HelloFresh SE — Interim / Quarterly Report 2024

Aug 13, 2024

HELLOFRESH

GROUP

Q2 2024 Results
August 13th, 2024

Disclaimer

This document has been prepared by HelloFresh SE (the "Company" and, together with its subsidiaries, the "Group"). All material contained in this document and information presented is for information purposes only and must not be relied upon for any purpose, and does not purport to be a full or complete description of the Company or the Group. This document does not, and is not intended to, constitute or form part of, and should not be construed as, an offer to sell, or a solicitation of an offer to purchase, subscribe for or otherwise acquire, any securities of the Company, nor shall it or any part of it form the basis of or be relied upon in connection with or act as any inducement or recommendation to enter into any contract or commitment or investment decision or other transaction whatsoever. This document is not directed at, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction. Persons into whose possession this document comes should inform themselves about, and observe, any such restrictions.

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A significant portion of the information contained in this document, including market data and trend information, is based on estimates or expectations of the Company, and there can be no assurance that these estimates or expectations are or will prove to be accurate. Where any information and statistics are quoted from any external source, such information or statistics should not be interpreted as having been adopted or endorsed by the Company or any other person as being accurate. All statements in this document attributable to third party industry experts represent the Company's interpretation of data, research opinion or viewpoints published by such industry experts, and have not been reviewed by them. Each publication of such industry experts speaks as of its original publication date and not as of the date of this document.

This document contains forward-looking statements relating to the business, financial performance and results of the Company, the Group or the industry in which the Group operates. These statements may be identified by words such as "expectation", "belief", "estimate", "plan", "target" or "forecast" and similar expressions, or by their context. Forward-looking statements include statements regarding: strategies, outlook and growth prospects; future plans and potential for future growth; growth for products and services in new markets; industry trends; and the impact of regulatory initiatives. These statements are made on the basis of current knowledge and assumptions and involve risks and uncertainties. Various factors could cause actual future results, performance or events to differ materially from those described in these statements, and neither the Company nor any other person accepts any responsibility for the accuracy of the opinions expressed in this document or the underlying assumptions. No obligation is assumed to update any forward-looking statements.

This document includes certain financial measures not presented in accordance with IFRS, including, but not limited to, AEBITDA. These financial measures are not measures of financial performance in accordance with IFRS and may exclude items that are significant in understanding and assessing the Company's financial results. Therefore, these measures should not be considered in isolation or as an alternative to result for the period or other measures of profitability, liquidity or performance under IFRS. You should be aware that the Company's presentation of these measures may not be comparable to similarly titled measures used by other companies, which may be defined and calculated differently. See the appendix for a reconciliation of certain of these non-IFRS measures to the most directly comparable IFRS measure.

Q2 2024 Highlights

Continued yoy Group AOV expansion by $4.7 \%$ on a cc basis; both segments contributing strongly
Group revenue of EUR c.1.95bn, a positive yoy cc growth of $0.9 \%$, comprised of strong RTE cc growth of $45.2 \%$ and meal kits negative cc growth of $(9.9 \%)$

AEBITDA of EUR 146.4m, a margin of $7.5 \%$ for the Group, including a margin of $4.0 \%$ for the RTE product category and of $12.2 \%$ for meal kits

Continued relatively soft new customer acquisitions in NA meal kits, partly driven by focus on high value meal kit customers and marketing budget shift towards RTE

As a consequence, HelloFresh initiated certain steps to reduce its production footprint, leading to among other things non-cash impairment charges of $€(44.7)$ in H 1 , of which $€(32.2)$ in Q2

Robust behavior of existing customers demonstrating increasing yoy order rates and retention for both product groups

YoY increase in FCF to EUR 56.6m in Q2 2024
€190m term loan financing successfully arranged at attractive terms, with up to 5 years maturity

29m orders delivered in Q2 2024

• Modest yoy decrease in overall order volume for the Group, in line with previous quarters
• Similar volume developments across both geographical segments
• Subdued new customer acquisitions in meal kits, partly driven by focus on high value meal kit customers and marketing budget shift towards RTE
• Existing customers show robust behavior, increasing yoy order rates and retention for both product groups
  Q2 Number of Orders
  (in Millions)
  $(3.6 \%)$
  

Average order value expansion for the twelfth sequential quarter in a row

• Group AOV increased $4.7 \%$ on a cc basis
• Both segments showed meaningful increase in AOV:
• NA: $5.4 \%$ (cc)
• Intl: $3.7 \%$ (cc)
• AOV increase primarily driven by:
• Higher RTE contribution (NA)
• Increase in add ons and surcharges uptake
• Lower price incentives

Q2 Average Order Value
(in $€$ )
$+5.6 \%$
CC +4.7\%
63.6

Q2 2023
Q2 2024

1\% cc revenue growth through further AOV expansion

• Revenue growth in cc of $1 \%$
• US cc revenue growth of $0.9 \%$
• Intl cc revenue growth of $1.1 \%$
• Continued cc revenue growth in RTE of $45.2 \%$, as production capacity continues to scale according to plan and demand grows
• Meal kits cc revenue growth of (9.9\%) remains impacted by yoy lower customer acquisition activity, partly driven by the strategic shift to increasingly focus on high value customers and relocation of marketing budget to RTE
  

Procurement and cooking expenses higher by (3pp), driven primarily by NA RTE

• Biggest driver of relative procurement and cooking expenses increase yoy is RTE:
• Increasing contribution to the mix (RTE has structurally higher procurement and cooking expenses, but lower fulfilment expenses)
• Ramp-up of Factor facilities in the US
• However, procurement and cooking expenses in NA segment are down 1.7pp qoq as RTE efficiency gains start to kick in
• Continued product investments, including higher number of weekly recipes, more premium and customizable meals

Q2 Procurement Costs (in \% of revenue)
$(3.0) \mathrm{pp}$
$(33.8 \%)$
Q2 2023

Q2 2024

Stable fulfilment expenses (excl. impairment)

• $€(32.8) \mathrm{m}$ of non-cash one-off impairment in North America segment in Q2, due to rationalization of fulfilment footprint
• Excluding impairment, NA fulfilment expenses improve 1pp yoy in Q2'24 driven mainly by the higher share of RTE in the mix
• In Intl, fulfilment expenses up ( 0.5 pp ) due to rampup costs of new FCs (UK and Germany) as previously flagged

HELLOFRESH
GROUP
Q2 2024 Results | 8

Contribution margin at $26.0 \%{ }^{1}$, a $(2.8 \mathrm{pp})^{1}$ decrease yoy

• Sequentially higher contribution margin than in Q1, but down yoy, driven by:
• Temporarily higher production costs within RTE during the current ramp-up phase
• Temporary impact of the ramp-up of new meal kits FCs in Germany and the UK
• Some fixed-cost deleveraging from lower meal kit volumes
  

Marketing expenses at $17.0 \%{ }^{1}$ of revenue, similar to Q2'23

• Absolute and relative marketing spend up yoy in RTE, due to rapid scale up
• Absolute and relative spend down yoy in meal kits
• Continuous shift of marketing budget from price incentives to product and paid marketing, with a focus on high quality customers
• Marketing budget allocation skewed towards Q1 in H1. Similarly towards Q3 in H2

Q2 Marketing ${ }^{1}$ (in \% of revenue)
$(0.7) \mathrm{pp}$
$(16.3 \%)$

HELLOFRESH
GROUP
Q2 2024

AEBITDA of $€ 146 \mathrm{~m}$ delivered in Q2 2024

	Q2		Q1		H1
	By segment
In MEUR	Q2 2024	Q2 2023	Q1 2024	Q1 2023	H1 2024	H1 2023
North America	132.1	167.2	26.4	76.0	158.4	243.2
International	54.4	59.7	28.9	28.0	83.4	87.7
Holding	(40.7)	(34.9)	(38.5)	(37.9)	(78.8)	(72.3)
Group	146.4	191.9	16.8	66.1	163.0	258.0
	By product category
In MEUR	Q2 2024	Q2 2023	Q1 2024	Q1 2023	H1 2024	H1 2023
Meal kits	171.8	199.9	80.7	92.1	251.6	292.0
AEBITDA margin meal kits	$12.2 \%$	$12.9 \%$	$5.2 \%$	$5.5 \%$	8.5\%	$9.0 \%$
RTE	20.6	30.0	(21.3)	15.6	(0.7)	45.6
AEBITDA margin RTE	$4.0 \%$	$8.5 \%$	$(4.3) \%$	$4.9 \%$	(0.1) $\%$	$6.8 \%$
Others	(5.3)	(3.1)	(4.0)	(3.7)	(9.1)	(6.8)
Holding	(40.7)	(34.9)	(38.5)	(37.9)	(78.8)	(72.3)
Group	146.4	191.9	16.8	66.1	163.0	258.0

Increase in H1 FCF due to lower yoy CapEx

• Yoy decrease in CF from operating activities, in line with AEBITDA movements
• However, lower CapEx leading to an overall increase in FCF
• H1'23 CapEx of EUR 169.3m vs. H1'24 CapEx of EUR 96.0m
• Simultaneously, new $€ 190$ term loan arranged at attractive terms, more than covering future refinancings
  

We reconfirm our full year 2024 outlook of $2 \%-8 \%$ cc revenue growth and $€ 350 \mathrm{~m}$ €400m AEBITDA

AEBITDA
€163m
€350m - €400m

Group: Operational and Financial Key Figures

North America: Operational and Financial Key Figures

International: Operational and Financial Key Figures

Profit and Loss Statement

	3 months ended		Change \%
	30-Jun-24	30-Jun-23	YoY
Revenue	1,950.8	1,917.5	$1.7 \%$
Procurement and Cooking Expense	(719.1)	(648.4)	$10.9 \%$
Fulfilment Expense	(767.8)	(732.7)	$4.8 \%$
Contribution Margin	473.8	545.5	$(13.1) \%$
\% of Revenue	$24.3 \%$	$28.4 \%$	$(4.2) p p$
Marketing Expense	(335.8)	(316.0)	$6.3 \%$
G\&A, other income and expenses	(117.4)	(119.9)	$(2.1) \%$
EBIT	10.7	100.6	(89.4)%
\% of Revenue	$0.5 \%$	$5.2 \%$	(4.7)pp
Financial Result	3.6	(3.3)	209.1\%
EBT	14.3	97.3	(85.3)%
Income Tax	(5.5)	(31.0)	$82.3 \%$
Net Income / (Loss)	8.9	66.3	(86.6)%
Reconciliation starting at EBIT
EBIT	10.7	100.6	(89.4)%
D\&A and impairment	94.7	51.4	$84.2 \%$
EBITDA	105.4	152.0	(30.7)%
\% of Revenue	$5.4 \%$	$7.9 \%$	(2.5)pp
Special items	12.5	14.9	(16.1)%
SBC Expense	28.5	24.9	$14.5 \%$
AEBITDA	146.4	191.9	(23.7)%
\% of Revenue	$7.5 \%$	$10.0 \%$	(2.5)pp
AEBIT	51.7	140.5	(63.2)%
AEBIT (excl. impairment)	84.0	140.5	(40.2)%

6 months ended		Change \%
30-Jun-24	30-Jun-23	YoY
4,024.3	3,933.6	$2.3 \%$
(1,505.8)	(1,371.2)	$9.8 \%$
(1,542.4)	(1,503.2)	$2.6 \%$
976.1	1,059.3	(7.9)%
24.7\%	27.4\%	(2.7)pp
(817.9)	(731.4)	$11.8 \%$
(240.4)	(236.2)	$1.8 \%$
(82.2)	91.6	(189.6)%
(2.0) $\%$	$2.3 \%$	(4.3)pp
10.0	(19.7)	150.8\%
(72.2)	71.9	(200.4)%
(2.8)	(31.0)	91.0\%
(75.0)	40.9	(283.4)%

(82.2)	91.6	(189.6) $\%$
173.8	101.8	70.7\%
91.6	193.4	(52.6) $\%$
2.3\%	4.9\%	(2.6)pp
16.2	19.7	(17.8)%
55.1	45.0	22.4\%
163.0	258.0	(36.8)%
4.1\%	6.6\%	(2.5)pp
(10.8)	156.3	(106.9) $\%$
34.0	156.3	(78.2) $\%$

Balance Sheet \& Cash Flow Statement

In MEUR	As at 30-Jun-24	As at 31-Dec-23
Assets
Non-current assets	1,752.5	1,756.4
Cash and cash equivalents	381.9	433.1
Other current assets	387.5	391.7
Total assets	2,521.9	2,581.3
Equity and liabilities
Equity	954.2	1,019.0
Non-current liabilities	492.1	649.3
Current liabilities	1,075.6	913.0
Total equity and liabilites	2,521.9	2,581.3
In MEUR	30-Jun-24	30-Jun-23
Cash and cash equivalents at the beginning of the period	433.1	504.0
Net Cash flows from operating activities	146.9	207.3
Net Cash flows used in investing activities	(96.1)	(203.3)
Net Cash flows used in financing activities	(105.8)	(39.0)
Effects of exchange rate changes on cash and cash equivalents	3.8	(4.5)
Cash and cash equivalents at the end of the period	381.9	464.5

Share Count

As of June 30, 2024
Types of share
Stock exchange
Market Segment
Number of shares issued
Number of shares outstanding

Ordinary shares
Frankfurt Stock Exchange
Regulated Market (Prime Standard)
173,190,562
$166,529,340$

Employee Incentive Plan	Options	RSU	Total
Vested (in mn)	10.2	1.1	11.3
Weighted average exercise price (in EUR) - vested shares	21.91	-	19.73
Unvested (in mn)	8.7	10.2	18.9
Weighted average exercise price (in EUR) - unvested shares	14.55	-	6.68
Total outstanding (in mn)	18.9	11.4	30.3
Weighted average exercise price (in EUR) - total shares	18.52	-	11.56

[^0]
[^0]: *Weighted average exercise price (WAEP)

HELLOFRESH

GROUP