In the past, capacity bottlenecks in the distribution centers had slowed down an expanded range.
(Photo: obs)
Dusseldorf The recipe box mail order company Hellofresh was able to stay on course for growth despite difficult economic conditions. As the company, which is listed in the MDax, announced this Thursday, sales in the third quarter increased by 31.4 percent compared to the previous year to 1.86 billion euros. The number of active customers increased by 8.2 percent to 7.5 million.
Hellofresh boss Dominik Richter said at the presentation: “Our figures show that we have built a very resilient business model.” He was optimistic that we would be able to maintain growth for the remainder of the year and confirmed the annual forecast that had been reduced in July. The company expects sales growth of between 18 and 23 percent this year.
The increased costs and high marketing expenses of almost 18 percent of sales weighed on the company’s operating profit. Earnings before interest, taxes, depreciation and amortization (Ebitda) fell from 79.8 to 71.8 million euros. The Ebitda margin to sales is 1.7 percent lower, at just 3.9 percent. However, Hellofresh performed better than analysts had expected.
New production facilities increase the variety of menus
This was again ensured by the good development in the USA. There, Ebitda even rose by 55.4 percent. In the remaining countries combined, however, operating profit collapsed by 39.4 percent. Hellofresh is also struggling with inflation, but according to its own statements it was able to keep the price increase well below the general trend in retail food prices.
Top jobs of the day
Find the best jobs now and
be notified by email.
The prices of Hellofresh’s menus rose by six to seven percent, while food retail prices in many countries saw double-digit increases over the same period. “We were able to prevent every price increase from being passed on in full, and as a result we have become a little more affordable for customers again,” stressed Chef Richter.
With the exception of the USA, all markets fell short of expectations.
(Photo: dpa)
“The expansion of the customer base makes our customers’ menu wishes more diverse,” observes the Hellofresh boss. That is why the company is concentrating on increasing the number of dishes offered in the markets. The plan is to expand the weekly selection by around 30 percent compared to the previous year.
In the past, capacity bottlenecks in the distribution centers had slowed down an expanded range. That’s why Hellofresh is investing around 500 million euros in the delivery centers this year. This will now make it possible for product innovations to be one of the company’s focal points in the coming year, Hellofresh announced.
The higher productivity also helped increase the company’s contribution margin. This was particularly evident in the USA, where the contribution margin increased by 2.8 percentage points to 25.4 percent. In the group as a whole, it was 24.5 percent.
Hellofresh stock surges after quarterly numbers
Hellofresh shares started trading on Thursday after the presentation of the figures for the third quarter with a significant plus and at times rose to over 24 euros. The share price had already increased slightly before the market. Now it will be seen whether the course of the recipe box mailer could rise again after a sideways movement in the past few weeks.
>> Read here: Fast and vegan: Start-up Every Foods benefits from two trends with frozen meals
Because despite the consistently high growth rates, the Hellofresh share has lost a lot of value this year. The price has fallen by two-thirds since the beginning of the year. The result was that the share fell out of the Dax-40 share index just over a week ago after only a year of membership.
Hellofresh stock has long been considered one of the winners of the pandemic. Because people were forced to cook more at home due to working from home and restaurants that were temporarily closed, many discovered the offer of the meal box mail order company, which sends measured ingredients for dishes including the recipe, making cooking easier. At its peak, the price almost reached the 100 euro mark at the end of 2021.
But with the general weakness of the tech and consumer stocks, the Hellofresh share also experienced a significant crash and was temporarily quoted at 20 euros. It is currently back to where it was before the pandemic. Many analysts still recommend buying the paper and have target prices, some of which are significantly higher than the current level. Deutsche Bank, for example, confirmed its buy recommendation and target price of EUR 54 this week.
More: The ten billion plan: This is behind the success of Hellofresh