HelloFresh SE: announces Q3-2024 financial results

Berlin / DE. (hf) HelloFresh SE released its financial results for the third quarter of 2024. The HelloFresh Group delivered a quarterly euro-reported revenue of around EUR 1.83 billion, corresponding to a 1.9 percent constant currency year-on-year growth (Q3-2023: EUR 1.80 billion). Revenue growth was driven by continued year-on-year average order value (AOV) expansion by 3.8 percent on a constant currency basis, more than offsetting a slight expected decrease in Group orders.

By product category, meal kit revenue decreased in constant currency Y-o-Y by (9.3) percent to EUR 1.28 billion (Q3-2023: EUR 1.41 billion). This temporary decline in revenue represents a continuation of the trends from previous quarters, driven by a normalization in the size of new customer cohorts and by the Company’s disciplined focus on achieving a strong return on investment on its marketing spend. Existing customers continue to demonstrate robust behavior, illustrated by strong order rates and retention. The RTE product category continues to grow strongly, delivering revenue growth on a constant currency basis Y-o-Y of 39.9 percent to EUR 529 million, and rapidly develops into a sizable and profitable business.

The contribution margin in Q3-2024 was 24.3 percent of Group revenue compared to 25.6 percent in the same period of last year. The Company is sequentially narrowing the contribution margin gap to last year, by gradually improving the productivity of its RTE sites and of existing meal kit sites, somewhat offset by ramp-up expenses of new production sites in Germany and the UK, as previously described.

Efficiency focus in marketing

The HelloFresh Group achieved an AEbitda of EUR 72 million in Q3-2024 (Q3-2023: EUR 69 million), a margin of 3.9 percent (Q3-2023: 3.8 percent) for the Group. This is driven primarily by the Company’s disciplined focus on achieving a strong return on investment on its marketing spend. Marketing expenses for the Group decreased in Q3-2024 year-on-year in relative and also slightly in absolute terms.

AEbitda for the meal kit product category increased Y-o-Y in Q3-2024 in absolute terms, mainly thanks to marketing efficiency measures, to EUR 109 million, a margin of 8.5 percent (Q3-2023: 5.8 percent). RTE reached a margin of 1.3 percent in the third quarter of 2024 (Q3-2023: 8.0 percent). In the coming quarters, RTE margin expansion will be driven by continued improvements in fulfillment and labor productivity.

Dominik Richter, co-founder and CEO: «In meal kits, our focus for the next couple of quarters will be on improving further on an already excellent proposition to our customers, through more meal choice, better value for money and higher service levels. We also aim to meaningfully expand free cash flows and profitability for the Group, and have taken first decisive steps, such as being more selective in attracting new customers to our meal kit brands and adjusting our production footprint. We see these steps starting to reflect in the numbers. The biggest growth driver over the next three years will be our RTE product category. Today, we are already the RTE market leader in the US and have developed the product, technology and food manufacturing capabilities to reach many more people around the world with our RTE products.»

Updates to FY-2024 outlook

The Company plans to maintain its strong focus on disciplined marketing investments also in future quarters. As a consequence, the Company is targeting to acquire fewer, but on average more profitable customers. This means that for the fourth quarter of 2024 the Company intends to spend less on marketing than in the same quarter of last year, especially in the latter half of the quarter, when the customer acquisition environment is typically seasonally less benign.

As a consequence, the Company reduces its revenue growth outlook for FY-2024 for the HelloFresh Group on a constant currency basis from previously between 2 percent and 8 percent to now between 1.0 percent and 1.7 percent. Given its strong AEbitda in the third quarter of 2024 and its continuous focus on marketing efficiency, the Company raises the lower end of its AEbitda outlook by EUR 10 million. The AEbitda outlook for the HelloFresh Group for the fiscal year 2024 therefore changes from previously between EUR 350 million and EUR 400 million to now between EUR 360 million and EUR 400 million.

Key figures

Group	Q3-2024	Q3-2023	YoY
Number of orders (in millions)	27.46	27.99	(1.9%)
Meals delivered (in millions)	231.2	236.6	(2.3%)
Average order value (EUR excl. retail)	66.2	64.2	3.2%
Average order value constant currency (EUR excl. retail)	66.6	64.2	3.8%

North America	Q3-2024	Q3-2023	YoY
Number of orders (in millions)	15.69	16.04	(2.2%)
Meals delivered (in millions)	124.2	128.3	(3.1%)
Average order value (EUR excl. retail)	77.2	74.9	3.1%
Average order value constant currency (EUR excl. retail)	78.1	74.9	4.3%

International	Q3-2024	Q3-2023	YoY
Number of orders (in millions)	11.77	11.95	(1.5%)
Meals delivered (in millions)	107.0	108.4	(1.3%)
Average order value (EUR excl. retail)	51.6	49.7	3.7%
Average order value constant currency (EUR excl. retail)	51.2	49.7	3.0%

Results of Operations

Group	Q3-2024	Q3-2023	YoY
Revenue (in mEUR)	1,828.4	1,804.0	1.4%
Revenue constant currency (in mEUR)	1,838.2	1,804.0	1.9%
Contribution margin[1] (in mEUR)	440.8	461.0	(4.4%)
Contribution margin[1] (in% of revenue)	24.1%	25.6%	(1.4 pp)
Contribution margin[1] (excl. impairment in mEUR)	444.0	461.0	(3.7%)
Contribution margin[1] (excl. impairment in% of revenue)	24.3%	25.6%	(1.3 pp)
AEbitda (in mEUR)	72.1	69.2	4.2%
AEbitda (in% of revenue)	3.9%	3.8%	0.1 pp
AEbit (excl. impairment in mEUR)	6.7	14.1	(52.3%)
AEbit (excl. impairment in% of revenue)	0.4%	0.8%	(0.4 pp)

North America	Q3-2024	Q3-2023	YoY
Revenue[2] (in mEUR)	1,212.0	1,201.7	0.9%
Revenue[2]constant currency (in mEUR)	1,226.0	1,201.7	2.0%
Contribution margin[1] (in mEUR)	319.5	330.8	(3.4%)
Contribution margin[1] (in% of revenue)	26.1%	27.3%	(1.2 pp)
Contribution margin[1] (excl. impairment in mEUR)	319.5	330.8	(3.4%)
Contribution margin[1] (excl. impairment in% of revenue)	26.1%	27.3%	(1.2 pp)
AEbitda (in mEUR)	74.0	83.3	(11.2%)
AEbitda (in% of revenue)	6.1%	6.9%	(0.8 pp)
AEbit (excl. impairment in mEUR)	44.5	57.3	(22.3%)
AEbit (excl. impairment in% of revenue)	3.7%	4.7%	(1.1 pp)

International	Q3-2024	Q3-2023	YoY
Revenue[2] (in mEUR)	616.5	602.3	2.4%
Revenue[2] constant currency(in mEUR)	612.3	602.3	1.7%
Contribution margin[1] (in mEUR)	137.3	144.9	(5.2%)
Contribution margin[1] (in% of revenue)	21.9%	23.8%	(1.8 pp)
Contribution margin[1] (excl. impairment in MEUR)	134.1	144.9	(7.4%)
Contribution margin[1] (excl. impairment in% of revenue)	21.4%	23.8%	(2.4 pp)
AEbitda (in mEUR)	34.7	23.7	46.5%
AEbitda (in% of revenue)	5.5%	3.9%	1.7 pp
AEbit (excl. impairment in mEUR)	11.1	5.0	122.6%
AEbit (excl. impairment in% of revenue)	1.8%	0.8%	1.0 pp

[1] Excluding share-based compensation (SBC) expenses — [2] External revenue from contracts with customers

Product category	Q3-2024	Q3-2023	YoY
Revenue[1] (in mEUR)
Meal kits	1,277.9	1,413.9	(9.6%)
RTE[2]	524.5	378.2	38.7%
Others	26.1	11.9	118.7%
Revenue[1] constant currency (in mEUR)
Meal kits	1,282.5	1,413.9	(9.3%)
RTE[2]	529.3	378.2	39.9%
Others	26.3	11.9	120.9%
AEbitda (in mEUR)
Meal kits	108.6	81.7	33.0%
RTE[2]	6.7	30.1	(77.9%)
Others	(6.6)	(4.8)	37.7%
Holding	(36.6)	(37.8)	(3.1%)
AEbitda (in% of revenue)
Meal kits	8.5%	5.8%	2.7 pp
RTE[2]	1.3%	8.0%	(6.7 pp)
Others	(25.4%)	(40.3%)	14.9 pp

[1] External revenue from contracts with customers — [2] Ready-to-eat