It was in November 2011 that the two college friends Dominik Richter and Thomas Griesel founded the company in Berlin together with another partner based on their idea: To send the ingredients for dinner at home pre-portioned so that there are no leftovers when cooking.

Ten years later, HelloFresh is a Dax group with 1.4 billion euros in sales in the past quarter from July to September.

Bastian Benrath

Editor in business.

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Business is going well, even in the waning pandemic. Contrary to the fears of some observers, customers continue to like to cook at home instead of eating out again and saving the money for the cooking box - after all, at least a good 40 euros a week. Instead, HelloFresh's international expansion is now bearing fruit in a total of 16 countries and the group has raised its annual outlook significantly.

Adjusted for currency effects, he now expects an increase in sales of between 57 and 62 (instead of 45 to 55) percent, as the Berlin-based company announced. In the best case scenario, HelloFresh would increase revenues to more than 6 billion euros. That is significantly more than the 20 to 25 percent that the company announced at the beginning of the year. In the first hour of trading on Tuesday, HelloFresh shares jumped more than 13 percent on this news.

The company now has almost 7 million customers worldwide, of whom the regular customers have recently ordered more and more.

In the third quarter, currency-adjusted sales climbed 45 percent compared to the same quarter of the previous year.

However, this is significantly less than a year ago, when the plus was more than 120 percent.

Greetings from the pandemic - the company will have to say goodbye to such growth rates in the future.

Worrying about the margin

While an increase in sales of almost half within a year compared to other Dax companies is still impressive, it is more the sustained decrease in the margin that could cause concern. Because as the sales outlook rose, so did the margin forecast. While HelloFresh had calculated a margin on the selected key figure of adjusted Ebitda (operating profit before taxes, interest and depreciation) between 10 and 12 percent in the spring, it should now only be 8.25 to 10.25 percent for the year. In the third quarter, the return was only 5.6 percent.

HelloFresh boss Dominik Richter explains this in a conference call on Tuesday morning with seasonal fluctuations - and the recently launched growth initiatives.

Half of the around 25 shipping centers in the world are so new that they are currently still in the familiarization phase.

It typically takes around nine months for the new staff to be trained and the processes to be implemented.

Only then did the plants achieve their full profitability.

In July, the Berlin team started in Norway and recently in Italy.

The United States continues to be the largest market, from where more than half of the orders come.

In view of the expansion, the adjusted Ebitda fell by 30 percent to almost 80 million euros in the third quarter.

Apparently HelloFresh has been burdened by the fact that customers were able to go on vacation more this year.

Richter said the fall quarter was traditionally the company's weakest.

Customers often canceled their subscription-based cooking boxes on a weekly basis, so the fixed costs were spread across fewer orders.

“That always costs around 2 percentage points of the margin,” he said.

In addition, more packaging material is required in summer to ensure that the food arrives safely and unspoiled.