CAZOO Investor Presentation
Risk Factors [2/3]
•
•
The Group's business is subject to risks related to the larger automotive ecosystem, including consumer demand, the shift to electric vehicles, global supply chain challenges and other macroeconomic issues.
.
The Group's business is sensitive to conditions affecting automotive manufacturers, including manufacturer recalls and potential financial issues.
Used cars in the Group's inventory may be stolen, damaged or destroyed before they can be sold. In addition, the Group's vehicles used for its subscription service may be stolen, damaged or destroyed before being returned to the Group.
•
The Group may be adversely affected by fraudulent behavior of sellers or purchasers of its used cars or an inability to correctly assess their creditworthiness.
•
•
•
.
.
•
•
•
The Group may experience significant returns of used cars sold.
The Group may experience seasonal and other fluctuations in its operating results, which may not fully reflect the underlying performance of its business.
The Group is highly dependent on its senior management team and other highly skilled personnel, and if it is not successful in attracting or retaining highly qualified personnel, it may not be able to successfully implement its business strategy.
A significant disruption in service of the Group's website and information technology systems could result in a disruption in the Group's business and could have a material adverse effect on its results of operations.
The Group is exposed to risks in connection with product-related warranties as well as the provision of services, which may be costly.
The Group will need to improve the capacity, speed and automation of its reporting systems and operational processes as it grows.
The Group's business relies on email and other messaging services, and any restrictions on the sending of emails or messages or an inability to timely deliver such communications could materially and adversely affect the Group's business, financial
condition and results of operations.
The Group is subject to risks related to online payment methods.
.
Cyber breaches caused by malicious hacking could jeopardise the integrity of the Group's IT systems and the security of its data.
•
•
•
•
•
•
•
.
•
•
•
•
.
•
Failure to safeguard the Group's customer and other personal data may result in reputational damage, financial penalties, claims from individuals and litigation, and decrease in revenues.
The Group may not succeed in adequately protecting its intellectual property and know-how.
The Group may be subject to intellectual property rights claims, which are costly to defend and could require it to pay damages.
The Group may require additional debt and equity capital to pursue its business objectives and respond to business opportunities, challenges or unforeseen circumstances. If such capital is not available to it, the Group's business, operating results and
financial condition may be materially adversely affected.
The Group relies, or may rely in the future, on various of forms of debt financing to operate its business, including car financing facilities, mortgage debt and syndicated loans, and there is no guarantee that such financing will be available in the future
on acceptable terms, or at all. In addition, the Group's leverage from any such facilities could adversely impact its business, financial condition and results of operations.
The requirements of being a public company may strain the Group's resources, divert management's attention and affect the Group's ability to attract and retain executive management and qualified board members.
The obligations associated with being a public company require significant resources and management attention, and the Group will incur increased costs as a result of becoming a public company.
The Group may identify material weaknesses in the future or otherwise fail to maintain an effective system of internal control, which may result in material misstatements of the Group's financial statements or cause it to fail to meet its reporting
obligations.
The Group operates in several highly regulated industries and is subject to a wide range of national and local laws and regulations which will increase as the Company executes on its business strategy of expanding into Europe. Changes in these laws
and regulations, or the Group's failure to comply, could have a material adverse effect on the Group's business, results of operations, and financial condition.
The Group's operations may be adversely affected by legal, regulatory and other developments in the jurisdictions in which it operates. Non-compliance by the Group with applicable financial regulations could have a material impact on the Group.
The Group's business may be adversely impacted by weakness in travel demand or a significant increase in fuel costs.
New laws, regulations or policies of governmental organisations regarding increased fuel economy requirements, reduced greenhouse gas or pollutant emissions or vehicle safety could give rise to significant costs.
Government regulation of the internet and e-commerce is evolving, and unfavorable changes or failure by the Group to comply with these regulations could substantially harm the Group's business and results of operations.
The Group is subject to many hazards and operational risks, including accidents or incidents relating to health, safety and the environment at the Group's customer centers and vehicle preparation centers, that can disrupt its business, which could have
a material adverse effect on its business, financial condition and results of operations.
Natural disasters, unusual weather conditions, epidemic outbreaks, global health crises, terrorist acts and political events could disrupt the Group's business.
The Group may become subject to risks arising from legal disputes in connection with its general business activities.
•
Tax matters could impact the Group's results of operations and financial condition.
•
The Group's inability to obtain affordable insurance on its inventory may materially adversely affect its financial condition and results of operations.
•
The Group's insurance may not provide adequate levels of coverage against claims.
CAZOO Investor Presentation - March 2021View entire presentation