Hello and welcome to the Aramis Group H1 2025 results call. Please note this conference is being recorded, and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you will be connected to an operator. I will now hand you over to your host, Fabien Geerolf, Chief Financial Officer of the Group, to begin today's conference. Please go ahead, sir.
Thank you. Good morning, everyone. Thank you for joining us today for Aramis Group H1 2025 results presentation. I am Fabien Geerolf, Chief Financial Officer of the Group. Today, with me to comment on these results, Guillaume Paoli, Co-founder and Co-CEO of the company. Before starting, the usual reminders: this conference is recorded, accessible both over the phone and internet. A replay will be made available on the company's website at www.aramis.group. The slideshow is available on the website for download. Let me also remind you that today's presentation contains forward-looking statements and that future results may differ materially from the statements or projections made on today's call. In particular, the risk factors that could affect those statements are described in our 2024 Universal Registration Document filed with the French Financial Markets Authority, AMF. This presentation will be, of course, followed by the usual Q&A session.
Finally, I remind you that Aramis Group has a non-calendar fiscal year with annual results closing at the end of September. As a consequence, the H1 2025 results we are going to report today refer to the calendar period from October 1st, 2024, to March 31st, 2025. I now leave the floor to Guillaume that will drive you through the main business and market highlights. Guillaume, please go ahead.
Thank you, Fabien. Good morning, everyone. Let's begin with the key highlights of this presentation. In the first half year of 2025, Aramis Group has continued to demonstrate strong, profitable, and cash-generative growth thanks to our singular business model. We achieved 10% organic revenue growth year-on-year, outperforming the used car market. Thanks to our very engaged teams, this is quality growth, with customer satisfaction remaining at very high levels. Adjusted EBITDA more than doubled to EUR 32.8 million, and we generated EUR 24 million in free cash flow, benefiting also from the work that is done on stock turn and working capital requirements. As you know, our market is absolutely huge, so as to grow more and more profitably, both our business model and operations are continuously improved, as we explained during the Capital Markets Day at the end of November 2024.
We're converging on our operating system, leveling up performance progressively across our geographies. We're leveraging our European scale, bringing new benefits to customers and creating value for the Group, and we are raising the bar, improving our model from sourcing to delivery. I'll give a few illustratives in this presentation. We are in line with our strategy and with our targets, and we confirm our guidance. Now, moving on to slide four, let's look at the market context. The used car market in Europe continues to prove its resilience, even in the face of macroeconomic uncertainty. As mobility remains absolutely essential for millions of Europeans, demand is structurally stable, as you can see on this graph.
The exception in 2022 and 2023 was what we call Carmageddon, the combination of COVID aftermath and war in Ukraine that provoked an inflation in used car prices and a shortage of pre-registered cars. We built our model to be robust and to grow regardless of the environment. The current economic and geopolitical turmoil should have limited effect on our business, as we are at the heart of the circular economy and we operate 100% in Europe. On the slide, you can see the used car market and the new car market that is more or less correlated with the consumer confidence index. Moving on now to slide number five, if we take a closer look at the environment for used cars, we are now operating in a more stable setting.
Used car prices are still correcting from 2022 highs, which is healthy and gives customers more opportunity to choose their used cars. This normalization supports both demand and supply, and it is also the backdrop for our continued growth. If we look at slide number six, we have consistently outperformed the market for several years. This semester is no exception. Thanks to our unique model, we grew B2C volumes by 10%, organically outperforming the market by 12%, first gaining market share across our six countries. We are now just short of 1% market share of used cars below eight years in large Europe, from Portugal to Poland, Norway to Greece, including the U.K. Our value proposition is strong and attractive as we provide affordable, sustainable, reliable mobility, and our scalable business model enables growth. Now, on slide seven, let us now talk about what drives this performance.
Our growth is underpinned by a unique integrated model with three core strengths. One is a full vertical integration across the value chain. Two, a clear operating system for buying, transforming, and retailing cars. Three, a performance engine at enterprise, people, and team level, with a distinctive learning culture centered on customer satisfaction. That is not just theory. It translates into results. Over 61,000 B2C vehicles sold this semester, record Net Promoter Scores and employee NPS scores, and continued GPU leadership. We started to build this model since 2001, and we are constantly improving it. On slide eight, the strategy we unveiled in November at the CMD, we are continuing to execute it in a disciplined and structured way. Number one, we have a European platform with a superior and winning operating system. We are converging on this system to level up performance amongst the group geographies.
This European platform, we're going to leverage it to bring unique benefits and value and to continue to expand it. Number two, this great model and system, we are converging on it, but we are also improving it in all its dimensions. We are calling that raising the bar. These pillars are central to our 2027 strategy and are already delivering tangible benefits. Now, moving on slide nine for a few examples. This is illustrative of convergence. You know our refurbishment capabilities are a cornerstone to our operational excellence. Refurbishing is an essential in the value we bring to customers, enabling us to propose first-class warranties, reliability, and all at an affordable price. In H1 2025, we continue to improve efficiency of our processes across all our refurbishing centers.
Lead times are decreasing, productivity is increasing, and quality remains high, with the ultimate indicator being Net Promoter Score, which stays at record level. This convergence is a direct result of our efforts to share learnings, upgrade our tools, and implement group-wide performance standards. On average, we have reduced our refurbishing lead times by 29% this semester, with the best-in-class unique refurbishing cars in as little as 3.5 days. We still have a lot of work to do, but things are moving in the right direction. Now, moving on slide 10, an illustration of how we are leveraging our European platform to create unique advantages for our customers and our business. This semester, we launched five new internal inventory sharing flows across countries, enabling better matching of local demand and available stock. This internal marketplace is an enabler of capital efficiency and sales agility.
It allows us to expose inventory across countries in real time based on local demand and therefore optimize our stock rotation and profitability. This is one of the many ways we turn our scale into an operational edge. Few players, actually, if any, in the market can operate such a cross-border platform, which reflects our ambition to be both deeply local and powerfully integrated at the European level. We are just getting started. This platform will become even more central to our operation in the years to come. As a result, combined volumes of internal and external marketplace have increased by 40%, the total representing still much less than 10% of our sales. Now, let's raise the bar together. Slide 11. Let's say a few words about our new group identity.
A week ago, and as announced during the CMD, we have launched a bold unified brand platform across our six countries. This new identity is a key milestone for Aramis Group. Our brands will keep their local names that customers know and love and will share the same platform, meaning the same DNA and the same visual identity. It reflects the ambition and cohesion of our Group and strengthens our visibility both internally and externally. It is based on the belief that refurbished cars are the smart choice, more reliable than used and more affordable than new. The new platform has been developed by our teams and very well received by customers in field surveys. This new identity supports our operational goals and our cultural unity. It's also a way to share assets such as advertising, websites, cars, and to improve our marketing efficiency.
We are making the edge and the value we bring much clearer for customers. If you're up for it, you can take a look later on at a short inspirational video that we published. Now, I'll leave it to Fabien for more details on the numbers.
Thank you, Guillaume. We are now on slide 14. As Guillaume said, H1 2025 was in line with our expectations, both in terms of growth, profitability, and cash generation. You can see here the key financials for the period. Total revenues reached EUR 1.2 billion, up by 10% compared to last year, driven by the B2C volume growth. GPU, once again, stood at European leading level of EUR 2,317 per B2C car sales. Adjusted EBITDA reached nearly EUR 33 million, twice as much as last year. The group once again managed to decrease its operating working capital by another three days versus last year.
As a result, the group generated almost EUR 24 million positive cash flow in H1 2025, excluding the payment of online cars earn-out and the share buyback plan. Now, on slide 15, for more details on revenues by segments. Overall, our B2C sales are up by around 10% in value and in volumes, well balanced between our two segments. B2C refurbished volumes grew by 11% with an acceleration between Q1 and Q2, 8% in Q1 and 14% growth in Q2. This acceleration is partly due to favorable calendar and base effects in Q2, expected to be partly offset in Q3, for which we therefore expect slower growth. B2C pre-registered volumes, mainly sold in France and in Belgium, keep improving by 7% versus last year. This growth is driven by the end of the catch-up effect in Belgium, while volumes have now stabilized in France. B2B revenues decreased by 3%.
The B2B segment activity, as you know, is driven by the volume of vehicles purchased to private customers, which has now stabilized. Finally, revenues from services increased by 7%, driven by the B2C growth. The penetration of the financial services, which account for a significant portion of our services margins, remained rather stable over the semester at 44%. I'm now on slide 16. The slide shows the usual revenue split by country. In France, revenues increased by 9%, driven by a strong growth in refurbished cars by 17%, whereas pre-registered cars have now stabilized as expected. In Belgium, revenues increased by 19%, driven by the end of the catch-up effect in the pre-registered vehicle segment, where volumes are up by 41%. In Spain, revenues grew by 8% compared to the first half of 2024, despite the flooding of the Valencia site in October 2024.
The Valencia site, which includes a point of sale and a refurbishing center, needed a complete overhaul and reopened only two weeks ago. Strong growth continues on the U.K. market, with another 19% growth rate in the semester, with a particularly favorable base effect during Q2. In Austria, revenues are down by 5%, reflecting here an unfavorable base effect after an exceptional 2024 year of hypergrowth, which benefited from one-off sourcing opportunities. In Italy, B2C revenues increased by 2%. If we take into account the volume sold to other group entities, total volumes increased by 38%, enabling us to improve our unit economics versus last year. Moving on to slide 17 now and our profitability. We keep maintaining our discipline, further improving both GPU and costs. We have improved our unit margin by approximately EUR 150 per unit versus last year. The services margin has now stabilized.
On the car margin itself, what we call the metal margin, we have confirmed the improvements made in H2 2024, meaning improved car selection and car pricing thanks to team training and our technologies, more efficient reconditioning, and logistics operations. As a reminder, our GPU is calculated in the same manner as our peers in the U.S., including all costs of refurbishing, rent, and labor, which is not the case for some of our European peers. Using comparable methodology, we are keeping our leadership position among listed peers in Europe. We also continue keeping under control our SG&A, as you can see on the chart on the right side. Those amounted to approximately EUR 108 million in H1 2025, which is a moderate increase of less than 5% compared to H1 2024. We kept investing into our brands while improving the efficiency of our marketing spend.
Of course, we continue to invest in new branches and in our sales teams to fuel our 10% volume growth. As a result, per B2C car sold, the SG&A decreased again by close to EUR 100 per unit versus last year. Going forward, we intend to maintain the same level of discipline and bring further up these productivity gains. If we now move to slide 18, we see the EBITDA bridge that illustrates the profitable growth achieved in H1 2025. H1 EBITDA has doubled versus last year from EUR 16 million- EUR 33 million. This was driven by solid volume growth, 10% year-on-year, margin improvement thanks to strong operational execution, and moderate SG&A increase to support our growth while delivering improved productivity. Moving to slide 19, finally, let's take a look at our cash flow generation.
We keep reducing our operating working capital thanks to continued discipline on our inventories, hence a reduction from 27 days last year to 24 days of revenues in 2025. We believe we still have room for improvement on this topic, where the group is already best in class. Our capital expenditures stood at EUR 5.4 million in this first semester, down from EUR 6.8 million last year as we are increasingly mutualizing our investments at group level. Thanks to increased profitability, reduced operating working capital, and increasingly mutualized CapEx, we generated EUR 24 million positive cash flows in H1, which enabled us to cover for the Online Cars earn-out payment for EUR 7 million and our share buyback program for EUR 3 million. Our financial net debt, excluding IFRS 16, went further down from EUR 61 million- EUR 47 million.
As a reminder, this net debt does not include the GBP 30 million estimated payment to be made for the remaining 40% of shares of card supermarkets and estimated to be paid out in FY 2026. We still have more than EUR 200 million of undrawn credit lines with no covenants attached, with tenancies, and with local financial partners. During the semester, the Group has renegotiated the terms of some of its credit lines with Stellantis, converting short-term credit lines or those with fixed maturities in 2026 or 2027 into a credit facility that can be drawn at any time for a maximum duration of three years and amounting to EUR 100 million. This shows, once again, the trust relationship that exists between Aramis and its partner, Stellantis. With that, I hand the floor back to Guillaume for the outlook and guidance.
Thank you, Fabien.
As you all know, we are an entrepreneurial, ambitious team. We believe we can build a very large and very profitable company in our field. Our market is huge and fragmented, so it enables it. We have the business model and consolidation platform. It is resilient, driven by the essential mobility needs of European households. In this context, we are confirming our objectives. We will deliver double-digit growth on refurbished car sales, resulting in high single-digit growth, B2C. We will deliver over EUR 65 million adjusted EBITDA, and we will continuously improve our operational working capital in days of revenue. Thank you for your attention, and we are now ready to take your questions.
Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. To withdraw your question, please press star two.
We will take our first questions from Alexandre Raverdy from Kepler Cheuvreux. Your line is open. Please go ahead.
Yes, good morning, Guillaume and Fabien. Thanks for taking the question. A couple of ones, please. The first one is regarding Italy. You mentioned that the performance in the country is disappointing. Could you please provide some more color on the issues you face in the country, whether it is location, the team in place? Looking at the performance, I guess the vehicles that you source from there are of good quality. Any detail on what you think is missing so far in the country and when you expect to reach the pregiven point would be very helpful. That is the first question. The second one is on the guidance, which was confirmed after what I would think is a strong start to the year.
Given the usual seasonality, how do you think, how conservative do you think this guide is? That is the second question. Finally, one for Fabien on working capital. I think 24 days of operating working capital is already a great level. Obviously, I think we should not expect a linear improvement from here. Could you please mention maybe qualitatively where you see a few easy wins to support the guidance and the 2027 targets? Thank you.
Thank you, Alexandre, for your questions. I will take one and two and let Fabien, as you named him, on the third one. Regarding Italy, yes, we are not satisfied with the performance. Actually, there are some things you do not really see because we are ramping up volumes because around 40% of the Italian production is being retailed via our internal marketplace.
The refurbished volumes have actually increased there, and we have significantly reduced our cash bond. Actually, the problem that we face is that our unit economics are progressing, but they are still not at the level we want them to be to push on the gas pedal. We have decided to work and work and rework and wait until the unit economics are where we want them to be, not necessarily at the level of France or Belgium or mature countries, but above where they are now. Working on that, we're patient. We know it is feasible because we have competitors that are working rather well in Italy, and we are confident on the medium term. For the short term, we will continue to work to improve the economy. It's a bit all along the chain.
There is not one single thing that is not going well. It's about the sourcing, the refurbishing, the logistics, the marketing, the sales. We're not where we want to be before pushing the gas pedal. That's number one. Number two, the guidance. Very good question. Look, we have announced this guidance just a few months ago at the end of November, so it's very recent. I know about the seasonality, but with the current market context, plus there are some calendar effects, as Fabien said, we consider it rather normal and cautious to maintain the guidance that we have. Of course, going forward, we want to provide much more profitability and continue to grow. At this stage, it seems that the right thing to do with the current economic, let's say, uncertainties and the fact that we have calculated it just a few months ago.
I'll let Fabien answer on number three.
Yes, thank you for the question on operating working cap. Indeed, we improved by another three days compared to last year. It was already an improvement last year compared to the previous one by 10 days. We are doing well on operating working capital. We still believe that we have room for improvement. We shared during the Capital Markets Day presentation that there were some countries that were able to achieve 20 days in operating working capital. There are some improvements that we can do. To be very specific, I cannot name very specific countries. It would not be very fair to them. We can improve the operating working capital all the way of the life of the car, I would say. There are some operating improvements that we can do.
Also on car selection that we can always improve and that we continuously try to improve. I cannot be very, very specific. We have a clear plan regarding operating working capital, and we hope that we can continue to deliver it moving forward. About your question on whether or not we can provide a more precise number at the end of the year, not really. You know that the operating working capital is a snapshot, and therefore, we prefer not to provide precise numbers regarding operating working cap. I hope it's clear.
Yes, that's very clear. Thank you very much.
Thank you. We are now taking our next questions from Christophe Germain from Société Générale. Your line is open. Please go ahead.
Yes, good morning. First question from my side is on the outlook again. What is the underlying GPU assumption you're taking on H2?
Should we assume that the H2 2024 last year GPU was maybe boosted by Austria or some special factors, and we should be cautious on the year-on-year comparison? That is the first question. The second one is on the pre-reg segments. I think you mentioned the catch-up effect in Belgium taking place after having taken place in France. Should we assume flat-ish volume in H2? The last one is on the profitability by market. I can see some tax in the P&L, which must suggest that maybe you are paying taxes in France, which would suggest a much above-average margin in France that we know. By difference, does it mean that the contribution of markets like Austria or Spain was particularly weak in H1 and that we could expect a catch-up in H2?
Thank you. Thank you, Christophe.
I'll take question number two and leave one and three for Fabien. Look, as we explained, the pre-registered is a factor of the structural overproduction of new cars. There has always been more cars produced than what the market can absorb, as all OEMs want to gain market share. The exception to this rule was what we call the Carmageddon in 2022 and 2023. For the first time ever, there was more demand than what the OEMs could provide because of the scarcity of spare parts and semiconductors. We are back in a normal situation. I would say even the new car market is particularly weak for different reasons, one of them being that the cars that are proposed are not all necessarily correspond to the demand. We anticipate the pre-reg supply to be more or less stable in the coming months.
We have had our catch-up effect. I believe we can still grow marginally here and there on this business. There can always be good surprises. At this stage, we anticipate the stability.
Yes. Regarding your first question about the guidance and more precisely the GPU, you know, Christophe, that we are not providing a precise guidance on GPU. I'm assuming your question was regarding the H2 2024 and whether we can forecast that going forward. On GPU, we need to take into account the fact that it's not a linear evolution of the GPU. Between H1 and H2 last year, indeed, we saw a EUR 250 per unit increase, which was a boost. It's not 100% linear, knowing that we are short in inventory, and we are buying the cars more or less for the next month.
We cannot 100% predict and secure that the GPU will grow very, very regularly, month-over-month. That is why we are not providing a guidance on these specific criteria. Yes, in H2 2024, there were some specific elements or deals that were quite favorable and that are a little bit less favorable in H1 2025, for example. I hope it answers your questions, Christophe.
It does. On the tax rates, the fact we are seeing tax P&L and the implication for the profit by market.
Yeah, that is something that we have been very clear during the Capital Markets Day. We have some differences in profitability from one country to the other. Indeed, France is one of the countries that is paying taxes, whereas in some other countries, like Italy, we are still making losses and not recognizing any negative taxes in Italy.
That is why you have this level of taxes.
Okay. Thanks. Very clear.
Thank you. It appears there are no further questions. We will now transition to the webcast for any remaining questions. Please go ahead.
Okay. I will read the questions that we had. There was one question about you have not completed the last share buyback. Do you have new plans for a new buyback plan? I will take that question. On the share buyback, it was always our intention to run the first share buyback to cover the LTIP plan. The only purpose of our share buyback is to cover the incentive plan for the management. We were already at the end of March, beginning of April, close to 50% covering the needs for September 2026 deliveries.
We are, in fact, in advance, and that's why we did not renew our share buyback plan. Question from Gabriel. Thank you for the presentation. How do you see the business developing since the start of Q3?
I think that's one, Gabriel. Thanks for the question. There are different levels to answer your question. On the profitability side, we're performing well, and we are working to enhance our margin further. On cash management and working capital, we're on track. As Fabien has answered Alexandre previously, we have more work ahead. On volume, we are growing at a more measured pace than our targets since the beginning of Q3. There are specific factors. First is a calendar effect. We have been working a lot on convergence.
Typically in Italy, we're waiting to push the gas pedal that more lights are on the good side. We are executing our plan, and we'll update you guys in Q3 at the end of July. Long story short, we're growing a little bit less fast than what we would like for. There are some calendar effects, some other effects, but we're confident going forward. On the profitability side, we're on track.
A question from Dominique. Thank you for your question, Dominique. On Spain, do you have any idea on the amount of sales lost due to the flooding in Valencia? I will take this question, Dominique. Indeed, you know that we lost 250 cars. That's the immediate loss that we incurred in Valencia.
You need to have in mind that Valencia is the second biggest site in Spain, that in fact, it was very dynamic in terms of sales. Not only is it a point of sales, it is also a refurbishing center. We had to delay the opening of the refurbishing center in Valencia. It is a double effect, a direct impact, immediate impact of 250 sales, and a delayed impact coming from the fact that we have not refurbished those cars. I am not providing a precise number, but it is clear that it is a significant impact on the H1 and the beginning of H2 sales in Spain. Italy, why is demand so weak? From Dominique, and I think Guillaume will take the question.
I will take this one.
Just to add on what Fabien has said, I was two weeks ago in Valencia to join the team that has worked very hard to reopen the Valencia point of sale, which is both a point of sale and a small refurbishing unit. Now they are in business again. Italy, the demand is not necessarily so weak. It is how we transform the demand that is not satisfactory for us up to now. Italy is market number four. It is a very big country. There are as many inhabitants in Italy as in France and the U.K. We will get there, but we admit we are taking more time than what we would like for.
Another question from Dominique [Decourt] What does the EUR 6 million increase in provisions correspond to? I will take that question.
The EUR 6 million increase in provision mainly corresponds to the flooding of Valencia once again. You know that we lost 250 cars. It is a EUR 4 million loss in assets that we had to depreciate and that are impacting the provisions. We received the reimbursement from the insurance. There is no impact on net results from these provisions. The last question on corporate income tax was high indeed in H1. What is the normative tax rate? The normative tax rate that we take is 25%. Indeed, you are right, Dominique. We recorded close to EUR 4 million income tax during H1, which is more than 25%. The reason is the one that I gave to Christophe, meaning that we have some profit-making countries where we pay taxes and some loss-making countries, essentially Italy, where we are not recording positive detailed taxes. Okay.
That is why our income tax is higher than our normative tax rate. I hope it is clear. You say Italy is losing money. Can we have some granularity, EUR 1 million , or closer to EUR 10 million? No, it is not. Thank you for your question, Eric. We are not closer to EUR 10 million. I confirm that we have significantly reduced the losses in Italy. We are closer to the EUR 1 million than the EUR 10 million, clearly.
Are there any other questions, operator? I think we are through the questions on the webcast.
We still do not have any questions from our audio participants. As a reminder, if you would like to ask a question, please signal by pressing star one.
Okay. I think we are done. Thank you very much for your attention. Looking forward to speaking with you again at the end of July for the Q3.
Thank you and bye-bye.
Thank you.
Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.