Marley Spoon Group SE
Original-Research: Marley Spoon Group (von NuWays AG): Kaufen

Original-Research: Marley Spoon Group – from NuWays AG

Classification of NuWays AG to Marley Spoon Group

Company Name: Marley Spoon Group
ISIN: LU2380748603

Reason for the research: Update
Recommendation: Kaufen
Target price: EUR 7.00
Target price on sight of: 12 Monaten
Last rating change:
Analyst: Mark Schüssler

Mixed 2024 guidance // efficiency measures bearing fruit; chg.

Last week, Marley Spoon Group (‘MSG’) released a mixed 2024 guidance. Sales
are expected to grow by a single-digit percentage versus the prior year
(eNuW new: +9% yoy; eNuW old: +17% yoy), largely driven by two separate
developments owing to MSG’s structure, which consists of the core mealkit
business Marley Spoon SE (>95% ownership) and the newly acquired bistroMD,
operating in the ready-to-eat business:

1) While consumer demand has stabilized throughout 2023, the company cited
cautious consumer behavior in the meal-kit market as the main culprit for
the muted outlook and now expects a single-digit percentage decline for
FY24e (eNuW new: -3% yoy; eNuW old: +5% yoy). In our view, this should be
explained by a continued normalization in the number of active subscribers
from Covid highs (eNuW: -3% yoy), the effect of which is likely more
pronounced for Europe and Australia than for the US.

2) The guidance implies, however, that on a group level its recent
acquisition of bistroMD shows a noticable impact on the overall topline
development (FY24e revenue of € 39m, +10% yoy; eNuW), demonstrating the
attractiveness and resilience of the ready-to-eat market. Besides
bistroMD’s leading doctor-designed RTE meal plans playing on relevant
consumer trends like health, convenience, and weight-loss, this acquisition
likely offers MSG an opportunity to use its own data and technology
platform to generate synergies over time.

Though MSG expects its contribution margin to remain flat (FY23: ~31.7%),
operating EBITDA is seen to grow to a positive mid-single-digit figure for
the full year (eNuW: € 2m), despite the fact that bistroMD should operate
on a lower contribution margin (eNuW: ~30%) and negative EBIT due to lack
of scale. The positive margin outlook is seen to be carried by (1) a
rectified voucher strategy, likely increasing marketing efficiency and
early cohort retention rates in H2’23 and Q1’24 and (2) a more streamlined
G&A setup (-11% yoy to c. € 69m, excluding one-off costs) as costreduction
measures from automation, centralization, and the closure of underutilized
operations begin to kick in.

While it looks like 2024 will be another challenging year for the meal kit
market, we like both the strategic outlook and the operational progress MSG
has made over the past quarters towards group profitability, leading us to
reiterate our BUY rating with a changed PT of € 7.00 (old: € 8.00) based on
DCF.

You can download the research here:
http://www.more-ir.de/d/29307.pdf
For additional information visit our website
www.nuways-ag.com/research.

Contact for questions
Die Analyse oder weiterführende Informationen zu dieser können Sie hier downloaden: www.nuways-ag.com/research.
NuWays AG – Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
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Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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