profitability without the need for further external capital.


Following a review of a range of strategic options, management has concluded that the right course of action is for Cazoo to now focus exclusively on its core opportunity in the UK, an enormous addressable market with approximately 8 million used car transactions and a value of over £100 billion annually.


Growth in the UK remains strong, with retail unit sales up over 100% year-on-year in July and August, despite the challenging macro-economic backdrop. The demand for our proposition leaves management very excited about the future opportunity for Cazoo and its ability to capture a 5% or greater UK market share.


The plan to withdraw from the EU is based on the material further investment that would be required for Cazoo to continue to scale its operations in the EU and the conflict this has with the Company’s priorities of cash conservation and achieving profitability without the need for additional capital.


As a result, the Company intends to commence an orderly wind down of its operations in Germany and Spain and is in consultation with its employee representatives in France and Italy. Cazoo will facilitate a structured closure for its customers, employees and suppliers and has notified the relevant employee representatives and unions in each market.


It is expected that the Company will achieve cash savings of over £100m, net of any wind down costs, as a result of its withdrawal from the EU, by the end of 2023. The Company believes that this decision will materially expedite its path to profitability and removes the requirement to raise any additional external funding.


The Company is now targeting cash flow breakeven by the end of 2023, at which point the Company expects to still have approximately £100m of cash on its balance sheet. The EU businesses represented <10% of Company revenues and retail units in H1 2022 and the Company believes this decision should have limited impact on its 2022 revenue and unit targets.


Alex Chesterman OBE, Founder & CEO of Cazoo, commented, “Given our target of reaching profitability by the end of next year, we have taken the tough decision to focus solely on the huge UK used car market, worth over £100bn+ annually. I would like to thank all our colleagues in the EU who are impacted by this decision, and we will of course look to support them in every way possible. We have built a market leading platform, team, brand and infrastructure in the UK, where we have now sold over 90,000 retail units since launch, despite the challenging macroeconomic backdrop.


“The strong customer demand we are seeing in the core UK business gives us high confidence in the future opportunity and the decision we have taken today to withdraw from mainland Europe ensures that our balance sheet remains strong and that we have a plan which we believe no longer requires any further external funding.”

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