Appendix 4C - Q1 2022 & Business Activity Report

CONTINUED GROWTH IN Q1 2022, CONSISTENT WITH FULL YEAR GUIDANCE

Berlin, Sydney, 27 April 2022: 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 31 March 2022 ("Q1 2022").

Conference Call

Management will present a business update to investors on a conference call at 8:30 am AEDT on 28 April, the details of which have been released separately to ASX.

Highlights:

  • Q1 2022 net revenue at €103m, +32% growth year-over-year (+27% growth in constant currency)

  • Launch of Market, the Company's marketplace offering customers add-ons and complementary food options to increase ARPU and support growth strategy

  • Global Contribution Margin (CM) in Q1 at 27.3%

  • Q1 Operating EBITDA loss of €(9.7)m as a consequence of the planned increased investment in marketing in the quarter

  • Operating Cash Flow at €(4.1)m and quarter end cash balance of €20m providing balance sheet capacity to continue executing 2022 plans

  • On track to deliver full year 2022 guidance

Marley Spoon CEO, Fabian Siegel, highlighted, "I am pleased to report we have had a good start to the year with Q1 results putting us on track to deliver our full year guidance. In Q1 we achieved solid growth at stable customer acquisition costs. Contribution margin was slightly down YoY, as we mostly offset global inflationary cost increases and the significant flooding in Australia which impacted our operations there.

The launch of Market at the end of the quarter introduces a new revenue stream that allows customers to add additional meal options and grocery items into their weekly meal-kit boxes. This launch marks an important milestone in executing our mid-term growth strategy, which consists of increasing our subscriber base while at the same time increasing ARPU.

In Q1 we also commenced close collaboration with our new team members from Chefgood, which brought new learnings into our group of brands and led to the integration of Chefgood ready-to-heat meals into our Marley Spoon and Dinnerly meal-kit boxes in Australia.

As expected, we incurred higher marketing spend (23% of net revenue) than the previous quarter to take advantage of the seasonal media and customer behavior environment and to benefit from the impact of new customer revenue in the remainder of the financial year. This expenditure led to an Operating EBITDA loss of €(9.7)m, in line with our plan.

The first quarter of the year is important for achieving our full year customer acquisition and revenue growth targets. Achieving plan for the quarter increases our confidence to deliver the plan for the year and allows us to reaffirm 2022 guidance.

I would like to thank our teams for their contributions to landing a good start to the year."

Q1 BUSINESS UPDATE

Q1 2022 net revenue grew 32% vs. the PCP to €103m. The revenue growth was driven by Australia (+53%) and the United States (+36%), as the Company continued to invest in increasing its subscriber base and in offering more recipe choices. Europe was down compared to the PCP, which saw strong growth due to the impact of COVID19 on growth at the time.

The Q1 growth was achieved with customer acquisition costs on target, leading to continued attractive unit economics. As planned, the Company front-loaded growth investments in Q1 such that marketing expenses landed at 23% of net revenue.

In March, the Company launched its new Market offering selectively in all regions for Dinnerly and Marley Spoon, which allows customers to add additional meal options, selected groceries as well as other food convenience items to their weekly deliveries. The launch of Market is intended to support the Company's growth strategy by increasing ARPU and will continue to be rolled out throughout Q2. In Australia, the Market launch includes Chefgood ready-to-heat meals as part of the ongoing integration of the Chefgood brand into the Marley Spoon brand portfolio.

Q1 2022 CM landed at 27.3%, 70 bps down YoY. Operating Contribution Margin (Operating CM), defined as CM excluding the impacts of marketing vouchers and fixed costs such as expenses relating to site leases, was 37.6% globally in Q1, down 40bps YoY. The quarterly margin performance wassupported by operational improvements mostly offsetting inflation and weather-related headwinds, particularly in the US and Australia. The Company continues to experience and expects further inflationary headwinds in the balance of the year. As such, the Company increased prices for all brands in all regions at the beginning of Q2.

The seasonally upweighted investment into marketing led to an Operating EBITDA loss of €(9.7)m for the quarter, in line with the Company's expectations and consistent with the delivery of full year guidance.

SEGMENT REVIEW United States

  • Q1 2022 net revenue up 36% to €51m YoY, 27% in constant currency

  • Q1 2022 CM at 28.2%, 30bps below the PCP however Operating CM was flat YoY at 38.7%

  • Operating EBITDA was breakeven at €(0.2)m in the quarter

Revenue grew 36% (+27% on a constant currency basis) driven by growth of the Company's subscriber base as well as growth in order value.

Contribution margin was stable YoY, as the Company was able to offset cost increases with improved operating efficiency. In order to offset expected further cost inflation, the Company increased prices by an average 6% across both brands in April 2022.

The Company successfully managed to mitigate the customer impact of this year's heavy winter storm season while launching the new Market for Dinnerly and Marley Spoon in select states at the end of the quarter. The Company intends to roll out Market nationwide throughout Q2.

Despite the seasonally strong investment in marketing, the US business was break-even with an Operating EBITDA result of €(0.2)m.

Australia

  • Q1 2022 net revenue up 53% YoY to €38m, 51% in constant currency

  • Q1 2022 CM at 28.4%, down 4.1pts vs. the PCP, while Operating CM reached 38.0%, down 3.7pts vs. the PCP

  • Operating EBITDA of €(1.9)m in Q1 2022

Continued strong net revenue growth of 53% YoY, including Chefgood, driven by strong growth of the Australian subscriber base.

CM was down YoY, primarily impacted by costs related to extreme floods as well as item availability and food cost inflation. In order to offset expected further cost inflation, the Company increased prices in April 2022 by approximately 6% across both brands.

The launch of Market at the end of the quarter featured Chefgood ready-to-heat items, marking a further step in the integration of Chefgood into the Company's operations.

The flooding related impact on margin combined with the seasonally higher marketing investment led to a quarterly Operating EBITDA result of €(1.9)m.

Europe

  • Q1 2022 net revenue down by 8% to €14m compared to a strong growth PCP due to COVID19

  • Q1 2022 CM at 21.3%, up 1.4 pts compared to the PCP and Operating CM at 33.2%, up 1.9 pts compared to the PCP

  • Operating EBITDA loss of €(2.1)m in Q1 2022 excluding headquarter costs

Order frequency in Q1 declined (13%) compared to a Covid-driven PCP, though Active Subscribers grew 3% YoY against a high growth PCP (107%), resulting in net revenue contracting by 8%.

The Company was able to increase margins despite an inflationary cost environment by realizing operating efficiencies. In order to offset expected further cost inflation, the Company increased prices in April 2022 by an average 4.5% across both brands.

Excluding headquarter costs, the region delivered an Operating EBITDA loss of €(2.1)m driven by seasonal investments in marketing.

KEY OPERATING METRICS*

Q1 2022 Active Subscribers grew 15% compared to the PCP, driven mainly by Australia (+37%) and the US (+9%).

The Company's Active Subscribers generated on average 6.8 orders in the quarter, down 2% versus the PCP which was still heavily influenced by COVID19 behaviour. The Company saw a sizable increase in average order value, reaching €52.0, a 17% increase versus the PCP largely due to activities to increase choice for customers as well as the annualization of 2021 price increases.

*Metrics for core Marley Spoon and Dinnerly meal kits only; excludes Chefgood and Bezzie

Active Customers are customers who have purchased a Marley Spoon or Dinnerly meal kit 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.

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

  • Original Link
  • Original Document
  • Permalink

Disclaimer

Marley Spoon AG published this content on 27 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 April 2022 07:14:05 UTC.