AUTO1 eyes growth after containing hit from COVID sales slowdown

BERLIN, March 24 (Reuters) - AUTO1, the online used-car platform that floated in Frankfurt last month, said on Wednesday it would focus on growing its Autohero retail brand after reporting a sequential increase in sales in the fourth quarter.

The Berlin-based company reported fourth-quarter revenue of 779 million euros ($921 million), a 13% rise from the preceding three months, as it climbed out of a trough in sales caused by the coronavirus pandemic.

For the year as a whole, group revenue declined 19% to 2.83 billion euros but Chief Executive Christian Bertermann told Reuters that AUTO1 still managed to cap adjusted core losses at 15 million euros thanks to rigorous cost control and the resilience of its digital business model.

AUTO1 shares are trading about 30% above the level at which they floated last month, valuing the business at around 10 billion euros and tempting another online car dealer, MeinAuto, to consider a stock market listing.

The company forecast revenue of 3.8 billion to 4.2 billion euros this year, with unit sales via its mainstay merchant platform seen at 560,000-600,000 units.

It raised guidance for its smaller but faster-growing Autohero division to between 32,000 and 38,000 units for the full year, up from an earlier view of more than 29,000 units. First quarter sales are seen at 7,200 to 7,900 units, up from 2,363 a year earlier.

Margins at Autohero were lower than in the merchant business, said Chief Financial Officer Markus Boser, and would likely remain so in 2021 and 2022 as the company prioritised growth in its direct-to consumer business.

Over the longer term, the retail business had greater margin potential, the executives said.

AUTO1, Europe’s leading online car platform operating in more than 30 countries, forecast an adjusted core margin of minus 2-2.5% this year.

$1 = 0.8462 euros Reporting by Douglas Busvine; Editing by Edmund Blair