FY24 sales increased by 0.5% yoy to € 330m carried by the continued execution of the company's strategic priorities, visible in a rise of order frequency of active subscribers, improved average order volume (+13.5% yoy), slowed customer churn but also the successful integration of Bistro MD. Note: The reported FY24 sales figures shows € 308m as Chefgood has been re-classified as "discontinued operations" as MSG signed an asset sale agreement at the end of Q4.
More importantly, MSG recorded a positive operating EBITDA for the fifth consecutive quarter with € 5.9m, € 9.2m for FY24 (vs. € - 3m in FY23). To a large extent, this is the result of the improved contribution margin (FY24 +3.1pp yoy to 34.7%) driven by the successful shift away from its former discount-heavy acquisition strategy but also positive implications from an improving product mix in the US as a result of the bistroMD acquisition and the shift towards an asset light operation in the US. Further, G&A and marketing expenses decreased by 8% for the FY.
Chefgood divestment. At the end of Q4, MSG decided to sell its subsidiary Chefgood, the group's Australian ready-to-heat brand, for AUD 11m/€ 6.3m, implying an EV/sales multiple of 0.3x. Worth highlighting, Chefgood operated at sub group gross margins (44.6% vs. 49.2%), making this a sensible move. The expected cash inflow (mainly in Q2) coupled with the cash on hand and the expected further operational improvements should be sufficient to bridge the gap to op. cash flow profitability, in our view.
FY25 guidance reflects further profitability focus. Management expects a single-digit % yoy sales decline while at the same time the contribution margin is expected to improve by >100bps and operating EBITDA to increase by 70-80% yoy (i.e. € 15.6-16.6m).
Strategic shift ongoing. MSG discontinued its brand Dinnerly (meal kit boxes for cost-conscious consumers) in Europe and migrated active customers to Marley Spoon, driving its single brand strategy, which offers simpler processes and synergies in regards to marketing. In Q2, the group plans to launch its ready-to-eat (RTE) offering in Europe. During the mid-term, management highlighted plans to offer additional food and nutrition solutions (e.g. juice packs, healthy snacks, special diet meals) under the Marley Spoon brand, ultimately increasing the value proposition for customers on the platform.
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ISIN: LU2380748603
