Marley Spoon upgraded its FY20 guidance to at least 70 per cent revenue growth up from its previous 30 per cent forecast as it delivered its half yearly results.
Company chair Deen Shiff said COVID-19 was having a deep impact on many businesses in the sector, but for Marley Spoon it had been “mainly positive and galvanising”.
CEO Fabien Spiegl said the pandemic was accelerating the switch from offline to online commerce but it has still barely begun. “As a direct-to-consumer manufacturing business we see us well positioned to benefit from the continuation of this trend,” Siegel said.
Results overview:
- 41 per cent revenue growth to €130 million;
- underlying operating EBITDA of €30 million versus €34 million CY2018;
- positive operating EBTIDA of €4.5m
- first positive global operating EBITDA in Q2 2020;
- Q2 2020 revenue at €73.3m, +129 per cent versus the prior corresponding period (PCP);
- 80 per cent + growth in all segments;
- second consecutive quarter with positive operating cash flow;
- revenue was up 103 per cent in Australia, 171 per cent in the US and 83 per cent in Europe; and
- Signed a pre-lease for a 14,200 square metre purpose-build facility in Sydney.
In 2019 the company introduced new manufacturing technology allowing for increasing menu choice and personalisation. Siegel said the patent pending technology was fully rolled-out in Europe and Australia with the US following this year.
“We invested into a single, global ERP platform, which has been fully rolled out in Europe and Australia with the US roll-out currently in progress.
“2019 saw significant investments into big data and machine learning infrastructure, which supports the development of consumer taste profiles and introduced prediction technology in our supply chain. “
Furthermore, we increased our manufacturing footprint in the US while consolidating our European manufacturing operations,” he said.
Continued losses were driven by high investment in marketing and topline growth, but revenue still increased 41 per cent while its contribution margin rose from 21 to 25 per cent.
“The Australian business reached a positive operating EBITDA for the first time in Q2 2019 and continued to achieve this in the second half of the year,” Siegel said.
New investors have brought in €50 million since 2019, which Siegel said allowed the company to scale up and meet the surge in demand brough on by the pandemic.
“The pandemic changed all of our lives. During the second quarter, we had to learn how to grow our business quickly in order to reliably fulfill the increased demand of our customers as our service was acknowledged to be essential across the globe.
“At the same time, we had to react to disruptions in our supply chains. We adapted working conditions in our manufacturing centres to heightened safety standards. Many of us had to learn how to work remotely from home while providing for our families and children, who stayed with us as schools closed. As a team we jointly rose to the occasion.”
Shiff echoed Siegel’s comments, saying the acceleration in demand represented a structural change in the markets Marley Spoon operates in.
“We predict a sustained step up in offline to online purchasing of home necessities, likely more white-collar workers working from home on an ongoing basis, and greater unprompted awareness of our brands and meal kits in general.
“Our ability to fund our growth coming into 2020 was supported by a series of fund raisings from existing and new investors, including Woolworths Group, with whom we struck a Strategic Alliance in Australia, Union Square Ventures, Acacia and Western Tech, netting a total €40 million in 2019.
“The green shoots of profitability first emerged here in Australia with the local business reaching positive operating EBITDA from Q2 2019 while implementing new manufacturing technology.
“In this current year it is pleasing that the accelerated expansion of the business, especially in the US, means that our US business reached a positive operating EBITDA for the first time, making Marley Spoon overall operating EBITDA positive in Q2 2020, ahead of our earlier forecasts.”
