Q3 2024 Hellofresh SE Earnings Call Transcript
Key Points
- HelloFresh SE (HLFFF) reported revenues of over EUR1.8 billion for Q3, in line with expectations, with a year-over-year growth rate of about 2% in constant currency.
- The company achieved an increase in Average Order Value (AOV) to EUR66.2, marking a 3.8% year-over-year growth.
- Marketing efficiency improved following a strategic shift to focus on high-value customers, resulting in reduced marketing expenses both relatively and absolutely.
- HelloFresh SE (HLFFF) expanded absolute EBITDA to over EUR72 million for Q3, with an EBITDA margin of 8.5% for meal kits.
- The company generated a positive free cash flow of about EUR30 million year-to-date, with expectations to increase further based on improving marketing efficiencies and reduced CapEx spend.
- Total orders for the group decreased by 1.9% year-over-year, from 28 million orders in Q3 '23 to 27.5 million orders in Q3 '24.
- The meal kits product group experienced a 9% decline year-over-year, attributed to a strategic shift in marketing and a lower number of new customers.
- Contribution margin was down by 1.3 percentage points year-on-year in Q3, impacted by ramp-up expenses of new meal kits fulfillment centers in Germany and the UK.
- Free cash flow in Q3 was negative by around EUR20 million, contributing to a year-to-date free cash flow that is approximately EUR50 million lower than the previous year.
- The company revised its revenue growth outlook for 2024 on a constant currency basis from 2% to 8% to now 1% to 1.7%, indicating a slightly negative growth expectation for Q4.
Good morning, ladies and gentlemen, and welcome to the HelloFresh SE Q3 2024 results. (Operator Instructions) Let me now turn the floor over to Dominik Richter, CEO of HelloFresh.
Good morning, and welcome, ladies and gentlemen, to our Q3 earnings call. After we've pre-released our headline numbers last week already, we would like to focus today on giving some additional color on our recent marketing strategy changes and share some more details on the respective performance of our two largest product groups: meal kits and RTE.
For all direct-to-consumer companies, marketing and advertising constitute a large investment area, with both near-term and long-term impact to both growth and profitability. This is because direct-to-consumer companies like us cannot rely on foot traffic to their stores nor halo third-party brands driving customers to the site.
After we've talked a little bit about our drive to lower cost in our fulfillment network and through
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