HelloFresh Sees Orders Double As Consumers Embrace Meal Kits During Lockdown
Meal-kit firm HelloFresh said that the number of orders (19.49 million) placed on its platform in the third quarter was up 114% on the same period the previous year, as consumers embraced its services during COVID-19 lockdowns.
HelloFresh which has now reached an all-time high of five million active customers, saw its revenue growth in the third quarter rise by 120% (or +127.7% at constant currency levels), to €970.2 million.
Indeed, such is the company's growth, that Dominik Richter, its CEO and co-founder, has suggested that many of the key drivers behind the firm's growth have now become "permanent" aspects of shopper behaviour.
Lower marketing costs and a sequential improvement in margin during the summer months meant that EBITDA margin increased by 8.3 percentage points to 11.8%, with the group boasting EBITDA of €114.7 million.
HelloFresh's International segment saw 131.5% growth at constant currency levels, while its US operation grew by 124.7% despite what it said were 'continued capacity constraints' during the third quarter.
EBITDA in the International division was €69.9 million (15.7% margin), and €57.6 million in the US division (10.9% margin).
"The trend towards eating more meals at home accelerated during the pandemic and we consider the key drivers for this to have become permanent," Richter said. "Consumers will continue to rely on e-commerce to shop for food in a safe and convenient way and additionally, they will continue to work from home and therefore eat more meals at home.
"We see this trend reflected in our continued strong customer growth and consistently higher customer engagement across all markets, despite COVID related restrictions being lifted during Q3.”
Last month, HelloFresh increased its full-year guidance for revenue growth for the third time this year, with the business expecting full year revenue growth to come in at between 95% and 105% higher than the previous year.
“We are very proud to have provided five million customers around the world with 162 million meals in the past quarter," Richter added. "We have continued to invest heavily into our product and service levels despite a very challenging operating environment, including close to maximum capacity utilisation.”
Commenting on its performance, Barclays Equity Research said, "P&L/segmental detail is broadly in line with our thinking, with much of the growth in international being driven by new customers; and growth in the US remaining capacity-constrained during Q3 (this should be changing now with the new FC coming on stream).
"Focus among investors has noticeably shifted to 2021-22E (or whenever things return to ‘normal’) - which is particularly hard to model for HelloFresh. However, management’s tone in the past has suggested they have multiple levers to continue driving growth in the medium term, and we think the CMD in end Nov/early Dec could act as a positive catalyst to illustrate this."
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