HelloFresh SE — Investor Presentation 2025

Mar 21, 2025

Capital Markets Day

Berlin, 20 March 2025

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 Company, any other Group company or any of their officers, directors, employees, affiliates, agents or advisers in relation to any written or oral information provided in this document or in connection with the document. All information in this document is subject to verification, correction, completion, updating and change without notice. Neither the Company, nor any other Group company undertake any obligation to provide the recipient with access to any additional information or to update this document or any information or to correct any inaccuracies in any such information.
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, AEBIT, FCF pre-leases. 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.

An exciting long-term opportunity

We are building the world's leading digital-first FMCG company

Disrupting some of the most attractive markets globally

We operate in the 'right corner' of the food market

Convenience

Personalization

Health

Quality

Set to benefit from accelerating trends

01

Food-as-medicine

ADDED SUGAR

02

Protein demand growth

PROTEIN INTAKE

Min. daily recommended amount (grams)

03

UPFs Awareness

UPF AS \% CALORIES

\% of calories from UPFs in a typical American diet

Weight Loss

$66 \%$ of GLP-1 customers who have used RTE meals started to do so when on the GLP-1 drugs ${ }^{(1)}$

We have built the 'muscles' to win in these categories

Direct consumer relationship

At the heart of product development

Largest taste preference database globally

Al-driven approach to personalization

Constant feedback loop

Global, fresh food supply chain

Operating efficiently at scale

Direct relationships
with suppliers

$30+$

Purpose-built
distribution centers

$25 \%$

Own last-mile capabilities

Data and technology platform

Powering our end-to-end value chain

Decisions powered by custom-built technology

Deeply-rooted culture of experimentation

Leading D2C acquisition engine

We create modern brands positioned for the future consumer

Without legacy portfolio drags

We have developed two profitable multi-billion revenue businesses

Revenue: ${ }^{(1)}$
AEBITDA: ${ }^{(2)}$
€ 5.5 bn $10 \%$

Ready-to-Eat (RTE)

Revenue: ${ }^{(1)} \quad$ AEBITDA: ${ }^{(2)}$
€ 2.0 bn $1.6 \%$

And a number of promising new brands in exciting new categories

FY 2024
Revenue (cc) $\sim € 100 \mathrm{~m}$
Revenue growth $\sim 120 \%$
AEBITDA $\sim €(20) \mathrm{m}$

The progress over the last 5 years has been remarkable

We completely changed the face of our value chain

30+
Custom built DCs

$10^{11}$

Geographies with own last mile

The road to here has not been linear

We are now in the efficiency reset period

We are laser focused on two major objectives

(4) Deliver on our efficiency program
(4) Create a step change in our customer proposition across MKs and RTE
...to return to growth at superior margins and cash flow profile

Executing on our efficiency program is equally critical to shortterm and long-term success

HELLOFRESH

GROUP

Efificiency measures and financial outlook

Our efficiency program runs until 2026 and cuts across all aspects of our cost base, except for our physical product.

Key measures include:

(1) Labor productivity increases in both meal kits \& RTE
(1) Indirect procurement savings
(2) Rationalization of meal kit production capacity
(3) Reduction of Group capex to $<€ 150 \mathrm{~m}$ by 2026
(4) Savings in overhead personnel expense
(1) Reduction of share-based compensation to $<€ 70 \mathrm{~m}$
(5) Higher marketing ROI threshold

Meaningful reduction in production costs through direct labor productivity increase across both product groups

Targeted production cost development

• Implementation of lean production principles to maximize throughput
  $+\quad$ Continued Factor productivity gains
• Productivity ramp-up of automated sites in DE and the UK
• Lower number of direct labor associates due to production capacity streamlining

Rationalization of meal kit production footprint by $\sim 25 \%$

Sqm of meal kits fulfillment and production capacity

$\div$ €181m of impairment recorded in 2024
$\div$ Several site closures already completed / announced
$\div$ Additional rationalization steps during 2025
$\div$ Related sites to be subleased to new tenants or terminated early
$\div$ Result:

• Less fulfilment overhead personnel
• Less other overhead costs (utilities, cleaning, maintenance)
  $\div$ Over time:
• Lower lease and IFRS 16 expenses

Streamlining of overhead work force targeting $>\epsilon 100 \mathrm{~m}$ annual net personnel cost savings by 2026

• All major functions globally included
  $\leftarrow$ Key levers: Process harmonization / automation, centralization, offshoring
  $\leftarrow$ Execution through a combination of churn, performance management, and reduction-in-force
  $\leftarrow$ Financial impact somewhat back-end weighted due to implementation periods/costs and run-rate effects

Reduction of equity program represents an integral part of all-in personnel costs savings ${ }^{(1)}$

$\leftarrow$ Narrower scope of grants going forward
$\leftarrow$ Exempted employee base partly compensated by raise in cash compensation
$\leftarrow$ Target P\&L expenses also $<\boldsymbol{\epsilon} 70 \mathrm{~m}$ by 2026 , compared to $€ 94 \mathrm{~m}^{(1)}$ in 2024

We are targeting higher marketing ROIs

Group marketing as $\%$ of revenue

• Reduced relative marketing spend since mid 2024
• Target higher ROI on marketing spend (vs. H1 2024)
• Primarily by attracting higher value customers at stable CACs

$\leftarrow$ Going forward:

• Continued reduction in absolute marketing spend in meal kits
• Continued ramp-up of RTE resulting in growing absolute marketing spend for RTE

This increase in ROI thresholds results in temporary negative revenue growth for meal kits, but meaningfully less than the underlying marketing expense reduction

The share of orders from our tenured customers has increased to $2 / 3$

Number of orders by
customer maturity, \% of total

$13 \%$
2021
2022
2023
2024
■51+ Orders 21-50 Orders 11-20 Orders 6-10 Orders 3-5 Orders 0-2 Orders

• $\sim 64 \%$ of orders placed on a given week come from customers who have already ordered at least 20 boxes
• High valuable customers not impacted by strategy-driven reduction in marketing spend

- Tenured customers

While a reduction in meal kit marketing reduces new customer activity, absolute # of orders from tenured customers has not decreased

Orders by customer loyalty group

$\begin{array}{llllllllll}\text { 2021 } & 2022 & 2023 & 2024\end{array}$
$\begin{array}{llllllllll}\text { 51+ Orders } & \text { 21-50 Orders } & \text { 11-20 Orders } & \text { 6-10 Orders } & \text { 3-5 Orders } & \text { 0-2 Orders }\end{array}$

Indirect procurement savings

In total, we are targeting efficiency measures of c. $€ 300 \mathrm{~m}$ annually by 2026, the majority of which will be taken to the bottom line

$\sim 70 \%$ of efficiency initiatives are on track to be implemented by the end of 2025

Cumulative value unlock

$\div \sim 70 \%$ of measures by value are targeted for implementation already by year-end 2025
$\div$ Therefore, 2026 P\&L will benefit from the full-year impact of these measures

Sustainable reduction of CAPEX to below $€ 150 \mathrm{~m}$ by 2026

2025 Outlook (1/2)

2024
2025 Outlook

| Revenue | $€ 7.66$ bn | (3) $\%-(8) \%$ |
| :-- | :-- | :-- | :-- |
| CC growth | | |

		$\leftarrow$	Direct labor productivity
Contribution Margin ${ }^{(1)}$	$25.8 \%$	$\uparrow$	$\leftarrow$ Site rationalization
			$\leftarrow$ Overhead efficiencies
Marketing	$(18.8) \%$	$\uparrow$	$\leftarrow$ Decreasing meal kit volume
			$\rightarrow$ Reinvestment in product
G\&A ${ }^{(2)}$	$(5.7) \%$	$\uparrow$	$\leftarrow$ Meal kits down
			$\leftarrow$ RTE up, to support continued
			scaling

$\leftarrow$ Headcount
$\leftarrow$ One-off severance costs

2025 Outlook (2/2)

2024
2025 Outlook

AEBIT,

before impairments

AEBITDA

FCF
(pre-leases)
€136m
€399m
€73m

2025 Outlook

€200-250m

€450-500m

• Primarily driven by AEBIT increase
• CAPEX broadly stable

Our efficiency measures target to disproportionately and sustainably boost profitability and cash generation already in 2025

Focus areas for investment opportunities

Steps taken today provide the foundation for how we shape our mid-term trajectory

EBIT and FCF generation in 2025/26 will support investments to return to growth

EBIT and FCF generation in 2025/26 will support investments to return to growth

Meal Kits

FRESR

Product investments

Attract and nurture
high value customers

TTE

Penetration
and monetization

International roll-out

New channels

Now Ventures

Laying the foundations to build the next 500 ventures

Our most valuable customers have high expectations on quality, convenience, deliciousness and health

High income
Less likely to cancel
because of price

Busy life
Value "peace of
mind" highly

Family oriented
Busy trying to juggle
work and family

• Health focused

Product used to complement lifestyle and get closer to nutritional / diet goals

• Suburban

Value physical convenience highly

• Well travelled

More likely to seek variety

Significant product and service improvements go hand in hand with a refined marketing strategy:

Products \& Service

Invest in better value for loyal customers
Improved depth of selection
Strong degree of personalization
Service level upgrades

Marketing

(01) Attract a larger share of high value customers

02 Communicate value more prominently

03 Nurture existing customers

The biggest drivers of long-term retention are the quality and the size of our menus

BEFORE

Free access to high-value proteins

Introduce exciting flavor drivers and new cuisines

Selection has increased steadily but will see another step change in late 2025 and 2026

Including modularity options:
Add, swap, upgrade protein // make it veggie, quick, healthy

Larger menus will allow us to

cater to diverse culinary needs and dietary trends

Current menu
(sample)

Customers will be able to access convenience options (RTE) from the same account and menu

We are building a $1^{\text {st }}$ party data, social graph of customer preferences and taste profiles...

01 Post code check
02 Recipe preferences
03 Plan selection

...to leverage meal recommendations, full meal plans, and navigate
a large menu seamlessly

Machine-learning meal selection tool

Multi layered preference criteria

Dietary restrictions considerations

Past behavior and cohort considerations

Moving to faster delivery options will further bolster customer experience levels

UK pilot for Next Day Delivery

Initial Findings

CACs

Retention

AOV

More than half of new customers opt in

Higher NPS

More likely to purchase add-ons

Our product plans will be accompanied by a fundamental shift in marketing strategy

Maximizing growth at low ROI thresholds

Prioritizing market share considerations

Focusing on first-time buyers

Primarily monetary incentives to drive trial

Optimizing marketing ROI to maximize long term EBIT growth \& cash generation

Prioritizing penetration of high value customer segments

Improving brand considerations and strength of the whole customer base

Product incentives to drive usage and customer tenure

We are strictly enforcing a higher quality bar...

Stricter on repeat voucher usage

Investment in channels that build long-term brand recognition

Reserving best investments for highest value customers

... shifting away from large monetary incentives...

Before
Repeat discount
OFFER, UPGRADED!

Discounts (\% gross revenue) in US meal kits

Source: Internal data: \% discount excluding VAT as a percentage of gross revenue, for US meal kit brands combined

Cumulative Net Revenue per Conversion ${ }^{(1)}$

After 10 weeks
After 20 weeks

(1) Source: Company data, for meal kits in US, CA, NL, AU, NZ, DE, AT, BE, DK, CH, SE, UK, FR, across all brands. Cumulative net revenue per
conversion calculated as a weighted average of all net revenue generated per conversions (blended) after a certain number of weeks since initial conversion

We're allocating a larger share of our investments to brand initiatives for long-term demand generation...

... and building the capabilities required to deliver category growth

We piloted our HelloFresh Loyalty Rewards program...

Benefits:

Premium meal upgrades
Free shipping opportunities
HF Market preferential prices
Price lock-in

...with great early results and high customer satisfaction among our most loyal customers

Pilot Results:

(4) $\sim 40 \%$ initial opt-in rate

Strong satisfaction levels with the program among loyal customer base

Driving the right behaviors:
Higher projected order rates through lower pause and much lower cancel rates of participants vs. non-members

This is accompanied by a massive upgrade to the digital and physical product experience

New Box

New ingredient packaging

Digital experience

Your perfect meal plan is ready!
Tailored to your lifestyle, tastes, and schedule-
so you can enjoy fresh, easy, and delicious meals every week.

Taken together, the next 12 months will see the largest upgrade to the customer experience we have ever done...

Customer offering
300 menu choices
RTE integration
Meal value upgrades

Digital
Loyalty program
Improved digital experience
Personalization

Brand

Elevated brand experience across customer journey New box \& packaging design

Service Level

Next day delivery
Fully flexible box sizes

EBIT and FCF generation in 2025/26 will support investments to return to growth

Opportunities for growth are evident

RTE market is only 5\%-7\% of total US food delivery market

Q4 2024 US food market delivery share ${ }^{(1)}$

Trends are supportive of this growth

Google trends interest for
"Factor Meals" term in the US ${ }^{(2)}$

Cooking operations at scale are hard to do well but, if done right, offer highly defensible moats and large profit pools

We pursue a differentiated strategy for predictable multi-year growth in RTE

After the steep ramp to get to volume and productivity targets in H1 2024...
...we now need to develop our capabilities in lockstep

A strategy defined with the Factor customer at the forefront

Mostly individual consumption
Low share of families

Busy young professional
Skewing mid-20s to mid-30s

Digitally driven

Medium-to high income
Inherent affordability advantage vs. food delivery platforms

Clear health and diet goals

Goal-oriented, whether in nutrition, career, or rest of life

Nutrition conscious

High interest in tracking macros and ingredient provenance

Many tried and tested, high-conviction strategies from our playbook will be introduced in the coming quarters

2025 Focus Areas

A significantly larger menu will help us cater to more audiences successfully, while increasing customer-level profitability...

... and allow us to dedicate a sizeable portion of the menu to GLP-1 friendly meals, one of the most exciting trends in the broader food market

Source: Internal data. Number of conversions on GLP1 preference, including reactivations. Month 4 has only 3 weeks of data.

We aim to create a holistic experience for GLP-1 users along their journey

Expand on attractive opportunity ahead

Integration w/ nutritionist platforms

Supplements

On the drug vs. post GLP-1 treatment

Trusted brand

We launched our first brand building campaign in Q1 2025 to build top-of-mind brand awareness

Aided brand awareness
US, Q1 2025

We have and will be launching attractive Factor-branded ranges that support the brand and capture adjacent meal occasions

The geographic expansion is well underway

EU launches have seen strong initial product market fit

EU Factor orders

2023
2024
2025E

The RTE product offers greater potential for expansion into new sales channels

RTE for work

In-office meals and employee benefits for remote-first employers

Non-traditional Retail partnerships

Non-traditional retail locations like universities / gyms selling Factor meals primarily as an amenity

Food-as-Medicine Programs

Full meal plans and programs for long term care, chronic patients and other health conditions

We plan to bring Factor meals to consumers in non-traditional retail locations and food deserts

Penetration opportunity (US)

$\sim 4,000$	$\sim 16,000$
Higher education	Top hospitality
/ Universities	locations
$\sim 7,000$	$\sim 55,000$
High-rise residential	Self-operated
properties	gym centers

We will start bundling our offerings...

(1) Build Muscle

$\rightarrow$ High protein diet while controlling caloric intake

...to provide great end-to-end propositions to diverse customer segments with clear health objectives

Weight
Management

$\rightarrow$ Low-carb,
low-calorie diet

Our RTE growth strategy in a nutshell

• Factor programs
• Factor own brand portfolio

HELLOFRESH

GROUP

Capital Markets Day