AUTO1 GROUP SE "Solid execution underpins a long-term growth and margin..."

Research evidence excerpt

AUTO1 GROUP SE "Solid execution underpins a long-term growth and margin..."

Management said the company is currently seeing limited and

contained impact from macro trends and geopolitical developments, including the

Middle East situation. Underlying market conditions in Q1 were broadly stable

across operating regions, with a slight decline offset by a recovery through the

quarter, and no material deterioration in customer or dealer behaviour.

Adjusted EBITDA cadence: The company reiterates its expectation that EBITDA

will be back-end loaded, with stronger profitability in H2 compared to H1. Q1

already showed improving operating leverage and sequential EBITDA growth, and

going forward, higher volumes, improving GPUs and continued cost discipline are

expected to drive further margin expansion, supporting the full-year guidance.

UBS view: solid execution sustained, despite headwinds

Despite some headwinds and investor concerns in 1Q26, Auto1 has delivered

another solid set of results, and management’s tone regarding the remainder of

2026 is reassuring. Overall, we believe the company continues to lay the

foundations for substantial longer-term profit expansion, driven by rapid near-term

volume growth alongside delivery against key profitability targets.

With Auto1’s share price down c30% YTD, we believe the shares present an

attractive opportunity for a number of reasons:

1) Despite headwinds in 1Q26, Auto1 meaningfully outperformed consensus on

units, demonstrating robust execution and a high degree of control over its

operating processes;

2) The outlook for 2Q26 units appears robust despite ongoing macroeconomic

uncertainty;

3) We think the announced CMD in June could serve as an additional catalyst, as