HelloFresh SE — Investor Presentation 2022

Aug 15, 2022

Q2 2022 Results August 15th, 2022

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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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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

Our Vision

The world's leading, fully integrated foods solution group

Q2 2022 Highlights

Continued strong outperformance vs. overall e-commerce trends
Record quarterly revenue of €1.96bn in Q2, representing a constant currency growth rate of 16%
Active customer year-on-year growth to 8.0m, somewhat impacted by higher than usual travel/away from home activity
Successful expansion in average order value by 11% (on a constant currency basis)
Solid retention and order rate development, with average orders per customer per quarter maintained at 4.0
Successful mitigation of inflationary cost pressures in ingredient prices and fulfilment: Q2 contribution margin maintained at 25.6%
AEBITDA of €146m, a margin of 7.5%

Q2 Active customers increased by 4.1% year-on-year to 8.0m

• Active customer growth maintained across both segments
• US +5.3%
• Intl +3.0%
• Low web traffic in holiday heavy long weekend periods and early start of summer negatively impacted new customer growth
• Slightly better y-o-y growth expected in both Q3 and Q4 compared to Q2
• Q2 2020: 4.2m [Y-o-2Y +90.5%]

Early retention of costumers acquired in 2022 is holding up at strong levels, in line with 2021

• ²⁰²¹ New customers in 2022 on average show the same strong retention and ordering pattern profile as in 2021, which was still affected by Covid tailwinds
• This is evidenced by the average 10-week lifetime in # of orders by starting customer one of our most important early retention metrics
• Remarkably stable development, also for most recent cohorts

We observe historically low cancellation rates among our Active Customer base

• Cancellation rates continue to improve y-o-y, currently trending at lowest ever levels
• Main drivers of this long term trend include:
• improved relative affordability
• greater selection of meals and marketplace items
• y-o-y service quality enhancements

Group Cancellation Rate

(% of Weekly Active Customers)

Since our CMD, we have further improved our value proposition against traditional supermarkets in real terms

Note: Inflation - U.S. Bureau of Labor Statistics: Food and beverages in U.S. city average, all urban consumers, not seasonally adjusted. HelloFresh price - Company Data, US HelloFresh brand only; 3-recipe box for 2 persons excluding delivery indexed to 2012.

Orders per customer stable year on year at 4.0, despite some remaining Covid effect in comparative period

• Robust ordering pattern of existing customers across both segments (outside of public holiday affected weeks)
• Stable to Q2 2021, despite some order rate enhancing Covid impact in that period
• Driven by continued improvement to menu, product quality and relative affordability
• Q2 2020: 4.3 [Y-o-2Y -7%]

We have achieved further meaningful expansion of average order value

• Group AOV increases 10.8% on a CC basis
• Key drivers
• Selected price increases over the last 2 quarters, in each case after careful testing
• More meals per order
• Further progress on the roll-out and uptake of HF market and surcharge offerings
• Consistently high service levels and therefore lower compensation
• Q2 2020: €53.7 [Y-o-2Y 12.5%]

We delivered another record revenue quarter of €1,957m, with CC growth of 15.9%

• US CC growth of 21.6% driven by stronger consumer resilience and RTE growth
• Intl CC growth of 9.0%
• Q2 2020: €972.1 Mil [Y-o-2Y +101.3%]

So far, we have successfully mitigated very meaningful food price inflation through a number of measures

• Selected price increases
• Leveraging strength of a well diversified procurement network
• Leveraging data advantage by factoring different degree of inflation into menu decisions
• Q2 2020: (35.2%) [Y-o-2Y +0.8pp]

Slight expansion of relative fulfilment expenses, primarily driven by increased shipping costs

• Increased shipping expenses mainly due to higher fuel costs and driver wages
• Improvement in production expenses (y-o-y and sequentially), as we successfully increase productivity, especially in the US
• Q2 2020: (38.7%) [Y-o-2Y -1.8pp]

Contribution profit increased in line with revenue growth

• Quasi stable margin compared to comparative period
• i.e. Meaningful inflationary pressure across ingredients, logistics and direct labor wages has been successfully offset
• Q2 2020: 26.2% [Y-o-2Y -0.6pp]

Whilst marketing as % of revenue in the comparative period was still impacted by Covid, Q2 2022 has normalised to 15.6%

• Seasonal sequential reduction in marketing spend quarter on quarter
• Continued strong ROI; however, less activity during public holiday and hot temperature weeks
• Q2 2020: (8.5%) [Y-o-2Y -7.1pp]

1 Excl. SBC

(13.7%) (15.6%) Q2 Marketing¹ (in % of revenue) (1.9)pp 2022 2021 Q2 2021 Q2 2022

Marketing spend as % of net revenue still coming down over longer periods of time

Q2 2022 Results | 16

2018

We continue to gain market share whilst maintaining superior marketing efficiency

1 % of Total Segment Spend

Q2 2022 Results | 17

HelloFresh share includes all brands in the respective geographies. Sources: TXN (US), Cardify (CA), Cardlytics (UK) and Company Data, Apr-Jun, Weighted average for the quarter

We delivered an AEBITDA of €145.9m in Q2

• Y-o-Y reduction in AEBITDA margin primarily driven by:
• A contribution margin reduction in Intl
• A normalization of CACs/ marketing expenses
• G&A increase to catch up to normalized levels after slower relative growth in Technology and central functions during Covid period
• Q2 2020: €153.6 M (15.8%) [Y-o-2Y -5.0%]

H1 Cash flow primarily driven by ongoing infrastructure investment program and €125m share buyback

• Cash flow from operations includes €106m cash outflow for paid taxes
• Infrastructure and automation investment program progresses substantially on time and on budget
• CFI also includes 1st payment for Factor earnout and supply chain management software business acquisition in Q2
• Cash outflow from financing activities primarily represents €125m share buyback in Q1

827.1 177.1 (214.5) (168.2) 20.7 642.2 FY 2021 CFO CFI CFF FX H1 22

Cash Position (in € Millions)

After peaking infrastructure and capacity optimization investments in 2022, we target positive FCF from 2023 onwards again

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We updated our FY 2022 outlook to 18% – 23% CC revenue growth and €460m - €530m AEBITDA

Group: Operational and Financial KPIs

4.Based on constant currency

USA: Operational and Financial KPIs

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

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		6 months ended		Change %
	30-Jun-22	30-Jun-21	Change % YoY	30-Jun-22	30-Jun-21	YoY
Revenue	1,957.1	1,555.0	25.9%	3,872.5	2,997.9	29.2%
Procurement Expense	(672.3)	(532.7)	(26.2)%	(1,333.6)	(1,020.0)	(30.7)%
Fulfilment Expense	(792.0)	(623.5)	(27.0)%	(1,569.6)	(1,176.6)	(33.4)%
Contribution Margin	492.8	398.8	23.6%	969.3	801.4	21.0%
% of Revenue	25.6%	25.9%	(0.3)pp	25.4%	27.0%	(1.6)pp
Marketing Expense	(307.8)	(213.4)	(44.2)%	(646.8)	(431.4)	(49.9)%
G&A, other income and expenses	(99.3)	(54.4)	(82.5)%	(192.0)	(105.0)	(82.9)%
EBIT	85.7	131.0	(34.6)%	130.5	265.0	(50.8)%
% of Revenue	4.4%	8.4%	(4.0)pp	3.4%	8.8%	(5.4)pp
Financial Result	11.5	(8.0)	243.8%	16.0	(3.3)	584.8%
EBT	97.2	123.0	(21.0)%	146.5	261.7	(44.0)%
Income Tax (Expense) / Benefit	(34.7)	(39.2)	11.5%	(57.0)	(76.3)	25.3%
Net Income / (Loss)	62.5	83.8	(25.4)%	89.5	185.4	(51.7)%

Reconciliation starting at EBIT

85.7	131.0	(34.6)%	130.5	265.0	(50.8)%
36.4	24.8	(46.8)%	68.5	40.4	(69.6)%
122.1	155.9	(21.6)%	199.0	305.4	(34.8)%
6.2%	10.0%	(3.8)pp			(5.1)pp
4.2	1.3	(223.1)%			(142.1)%
19.7	0.6	nm			(374.4)%
146.0	157.8	(7.5)%	245.2	317.0	(22.6)%
7.5%	10.1%	(2.6)pp	6.3%	10.6%	(4.3)pp
				5.1% 9.2 37.0	10.2% 3.8 7.8

Balance Sheet & Cash Flow Statement

In MEUR	As at 30-Jun-22	As at 31-Dec-21
Assets
Non-current assets	1,319.7	1,055.5
Cash and cash equivalents	642.2	827.1
Other current assets	386.6	326.0
Total assets	2,348.5	2,208.6
Equity and liabilities
Equity	917.7	896.6
Non-current liabilities	501.5	486.7
Current liabilities	929.3	825.3
Total equity and liabilites	2,348.5	2,208.6

In MEUR	30-Jun-22	30-Jun-21
Cash and cash equivalents at the beginning of the period	827.1	729.0
Net Cash flows from operating activities	177.1	311.3
Net Cash flows from investing activities	(214.5)	(67.1)
Net Cash flows from financing activities	(168.2)	(50.7)
Effects of exchange rate changes and other changes on cash and cash equivalents	20.7	10.9
Cash and cash equivalents at the end of the period	642.2	933.4

Share Count

As of June 30, 2022

Types of share	Ordinary shares
Stock exchange	Frankfurt Stock Exchange
Market Segment	Regulated Market (Prime Standard)
Number of shares issued	173,934,478
Number of shares outstanding	171,488,297

Employee Incentive Plan	Options	RSU	Total
Vested (in mn)	7.0	0.02	7.01
WAEP (in EUR) - vested instruments	13.8	0	13.77
Unvested (in mn)	3.5	1.3	4.78
WAEP (in EUR) - unvested instruments	44.46	0	32.21
Outstanding (in mn)	10.5	1.3	11.80
WAEP1 (in EUR)	23.96	0	21.24