Carvana Co. · NYSE:CVNA
Carvana — DB Auto Conference (January 2018)
21 slides from Carvana's conference presentation, Jan 17, 2018
Slide 1: DB Auto Conference
DB Auto Conference CARVANA January 17, 2018
Slide 2: Important Notice: Forward-Looking Statements
IMPORTANT NOTICE Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect current expectations and projections with respect to, among other things, its financi
Slide 3: Important Notice: Market and Industry Data
IMPORTANT NOTICE Market and Industry Data This presentation includes information concerning economic conditions, the industry, the markets and the competitive position that is based on a variety of sources, including information from independent industry analysts and publications, as well as own est
Slide 4: Our mission is to change the way people buy cars
OUR MISSION IS TO CHANGE THE WAY PEOPLE BUY CARS. 5 5 4
Slide 5: Industry Overview: Massive, Fragmented Market
MASSIVE, FRAGMENTED MARKET INDUSTRY OVERVIEW Massive Fragmented & Ripe for Disruption 61,000+ N.A. Used Car Dealerships (7) $1.1 Tn $710 Bn 1.6% 81% in 2015 U.S. Sales (1) in 2015 U.S. Used Car Sales (2) U.S. Market Share of Consumers Do Not Enjoy Largest Dealer Brand (4) the Car Buying Process (5)
Slide 6: Digital Economy Is Transforming Car Buying
MASSIVE, FRAGMENTED MARKET DIGITAL ECONOMY IS TRANSFORMING CAR BUYING % % % of customer would test drive purchases consider only one involve online purchasing vehicle (3) research (1) a car online (2) (1) Capgemini 2014 Cars Online report (2) Accenture 2015 Automotive Digital Survey (3) AutoTrader 2
Slide 7: Rapid Secular Growth
RAPID SECULAR GROWTH $594 YTD Multiple Revenue Streams (1) 130% YoY $225 Retail Vehicle Sales $209 Revenues ($17.8k selling price/retail unit) ($M) $159 $365 Wholesale Vehicle Sales $107 $130 $87 $99 ($4.2k selling price/wholesale unit) $73 $42 $43 Other Sales & Revenues $36 $24 $29 ($837 gross prof
Slide 8: Carvana's Vision Is Focused on Providing Our Customers With
SUPERIOR CUSTOMER EXPERIENCE CARVANA'S VISION IS FOCUSED ON PROVIDING OUR CUSTOMERS WITH: Best Experience Best 10 minutes time in Value which purchase can be $1,430 in average completed after vehicle savings per vehicle selection compared to KBB As soon as Next Day Suggested Retail Value car deliver
Slide 9: A Simple and Seamless Car Buying Experience
SUPERIOR CUSTOMER EXPERIENCE A SIMPLE AND SEAMLESS CAR BUYING EXPERIENCE Vehicle Search & Discovery From Any Device Intuitive vehicle search with 9,500+ vehicles available online Trade or Sell All Online Nearly instantaneous, firm, fully automated trade-in offers Real-Time, Personalized Financing Ma
Slide 10: Creating Differentiated Fulfillment Experiences
SUPERIOR CUSTOMER EXPERIENCE CREATING DIFFERENTIATED FULFILLMENT EXPERIENCES Carvana Delivery delivery as soon as the next day in our markets -uniformed employee in a branded, custom single-car hauler, in our markets Vending Machine with strong branding 7 vending machines currently operational (1) x
Slide 11: Delivering Superior Customer Experiences
SUPERIOR CUSTOMER EXPERIENCE DELIVERING SUPERIOR CUSTOMER EXPERIENCES 4.7 12,900+ 97% 85 Rating (1) Customer Would Recommend Net Promoter Score Reviews on To A Friend (1) (NPS) (2) Carvana.com (1) Carvana will I never change the way Carvana thought car cars are sold. is the bomb! buying could be enj
Slide 12: Proven Go-to-Market Strategy
PROVEN GO-TO-MARKET STRATEGY PROVEN GO-TO-MARKET STRATEGY Repeatable Market Entry Playbook Proven by Success in Our Markets Retail Units Sold Activate Team of Connect to 11,719 Expansion Advocates Logistics Network +133% 10,682 Market Launch CapEx Spend Turn on Marketing Y/Y $500k for initial delive
Slide 13: Vending Machines Are a Powerful Branding Tool
VENDING MACHINES ARE A POWERFUL BRANDING TOOL Market Penetration Market Penetration Nashville Vending Machine Launch Quarters in Operation * Quarters in operation as of 12/31/16. 13
Slide 14: Expanding at Increasing Pace (January 2017)
VERTICAL INTEGRATION & FULFILLMENT EXPANDING AT INCREASING PACE Premium JANUARY Fulfillment 2017 Capabilities Control over delivery times enables seamless Philadelphia customer experience IRC Speed of delivery drives conversion Carvana Logistics Centralized Network Atlanta IRC inventory powers broad
Slide 15: Expanding at Increasing Pace (December 2017)
VERTICAL INTEGRATION & FULFILLMENT EXPANDING AT INCREASING PACE Premium DECEMBER Fulfillment 2017 Capabilities Control over delivery times enables seamless Philadelphia customer experience IRC Speed of delivery drives conversion Carvana Logistics Phoenix IRC Centralized Network Atlanta IRC inventory
Slide 16: Positive Feedback Loop Supports Growth
POSITIVE FEEDBACK LOOP SUPPORTS GROWTH Improving Cash Burn on New Market Launches OPEN NEW MARKETS LOWER TURN TIMES CACx CACx+n GPUx GPUx+n BETTER MARKET GROW ECONOMICS SELECTION Reducing Time to Cash Generation RAISE GPU RAISE CONVERSION * Graphs are conceptual and do not necessarily reflect actual
Slide 17: Phases of Inventory Strategy
PHASES OF INVENTORY STRATEGY 1 2 3 Selection Drives Conversion INVENTORY TURN TIME Conversion GPU Inventory * Graphs are conceptual and do not necessarily reflect actual data. SALES 17
Slide 18: Unit Economics
UNIT ECONOMICS Gross Profit Key Drivers of Gross per Unit $1,742 Profit Expansion $1,501 Increase number of markets / Sell more retail units $1,169 $1,023 Reduce average days to sale CarMax, Inc. Gross Profit Increase conversion on existing products per Unit Addition of new products ~$3,889 (1) and
Slide 19: Building a Competitive Moat
BUILDING A COMPETITIVE MOAT LARGE SCALE DEEP AUTO FINANCE RECONDITIONING EXPERTISE INTERNAL LOGISTICS FULLY TRANSACTABLE NETWORK E-COMMERCE EXPERIENCE NATIONAL CONSUMER FOCUSED BRAND 19
Slide 20: Significant Growth Opportunities
SIGNIFICANT GROWTH OPPORTUNITIES Develop New Products Improve Brand Awareness Innovate and Extend Technology Leadership Enter New Key Geographical Drive Revenue Markets Growth in Existing Markets 20
Slide 21: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS MASSIVE, FRAGMENTED MARKET $710B 2015 U.S. 1.6% Largest dealer brand Exceptionally large and inefficient used car market Used Car Sales market share in US SUPERIOR CUSTOMER EXPERIENCE Simple, seamless and differentiated used car buying experience 97% Customers who would 4.7