HelloFresh SE — Investor Presentation 2018

Aug 13, 2018

Highlights Q2: strong group performance across all financial metrics

Another quarter of > 40% year-on-year topline growth for the group (in constant currency)

Operational efficiencies tracking significantly ahead of plan, translating into a strong contribution margin increase in Q2

• Contribution margin¹ increase by 5.8% points y-o-y
• 1.8% points increase q-o-q (despite margin dilutive impact of Green Chef acquisition)
• Margin expansion primarily driven by
• o COGS savings across the group
• o Fulfilment efficiencies in Intl,

supported by strong volume growth

1. Contribution margin is defined as revenue less cost of goods sold and fulfilment expenses, excluding share-based compensation expenses; contribution margin is shown as % of revenue

Driving down CACs and seasoning of our sticky customer base allow us to decrease our marketing investments as % of Net Revenues

• H1 marketing investment¹ as % of Net Revenue decreased y-o-y by 2.5% points
• Lower CACs y-o-y, driven by
• o Refining of ad tech tools, data analytics and data science
• o More disciplined seasonal spending to optimize ROI
• Increasing share of revenues from vintage customers

For the 1st time, HelloFresh reached quasi-AEBITDA¹breakeven in Q2²

• 0.0% AEBITDA margin in Q2²
• 7.4% points y-o-y improvement
• Both segments profitable (ex. Green Chef):
• US AEBITDA margin of 2.0%
• International AEBITDA margin of 4.1%
• (1.2)% AEBITDA margin from Green Chef impact

1.AEBITDA is calculated by adjusting EBITDA for special items and share-based compensation expenses; AEBITDA margin is defined as % of revenue 2.Excluding Green Chef

US: Organic y-o-y revenue growth of 33% (in constant currency)¹ and AEBITDA profitability reached (ex. Green Chef) in Q2 2018

OPERATIONAL AND FINANCIAL KPIs

	Q2 17	Q2 18	Q2 18
Active Customers (m)	0.8	(Ex. Green Chef)	(Incl. Green Chef) 1.1
Average Order Rate	3.4		3.4
Average Order Value (€)	53.0		49.6
Average Order Value constant currency (€)	53.0		53.9
Revenue2 (€m)	143.3	175.3	188.9
% YoY revenue growth	100%	22%	32%
CC3		33%	43%
Contribution margin4 (€m)	31.4	52.9	54.2
% Revenue	21.9%	30.2%	28.7%
		3.5
AEBITDA5 (€m)		2.0%	-0.3
Revenue %	-8.5 -5.9%		-0.2%

1.Excluding Green Chef Q2 results

2.Revenue post promotional discounts, customer credits, refunds and excluding VAT; YoY stands for year on year and compares the respective quarter with the same quarter of the previous year

3.Based on constant currency

4.Contribution margin is defined as revenue less cost of goods sold and fulfilment expenses, excluding share-based compensation expenses

5.AEBITDA is calculated by adjusting EBITDA for special items and share-based compensation expenses; AEBITDA margin is defined as % of revenue

International: outstanding y-o-y revenue growth of 55% (in constant currency) and AEBITDA margin improvement of 9% points y-o-y

OPERATIONAL AND FINANCIAL KPIs

	Q2 17	Q2 18
Active Customers (m)	0.46	0.72
Average Order Rate	4.3	4.0
Average Order Value (€)	43.9	44.9
Average Order Value constant currency (€)	43.9	46.2
Revenue1 (€m)	86.8	130.8
% YoY revenue growth CC2	11%	51% 55%
Contribution margin3 (€m)	20.6	35.5
% Revenue	23.7%	27.1%
AEBITDA4 (€m)	-4.2	5.4
% Revenue	-4.9%	4.1%

1.Revenue post promotional discounts, customer credits, refunds and excluding VAT; YoY stands for year on year and compares the respective quarter with the same quarter of the previous year

2.Based on constant currency

3.Contribution margin is defined as revenue less cost of goods sold and fulfilment expenses, excluding share-based compensation expenses

4.AEBITDA is calculated by adjusting EBITDA for special items and share-based compensation expenses; AEBITDA margin is defined as % of revenue

Owning the Future: based on our strength as Global Leader by size, growth and margin, we have decided to reinvest part of our margin gains in H2

Implement Multi-Brand Strategy for the US market

Price & Selection Leadership for HelloFresh US

Ramp up New Geography in International

We will vastly expand our TAM by offering distinct meal plan solutions at different price tiers

Green Chef Integration with very good progress to date, setting us up for growth and success in Q4

•

•

Our brand "EveryPlate" targets a previously untapped demographic, leveraging the scale and cost advantages of the HelloFresh platform

•
•	o o
• •

Recent strong Margin Improvements make a price decrease the superior strategy for long – term LTV optimization and market share

Investment in Price Leadership will adversely impact bottom-line in the shortrun but is very beneficial in the medium- and long-run

In H2, we will also start to ramp up investment in New Business opportunities for sustained long–term value creation

1

2

3

Business Outlook for H2

REVENUE

Organic¹ group revenue growth target for 2018 increased to c. 32% - 37% (on constant currency) from previously 30% - 35%

CONTRIBUTION MARGIN

Contribution margin > 25% re-confirmed, in spite of additional investments in price, selection and new verticals in H2

AEBITDA

Given certain investments in growth in H2, we expect that our previous target of AEBITDA breakeven for the Group (ex Green Chef) in Q4 2018 will be reached later during the course of 2019

Profit & loss statement

(€m)	Q2 2017	Q2 2018	H1 2017	H1 2018
Revenue	230.1	319.7	435.4	615.2
% YoY growth	49.3%	38.9%	49%	41.3%
Cost of goods sold1	(93.4)	(117.9)	(180.5)	(234.0)
Gross profit	136.7	201.8	254.9	381.2
Margin (% of revenue)	59.4%	63.1%	58.5%	62.0%
Fulfilment expenses1	(85.9)	(113.0)	(162.8)	(215.7)
Marketing expenses1	(58.5)	(74.3)	(123.1)	(158.3)
G&A1	(11.2)	(26.1)	(20.5)	(44.9)
Other operating income & expenses	(1.3)	(2.0)	(1.4)	(3.8)
EBIT	(20.2)	(13.6)	(52.9)	(41.5)
Margin (% of revenue)	(9)%	(4)%	(12)%	(7)%
Financial result	(2.9)	0.5	(4.2)	(0.6)
EBT	(23.1)	(13.1)	(57.1)	(42.1)
Income tax (expense) benefit	0.4	(2.1)	0.4	(2.9)
Net income / (loss)	(22.7)	(15.2)	(56.7)	(45.0)

Reconciliation starting at EBIT

EBIT
D&A
EBITDA
SBC
Special Items
AEBITDA2
Margin (% of revenue)

(20.2)	(13.6)
(1.9)	(3.6)
(18.3)	(10.0)
0.7	5.1
0.7	1.0
(16.9)	(3.9)
(7.4)%	(1.2)%

(52.9)	(41.5)
(3.8)	(6.1)
(49.1)	(35.4)
1.8	8.6
0.7	1.2
(46.5)	(25.6)
(10.7)%	(4.2)%

1.Including share-based compensation expenses

2.AEBITDA is calculated by adjusting EBITDA for special items and share-based compensation expenses; AEBITDA margin is defined as % of revenue

Balance sheet statement and other information

(€m)	FY 2017	H1 2018
Assets
Non - current Assets	66.1	86.1
Current Assets*	386.8	353.1
*of which cash	339.9	307.6
Total assets	452.9	439.2
Equity and liabilities
Equity	303.3	266.4
Non - current liabilities	41.6	42.6
Current liabilities	108.0	130.2
Total equity and liabilities	452.9	439.2
	H1 2017	H1 2018
Cash flow from operating activities	(29.3)	(9.1)
AEBITDA	(46.5)	(25.6)

Financial calendar 2018

			1	2	3	4	5
	6	7	8	9	10	11	12	14.08.2018	•	Frankfurt roadshow
st u g u	13	14	15	16	17	18	19	15.08.2018	•	Stockholm/Helsinki roadshow
A	20	21	22	23	24	25	26
	27	28	29	30	31	1	2	16.08.2018	•	Copenhagen roadshow
er	3	4	5	6	7	8	9	12 - 13.09.2018	•	Zurich/Lugano roadshow
b m e	10	11	12	13	14	15	16	18.09.2018	•	London roadshow
pt e S	17	18	19	20	21	22	23
	24	25	26	27	28	29	30	24.09.2018	•	Berenberg & GS Conference - Munich
er b m e v o N				1	2	3	4
	5	6	7	8	9	10	11	13.11.2018	•	Publication of Quarterly Financial Statements (Q3 2018) and Earnings Call
	12	13	14	15	16	17	18	13.11.2018	•	Capital Markets Day 2018 - London
	19	20	21	22	23	24	25	15.11.2018	•	Morgan Stanley European Technology, Media & Telecom
	26	27	28	29	30					Conference - Barcelona

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