Original-Research: Marley Spoon Group SE - from NuWays AG Classification of NuWays AG to Marley Spoon Group SE Company Name: Marley Spoon Group SE ISIN: LU2380748603 Reason for the research: Update Recommendation: Kaufen from: 02.05.2024 Target price: EUR 7.00 Target price on sight of: 12 Monaten Last rating change: Analyst: Mark Schüssler Healthy Q1 results / / FY'24 guidance confirmed; chg.

Original-Research: Marley Spoon Group SE - from NuWays AG

Classification of NuWays AG to Marley Spoon Group SE

Company Name: Marley Spoon Group SE
ISIN: LU2380748603

Reason for the research: Update
Recommendation: Kaufen
from: 02.05.2024
Target price: EUR 7.00
Target price on sight of: 12 Monaten
Last rating change: 
Analyst: Mark Schüssler

Healthy Q1 results // FY'24 guidance confirmed; chg.
 
On Tuesday, Marley Spoon Group ('MSG') released healthy Q1'24 and final
FY'23 consolidated results that were in line with expectations. Q1'24 sales
came in at EUR 80.7m or -12% yoy (excluding bistroMD c. EUR 76m; eNuW: EUR
75.6m). Cautious consumer behavior in the meal-kit segment continued to
weigh on sales as the number of active subscribers fell 23% yoy to 194k
(eNuW: 189k) - the effect of which was more pronounced for Europe and
Australia than for the US - while revenue from bistroMD partially offset
this decline and had a noticeable impact on Q1'24 group sales of c. EUR 5m
(eNuW).
 
Importantly, after several quarters of decline, MSG was able to observe
bottoming-out effects in its subscriber base (+0.5% qoq) as well as a
recovery in both order frequency (+5% qoq to 6.5; +2% yoy) and basket size
(+3% qoq to EUR 64; +11% yoy) indicating a return to healthy growth and KPI
levels. This positive development was overwhelmingly driven by (1) a
higher-quality subscriber base with enhanced retention levels on the back
of a rectified voucher strategy in H2'23, (2) higher-priced and largersized
plan items and (3) an overall stabilizing consumer sentiment.
 
While topline headwinds persisted, MSG managed to expand its
industry-leading contribution margin in Q1 to 34.4% (+335bps yoy, eNuW:
32.5%) on account of reduced voucher and promotional activity and first
cost savings in fulfilment (-37% yoy to EUR 9.2m) derived from the FreshRealm
partnership. Notably, MSG translated a higher contribution margin into a
healthy operating EBITDA margin of 0.2% for Q1 (c. +700bps yoy) impacted by
an increased marketing efficiency (-33% yoy to EUR 13.8m) and a more
streamlined G&A setup (-3% yoy to c. EUR 21.5m excluding one-offs) as cost
reduction measures from automation, centralization, and the closure of
underutilized operations began to kick in.
 
This promising Q1 performance led the company to confirm its FY'24
guidance, expecting sales to grow by a single-digit percentage figure
(eNuW: +9% yoy) and a flat contribution margin of c. 31.5% (eNuW: 31.8%).
Operating EBITDA is seen to grow to a positive mid-single-digit figure
(eNuW: EUR 2m). In our view, this guidance looks achievable and - aided by a
promising strategic outlook and operational progress towards group
profitability - MSG looks set to disproportionately benefit from an
eventual return of consumer confidence.
 
We reiterate our BUY rating with an unchanged PT of EUR 7.00 based on DCF.

You can download the research here:
http://www.more-ir.de/d/29579.pdf
For additional information visit our website
www.nuways-ag.com/research.

Contact for questions
NuWays AG  - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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