Release Date: April 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- HelloFresh SE (HLFFF, Financial) reported a significant increase in adjusted EBITDA, up 245% to EUR58.1 million year over year.
- The company achieved a substantial improvement in free cash flow, increasing by about EUR100 million year over year.
- Contribution margin expanded by 1.3 points to 27%, driven by efficiency improvements.
- North America saw a remarkable increase in contribution margin, up by 290 basis points.
- The company is on track to expand its contribution margin by approximately 100 basis points for the full year 2025.
Negative Points
- Net revenue declined by 8.3% year over year, primarily due to reduced marketing expenses and lower new customer additions.
- Meal kit orders in North America declined by about 18% in Q1.
- The international segment experienced a temporary reduction in contribution margin by 80 basis points due to the ramp-up of automated sites.
- Ready-to-eat (RTE) segment saw a temporary decrease in EBITDA margin by approximately 4 percentage points year over year.
- The company faces macroeconomic uncertainties, including potential tariffs, FX headwinds, and unclear consumer confidence, particularly in the US.
Q & A Highlights
Q: Can you provide more specifics on the adjusted EBITDA outlook and trends for your core loyal customer base into the second quarter?
A: Christian Gartner, CFO: We are targeting each quarter to be EUR10 million to EUR20 million better than the prior quarter in terms of profitability. Regarding our loyal customer base, there is no change from what was discussed at the capital markets day; their behavior remains stable.
Q: With the RTE segment, considering the EUR30 million investment into the brand, why might Q2 be softer, and is marketing efficiency declining?
A: Dominik Richter, CEO: The focus in H1 is on building long-term demand and brand equity, not just chasing immediate customer gains. We expect revenue growth to accelerate in H2 after these investments, despite current US consumer uncertainty.
Q: What will drive revenue acceleration in H2 for the RTE segment?
A: Dominik Richter, CEO: The acceleration will primarily come from the US, driven by brand and product investments. We plan to leverage these during key marketing periods like the back-to-school season, which is crucial for us.
Q: Regarding the substantial brand marketing in RTE, what indicators suggest a good payback on this expenditure?
A: Dominik Richter, CEO: We have seen positive results from past brand advertising tests, such as increased search traffic and brand awareness. In Q1, unaided brand awareness for Factor rose from 8% to 12%, indicating promising long-term demand generation.
Q: Do the cost savings guided at the capital markets day include savings from reduced discounts?
A: Christian Gartner, CFO: Yes, reduced price incentives are included in our efficiency savings targets, contributing to the EUR300 million gross savings and EUR200 million net savings discussed.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
