CONTINUED GROWTH IN Q2 2022, CONSISTENT WITH
FULL YEAR GUIDANCE
Marley Spoon AG (“Marley Spoon” or the “Company” ASX: MMM), a
leading global subscription-based meal kit provider, is pleased to
share with investors its highlights from the quarter ended 30 June
2022 (“Q2 2022”).
Conference Call
Management will present a business update to investors on a
conference call at 9:00 am AEST on 29 July, the details of which
have been released separately to ASX.
Highlights:
- Q2 2022 net revenue at €109m, +35% growth year-over-year (+25%
growth in constant currency)
- H1 2022 net revenue of €212m, +34% growth year-over-year (+26%
growth in constant currency)
- Global Contribution Margin (CM) in Q2 at 27.2%, a 50 basis
point (bp) improvement vs. the prior corresponding period
(PCP)
- Q2 Operating EBITDA loss of €(3.0)m1, a sequential improvement
vs. Q1 2022, with both the US and Australia delivering a profitable
quarter
- Operating Cash Flow at €(5.3)m and quarter end cash balance of
€29m providing balance sheet capacity to continue executing 2022
plans
- On track to deliver full year 2022 guidance
Marley Spoon CEO, Fabian Siegel, highlighted, "In the second
quarter we continued to see good growth that was driven by the
successful execution of all three pillars of our growth strategy.
We continue to acquire subscribers at attractive unit economics, we
have increased average order volumes by expanding our offering to
our customers and revenue from our newly acquired ready-to-heat
business, Chefgood, further drives growth of our Australian
segment.
While the business is growing healthily, we were also able to
keep margins stable year-over-year, offsetting operational
headwinds and inflation.
The increased scale and improved margin led to a sequential
improvement of Operating EBITDA both quarter-over-quarter as well
as year-over-year, reducing our Q2 2022 Operating EBITDA loss to
€(3.0)m.
Overall, we have executed H1 2022 to plan and expect to deliver
on the 2022 guidance we provided at the beginning of the year.
I would like to thank our teams for their ongoing, tireless
contributions in a challenging operating environment, which have
kept us on course to date for executing our 2022 plan.”
Q2 BUSINESS UPDATE
Q2 2022 net revenue grew 35% vs. the PCP to €109m, an
acceleration versus the previous quarter. This growth was driven by
Australia (+53%) and the United States (+43%), both of which
benefited from an increase in active subscribers and basket size.
Europe was down 14% vs. the PCP driven by reduced order frequency
in a market environment of lower consumer confidence and overall
slowdown of e-commerce activities.
During the quarter Marley Spoon successfully executed its
three-pillar growth strategy, namely investment in growing active
subscribers, initiatives to grow basket size and inorganic growth
from the Chefgood acquisition, complementing the Company’s meal kit
business.
Active subscribers grew 13% in the quarter to 309k, nearly the
same level of growth seen in Q1 2022 despite a lower level of
marketing investment. Continued favorable unit economics and a
focus on reactivating customers helped deliver the increase in
active subscribers.
Basket size, which grew 23% (13% in constant currency),
benefited from a number of revenue-enhancing activities, namely an
expanded number of recipes which led to high average meals per
week, improved recipe quality and pricing executed half-way through
the quarter to offset inflation. The Company’s recently launched
Market initiative, which offers add-on items to meal kits, also
continued to grow in the quarter.
Contribution Margin in Q2 2022 was 27.2%, an expansion of 50 bps
versus the PCP. Operating Contribution (Operating CM), defined as
CM excluding the impacts of marketing vouchers and fixed costs such
as expenses relating to site leases, also improved slightly versus
the PCP by 40 bps to 36.7%. Operational efficiencies and pricing
helped offset the high inflation the Company saw across food
ingredients and fuel in all regions. However, further margin
expansion was impacted by the ongoing external supply chain issues
seen in Australia, particularly substitutions due to lack of
availability or poor quality.
The Company’s planned sequential reduction in marketing spend
versus Q1 2022 led to marketing expense as a percent of net revenue
of 16% in Q2 2022. This, and the expanded Operating CM, led to an
Operating EBITDA result that was significantly improved versus the
previous quarter, landing at €(3.0)m, excluding one-time charges
from severance payments and a historical sales tax correction in
the US.
Consolidated Income Statement (unaudited) € in
millions Q2 2022 Q2 2021
% vs. PY H1 2022 H1
2021 % vs. PY Revenue
109.2
80.6
35%
211.8
158.0
34%
Cost of goods sold
60.1
44.3
36%
116.1
85.9
35%
% of revenue
55.0%
55.0%
0pt
54.8%
54.4%
0pt
Gross Profit
49.1
36.3
35%
95.6
72.1
33%
% of revenue
45.0%
45.0%
(0)pt
45.2%
45.6%
(0)pt
Fulfilment expenses
19.4
14.8
31%
37.9
28.9
31%
% of revenue
17.8%
18.4%
(1)pt
17.9%
18.3%
(0)pt
Contribution margin (CM)
29.7
21.5
38%
57.7
43.2
34%
% of revenue
27.2%
26.7%
1pt
27.2%
27.3%
(0)pt
Marketing expenses
17.4
16.8
3%
40.6
32.3
26%
% of revenue
15.9%
20.9%
(5)pt
19.2%
20.4%
(1)pt
G&A expenses
20.0
16.2
24%
38.4
30.1
27%
% of revenue
18.4%
20.1%
(2)pt
18.1%
19.1%
(1)pt
EBIT
(7.8)
(11.6)
(33)%
(21.1)
(19.3)
10%
Operating EBITDA
(3.0)
(9.1)
(57)%
(12.7)
(14.8)
(8)%
% of revenue
(2.8)%
(11.3)%
8pt
(6.0)%
(9.4)%
3pt
*Figures exclude severance payments in the
amount of €0.4m in Q2 2022 as well as a one-time sales tax charge
in the US of €0.5m in Q2 2022
SEGMENT REVIEW
United States
- Q2 2022 net revenue was up 43% to €54m YoY, +26% in constant
currency
- Strong margin expansion in both CM, at 27.4%, up 3 pts vs. the
PCP, and Operating CM at 37.2%, also up 3 pts vs. the PCP
- The US returned to profitability in the quarter, deliver
Operating EBITDA of €2.5m
Revenue grew 43% (+26% on a constant currency basis) driven by
growth of the Company's subscriber base as well as growth in order
value coming from an increase in portion sizes as well as pricing
taken to offset inflation.
This pricing, combined with operational efficiencies such as
increased picking line productivity, led to contribution margin
expansion of 3 pts year-over-year to 27.4% in Q2 2022. Equally,
operating contribution margin expanded 3 pts to 37.2%, helping lead
to a profitable quarter for the region, with delivery of €2.5m in
Operating EBITDA.
The Company continues to see improved attachment rates for its
Market initiative which is now available nationally across the
US.
Australia
- Q2 2022 net revenue up 53% YoY to €42m, +46% in constant
currency
- Q2 2022 CM at 30.1%, down 3 pts vs. the PCP, while Operating CM
reached 38.3%, down 3.7 pts vs. the PCP
- Operating EBITDA of €2.4m in Q2 2022
Australia had a solid quarter despite significant supply chain
challenges. Revenue grew 53% y-o-y in Q2 2022 thanks to strong
subscriber growth and improved recipes, as well as the
consolidation of the Company’s newly acquired Chefgood
business.
Given the ongoing supply chain challenges stemming from the
pandemic and the flooding, contribution margin contracted versus
the PCP in Australia, with CM and Operating CM landing at 30.1% and
38.3%, respectively. Substitutions of ingredients that were either
unavailable or of poor quality and inflation were the primary
drivers of margin pressure.
However, the region’s focus on cost discipline led to a return
to profitability, with Operating EBITDA coming in at €2.4m in Q2
2022.
The Company’s integration of Chefgood continues as planned, with
synergies particularly in marketing beginning to materialize.
Europe
- Q2 2022 net revenue down by 14% versus the PCP to €13.5m
- Q2 2022 CM at 17.2%, down 5 pts compared to the PCP and
Operating CM at 30.5%, down 1.5 pts compared to the PCP
- Operating EBITDA loss of €(2.1)m in Q2 2022 excluding
headquarter costs
Europe had a challenging quarter. Net revenue declined versus
the PCP driven primarily by lower order frequency as the e-commerce
sector in the region has been particularly soft while consumer
confidence deteriorated. Contribution Margin was impacted by food
and fuel inflation leading to a y-o-y decline. The reduced scale
and compressed margin led to a disappointing performance and an
Operating EBITDA loss of €2.1m excluding headquarter costs.
The Company is actively working to implement turnaround plans to
return to growth, expand margin and bring the European business to
breakeven profitability.
KEY OPERATING METRICS*
Q2 2022 Active Subscribers grew 13% compared to the PCP to 309k,
a new high for the Company. This was driven mainly by Australia
(+36%) and the US (+9%).
While orders per subscriber were down slightly by 3%, average
order value was up 23%, reflecting the Company’s focus on basket
size-generating activities, including its pricing initiatives,
Market add-ons and increased recipe choice.
preliminary & unaudited
Q2 2022 Q2 2021
Variance % H1 2022 H1 2021
Variance % Group
Active customers (k)
447
425
5%
658
413
59%
Active subscribers (k)
309
272
13%
302
265
14%
Number of orders (k)
1,995
1,813
10%
4,032
3,562
13%
Orders per customer
4.5
4.3
5%
6.1
8.6
(29)%
Orders per subscriber
6.5
6.7
(3)%
13.3
13.4
(1)%
Meals (m)
16.9
15.1
12%
33.7
29.6
14%
Avg. Order value (€, net)
54.7
44.5
23%
52.5
44.4
18%
Avg. Order value (€, net) in CC
50.2
44.5
13%
49.3
44.4
11%
Australia
Active customers (k)
167
133
25%
243
169
44%
Active subscribers (k)
108
79
36%
104
93
13%
Number of orders (k)
788
585
35%
1,547
1,111
39%
Orders per subscriber
7.3
7.4
(1)%
14.8
12.0
24%
Meals (m)
6.8
5.2
30%
13.2
9.9
34%
USA
Active customers (k)
197
197
(0)%
290
173
68%
Active subscribers (k)
137
125
9%
134
114
17%
Number of orders (k)
870
825
6%
1,781
1,638
9%
Orders per subscriber
6.4
6.6
(3)%
13.3
14.4
(7)%
Meals (m)
7.4
6.7
10%
14.9
13.4
12%
Europe
Active customers (k)
83
94
(12)%
125
71
76%
Active subscribers (k)
65
68
(5)%
64
59
10%
Number of orders (k)
336
403
(17)%
703
813
(14)%
Orders per subscriber
5.2
5.9
(13)%
10.9
13.9
(21)%
Meals (m)
2.7
3.2
(15)%
5.5
6.4
(13)%
*Metrics are for core Marley Spoon and
Dinnerly meal kits as well as Chefgood and Bezzie
Active Customers are customers who have
made a purchase at least once over the past 3 months.
Active Subscribers are customers who have
ordered or skipped a Marley Spoon or Dinnerly meal kit, on an
average weekly basis, during the quarter.
CASH FLOW
Marley Spoon ended the quarter and H1 2022 with €29m in cash.
Cash flow from operations was €(5.3)m in the quarter, tracking
lower than Operating EBITDA due to working capital impacts. For the
first half, cash from operations was €(9.4)m.
Cash flow from investing activities landed at €(2.9)m, almost
equally split between the purchase of efficiency-generating and
infrastructure items for the Company’s FCs and investment in
product development. For H1 2022, cash from investing activity was
€(12.8)m, or €(6.2)m excluding the impact of the purchase of
Chefgood in Q1 2022.
Finally, cash from financing activities was €20.4m for the
quarter, reflecting the proceeds of 1) tranche 2, US$20m or €19.3m,
of our debt facility with Runway Growth Capital and 2) the renewal
of the Company’s €5m term loan with BVB, offset by cash outflows
for lease and interest payments and repayment of borrowings.
For the second quarter, cash payments to related parties of the
entity were €343 thousand in aggregate. These payments were
personnel compensation for key executive management, including the
Management Board and the Supervisory Board.
2022 OUTLOOK AND GUIDANCE RE-AFFIRMED
Having delivered another quarter in line with the Company’s
expectations, Marley Spoon reaffirms its full year guidance. Marley
Spoon expects inflation globally and supply chain volatility in
Australia to continue, and as such will maintain its focus on
operating with financial discipline and within its balance sheet
capacity.
Guidance is affirmed:
- Mid-to-high teens YoY net revenue organic growth plus full year
contribution from Chefgood
- Contribution Margin in-line with 2021
- Operating EBITDA better than €(15)m
INVESTOR CONFERENCE CALL
An investor conference call will be held at 9:00 am AEST on 29
July 2022. Pre-registration links and dial-in details have been
released separately.
This announcement has been authorised for release to ASX by the
Board of Directors of Marley Spoon AG.
About Marley Spoon
Marley Spoon (MMM:ASX, GICS: Internet & Direct Marketing
Retail) is a global direct-to-consumer brand company that is
solving everyday recurring problems in delightful and sustainable
ways. Founded in 2014, Marley Spoon currently operates in three
primary regions: Australia, United States and Europe (Austria,
Belgium, Germany, Denmark, Sweden and the Netherlands).
With Marley Spoon’s meal-kits, you decide what to eat, when to
eat, and leave behind the hassle of grocery shopping. To help make
weeknights easier and dinners more delicious, our meal kits contain
step-by-step recipes and pre-portioned seasonal ingredients to cook
better, healthy meals for your loved ones.
As consumer behaviour moves towards valuing the convenience
aspect of online ordering, Marley Spoon’s global mission through
its various brands, such as Marley Spoon, Martha Stewart &
Marley Spoon, Dinnerly, and Chefgood is to help millions of people
to enjoy easier, smarter and more sustainable lives.
______________________ 1This result excludes the impact of
one-time charges stemming from a) €0.4m in severance costs and b)
€0.5m for a historical sales tax correction in the US
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220728005496/en/
COMPANY INFORMATION: Fabian Siegel, Marley Spoon CEO
fabian@marleyspoon.com
INVESTOR QUERIES: Michael Brown, Pegasus 0400 248 080
mbrown@pegasusadvisory.com.au
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