Thank you for standing by, and welcome to the Marley Spoon Q1 2022 Quarterly results Investor Conference Call. All participants are in a listen only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Fabian Siegel, Founder and CEO. Please go ahead. Yeah, thank you and good morning. Thanks for joining our investor call. My name is Fabian Siegel, Founder and CEO of Marley Spoon, and I have with me here today Jennifer Bernstein, our CFO. Now, yesterday we released our Q1 results of calendar year 2022. We're looking forward to presenting you those results today as well as providing you with an update on the business. At the end, as usual, we'll open the call to your questions. Now, we are pleased to announce that we had a good start into the year with solid continued growth. As always, the Q1 each year is an important quarter for us to invest into marketing and to set us up for reaching our full year goals. In Q1, the media environment is normally attractive, and customer behavior at the start of the year tends to be favorable for our business model. Customers are open to inviting a subscription service into their lives, with people returning from holidays and making New Year's resolutions. Consequently, we plan with large media budgets for this quarter, which have to be efficiently deployed at attractive acquisition costs in order to not just achieve scale, but scale at good unit economics. After finishing the quarter, we can say that our teams have fulfilled our plans, and we are satisfied with both the scale of acquisitions as well as the achieved acquisition costs. Overall, marketing as a percentage of net sales reached 23%, which will be the high mark for this calendar year. The successful acquisition environment, paired with good base behavior of our large back book of business, led to a new record. When we IPO'd Marley Spoon in 2018, we generated EUR 92 million net revenue for the year. In the Q1 this year, we exceeded EUR 100 million in net revenue in a single quarter for the first time. We generated EUR 103 million net revenue, a growth rate of 32% year-over-year, and a great affirmation of a continued growth story for Marley Spoon. As mentioned in our Q4 results call at the beginning of the year, this year's growth strategy is driven by acquiring new subscribers and at the same time launching additional revenue lines to drive ARPU. In March, we launched our Marley Spoon and Dinnerly market offering in select geographic areas across all of our regions, which subsequently will be rolled out to most areas we cover globally by the end of the second quarter. Our market offering currently features up to 50 SKUs across categories such as breakfast, desserts, pantry items or ready to heat convenient items. We expect the market offering to support our growth strategy this year, with meaningful sales contribution to materialize in the second half of the year. Q1 was also the Q1 of operational integration and collaboration between the Chefgood team and the rest of Marley Spoon. Both teams connected well, and we have started to learn from each other while aligning on best practices. One outcome of this collaboration is the launch of Chefgood meals in our market, offerings for Dinnerly and Marley Spoon in Australia. Operationally, we were quite exposed to some challenges. We experienced supply chain disruptions that impacted the availability or quality of individual ingredients in all regions which the teams needed to replace on short notice to minimize customer impact. In Australia, we faced unprecedented floodings which directly impacted customers deliveries and our food supply chains. Finally, across all regions, we experienced significant input cost inflation, a trend that continues. At the same time, the Q1 saw lots of improvements and execution success stories. For example, we experienced a strong U.S. winter storm season impacting logistics and our manufacturing facilities, which the teams were able to mitigate by flexibly reallocating production volume across our three sites in the U.S., minimizing customer and margin impact. All in all, our contribution margin was down 70 basis points compared to the prior year, landing at 27.3% and operating CM, defined as CM, excluding the impact of marketing vouchers and fixed costs such as expenses relating to site leases, reached 37.6% globally in Q1, down 40 basis points year-over-year. In fact, year-over-year operating CM in Europe was up by 190 basis points. The US was flat and only Australia took a significant hit, down almost 4 points, primarily driven by the temporary impact of the floodings. Going forward, we are expecting continued inflationary headwinds throughout the rest of the year and consequently have raised prices in April for all brands in all regions. Last year, we invested into people and processes to build the foundation for ongoing, continued future growth after doubling our business in 2020. This up-weighing of G&A has been primarily achieved, and we saw in Q1 G&A's percentage of net sales decline versus the prior quarter. While we expect continued increase in absolute G&A costs as we selectively invest into new capabilities and increase salaries in line with inflation, we also continue to refine our cost structure and continuously look for more efficient ways to operate so we can deliver more operating leverage. Overall, the planned increased investment into marketing led to an operating EBITDA loss of EUR 9.7 million, which is in line with our expectations and our plan for the year. With this, I would like to hand over to Jennifer, who will walk us through some key metrics, the regional snapshots, as well as the Q1 cash flow. Thanks, Fabian. We delivered a strong quarter of active subscriber growth, up 15% versus the PCP, driven especially by Australia, which grew subscribers 37%, and the US, which grew 9%. We also saw average order value increase up 13% in constant currency, driven by expanding our menu to give customers more choice, as well as the annualization of last year's price increase. Though orders per subscriber were slightly down versus the PCP, our overall revenue in the quarter, as Fabian mentioned, topped EUR 100 million and grew 32% year-over-year. Looking by region, we witnessed continued growth in Australia thanks to a strong acquisition environment, which, combined with the first time inclusion of revenue from the Chefgood acquisition, led to a 53% increase in net revenue versus the PCP. The growth was countered, however, by a very challenging operational environment, which saw supply chain issues leading to high levels of substitution or outright ingredient shortages, compounded by the unprecedented flooding that occurred in March. The two factors together led to a contribution margin that was well below normal levels for the region, landing at 28.4%, a 4-point drop versus the PCP. The margin contraction, as well as the upweighted investment in marketing that was planned for the quarter, led to an operating EBITDA loss of the region of EUR 2 million for the quarter. The region also began its first phase of the Chefgood integration, which included the business moving into its new fulfillment center in Keysborough at the end of March, and the inclusion of Chefgood's ready-to-heat meals and Marley Spoon meal kit boxes from this month. Turning to the US, we also saw strong growth in the quarter, with net revenue increasing 36% versus the PCP, or 27% in constant currency, thanks to an increase in subscriber base and order value. We were also able to offset inflationary headwinds to deliver a contribution margin that was in line with the PCP at 28.4%. Operational improvements in the region also played a key role in holding margin steady. Notably, this time last year, we spoke of the impacts of the unusual heavy ice storm that occurred in Texas in February 2021 that led to the cancellation of approximately 20,000 orders. This year, almost to the day, the region experienced a similar storm, but with minimal customer impact, a testament to the planning and process improvements in the region. The operating efficiency is also evident in the region's operating EBITDA performance, landing at breakeven despite the seasonally upweighted marketing spend. Finally, in the EU, we saw active subscriber growth of 3%, though a decline in orders per subscriber, ultimately leading to a decline in revenue of 8% versus the PCP. The EU in particular was lapping a very strong Q1 2021, which saw a resurgence of COVID at the time and therefore particularly low skip behavior and strong acquisition dynamics. Operationally, however, we see solid improvements in this region with contribution margin of 21.3%, up 1.4 points versus the PCP. Operating EBITDA was -EUR 2 million for the quarter, excluding headquarters costs. As Fabian mentioned, we continue to see significant cost inflation across multiple categories of input costs. As a consequence, we have announced pricing actions of around 5%-6% in all regions across both brands. This price increase is now live in the US and expected to be in the market in Australia and Europe in May. Turning now to cash. We ended the quarter with a cash balance of EUR 20 million. The movements in cash include outlays of seven and a half million euros for the first payment tranche of Chefgood in January, negative EUR 4 million in cash from operations, less than half our operating EBITDA landing, given our negative working capital dynamics. Approximately EUR 3 million in investments in PP&E and product development, and a net outflow of EUR 4 million in cash from financing activities. This includes costs associated with lease and interest payments, offset by the EUR 5 million equity capital raise executed in January 2022. Our financing activity also includes the settlement of a EUR 5 million short-term loan balance with Berliner Volksbank, with a drawing of a EUR 5 million account overdraft facility with the bank. We expect to renew this loan during the second quarter. Given our performance in the quarter and achievement of the targets we set in place, we have an amount of capital sufficient to fund our balance of year plan. With this, I would like to turn it back over to Fabian. Yeah. Thank you, Jennifer. Well, as mentioned earlier, we're satisfied with the start to the year. We said in the past that the priorities for this year are to, firstly, grow our business by increasing our subscriber base at attractive acquisition costs and to increase choice and personalization for our customers to further drive ARPU. Secondly, maintain our contribution margin and manage costs, and thirdly, to integrate Chefgood. In Q1, we have done important work and achieved significant milestones that will aid us in fulfilling those priorities. Arguably, Q1 is one of the hardest quarters to get right. It requires efficient deployment of the biggest marketing budget of the year while operating during difficult winter weather in the Northern Hemisphere. This year, we also experienced significant floodings in Australia. Having nevertheless achieved our target for the quarter increased our confidence, and we therefore affirm our guidance for the year. I would like to thank everyone at Marley Spoon for the great teamwork that delivered this good start into the year. Thank you for taking the time this morning. With that, I would like now to open the call to questions. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Owen Humphries from Canaccord Genuity. Please go ahead. Good day, team, and well done on the quarter. Looks like it's on plan. Just a couple of questions. One, are the price rises you guys are putting through in April and May, call it 6% across the group, is that only recouping the cost inflation or is there some margin benefit to come through from those price rises? Yeah. Look, we've given guidance that we expect to see our margins to be in line with last year margin, which we affirm. We always said there's two elements that we have to manage two margins. On the one hand side, continuously improve our operation performance and get efficiencies and savings. At the same time, we do believe we have pricing power. As consumers see prices to increase in supermarkets and across the whole grocery space, we do feel that consumers understand and follow if we go that direction. Therefore, in that line, expectations should be according to guidance, which is contribution margin should stay steady. Did that answer the question? Yep. Yep. Okay. Just on you know, looking at the guidance of -EUR 15 million versus -EUR 10 million for the quarter. You're kinda looking at around that EUR 1.5 million now run rate for the next nine months. I know there's a bit of seasonality in there, so it won't exactly be one and a half, one and a half, one and a half. Could you just maybe Fabian or Jennifer paint a picture for us? I know we're all looking at the companies as they pass the promised land to break even. Could you just talk through your expectations of how that will land from an EBITDA perspective into the second half? Yeah, absolutely. I mean, if you look at past years, it gives you maybe some understanding on the seasonality of the business. We are always taking advantage of the Q1 to acquire a lot of customers to grow the business. Therefore, we see most marketing spend, you know, the biggest budget in the Q1. If you basically take that cue, you'll see how operating EBITDA might develop over the rest of the year on a quarterly basis. There's also another element. I mean, we said when we started the year, the priority this year is not to maximize top line at good unit economics, it's to manage to the bottom line and growing at the same time as much as we can. Given that we've had a really good start to the year, think about the revenue that we are at this point in time, you could argue, you could actually, if you would just manage to bottom line and not the top line, we kind of already on that runway that we need from a top-line perspective. Therefore, in terms of future investment to marketing, you would expect continuously declining marketing spends in the following quarters, which again then gives you that bottom line benefit. I wouldn't expect the 1.5% linear, but you probably expect continued improvement throughout the year on the bottom line as we manage to our bottom line target throughout the year. Good one. Maybe last question from me. You've started this quarter, important quarter for you. As you say, subscribers up 9%. Your price rise is coming through this quarter, of course, 6%. The other aspect here is, you know, the focus on ARPU improvements with this, the new initiatives around value-added products. Let's say you got 50 on the platform now. I think some regions a bit higher. Can you talk through, if you fast-forward 12 months, what's the expectation for ARPU increases from that initiative? Yeah. I wouldn't put any guidance out there as this is new for us. We're experiencing and learning and trying to understand what are the right items and categories that customers love to see. Therefore, I wouldn't want to give specific amount or growth contribution from this part. I would argue it's definitely the ability to aid us in reaching our growth target. It's another lever that gives us the confidence to affirm guidance at this point in time. It's like we have multiple paths to get to where we wanna get this year and having market launch so quickly and in time gives us another lever to pull to make sure we hit our targets this year. That's why we said after this quarter, we have an increased confidence of achieving the goals for the year. Good one. Well done, guys, on the quarter. I'll step back. Thanks, Owen. Thank you. Your next question comes from Lashan Perera from Morgans Financial. Please go ahead. Hi, team. Nice work on the quarter. What is the plan to expand the offerings frequency? For example, when people need meals more frequently rather than waiting for the full week. Is there a plan to increase that to capture more of the market share? We are sending a box once a week to our customers. What we're trying to do is we're trying to capture as many meal opportunities that the household might have. Our customers tend to be couples or families. They tend to have a regular schedule, and cooking is already part of their lives. Especially as we see people also staying more at home during and after the pandemic, working from home is probably something more prevalent throughout our regions and therefore lunch opportunities or convenient options at lunchtime probably are also areas where we can solve our customers' problems. I would expect that our ambition is over the next year to capture more of these meal opportunities. Do we have to be in the household therefore more than once a week? Do you have to deliver more than once? I don't think so. I think that's the benefit of this model. You have a very capital efficient way, and also cost efficient way to deliver a box in your customer's home once a week. Now it's about leveraging this infrastructure cost, so to say, to solve as many problems as possible. I'm not sure that currently we would improve the experience of our customers by sending more often per week a box to our customers. It's about getting that box that we're sending anyway, getting that just right when it comes to the content. That's at least the current strategy and the expectations for this year. Thanks for that. Regarding marketplace, is there a plan to expand, you know, into a lot more categories, for example, to avoid people going to the grocery shop? Because as I look through the marketplace, at least here in Sydney, I see very, very limited items. For example, a lot of, you know, drinks items are not included. Even I couldn't even see Coke there. So what's the plan to expand that? Yeah. I mean, it's a good question and it really gets back to what is our vision and strategy for our brands, for Marley Spoon particularly. Our ambition is to build brands that solve consumer problems. They are direct-to-consumer brands that we manufacture to each customer specifically. Our model, therefore, allows us to have the supply chain where we just manufacture to order, and we have everything deliver just in time for manufacturing. That gives you these great cash cycles that we have with negative working capital, and it allows us to personalize the box that we send to our customer. We are not a supermarket and a retail store. We don't have 20,000 SKUs, nor do we expect or intend to compete with supermarket on that perspective. You would say, what's the incremental value add? What's the reason why we can do Coke better than Woolies? Therefore, it's really about leveraging that box that we send anyway, solve adjacent problems in a very personalized way, solve meal problems that you as a customer might have by having a more convenient eating option, not cooking. Ready-to-heat is an example here, or having something for lunch or something for snacks or for breakfast. It's really about solving some of these eating opportunities in a convenient way, but not start becoming a supermarket and starting to compete with Woolies or Coles on that. Therefore, I wouldn't rule out selling Coke. I wouldn't necessarily see this as an area where we have an unfair advantage, where we can provide a better experience to the customer. That's why probably Coke is something you won't see in the near or immediate future in our offering. The goal is not to build an online supermarket here. The goal is to leverage the box that we're sending to the customer. The customers love how we solve the problem of weeknight cooking for them. It's one thing they don't have to worry about anymore. They can do it in a personalized way, in a way free of waste, in a much more efficient way than any retail business or supermarket could do that. Leveraging that sunk cost, so to say, of incrementally solving adjacent problems, that's really the strategy around the market that we currently have. Got it. On the cash side of things, where do you guys see in the next two to three quarters? Because it looks like we are getting very close to, you know, running out of cash at EUR 20 million in the bank right now. Maybe, Jennifer, you wanna speak to our liquidity? Yeah, sure. I wouldn't characterize it as running out of cash. I would say that this year is a year that we're operating within our balance sheet capacity. We ended the quarter with EUR 20 million in cash. As you noted, of course, there's also a timing issue with respect to a EUR 5 million bank loan that was a short-term maturity we retired in Q1, but is renewable in Q2. So that will be some incremental capital. Really what the cash picture looks like is more a function of how we've planned the year and what we expect in terms of operating EBITDA losses and therefore subsequently cash from operations. As you saw in this quarter, we landed operating EBITDA at about negative between -nine and -10. Cash from operations was about half that. We tend to track better in operating cash terms than we do in operating EBITDA because of the negative working capital that we have. What we're seeing for the balance of the year is that Q1 is, let's say, the lowest or the highest level of operating EBITDA losses that we intend to sustain. That improves as we progress through the year. Subsequently, cash from operations should also improve. We've been very contained and disciplined in our CapEx spend for the year. Last year was a heavy CapEx investment period, very much focused on growth, building out new FCs, installing new manufacturing lines or picking lines rather. This year it's a much more scaled back CapEx program. We also have a debt facility that has a second tranche that has not yet been drawn. I would say we feel comfortable with the cash position. We have sufficient capital to do what we intend to do this year. We're not particularly concerned about it. Thanks. One last one for me, please. Regarding the price increases and in Europe, the energy price rises that are happening, is there impact for you guys in particular that you would have to raise prices again there? Or how is the situation over there? Yeah, I mean, we've seen increasing prices all over the world because we're seeing input cost inflation everywhere, and for various reasons and some are the same. We are confident that we can maintain the margins and maintain guidance of keeping margins this year in line with last year's margin. Currently we don't plan for another price rise this year. We have some forward-looking assessment included when we made the decision of how to execute the price rises and at what magnitude. Having said that, it's a very volatile environment. Nobody knows exactly what will happen throughout the rest of the year. What we've experienced the last 12 months was that if price increases in supermarket and other reference point that consumers have, they're not fazed when they see similar movements on our end. We've experienced it just as we in the US increased price a bit earlier, so we have a couple more weeks of data in there. To me, it looks like customers, like last year, fully understand and follow us through, and so we have that pricing power. That meaning if prices continue to accelerate throughout the year and consumers would experience more price increases in the supermarket, then they wouldn't be surprised that we probably would have to take another step. I think we'd be in a position to do so. We have the pricing power to do so. Currently we do not foresee this, and we haven't planned this. Thank you, guys. Nice working. Thank you. Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. We will pause momentarily to allow further questions to register. There are no further questions at this time. I'll now hand back to Mr. Siegel for closing remarks. Yeah. Thanks, everybody, for joining this morning. As mentioned at the beginning, we think we had a good start into the year. We reached the full height of the revenue that puts us comfortable for hitting our top-line targets and gives us now all the options of hitting then also the guided bottom line. Therefore, I think we after this quarter have increased confidence and therefore we're able to reaffirm guidance. We are going on a virtual next week, and I'll be looking forward to having many of you in a one-to-one or broker conversation there. Again, thanks for joining this morning and talk to you soon. That does conclude our conference for today. Thank you for participating. You may now disconnect.