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HelloFresh SE Investor Presentation 2021
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Investor Presentation
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Q3 2021 RESULTS November 2nd, 2021
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. No representation, warranty or undertaking, express or implied, is made by the Company or any other Group company as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein, for any purpose whatsoever. No responsibility, obligation or liability is or will be accepted by the
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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.
OUR MISSION WE CHANGE THE WAY PEOPLE EAT FOREVER AT
OUR VISION
THE WORLD'S LEADING, FULLY INTEGRATED FOOD SOLUTIONS GROUP
Q3 Results 2021
Q3 Highlights
Continued strong revenue growth of 45% (on a constant currency basis) to €1.4bn
High customer engagement, despite return to normal summer seasonality: Average quarterly order rates increasing YoY to 4.0 (+14% Yo2Y)
Further increase in average order value to €51.3 (+6% Yo2Y)
Key Revenue driving KPIs continue to perform ahead of pre-pandemic trading
€79.8m AEBITDA, a margin of 5.6%
Remain free cash flow positive during a quarter of substantial investment in long-term value creation
Continued capitalization on growth opportunities, with ongoing capacity expansion, Italy launch and successful closing of YouFoodz acquisition
We continued our geographic TAM expansion and ongoing RTE investment
The launch in Italy marks an important milestone in HelloFresh's global growth strategy to expand its TAM
Following the success of Factor in the US, HelloFresh completes its acquisition of ready-to-eat offering in Australia
26m households market opportunity
A strong focus on sustainability and a localised culinary offer
New state-of-the art FC near Milan
A\$125m investment in an established market leader
Strengthens HelloFresh's RTE capabilities
Acquisition creates synergies and strong future growth potential
Q3 Customers increased by 38.8% year-on-year to 6.94m
2021 2020
- Continued YoY growth momentum across both segments
- Intl +37.8%
- US +39.8% (incl. Factor)
- Return to long running prepandemic seasonal pattern, with reduced new customer acquisition activity in peak-summer months Jul-Aug
- All quarters in 2021 follow historical pattern except unusually high Q2 due to Covid restrictions in Europe
- Q3 2019- 2.61m [Y-o-2Y +164%]
Order rates remained high and ahead of pre-pandemic levels
- Average order rate per customer increases YoY to 4.0 against strong Covid comparatives and despite more normal summer seasonality
- Strength in Order rate reflects high customer engagement and ongoing strength in advancing our customer value proposition across all markets
- Q3 2019- 3.5 [Y-o-2Y +14%]
Average order value has increased significantly, even beyond Covid-affected prior year period
- Bigger basket sizes and higher contribution from HelloFresh Market items
- US segment core driver of AOV increase
- Q3 2019- 48.3 [Y-o-2Y +6%]
We generate very stable and increasing long term revenue retention
Q3 Results 2021
Lines represent unweighted average revenue retention for Q4-->Q3 cohorts, X Quarters after initial acquisition. Where cohort data is unavailable for the latter 3 quarters plotted, the average is taken only from the realised quarters. Example: For the Q4 2019 line, the Q5 point is the average of the four cohorts from Q42019 to Q3 2020, the Q7 data point is the average of the realised performance of 2 cohorts being Q4 2019 and Q1 2020
Strong underlying fundamentals delivered Constant Currency Revenue growth of 44.9%
- Strong topline growth across both segments and meaningfully ahead of our initial full year guidance of 20-25%
- US CC growth of +51.0%, including Factor contribution
- Intl with a CC growth of +37.7%
- Q3 2019- €440.6m [Y-o-2Y +221%]
Q3 contribution margin decreased to 22.5%
- YoY decrease primarily a result of ongoing ramp-up of fulfilment sites, operating under our longterm productivity targets
- Additional impact of more "normal" summer seasonality relative to Q3 2020, one-off costs relating to Hurricanes in the US, Covid lock-downs in AU and NZ, and some elements of input cost inflation
Very disciplined and successful growth investments delivered marketing as % of revenue at lower levels than initially guided
2021 2020
- Marketing as % of revenue remains meaningfully lower than in pre-Covid period
- Q3 Marketing expenses reflect seasonal investments in September into 'Back to School' campaigns
- Q3 2019- (20.1)% [Y-o-2Y +5.3pp]
We delivered Q3 AEBITDA of €79.8m in seasonally low-margin quarter whilst continuing to strongly invest in growth
- AEBITDA margin primarily driven by compression in contribution margin due to fast ramp-up of new sites
- Prioritising investments into long-term growth opportunity and our customer value proposition, while navigating volatile post-Covid supply chains
Each segment contributed similarly to AEBITDA in Q3
We delivered additional positive free cash flow, despite sizeable growth capex
- Progress in capacity expansion (in € Millions) translating into step-up in investments with €57.5m capex in Q3
- First 9-month capex of €124.5m, still on track for > €200m for the year
Continued strong growth performance year-to-date drives revised 2021 revenue growth outlook on a constant currency basis of 57%-62%
Const. Currency Rev. growth1
AEBITDA margin %
- Includes a c. 0.4% growth contribution from the acquisition of YouFoodz, which closed on October 27 and will be consolidated for the months November - December in HelloFresh's Group full year reported revenue.
Group: Operational and Financial KPIs
Q3 Results 2021
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.Contribution margin is defined as revenue less cost of goods sold and fulfilment expenses, excluding share-based compensation expenses 3.AEBITDA is calculated by adjusting EBITDA for special items and share-based compensation expenses; AEBITDA margin is defined as % of revenue 4.Based on constant currency
USA: Operational and Financial KPIs
Q3 Results 2021
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.Contribution margin is defined as revenue less cost of goods sold and fulfilment expenses, excluding share-based compensation expenses
3.AEBITDA is calculated by adjusting EBITDA for special items and share-based compensation expenses; AEBITDA margin is defined as % of revenue 4.Based on constant currency
International: Operational and Financial KPIs
Q3 Results 2021
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.Contribution margin is defined as revenue less cost of goods sold and fulfilment expenses, excluding share-based compensation expenses
3.AEBITDA is calculated by adjusting EBITDA for special items and share-based compensation expenses; AEBITDA margin is defined as % of revenue 4.Based on constant currency
Profit and Loss Statement
| 3 months ended | Change % YoY |
9 months ended | Change % | |||
|---|---|---|---|---|---|---|
| 30-Sep 21 | 30-Sep 20 | 30-Sep 21 | 30-Sep 20 | YoY | ||
| Revenue | 1,415.5 | 970.2 | 45.9% | 4,413.4 | 2,641.4 | 67.1% |
| Procurement Expense | (489.8) | (332.4) | 47.3% | (1,509.8) | (915.3) | 65.0% |
| Fulfilment Expense | (613.8) | (379.8) | 61.6% | (1,790.4) | (1,014.5) | 76.5% |
| Contribution Margin | 311.9 | 258.0 | 20.9% | 1,113.3 | 711.6 | 56.4% |
| % of Revenue | 22.5% | 26.7% | (4.3)pp | 25.6% | 27.1% | (1.5)pp |
| Marketing Expense | (209.5) | (124.3) | 68.5% | (640.9) | (326.6) | (96.2)% |
| G&A, other income and expenses | (56.2) | (39.1) | 43.5% | (165.9) | (112.2) | (47.9)% |
| EBIT | 41.4 | 92.1 | (55.0)% | 306.4 | 272.8 | 12.3% |
| % of Revenue | 2.9% | 9.5% | (6.6)pp | 6.9% | 10.3% | (3.4)pp |
| Financial Result | (5.4) | (11.5) | 53.0% | (8.6) | (20.0) | 57.0% |
| EBT | 36.0 | 80.6 | (55.3)% | 297.8 | 252.8 | 17.8% |
| Income Tax (Expense) / Benefit | (12.9) | (6.0) | (115.0)% | (89.2) | (22.4) | (298.2)% |
| Net Income / (Loss) | 23.1 | 74.6 | (69.1)% | 208.6 | 230.4 | (9.9)% |
| Reconciliation starting at EBIT | ||||||
| EBIT | 41.4 | 92.1 | (55.0)% | 306.4 | 272.8 | 12.3% |
| D&A | 25.5 | 11.6 | (119.7)% | 65.9 | 33.7 | (95.4)% |
| EBITDA | 67.0 | 103.7 | (35.4)% | 372.3 | 306.5 | 21.5% |
| % of Revenue | 4.7% | 10.7% | (6.0)pp | 8.4% | 11.6% | (3.2)pp |
| SBC | 4.0 | 4.7 | 15.3% | 7.8 | 6.7 | (15.9)% |
| Special Items | 8.9 | 6.3 | (40.4)% | 16.6 | 18.2 | 8.6% |
| AEBITDA | 79.8 | 114.7 | (30.4)% | 396.8 | 331.4 | 19.7% |
| % of Revenue | 5.6% | 11.8% | (6.2)pp | 9.0% | 12.5% | (3.6)pp |
Balance Sheet & Cash Flow Statement
| In MEUR | As at 30-Sep 21 | As at 31-Dec 2020 | |
|---|---|---|---|
| Assets | |||
| Non-current assets | 840.3 | 603.6 | |
| Cash and cash equivalents | 955.1 | 729.0 | |
| Other current assets | 304.2 | 193.0 | |
| Total assets | 2,099.6 | 1,525.6 | |
| Equity and liabilities | |||
| Equity | 834.8 | 656.0 | |
| Non-current liabilities | 452.7 | 349.8 | |
| Current liabilities | 812.1 | 519.8 | |
| Total equity and liabilites | 2,099.6 | 1,525.6 | |
| In MEUR | Q3 2021 | FY 2020 | |
| Cash and cash equivalents at the beginning of the period | 933.4 | 193.6 | |
| Net Cash flows from operating activities | 85.2 | 601.5 | |
| Net Cash flows from investing activities | (57.5) | (210.5) | |
| of which M&A | — | (128.3) | |
| Net Cash flows from financing activities | (8.5) | 163.4 | |
| Effects of exchange rate changes and other changes on cash and cash equivalents | 2.5 | (19.0) | |
| Cash and cash equivalents at the end of the period | 955.1 | 729.0 |
Share Count
As of September 30, 2021
| Types of share | Ordinary shares | ||
|---|---|---|---|
| Stock exchange | Frankfurt Stock Exchange | ||
| Market Segment | Regulated Market (Prime Standard DAX) | ||
| Number of shares issued | 173,864,414 | ||
| Number of shares outstanding | 173,501,251 |
| Employee incentive plan | Options | RSU | Total |
|---|---|---|---|
| Vested (in mn) | 5.6 | 0.1 | 5.7 |
| Unvested (in mn) | 2.5 | 0.3 | 2.9 |
| Outstanding (in mn) | 8.1 | 0.4 | 8.5 |
| WAEP1 (in EUR) Vested |
10.60 | 0.00 | 10.40 |
| WAEP1 (in EUR) Unvested |
27.00 | 0.00 | 23.90 |
| WAEP1 (in EUR) |
15.80 | 0.01 | 15.00 |
Quarterly Marketing Spend as % of Net Revenue since 2018
