Thank you for standing by, and welcome to the Marley Spoon AG Q4 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 one on your telephone keypad. I would now like to hand the conference over to Mr. Fabian Siegel, CEO. Please go ahead. Yeah, thank you and good afternoon. 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. Just earlier today, we released our fourth quarter and preliminary full year 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. We will be using a slide presentation, and throughout the call we'll refer to page numbers. At the end, as usual, we will open the line to your questions. Starting with slide three of our investor presentation, for the full year 2022, we were able to deliver on all metrics of our guidance despite the various headwinds that materialized through the year. We grew revenue by 24% to EUR 401 million for the full year as planned. Our growth was driven by a high amount of orders, higher average order value, and the benefits of consolidating our Chefgood acquisition in Australia, following our three-tiered growth strategy as laid out at the beginning of 2022. Turning to slide six. Let's start with customer acquisition. As you might recall, our 2022 plan was to focus on our investment in marketing on the first half of the year and sequentially reduce marketing spends each quarter. That means that our plan was to settle on a lower investment in marketing as a potential net revenue in the second half compared to the first half and also compared to the prior year's PCP. While in the last quarter of the prior year, we spent 19.6% of net revenue on marketing, this past quarter we spent less than half of that in marketing, or more specifically, about 9% of net revenue. Consequently, as planned, Q4 revenue grew only 5% year-on-year or was flat in constant currency, while active subscriber declined year-on-year. Now looking at our progress of average revenue per user. During the last year, our strategy to offer additional options to our customers paid off. We launched our Market offer in Q2 with up to 100 additional items such as snacks, lunches or breakfast options. In Q3, we launched Premium recipes, providing more exclusive meal options at a surcharge. Throughout the year, we increased our overall menu choice with our U.S. business reaching 100 weekly recipes as we enter 2023. There's more to come throughout the rest of this year. As a result, we were able to increase the average amount of meals we ship with every box, contributing to the fourth quarter to a 17% increase of average order value year-on-year. The other driver of our increased average order value was our pricing strategy throughout 2022. We decided to proactively take pricing in order to offset part of the food cost inflation experienced throughout the regions we operate in. As a result, over the past year, we experienced the pricing power our brands enjoy, allowing us to not only contribute to net revenue growth, but also to extend margin year-on-year. Moving on to slide seven. Throughout the last year, our investment in attracting new customers continued to yield attractive unit economics. This was partly driven by our performance marketing model that we have been building over the past years, which allowed us to successfully navigate an environment of changes in media costs and e-commerce conversion rates. As a result, we are able to acquire customers at flat acquisition costs year-on-year. Throughout last year, we expanded the share of revenue derived from our loyal customer segments, underscoring the predictability of our business model, which is driven by repeat purchases, as you can see on slide eight. Driven by long-term stable net revenue retention in the second half of 2022, around 82% of our net revenue was generated by customers who ordered 6x or more. That share of long-term repeat net revenue continues to increase over time and increased seven points compared to the PCP. Turning to slide nine. In the fourth quarter, we finished with a record Contribution Margin at 32.3%, which is up 130 basis points year-on-year. Q4 2022 Operating Contribution Margin, Operating CM, defined as CM excluding the impact of marketing vouchers and fixed costs such as expenses related to site leases, was up 40 basis points to 39.6% compared to the PCP. The Contribution Margin performance was driven by pricing, as earlier described, and strong operational improvements. Those improvements resulted in margin gains in the U.S., which reached a record Contribution Margin of 33.7% in Q4, which is up 420 basis points year-over-year. European margin performance also improved significantly in Q4, expanding 600 basis points quarter-over-quarter and returning closer to its prior year levels as we started executing our turnaround plan for the region. The company's planned sequential reduction in marketing spend throughout the year and the Contribution Margin expansion led to a record Operating EBITDA result that was significantly improved versus the prior year and the prior quarter, landing at a EUR 5 million profit, excluding one-time charges from severance payments and historical sales tax corrections in the U.S. This result exceeds the prior given guidance range. I would like to hand over to Jennifer, who will walk us through the regional snapshot as well as the Q4 cash flow. Thanks, Fabian. As you can see on slide 11, the U.S. saw an increase in net revenue for the quarter in both reported and constant currency at 13% and 2% respectively. This was achieved despite the planned reduction in marketing spend that led to a decline in active subscriber growth for the quarter of -2% versus the PCP. Initiatives such as the recently launched Premium recipes and expansion of our core meal kit recipes, and increasing improvement in attachment rates for Market add-ons have contributed to the top line growth, as did the pricing taking during the year. The improvement in average order value, combined with continued operational improvements, led to a strong margin quarter for the US, with Contribution Margin landing at 33.7% and Operating Contribution Margin at 40.5% in Q4. In fact, as has been discussed on previous calls, for the last 12-18 months, the U.S. had been working on initiatives to turn around and improve its margin performance, which culminated in the region's best margin quarter to date in Q4 and which represented a four-point improvement versus the PCP. The higher margin, combined with G&A cost discipline, led to an Operating EBITDA delivery of EUR 7 million in Q4 and nearly EUR 10 million improvement versus the PCP and an approximately EUR 22 million positive swing on a full year basis to EUR 12 million. Looking now at Australia on Slide 12, we saw a similar level of growth in the region as in the U.S. in constant currency terms, with 2% growth in Q4 versus the PCP, or 3% on a reported basis. Active subscribers were down 13% in Q4 versus the PCP, which outpaced the other regions. Australia was lapping 45% subscriber growth in Q4 2021, and in addition invested a significantly lower level of marketing spend this year versus the PCP. Despite the lower subscribers in the quarter, the region also benefited from ARPU generating activities, including Market add-ons and Premium recipes, along with pricing earlier in the year. Together, these initiatives, as well as a partial abatement of the supply chain issues the region saw throughout most of 2022, led to Contribution Margin and Operating Contribution Margin that were higher in Q4 than the previous three quarters. Q4 contribution margin was 33.3%, while operating contribution margin was 41.7%, nearly back to historical levels, but still a contraction versus the PCP due to the ongoing supply chain issues, inflation and integration of Chefgood. As a result of discipline around fixed costs and the improved margin throughout the year, Australia also had a profitable operating EBITDA in the quarter, delivering EUR 5 million, a EUR 3 million improvement over the PCP. Finally, Europe, as seen on Slide 13, continued to have subscriber and revenue softness in the quarter, but a significantly improved margin. Net revenue declined 14% in Q4 versus the PCP on account of the lower level of marketing spend. While in the EU, we also launched Premium recipes and continued to see improvement in Market attachment rates, this was not enough to offset softness in base behavior. We continue to see category softness on account of macroeconomic conditions, with the EU being most impacted by this among our three regions. Helping offset the revenue drop in the quarter was Contribution Margin in Q4 that landed 6 percentage points better than Q3, reaching 23.1%. Operating Contribution Margin landed at 31.5%, 3 points better than Q3. This is the result of our operational turnaround plan that while still work in progress, is starting to show early results and led to Q4 Operating EBITDA, excluding the cost of headquarters that was flat versus PCP at minus 1 million EUR. We continue to review the EU business, push for improvement in margin and implement a cost reduction program while countering skip behavior in the base business. To that end, as Fabian mentioned, we have just launched Super Saver meals in the EU along with in the U.S. On Slide 14, you can see trends in our marketing and fixed costs, with both coming down as a% of net revenue for the full year versus 2021. As previously mentioned, marketing costs were deliberately planned to be lower year-over-year and in fact were nearly at 2020 COVID levels while still delivering double-digit growth. The profile for the full year marketing spend was to be sequentially lower across the four quarters of the year, which again led to the reduction in active subscribers in Q4 versus the PCP. Significant focus on cost reduction throughout the year enabled us to shave 60 basis points off our full year spend as a% of net revenue versus the PCP despite cost inflation globally. The Q4 G&A spend at 22.2% of net revenue, one point higher than the PCP, was mainly due to higher amortization of intangible assets. In summary, looking at Slide 15, we believe we delivered a strong Q4 operationally, net revenue growth in two out of our three regions on a constant currency basis, despite significantly reduced marketing spend versus the PCP, expanded margins and our highest level of positive Operating EBITDA to date. Turning to Slide 16, I'd like to discuss our cash performance for the quarter and our net debt position at year-end. In Q4, we delivered operating cash at negative EUR 4.6 million, driven by seasonal working capital effects, including increased inventory levels due to stocking ahead of supplier shutdowns for the holidays. We also saw a lower level of deferred revenue versus the previous year and quarter due to the planned decrease in marketing spend. Cash from investing activities landed at negative EUR 3.4 million. This included a partial payment of an earn-out for the Chefgood acquisition that was planned for Q4, as well as investment in our digital platform. Capital expenditures on fixed assets were immaterial and remain one of the levers we can pull to manage within our balance sheet capacity. Further Chefgood earn-out payments are foreseen in 2023, including the balance of the Q4 2022 payment, which was postponed to Q1 of this year. Cash from financing activities was a positive EUR 5.5 million, with a nearly EUR 11 million from our capital raise at the end of 2022 offsetting our lease and interest payments. We also received proceeds of EUR 0.9 million in asset financing from National Australia Bank while reducing remaining borrowings by EUR 1.3 million. Our EUR 5 million money market loan with Berliner Volksbank was due to mature tomorrow, but has been extended by one month while we renegotiate the renewal of this facility. This outcome leaves us with a cash balance at the year-end of EUR 19 million, which net of the proceeds of the capital raise, implies a cash burn of approximately EUR 10 million in the second half of 2022. That, combined with a slight reduction in total borrowing, leads to a net debt position of approximately EUR 60 million at the end of the year. With this, I would like to turn it back over to Fabian. Yes, thanks, Jennifer. To quickly recap the past year, as summarized on slide 18, we continue to grow our business as planned. Our initiatives to grow average revenue per user, which started to materialize in the second half, has been successful and there's more to come. We have been able to demonstrate pricing power and become more adept in rolling out price increases across various customer groups, brands and regions. We kept Contribution Margins stable with a higher exit rate in the fourth quarter. As we brought marketing as a% of net revenue down and held G&A flat in an inflation environment, we were able to materially improve our bottom line, leading to an Operating EBITDA profitable quarter at the end of the year. We were able to achieve this performance while managing within a tight balance sheet. Looking forward, our strategy to 2023 is highlighted on page 19. Our plan is to continue to improve and extend the service we offer to our customers, attract new customers at attractive unit economics, continue to invest in our people, building a strong company culture by extending margins, managing cost discipline, and operating within our balance sheet capacity. We are cautiously optimistic for the new year. The start of the year was soft compared to previous years, especially in the U.S. and Europe. The economic outlook is uncertain and consumer confidence is low. We expect more raw material and wage rate inflation paired with higher interest rates. We continue to see adverse impacts from global warming driven by extreme weather events across the regions we operate. Despite that, we believe we will improve our financial performance year-over-year. We aim to achieve this by adapting our products to the demands of the current times. We will continue to increase choice and personalization as it tends to drive average revenue per user to go up. We will do this by leveraging the technology that we've built over the past years. In order to react to tighter budgets, we are emphasizing the benefits of cost control for our customers' weekly dinner budgets that meal kits facilitate compared to supermarkets. At the same time, we have launched Super Saver recipes both in the U.S. and in Europe, allowing customers to save money within their weekly Marley Spoon box. We'll continue to leverage the pricing power and our multi-brand portfolio to aid our margin expansion while meeting various consumer demands. Specifically, we guide to the following full year 2023 financial profile as detailed on slide 20. We expect single-digit growth in constant currency for the full year 2023 compared to 2022. We expect an expansion of our contribution margin towards a range of 30%-32%. We expect positive operating EBITDA for the full year. This improved profitability year-over-year will be driven by continued growth at expanded margin with a disciplined approach towards marketing investment and G&A costs. I'd like to thank everybody at Marley Spoon for the great teamwork that delivered an on-plan performance for 2022, and that is already in full speed preparing for the challenges that this year might present. Thank you for taking the time this afternoon. With that, I would like 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 speaker phone, please pick up the handset to ask your question. Your first question comes from Owen Humphries from Canaccord. Please go ahead. Thanks, Jennifer. Thanks, Fabian. Quick question. Just can you guys just highlight what the Super Saver product is that you just made a note? Yeah, absolutely. We launched beginning of the year in the US, the option within Marley Spoon to choose recipes that are cheaper than the average price you normally would get, or your standard price. Same for Europe. These recipes allow you to save between EUR 0.50 and EUR 1 per recipe per portion. From a margin perspective, they still have the same margin profile. They tend to be simpler recipes, easier recipes that have the same food amount. It's just a small budget for those customers that want to have the option to flex down on the weekly spends. Move on. I know the last two years have seen probably your inflation in the COGS or the price of raw materials over food. Have you seen any normalization in some of your regions on this front? I know that's not been the case in Australia, maybe when it does revert back to more normal times, do you think you guys will keep the margin? Well, we were able to extend the margins despite the food cost inflation. Indeed the question is, are prices coming down? It's really hard to foresee. My bet, we are more conservative. We don't plan for that. We had floodings in California just recently, which already probably will make the planting season a bit harder, which might go through earlier this year. There continue to be quite some uncertainty across the regions on general supply chains and food costs. Look, if food prices were to retreat, this might be another margin tailwind, but we haven't planned for that. For sure. I guess the question around margins and evaluation around today is just around the balance sheet and the cash generation. Just walking, talking me through, does Operating EBITDA positive mean kind of operating cash flow positive and does it mean free cash flow positive? Jennifer, you wanna take that question? I can take that. Yeah, I can take that one too, Owen. The guidance towards Operating EBITDA positive for the year is indeed an improvement over this year. We're looking at focusing very hard on, again, balancing top line and bottom line so that we have a meaningful improvement in Operating EBITDA. As we improve Operating EBITDA, we do expect operating cash to also flow through positively, particularly in the balance of the year in half two. We're not guiding to free cash flow yet, or we don't typically guide to free cash flow. I wouldn't expect that to flow through positively in free cash flow though. Certainly on operating cash flow as we improve the profitability profile, that should flow through. You know, we feel. Yeah. Sorry, I was just gonna add, you know, as you saw in our, you know, maybe you've seen in the Q4, CapEx, you know, we do have levers to pull still. We had very minimal CapEx spend in Q4 for the full year, similar, not a tremendous amount of CapEx versus the previous year, and we'll maintain a similar, if not better, profile for 2023. Gotcha. I guess then the only factor there is interest because of the positive growth in capital and if the CapEx is coming down this year. Okay. The delta then is in interest. Okay. A question around Europe. 'Cause if the group's gonna be Operating EBITDA positive, is the view that the European business will end the year or will have an Operating EBITDA positive view this year? It's hard to say, and I would be, I would say it's more likely that we might have another slight miss on Operating EBITDA profitability for the full year. It will be a meaningful improvement year-over-year, at this it really depends on the consumer. The consumer in Europe is probably softer or the consumer behavior in Europe is softer compared to the other three regions. That's kind of the key lever. Ceteris paribus, if the consumer behavior in Europe would be on par in 2023 on par with 2022, I think we would be seeing towards a full year profitability in Europe, it's hard to predict, and we are cautious in regards to the European consumer behavior. Therefore, I would rather think, it's going to be not profitable on a full year basis, but very close to, with some profitable quarters. A meaningful improvement year-over-year so that the European region is actively working not on an expanding margin and expanding the product portfolio to be relevant for the current consumer outlook. Also we are implementing a cost reduction program to make sure that the cost hit is aligned with the overall size of the business. It's going to be an improvement year-over-year, but the question whether the European region standalone will be profitable for the full year is really depending a little bit on the customer sentiment and customer behavior. Good one. Well done on beating a record profitability quarter. Thanks, Owen. Thank you. Once again, if you wish to ask a question, please press star one on your phone and wait for your name to be announced. That's star one to ask a question. We'll now pause a moment to allow for any final questions to register. Thank you. Your next question comes from Emma Wyndham-Smith from Wilsons. Please go ahead. Congratulations on the result, Fabian and Jennifer. Just following on Europe, I was wondering if you could provide a bit more color on sort of what's actually been done operationally, as part of the turnaround plan in the fourth quarter and what we can expect to see, next year as well? Yeah, absolutely. I mean, you did see a big step forward in Contribution Margin between Q3 and Q4. On the one hand side, it is due to the execution of our operations playbook, which is well used in both the U.S. and Australia and leads to strong margins. We changed a lot of, or we onboarded a lot of team members over the summer, operational team members, a new head of production, a new head of logistics. Those team members were able to drive the teams forward using our playbook that yielded significant improvements in picking costs, in logistics performance. So this is one part of flowing through flow through benefits. Also the pricing strategy for Europe was not as proactive as in the other regions. As we saw inflation hitting us, we proactively adjusted pricing, always trying to be one step ahead of inflation, not behind inflation. We weren't successful doing that in Europe. We did increase pricing finally end of November. While the full benefits of that price increase are not yet reflected in the fourth quarter, you also see part of that pricing strategy flow through into the margins. This is one part of the turnaround strategy is getting to a margin profile that's healthy, that allows us to generate our attractive unit economics that we always go for. As As you know, six months pay back, three weeks return. At the same time, we have been looking at the cost structure. There's opportunities to get more efficient, to automate more, to operate leaner. The cost structure is also more, a better relationship to the overall size of the business. Yeah. Okay, that makes sense. Thanks, Fabian. Just on, first quarter 2023, so post-COVID, you know, in the results, you sort of talked about seeing a lot of volatility in customer behavior, particularly around extended holiday periods. Along those lines, I'm just wondering if you can provide any color on what you're seeing in first quarter so far. Yeah, absolutely. I mean, we saw also in the end of the fourth quarter, again, a very extended travel behavior over the holidays, more than the prior year. The 2022 holiday travel season was much more pronounced than the 2021 holiday travel season, which then leads to higher skip rates as customers aren't at home. As we entered the first quarter, we saw also a softness in consumer frequency or purchase frequency compared to the prior years, most pronounced in Europe and yeah, in the U.S., lesser in Australia. Mm-hmm. That's what makes us cautious for this year. We also saw conversion rates slightly lower, which is a continuation of the trend we saw already starting at the end of last year, e-commerce conversion rates. We were somewhat offset by a lower cost environment in the media, in the media area. As you could see last year, despite volatility both on conversion rates and media costs, we were still able to acquire customers at the right price. We think this will, we will be able to do that again this year, that we are able to get the price we need to achieve our attractive unit economics. We see in general that consumer behavior is changing year-over-year more than maybe in the past. Yeah, that makes sense. Thanks for your time, Fabian. Thanks, Emma. Thank you. Your next question comes from Weimin Xie from MX Capital. Please go ahead. Hi. Hi, Jennifer and Fabian. You guys doing well despite the tough environment. You were definitely doing tough and the, you know, recession seems to be, and it seems like Australia and the U.S. are going into recession and it's like in the near future. I'm just curious about the financing. You seem to always be able to pull, wrap it off the head and get someone to fund you. Just understand how much patience do the debt financier have, because you basically have no growth now since people are gonna get work and still cook up your debt. Just maybe run through, like, how much time does the company have to actually make sure it's got a lot of cash flow generation to make sure the debt financier are happy to just keep funding the business? Yeah. Thanks for the question, Weimin. So look, I think the business has been growing over the past years, quite fast. It doubled in, during COVID. We grew 27% and 24% respectively in the years 2021 and 2022. This year indeed might be more of a growth reader. So we're guiding to single-digit growth this year. That's because we do believe in a recession, you have to be conservative in regards to consumer behavior. I would say after having grown this business now for nine years, every year quite significantly, taking a somewhat a smaller step forward in a recession year is probably not a bad outcome. While at the same time, we do improve our bottom line profitability. I think that is also then the connection to the relationship that we have with our backers, which both on the equity and on the debt side, I think we have very supportive partners also on the lending side, and we continuously communicate and talk to our lenders. They do see the continued improvement of the business, meaning continued growth, but more importantly also continued improvement on the bottom line performance. They're very supportive of the business. At this point in time, we're very confident in the support we have from our backers as the business is now transitioning into full year Operating EBITDA profitability, which is a big milestone for us. You could imagine doing such a transition within an environment of headwinds. You've mentioned a potential recession environment, I think speaks for the strength of the business. You could argue that, as then economies pick up, there's more tailwinds that will further develop the profitability of the business. We are confident in the support we have from the various sources of backers, be it both equity and debt. I guess maybe it's easier to rephrase question to answer. What are the key covenants for the financing piece that could trigger, say, an immediate repayment or something that is a bit harder to handle? Like, what would be the key covenants? We don't disclose covenants, but in general it's very light covenant. There's a certain outlook that we continuously provide in terms of the cash balance. Other than that, there's no performance covenants, P&L covenants in our relationship with our lender. Okay, thank you. Thank you. Your next question comes from Peter Talbot from Canaccord. Please go ahead. Fabian and Jennifer, congrats on these results. That's terrific. In the past, we've been educated that your seasonality at the bottom line is pretty heavily impacted by the discretionary expenditure in marketing. Marketing is gonna be moderated, will the seasonality moderate? You've given us a full year projection for Operating EBITDA. Should we expect less volatility quarter by quarter in 2023? Well, I wouldn't call it volatility. Volatility is something that's out of your control. What we normally tend to do is we tend to invest into customer acquisition when it's most effective, so most profitable. Profitable meaning your paybacks are the fastest and the returns are the highest because of user behavior and acquisition costs being low and user behavior being strong or retention being strong as customers build good habits. That tends to be the first quarter. I think that's what you're alluding to. The first quarter is the best quarter for us to acquire customers. It has a positive impact on our full year operating EBITDA performance. If you acquire the right amount of customers at the right profitability in Q1, it is accretive to fully Operating EBITDA, given that we pay back after 6 months. Therefore, we do also this year expect to invest more in the first quarter than in any other quarter. We therefore also expect that we'll be not Operating EBITDA profitable in the first quarter. You would then expect that as in prior years, that Operating EBITDA is much better than all the other quarters. Given that we've guided to a full year profitable Operating EBITDA result, whatever losses might occur in the first quarter will be offset by the profits in the remainder of the year. Yeah. Got you. That's helpful. Yep. Thanks. 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. Thank you. Your next question comes from Bastian Bursch, Private Investor. Please go ahead. Hi. Regarding Chefgood, you are now one year in after the acquisition. How do you see that business? What did you learn? Can you talk a little bit about the growth of the Australian business? Is it faster than your Marley Spoon Dinnerly business or, is it quite in line with that? Yeah, how do you see the integration going? Do you plan on integrating that in the Marley Spoon Dinnerly offering or, yeah, how do you see that business going forward? Yeah. Thanks for the question. Overall, we are happy with the Chefgood integration. It was a good contributor to growth for the region in the past year. We have integrated the offering also within our Marley Spoon and Dinnerly boxes. We offer ready-to-heat options in the Market, which allows customers to choose for lunch or for an evening when they don't wanna cook, and it's been taking up quite successfully. There's some synergies here. The business as a standalone is quite attractive. It has attractive unit economics. When we acquired the business, we started our integration first on the marketing side. The hypothesis was that our performance marketing model should allow us to acquire customers at greater scale and at lower acquisition costs. Both was, we were able to do both. As of the summer last year, we had integrated the teams. Since then we are able to grow the business at better acquisition costs than before the acquisition. We saw these synergies really flowing through. That led to the brand growing faster than the other two brands or the meal-kit brands in Australia. Overall, quite successful. The integration isn't fully done yet. There is integration, especially on the supply chain side, that is still materializing. As that materializes, we do expect also margin benefits to flow through for this piece of our business. Net-net, we are very happy with the acquisition. It fits very well strategically to the way we operate. It is a good driver of growth at good unit economics, and there'll be more opportunity to drive margin by better integration that is starting to flow through, probably in the first half this year. Yeah. Thanks for that. Do you plan any addition of ready to eat for your U.S. or Europe segment? Is this now only Australia and you don't have any plans to extend that? We are offering ready-to-eat options in our markets for Dinnerly and Marley Spoon in the U.S. This is provided via a third party partner that is providing us those meals. We don't produce them ourselves. We develop the recipes. We have a partnership that allows us to provide such a service, but not as a standalone brand. We do see the opportunity to also serve customers with a pure standalone brand around ready to eat. We see these customer demographic are slightly different. They tend to be younger. They tend to be skewed towards more single households, whereas the meal-kit business, Marley Spoon and Dinnerly's, are skewed more towards couples and families. Again, based on the good unit economics in Australia, we think there's an opportunity to offer such a service also in the U.S. As to the timing, we don't rush it. It's not the focus this year to optimize for top line growth, but more for bottom line performance. Keeping therefore our balance sheet constraints in mind and our focus on the full year Operating EBITDA landing in 23, we will have to basically adjust the timing of such initiatives. At this point in time, we can't guide to potential next steps here in the U.S. Okay. Thank you. One last little question. In the presentation you mentioned, the extension of the interest-only period for your Runway debt facility. Can you give any more details on that? How long it's extended? I think it was mid 2023 before. Is it now December or end of 2023? Jennifer, you wanna take this? It is indeed extended as you've read. That is now extended until January of, well, a year from now, basically. We do have the possibility as well of extending for a further six months upon reaching certain milestones. That's something that we'll address with our lender as it gets closer to that time. We basically continue status quo as we have been since since the facility was put in place. Okay, thank you. Good luck this year. Thank you. Thanks. Thank you. Your next question comes from Todd Cole, Private Investor. Please go ahead. Oh, good day, Fabian. Just another quick question about the balance sheet. That BVB loan, you just said that it's been, it's still in negotiation being extended for another month. I guess worst case scenario, it doesn't get extended. How's that gonna impact your short-term plans with Q1 spend and things like that? We've been working with BVB over the past, I would say five years. We've got an LOI, and by them that indicates that they are indeed interested to renew. At this point in time, we just have to figure out the paperwork. Having said that, as long as the paperwork isn't done, it's not done. That's why your question certainly is prudent. We have options to manage within our balance sheet capacity, be it as Jennifer mentioned earlier, our CapEx plans, the cost structure that we operate very tightly. We have the capability to pre-pay that debt, but we currently plan and expect that debt gets renewed. We are in the process of finalizing the paperwork. That's why the bank renewed by a month, so we can get a proper, new paperwork in place. Perfect. Just another question? I guess, you know, you're dealing with, you know, inflationary environment and weakening consumer demand. Eventually, assuming you get over the hill of that, you know, how do you foresee in the future, you know, de-leveraging the balance sheet to a more reasonable level to help with profitability and... Yeah, absolutely. I mean, we do have the addition to deleverage our balance sheet as the business transitions into profitability, positive operating cash, and then also moves towards positive free cash. There's two, I think, avenues. On the one hand side, by the time the interest-only period expires, which is after another option of renewal middle of next year, the business would be in the position to start paying down debt, which is probably the prudent thing to do at that point in time. Also the there is the option to refinance the debt. Our pre-payment penalty for the debt is quite low. Given that we have a relatively wide spread of 850 basis points above LIBOR, it's not a cheap debt. We signed this debt deal when the company was significantly more loss-making, which explains the wider spread and the nature of the debt provider, which is more a venture debt provider that is willing to take higher risks for higher returns. I would expect that as the business transitions towards profitability, we should be in a position to refinance with some more adequately priced debt, which then would allow us to kind of paying interest, actually starting paying interest plus principal and paying a proper annuity. That's probably the more the option I'd be more actively steering towards to find as the business transitions towards profitability. A partner that is supporting us for the next step of our growth journey, where the company is significantly more profitable than two years ago when we entered into this agreement. Perfect. One more if I can. Just with the operational improvements, you know, you seem to be doing more, making more money, with less subscribers and more revenue. Your guide to those operational improvements, which is there's further go and more margin expansion. I guess, can you just help us understand, I guess, what you're doing differently that you haven't done before that's leading to these good operational results? Um, we've- Okay. I mean, I think there's two. Yeah, Jennifer, maybe you go ahead. Sorry. I was gonna say I could take that. Yeah, sorry to jump in, but I think there's just a lot of I wouldn't say low-hanging fruit necessarily because we've done some of that, but there's still just a lot of room for improvement across all product lines, and we see that in most regions. It ranges from, you know, our procurement team being able to continue to work on obtaining favorable pricing to offset inflation. As we get bigger, we do get more scale where we can negotiate differently, but equally we just have we're improving our talent. I mean, some of the investments that we made in the, in the last, I would say 18 months to two years, have been to bring in new talent that just are helping us more strategically, you know, doing more seasonal forecasting with food ingredients, looking at new logistics, low-cost partners. We're constantly evolving the carriers that we're partnering with to try to improve the rates that we're getting. Things like dynamic box, which is looking at the optimal box size and installation amounts, so we can make packaging costs cheaper. In turn, if we use reduced boxes or reduced box sizes, then we also get truck optimization. It really is, you know, the examples that I mentioned really are cutting across all three regions. There's lots of opportunity and equally we've centralized a lot of what we're doing. There's either cross-sharing across the regions, best practice sharing, or we're trying to, you know, we're trying to do things, for example, with our biggest supplier of picking line equipment, managing that relationship on a global level so that we can try to get productivity across all three regions at the same time. I would say it's a handful of things. It's not any single specific initiative. It's just a lot of hard work on the ground in the FCs, but by the teams, across procurement operations, et cetera. Maybe if I can add 1 more high level view to that. This is still a very young business, maybe 9 years old. I would say there's so many things that we just didn't have time to optimize on. We see lots of opportunity that you could do it differently and more refined, and we learn constantly how to run this business better. We're still also a very small business at EUR 400 million in sales. It's still in the food space, relatively small. I would say the overall level of maturity is still low, and there's tons of opportunities. Now, the past last 2 years, the teams just were so distracted by all the changes in the external environment that in the first years of the company was relatively stable. Now, the last two years were very in flux. I think it distracted us also from doing many of those next steps that Jennifer just mentioned. I would say there's a long list of projects that we all know would drive margin. We know exactly what needs to be done. I mean, know exactly how it will be done. We just didn't get around to do it yet, so because the business is still young in its evolution. Therefore, we have a high degree of confidence that the margin potential is still there to be expanded over the next years. We just have to react to the external impact to the business that sometimes sidetrack initiatives because they're more imminent, be it inflation, be it disruptions, be it doubling the growth in 2020. There's a couple of things that always came in between that were in the way of doing this next logical step that we are going to do. That kind of is maybe also a more high-level view towards margin for the business. Yeah. Great. Thanks, again. There's no more Chefgood earn-outs are there? Is that the last one or is there more? Whatever you wanna. No, it's not the last one. Go ahead. Yeah, we've got, as I said in my remarks, we've got a partial payment of the Q4 payment that is coming due in this quarter. Equally, I think in May and September, there are also some earn-outs. If you I think it's spelled out in the release from last year when we actually announced the acquisition. There's still some earn-outs to come this year. Okay, cool. Thank you. We have a follow-up question from Peter Talbot from Canaccord. Please go ahead. Again, thank you. One more. One of the very impressive figures here is the growth in ARPU, and I'm reading from the deck that that's come from more meals per order. Could you comment, please, on the add-on items delivery, whether you, whether you consider that a success so far, any trends through the year as it's been offered and added, and whether you think that can be a really major significant contributor to ARPU going forward? Yeah, absolutely. It was the first initiative we launched to offer something beyond the core menu that we offer our customers, and which in itself we keep expanding. As we see, as we give more options in our core menu, we also increase orders per box on average, and we increase average order value. The basket was the first completely new offering which we launched in the second quarter. It's been well accepted, and it's now a fully integrated piece of our business, how we think about our business and grow our business. We are not done yet in terms of optimizing attachments to our boxes. There'll be improvements in offering to our customers based on the data that we gather about the taste profiles relevant items. Right now, this is not very well targeted. There's opportunities to improve the targeting, improve the relevance, and therefore increase attachment rates and basket size should benefit from these activities also throughout 2023. There are more things to come. We mentioned the Premium recipes which we launched in the third quarter, which allows you to pick a recipe at a $1, $2, $4 surcharge, but that offers something truly in addition. Especially the organic items or the premium cuts. We see good take up from that as well, driving also basket size and revenue. There's more coming. In fact, by the end of the first quarter, you'll also see customers being able to customize their recipes themselves and switching maybe a conventional chicken breast to an organic chicken breast or switching the proteins. So there is a good filled pipeline with product innovation waiting to be delivered throughout this year. We expect that all of those will aid us also in increasing average order value and ARPU. Thanks again. Thanks. Thank you. There are no further questions at this time. I'll now hand back to Mr. Siegel for closing remarks. Yes, thanks everybody for joining today. I just want to quickly also point towards the virtual that we are on this week. There are broker calls in the next two days and also one-on-ones. If you haven't reached out yet and would like to do a one-on-one call, please, you see the email address at the end of our investor deck or join some of the broker calls, and we're looking forward to more conversations over the following weeks. Thanks again for joining. Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.