Marley Spoon Group SE
Marley Spoon Group SE reports Q1 2024 Results

MARLEY SPOON GROUP REPORTS POSITIVE OPERATING EBITDA IN Q1 2024 WITH €81M IN NET REVENUE

(“Marley Spoon” or the “Company”), a leading global subscription – based meal kit provider, reported its results for the quarter ending 31 March 2024 (“Q1 2024”).

Highlights:

• Q1 2024 net revenue of €80.7m, up nearly 10% quarter – over – quarter;
•  Strong margin expansion with Contribution Margin in Q1 2024 of 34.4%, up 335 bps vs. the previous corresponding period;
• Q1 2024 Operating EBITDA of €0.2m, an improvement of €6.6m vs. the prior year;
• Operating Cash Flow of €2.9m in Q1 2024 and quarter – end cash balance of €26.6m;
• Smooth transition to asset – light model in the US.

Marley Spoon’s CEO Fabian Siegel, commented: “ After a challenging 2023, 2024 started with a stabilization of our customer base, resulting in quarter – over – quarter net revenue growth. This improvement on our revenue dynamic is a result of adjustments to our marketing strategy made at the end of Q3 2023, including greater focus on higher quality customer cohorts and lower discounts. It is great to see the benefits of these adjustments, such as improved customer retention, materializing. Noticeably, consumer se ntiment also stabilized.

At the same time, the team worked hard on executing our strategic shift to an asset – light model for our US business which is expected to provide us with a scalable platform at an improved cost structure. The transition has been smooth with our meal – kit business havin g been transferred in early February. Since then, customer satisfaction has remained high, and the first cost savings have been realized. At the same time, our US team has begun integrating our newly acquired bistroMD operations. The combination of strong operational execution globally and our lower – discount marketing strategy led to a record contribution margin for the quarter, significantly up year – on – year.

The higher contribution margin paired with cost reductions as a result of last year’s restructuring programs led to the first ever profitable first quarter on an Operating EBITDA level, despite the seasonally higher marketing investments. Overall, we had a good start to the year with heavy lifting on the execution of two transformative strategic transactions and year – over – year improved financial performance. I want to thank everybody at Marley Spoon for their teamwork that allowed us to deliver a good start into the year.”

Q1 2024 Business Update

Q1 2024 net revenue landed at €80.7m, a decline of 9.5% in constant currency year – over – year, but up 10% Q – o – Q (3% excluding bistroMD). The improved revenue trajectory is driven by an adjusted customer acquisition strategy focusing on higher quality custome r cohorts at lower discounts, implemented at the end of Q3 2023. Also, the company is experiencing a stabilization of consumer sentiment, leading to improvements in order frequency. A 14% (in constant currency) increase Y – o – Y in AOV was primarily driven by customers opting for higher – priced recipes and incremental Market items. Pricing also accounted for the increase in AOV, though to a lower degree than in the previous corresponding period (PCP).

The improved marketing performance allowed the Company to reduce its marketing investments in Q1 2024 to 17.1% of net revenue compared to 22.5% of net revenue in the PCP.

Marley Spoon achieved strong Contribution Margin (CM) expansion in the quarter, driven by its focus on continuous improvement and cost management, as well as the lower level of marketing discounts given. As a result, Q1 2024 CM was up 335 bps vs. the PCP to 34.4%, the highest margin on record for the Company. Q1 2024 Operating Contribution Margin (“Operating CM”), defined as CM excluding the impacts of marketing vouchers and fixed costs such as expenses relating to site leases, was lower at 40.9% compared to the PCP of 43.7%. This was driven by a conscious decision to provide more value to customers and re – invest in recipe ingredients.

During Q1 the Company transitioned to an asset – light manufacturing and fulfillment model and effectively moved all US meal – kit operations to its partner FreshRealm. The transition succeeded smoothly with customer satisfaction remaining high while first cos t savings in the logistics area were achieved.

G&A decreased approximately 3% vs. the PCP, excluding the impact of one – off costs in connection with the strategic transactions in Q1 and follow – on costs of the restructuring in 2023. This is a result of the Company’s financial discipline and continued cos t reduction program which is expected to yield incremental process optimizations and savings through automation and business service centralization over the coming quarters.

The margin improvement and G&A savings led to Marley Spoon’s first ever positive Q1 Operating EBITDA of €0.2m, an improvement of €6.6m vs. the PCP.


RECONFIRMING 2024 GUIDANCE

Marley Spoon CFO, Jennifer Bernstein, commented, “We are pleased with how we began the year, stabilizing or improving on our key revenue metrics, delivering our strongest contribution margin on record and continuing to operate with a leaner cost structure as a result of the cost reduction programs we executed in 2023. This led to the Company’s first profitable Q1 on record on an Operating EBITDA level despite the seasonally higher investment in marketing. Our financial performance in Q1 allows us to reconfi rm our guidance for the full year 2024.”

2024 Guidance:

• Single – digit net revenue growth vs. FY 2023 in constant currency
• Contribution Margin in line with the prior year
• Full – year mid – single – digit positive Operating EBITDA

About Marley Spoon

Marley Spoon Group SE, is a global direct – to – consumer (DTC) meal – kit company. Our Vision is to “Build a better everyday, just for you, just right”. We started Marley Spoon in 2014 to help our customers to cook for their families and deal with their busy li ves. We also felt there should be a more sustainable way to cook at home, reducing food waste that traditional supermarket supply chains generate. Marley Spoon currently operates various brands in three regions: Australia, the United States, and Europe (Au stria, Belgium, Germany, and the Netherlands). Our meal – kit brands, Marley Spoon, Martha Stewart & Marley Spoon, and Dinnerly, bring pre – portioned fresh ingredients with tasty and simple recipes and other eating solutions reliably to our customers every we ek. Our customers just decide what to eat, when to eat, and

leave behind the hassle of grocery shopping. Chefgood and bistroMD are our direct – to – consumer ready – to – heat (RTH) services that offer tasty, high – quality, healthy, and nutritious RTH meals and eating solutions for our wellness and health – focused customers.

Disclaimer

This announcement constitutes neither an offer to sell nor a solicitation to buy securities. Certain statements contained in this release may constitute “forward – looking statements” that involve a number of risks and uncertainties. Forward – looking statemen ts are generally identifiable by the use of the words “may”, “will”, “should”, “plan”, “expect”, “anticipate”, “estimate”, “believe”, “intend”, “project”, “goal” or “target” or the negative of these words or other variations on these words or comparable ter minology. Forward – looking statements are based on assumptions, forecasts, estimates, projections, opinions or plans that are inherently subject to significant risks, as well as uncertainties and contingencies that are subject to change. No representation is made or will be made by Marley Spoon Group SE or any of their respective affiliates that any forward – looking statement will be achieved or will prove to be correct. The actual future business, financial position, results of operations and prospects may dif fer materially from those projected or forecast in the forward – looking statements. Neither Marley Spoon Group SE nor any of their respective affiliates assume any obligation to update, and do not expect to publicly update, or publicly revise, any forward – l ooking statements or other information contained in this release, whether as a result of new information, future events or otherwise, except as otherwise required by law.