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Marley Spoon continues strong growth in Q1 2021, upgrades revenue guidance

Marley Spoon continues to deliver on growth strategy - 81% revenue growth in Q1 2021, revenue guidance for FY2021 upgraded.

Marley Spoon (ASX:ASX:MMM)

"We never won more subscribers or generated more revenue than in Q1 2021. This led us to upgrade revenue guidance for FY2021. We now expect to grow 30% - 35% this year".”
— Fabian Siegel, Marley Spoon CEO
SYDNEY, NEW SOUTH WALES, AUSTRALIA, April 29, 2021 / -- Marley Spoon AG (“Marley Spoon” or the “Company” ASX: MMM), a leading global subscription-based meal kit provider is pleased to share with investors its highlights from the quarter ended 31st March 2021 (“Q1 2021”) (unaudited) and upgraded revenue guidance for FY21.

Conference Call
Management will present a business update to investors on a conference call at 6.00 pm AEST on 29th April – call details have been released separately to ASX.

Q1 Highlights
Q1 2021 revenue at €77.4m, +81% versus the prior corresponding period (PCP), +83% on a constant currency basis, with all regions contributing strong growth
Global Contribution Margin (CM) in Q1 at 28%
Operating EBITDA of €(5.7)m driven by seasonal marketing investment
Positive Operating Cash Flow of €5.3m in Q1 2021, with total cash balance at €38.4m
FY21 net revenue guidance upgraded: the Company is now expecting FY21 revenue to increase by between 30-35% YOY

Marley Spoon CEO, Fabian Siegel, highlighted, “We are pleased with this strong start to the year across all our regions. We delivered a record quarter in terms of new customer acquisitions, subscriber numbers and absolute revenue, demonstrating an ability to deliver strong growth during both pandemic-related lockdowns and as markets reopen. We also overcame some operational challenges, notably weather-related headwinds from the floods in Australia and winter storms across the US and Europe.

Because of the strong growth in all of our markets and the continued demand for our services, we are upgrading our full-year revenue guidance as we continue to see opportunities to invest in new customer growth at attractive unit economics.

User behavior across the regions has mostly normalized to its pre-COVID state. While COVID19 brought forward the structural shift online, the penetration rate of online grocery is still in its infancy. The dramatic growth we have seen across all e-commerce verticals in 2020 has created some temporary operational challenges in logistics, labor and supply chain infrastructure in the industry. As the consumer switch to online shopping in our categories continues, and as our team grows, we will be focused on managing these operational challenges while we continue to build further scale in our large addressable markets and deliver ongoing growth through strengthening our direct-to-consumer brands.”

Marley Spoon reported revenue of €77.4 million for the first quarter in 2021, an increase of 81% vs. PCP, or 83% excluding the impact of foreign exchange (FX) movements.

The growth was driven by all regions with Europe leading at 108% growth compared to the PCP. The business is now experiencing normalized customer behavior compared to pre-COVID times, while unit economics remain attractive.

As is typical in Q1, a seasonally strong growth quarter for the business, the Company invested more heavily into marketing to continue building up its back-book of recurring business. Marketing efficiency improved with marketing expenses as a percentage of revenue declining to 20% in the quarter, compared to 27% in the PCP.

Globally, CM reached 28%. Operating Contribution Margin (Operating CM), defined as CM excluding the impacts of marketing vouchers and fixed costs such as expenses relating to site leases, reached 38% in Q1 globally. The quarterly margin performance was impacted by both weather-related operational challenges (Australia floods, winter storms across the US/EU) and infrastructure-related issues across supply chain, labor and logistics driven by the general, ongoing e-commerce boom. The increased investment in marketing led to a higher marketing voucher share, also impacting CM.

Given the seasonal strong marketing investments in Q1, the Company posted an Operating EBITDA loss of €(5.7)m in the quarter while generating positive operating cash flow of €5.3m.


United States
Q1-21 revenue is up 82% compared to the PCP, or 98% excluding the impact of FX
CM at 28%; Operating CM reached 39%, up 3 pts YOY
Delivered breakeven Operating EBITDA in Q1

The US had a strong start to the year thanks to continued demand across both its Martha Stewart & Marley Spoon and Dinnerly brands. The favorable acquisition environment led to strong topline performance despite the unprecedented winter storm in Texas and storms in the Northeast that caused order cancellations as delivery of supplies and outbound logistics came to a halt.

We also saw margin expansion in the region, in both CM and Operating CM, versus the PCP as a result of a price increase at the end of 2020. This margin expansion was partly offset by the weather-related operational cost headwinds. Furthermore, the boom in e-commerce combined with an overall shortage of labor in the logistics industry led to a degradation in logistics performance beyond the weather-related disruptions. To counter these issues, Marley Spoon has started to further diversify its last mile logistics network to improve performance and mitigate disruptions.

Q1-21 revenue up 65% compared to the PCP, or 50% excluding the impact of FX
CM at 33%; Operating CM reached 42%, down 3pts YOY
Australia also delivered breakeven Operating EBITDA in Q1

Australia delivered solid YOY revenue growth which accelerated during the quarter with the Company's new operations in Western Australia contributing to this trend. The ramp-up in the new fulfillment center, combined with a greater share of marketing vouchers and a different brand mix due to the growth of our budget brand Dinnerly, contributed to a lower margin profile compared to the prior year. A new, enlarged fulfillment center in Sydney is on track to be opened at the end of Q2 2021.

Q1-21 revenue up 108% compared to PCP
CM at 20%; Operating CM reached 31%, up 1 pt YOY

Operating EBITDA loss of €(1) million excluding global headquarter costs

Europe continued to benefit from a very favorable growth environment with strong demand, allowing the Company to exceed growth plans at attractive unit economics. Operationally, Europe also experienced weather-related challenges due to extreme winter storms. At the same time, the Company introduced its newest manufacturing technology, expected to significantly improve picking quality and productivity. The launch of this next-generation manufacturing technology incurred some one-off ramp-up costs in the quarter.

Marley Spoon enjoyed continued strong, sequential Active Subscriber growth, with Q1 ending with 252k Active Subscribers, up 86% YOY. These subscribers generated on average 7 orders per subscriber in the quarter, down slightly versus the PCP. On average, Q1 net order value reached €44.3, a rise of 1% on the PCP. On a constant currency basis, net order value was €44.8, up 2% YOY.

The Company delivered a strong cash position in the quarter, with cash from operating activities of €5.3m versus €0.5m in the PCP. This was driven by seasonal cash flow dynamics as well as the strong sales performance in the quarter. Cash from investing activities was €(3.1)m. This includes investments in the Company’s new manufacturing technology in Europe and fulfillment center expansion in Australia and the US.
The Company’s overall cash position at the end of Q1 2021 is €38.4m, an increase of €4m versus the end of last year, owing in part to an increase in our credit line from Berliner Volksbank of €2.5m (for a total line of €5m). Q1 2021 cash represents an increase versus the PCP of €32.6m.

Given the continued global traction in online meal kit adoption and retention of customers acquired in 2020, Marley Spoon is upgrading its 2021 net revenue guidance. The Company now expects to grow net revenue between 30-35% YOY in CY 2021 (previously 25-30%).
Marley Spoon continues to expect CM in 2021 to be between 30% and 31%.

An investor conference call will be held at 6.00 pm AEST on 29th April 2021. Pre-registration links and dial-in details have been released separately.
This announcement has been authorised for release to ASX by the Board of Directors of Marley Spoon AG.

About Marley Spoon
Marley Spoon (MMM:ASX, GICS: Internet & Direct Marketing Retail) is a global direct-to-consumer brand company that is solving everyday recurring problems in delightful and sustainable ways. Founded in 2014, Marley Spoon currently operates in three primary regions: Australia, United States and Europe (Austria, Belgium, Germany, Denmark, Sweden and the Netherlands).

With Marley Spoon’s meal-kits, you decide what to eat, when to eat, and leave behind the hassle of grocery shopping. To help make weeknights easier and dinners more delicious, our meal kits contain step-by-step recipes and pre-portioned seasonal ingredients to cook better, healthy meals for your loved ones.

As consumer behaviour moves towards valuing the convenience aspect of online ordering, Marley Spoon’s global mission through its various brands, such as Marley Spoon, Martha Stewart & Marley Spoon, and Dinnerly, is to help millions of people to enjoy easier, smarter and more sustainable lives.

Jonas Tobias
Marley Spoon
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