HelloFresh Capital Markets Day 2025

Summary

HelloFresh's Capital Markets Day 2025 event offered insights into the company's future trajectory, focusing on transformation strategies for sustained growth and improved profitability. With a strategic change in the marketing approach, enhanced product offerings, and an efficiency program aimed at saving 300 million euros annually, HelloFresh is set to solidify its position in the meal kit and RTE markets. The focus is on leveraging customer data for personalized meal plans, expanding the menu for more diverse tastes, and maintaining competitive advantage through digital and operational excellence.

Highlights

• HelloFresh is adapting to market changes with a focus on sustainable growth strategies. 🌟
• Significant marketing strategy shifts are underway to improve ROI and customer retention. 🔄
• The menu expansion aims to cater to a broader range of dietary needs and preferences. 🌱
• A robust efficiency program is expected to save 300 million euros annually by 2026. 🏦
• Plans to integrate ready-to-eat meals with meal kits will enhance convenience for customers. 🍴
• Exploration into new markets like pet food and vitamins opens new revenue streams. 🌐
• Personalization and enhanced customer engagement are key to future success. 🎯

Key Takeaways

• HelloFresh is emphasizing a shift in its marketing strategy to prioritize sustainable growth and profitability. 🚀
• The company plans to expand its menu offerings significantly, addressing diverse customer dietary preferences. 🍽️
• A major efficiency program is set to save 300 million euros annually, enhancing profitability. 💰
• The integration of ready-to-eat meals with meal kits aims to diversify consumer choices. 👨‍🍳
• HelloFresh is exploring new consumer categories like pet food and vitamins for future growth. 🐶💊
• Enhanced personalization and customer experience are central to HelloFresh's future strategy. 📈
• The focus remains on maintaining strong direct-to-consumer relationships for growth. 🤝

Overview

At the core of HelloFresh's future plans is a transformative shift in its marketing and operational strategies, focusing on sustainable growth and improved profitability. The company is dedicated to enhancing its meal kits and expanding ready-to-eat (RTE) offerings to adapt to evolving consumer preferences, aiming to capture more of the dining markets globally.

A comprehensive efficiency program is underway with the aim of saving 300 million euros annually by 2026. HelloFresh's strategy includes expanding its menu to include a wider variety of meals and dietary preferences, leveraging customer data for better personalization, and enhancing service levels with quicker delivery options.

Excitement is building around HelloFresh's move into new consumer categories such as pet food and vitamins, indicative of its strategy to diversify and increase market share. With a commitment to digital and operational excellence, HelloFresh is positioning itself as a leader in consumer food solutions for the future.

Chapters

• 00:00 - 01:00: Welcome and Introduction The chapter begins with a warm welcome to the audience, both present in person in Berlin and those joining via stream. The speaker mentions the sunny yet cold winter weather in Berlin and expresses hope that the attendees will learn a lot over the next few hours. This introduction sets the tone for the event, emphasizing learning and engagement.
• 01:00 - 04:00: Period of Change and Strategic Focus In the chapter titled 'Period of Change and Strategic Focus,' the organization reflects on the significant changes initiated over the previous year. These changes are set to accelerate between 2025 and 2026, marking a pivotal phase for the company. The leadership expresses optimism, believing that these transformations are beneficial for both customers and long-term shareholders. The chapter outlines a focus on three main topics, which are anticipated to be discussed in detail.
• 04:00 - 07:00: Company Journey and Product Expansion The chapter begins with an overview of the company's current status and its long-term opportunities. It moves into a detailed explanation of an efficiency program initiated in the previous year, which is anticipated to achieve savings of approximately 300 million annually by 2024.
• 07:00 - 11:00: Market Opportunity and Consumer Trends The chapter titled 'Market Opportunity and Consumer Trends' discusses the product and marketing investment plans for meal kits and Ready-to-Eat (RTE) options. It includes a presentation by colleagues Patrick and Kono. Patrick discusses the investment plans, while Kono shares insights on the nutrition philosophy of the brand, Factor, which is central to the customer proposition. The ultimate mission of the company, which remains unchanged, is to alter the consumer's approach to eating.
• 11:00 - 15:00: Business Strategy and Consumer Needs The chapter discusses the importance of having a mission that serves as a 'north star' for a company, guiding its long-term strategy. It highlights that this mission helps the company focus on sustained opportunities and long-term goals rather than getting bogged down by short-term financial pressures like quarterly earnings. The mission serves as a foundational element both for internal decision-making and external communication.
• 15:00 - 19:00: Long-Term Vision and Financial Metrics The chapter titled 'Long-Term Vision and Financial Metrics' explores the company's approach to developing corporate strategies over extended periods, particularly focusing on their presence in large, resilient consumer categories. Established in 2011, the company shipped its first order in 2012, marking over a decade since entering the meal kit market. This background frames the discussion on how they assess and plan long-term financial and strategic goals.
• 19:00 - 23:00: Supply Chain and Growth Capabilities The chapter titled "Supply Chain and Growth Capabilities" discusses the company's evolution from being a single product company specializing in meal kits from 2012 to 2020, during which they pioneered the market and became the market leader in various geographies. By 2021, the company expanded its product line to include ready meals as a second product offering, reflecting their growth capabilities.
• 23:00 - 28:00: Efficiency Program and Cost Management ### Chapter: Efficiency Program and Cost Management In 2024, reflecting on recent successes, particularly in ready meals, there's an expansion into pet food and VMS (vitamins, minerals, and supplements). The company is enthusiastic about ongoing potential in meal kits and ready meals and believes the skills developed can be applied to these new areas.
• 28:00 - 33:00: Marketing and Customer Engagement The chapter 'Marketing and Customer Engagement' discusses the company's future vision of evolving into a digital-native, technology-first FMCG (Fast-Moving Consumer Goods) group. The focus is on targeting high-growth, high-margin consumer categories, particularly in the food sector, which is emphasized as the largest consumer category. The narrative outlines the strategic direction towards embracing modern technology and digital strategies to optimize marketing and enhance customer engagement while expanding into new consumer markets.
• 33:00 - 38:00: Product Investment and Menu Expansion The chapter discusses the importance of nutrition and well-being as a fundamental need, making a significant collapse in food consumption demand unlikely. It highlights the Total Addressable Market (TAM) for home cooking, which amounts to approximately $600 billion in the US and about a trillion in Europe. The focus is on both home cooking and ready meals.
• 38:00 - 43:00: Marketing Strategy and Customer Insights The chapter discusses the evolution and characteristics of the meal kits and ready meals market, highlighting its relatively recent emergence and small market size. Unlike winner-takes-all markets, this sector offers consumers a variety of choices in terms of formats, meal types, and business models. Despite its growth, the market only accounts for about 1% of dinner occasions and even less for other meal occasions.
• 43:00 - 48:00: Factor Brand and Ready-to-Eat Strategy This chapter discusses the market opportunities within the pet food and VMS (vitamins, minerals, and supplements) sectors. It highlights that pet food, a $60 billion market in the US, is expected to grow at an annual rate of 5% over the next five years. Similarly, the VMS market is currently valued at $40 billion in the US.
• 48:00 - 53:00: Nutritional Philosophy and Product Quality The chapter titled 'Nutritional Philosophy and Product Quality' discusses the projected annual growth of about 4% in specific consumer categories over the next five years, highlighting a stronger growth momentum in Europe despite their smaller current size. It also reflects on how food consumption habits have significantly changed over the past 20 years, focusing on notable trends influencing this shift.
• 53:00 - 62:00: Q&A Session The chapter discusses the evolving trends in the food ecosystem, highlighting a move towards more convenient meals, a high degree of personalization, health, and quality. The belief is that these trends will continue to grow and become more significant in the future, with food becoming more convenient over time.
• 62:00 - 63:00: Closing Remarks and Lunch Announcement The chapter discusses the increasing personalization of customer meals, emphasizing that customers will be able to access the right meals at the right time and price. It acknowledges the various trade-offs customers face, such as between convenience, price, health, and quality.

HelloFresh Capital Markets Day 2025 Transcription

• 00:00 - 00:30 good morning everybody A very warm welcome also from my side uh both to those of you joining via stream but even more so to those of you who've made the pilgrimage to Berlin today Um it's a nice sunny but cold winter day here and hopefully um there's a lot to learn over the next couple of hours Um I think it's clear that we are at the moment in a
• 00:30 - 01:00 period of change Change that we have started to enact um over the course of last year but which we will very forcefully drive over 2025 and 2026 I'm personally very excited about that phase of the company because I think we're doing the right thing for customers and we're doing the right thing for long-term shareholders Today um we're going to talk about mainly three different things and that's
• 01:00 - 01:30 how we've structured the capital markets day which is um I'll start with contextualizing where we are in our journey and also um what the long-term opportunity is I'll then hand over to Christian who's going to walk us in detail through the efficiency program that we've started last year and that should see us realize um savings of about 300 million annually versus 2024 And finally after the break my
• 01:30 - 02:00 colleague Patrick and I will share our product and marketing investment plans both for me kits as well as for RTE before upon popular request um my colleague Kono will share some of our nutrition philosophy around factor which is a key part of the customer proposition that we have Our mission is and has been since day one that we want to change the way
• 02:00 - 02:30 people eat forever You'll probably hear me and other leaders reference that mission often both internally and externally because it's something that really describes the long-term opportunity that we're after and also allows us to look beyond just quarterly earnings and some short-term financial pressures It's really the sort of like north star that we have and which we then use to actually derive our business
• 02:30 - 03:00 and corporate strategy over longer periods of time from As of today we're active in a number of large and resilient consumer categories We've started the company in 2011 shipped our first order in 2012 Hence we've been on the market for meal kits for now about 13 years We've
• 03:00 - 03:30 actually been on the milkit market um or we've been a single product company with me kits for the first eight years of our existence from 2012 to 2020 uh to 2020 and over that period not only pioneered me kits but also became the clear market leader in every single geography that we've entered We've then by 2021 also went into ready meals as the second product group that we have and more
• 03:30 - 04:00 recently in 2024 Given the many capabilities and given the success that we've seen in ready meals also entered um pet food and VMS which stands for vitamins minerals and supplements So while we're still really excited about the midterm opportunities for meal kits and ready meals we think that a lot of the capabilities that we have developed we can also bring into some of
• 04:00 - 04:30 those newer consumer categories And so the vision for us is that over the next couple of years we actually develop into a digital native and technology first FMCG group targeting some of the fastest growing and highest margin consumer categories out there Food is really the largest consumer category out there and given its essence
• 04:30 - 05:00 to nutrition well-being it just being a basic need it's very very hard to see a world where the demand for food consumption um collapses significantly from where we are today If you look at the TAM for home cooking specifically then that's about 600 billion in the US and about a trillion in Europe Both home cooking and ready meals which
• 05:00 - 05:30 is obviously still a significantly smaller market but a market that came into existence also much much later are not winner takes all market but are markets where consumers have the choice between many different formats many different meal types and many different business models Even today across meal kits and ready meals we only capture about 1% of the dinner occasions and even less than that in terms of meal occasions with the
• 05:30 - 06:00 penetration that we have across those geographies Pet food and VMS offer some of the most attractive opportunities in consumer The market for pet food is about 60 billion in the US and its stam is expected to grow by about 5% over the next 5 years annually VMS is a market that is about 40 billion right now in the US and is
• 06:00 - 06:30 expected to grow by about 4% annually over the next 5 years Both of those consumer categories are about half the size in Europe but offering stronger growth momentum from a lower baseline Over the last 20 years alone a lot of food consumption habits have really changed a lot And most notably some of the trends that we've
• 06:30 - 07:00 observed but also the broader food ecosystem has observed is the trend towards increasingly convenient meals much higher degree of personalization as well as health and quality We believe that those four trends will be the main trends also into the future And we think that over a sufficiently long time horizon the future of food will be much more convenient that is today and much more
• 07:00 - 07:30 personalized than it is today Meaning customers will have access to the right meals at the right time and at the right price point At the same time in today's world customers definitely fa face a lot of trade-offs So trade-off between convenience and price trade-off between health and convenience trade-off between quality and price So a lot of different trade-offs that customers face We very
• 07:30 - 08:00 much believe those companies who will be able to break through those trade-offs will be able to capture a much much larger share of consumers food budgets in the future If you think about our two main business lines meal kits and ready meals then I think we have a lot to offer in the realm of convenience mental convenience and the convenience of planning and shopping in the case of meal kits And
• 08:00 - 08:30 then very clearly convenience and affordability advantages when it comes to ready meals versus grocerers other forms of shopping but also food delivery platforms The understanding that what you put into your body has a really really big impact on your overall health and well-being is something that has gained a lot of momentum over the last couple of years I
• 08:30 - 09:00 think a decade or two ago this was really sort of like a niche proposition but over the last couple of years it has made its way into mainstream knowledge Consumers care greatly about both health and the quality of what they eat And I think we can provide strong proof points around our ability to serve those needs very very well Some of the most interesting trends that
• 09:00 - 09:30 we see outside of the general benefits of home cooking which is the absence of non-GMO foods you know very low added sugar um a very high degree of understanding food from farm to table and what the provenence of food is or a low amount of seed oils or the absence of seed oil oils at all Those are some of the general trends of home cooking But more specifically the health trends that are really dominant as of today is
• 09:30 - 10:00 really a very high concern about the amount of added sugar in your diet Making sure that consumers have enough protein intake with all of their meals and then also a very low share of consumption of ultrarocessed foods I think to all of those trends we play very well And if you compare the diet of HelloFresh meals or also of factor meals versus the average diet of a US or European consumer then especially across
• 10:00 - 10:30 those different um dimensions of low added sugar high protein intake and a very very small amount of ultrarocessed foods we do extremely well So if we think about the future of food what does it take to actually build a big company and to win in those different consumer categories traditional consumer categories you had
• 10:30 - 11:00 retailers as stage gatekeepers Meaning that the ability of a consumer brand's success was mostly determined by how well are they doing in getting into retail shelves and then how good are they at top of mind awareness for consumers that are making a purchase decision in front of a retail shelf That game really has changed a lot over the last 10 years And I think the
• 11:00 - 11:30 muscles that were needed to win in retail consumer categories are actually very very different muscles to the one that you need to win in direct to consumer consumer categories Some of the most important muscles that you need to win in direct to consumer are really making sure that you can understand customers needs and make sure that you are on top of the direct customer
• 11:30 - 12:00 relationship It's also extremely important to run your supply chains efficiently We do that by our investments in technology and data which allow us not only to run our supply chains efficiently but also have a very different supply chain established than traditional consumer brands that go via retail We've also made a number of very very big investments into our physical infrastructure We've spent about a
• 12:00 - 12:30 billion in capex over the last 5 years which now obviously offers a very defensible mode against any existing and future competitors that we're competing against Finally I think we've seen when we've moved from one product group Milk Kits into our second product group RTE that a lot of the capabilities that we have around our growth engine our advertising and targeting came in very handy and allowed us to be successful in that
• 12:30 - 13:00 second direct to consumer category that we've entered as well Of course the most important thing for any successful consumer brand is actually to be able to understand consumer needs and to craft winning product propositions No matter if you sell directly to customers or into retail I think in the end what customers spend their hard-earned money on is the product that you're giving them And so
• 13:00 - 13:30 there are many many different reasons why consumers don't buy your product why consumers don't repurchase your product but there's one main reason why they do And that is because you have a winning product proposition that satisfies the need of different customers And the big advantage that we have here is not only that we don't have a legacy portfolio but that through those direct customer relationships that we have that we can actually craft those winning product propositions quickly and can react to
• 13:30 - 14:00 trends very very agile So for the first eight years that we've been around we pursued our mission to change the way people eat forever exclusively through our activities and first pioneering then scaling and eventually assuming market leadership in our to date the largest Milkit product group Milkits in 2024 did about 5.5
• 14:00 - 14:30 billion in revenue Ibida margin a little bit under 10% pretty much in line with the longerterm IBIDA target that we've given out before which sees us to achieve a Milkit Ebida margin of north of 10% But food consumption actually comes in many different forms and shapes and many different formats And so since 2021 we've also made um big big progress in
• 14:30 - 15:00 scaling into our second product group which is ready meals which we scaled from 100 million when we took over the business um in late 2020 to about 2 billion in 2024 while achieving Ebida profitability and really building out um and going through a massive massive um physical infrastructure buildout In addition we've also launched a number of
• 15:00 - 15:30 promising new brands in some of the most attractive consumer categories out there We have internally screened a lot of different consumer categories I think we're acutely aware of competitive dynamics in those different categories of the profit pools that are out there to capture and the target margin profiles that are there And we've identified specifically vitamins minerals and supplements as well as pet food as the two most attractive direct
• 15:30 - 16:00 to consumer verticals While those are still comparably small with about 100 million in revenue combined in 2024 they've been growing very fast And if we look at the growth trajectory of those over the next couple of years then we think starting in 2027 2028 those as a group can make a real difference to the growth trajectory of the company They're still ebida consuming So
• 16:00 - 16:30 they're not profitable yet but they will go through that type of J curve where you first building up your customer base and then over time start monetizing on a much much bigger customer base the different economies of scale that you actually um capture at much much higher volumes that you ship So we are excited about the next couple of years where we will build HelloFresh from a single product company that we were for the first eight years into a
• 16:30 - 17:00 company that has a much clearer and predictable growth trajectory that doesn't rest on one or two product groups but where revenue growth comes in a very diversified fashion And hopefully with improving underlying economics that also allows us to actually show a very predictable margin expansion runway To better understand the long-term opportunity and contextualize where we
• 17:00 - 17:30 are in our journey it makes also sense to look at a five-year trajectory And to be fair five years is to entrepreneurs or builders like myself um a very weird time because it's incredibly short in following your long-term mission and at the same time it's incredibly long in many many other different aspects and there's obviously a lot of change that happens in a 5-year period If you just look at some of our
• 17:30 - 18:00 financial metrics then revenue over that period has been up by over four times IBIDA has been up by over nine times and I want to remind you that the IBIDA in 2024 was the low point um during that period and will be the low point also for the future and we've also um turned free cash flow positive over that period while at the same time investing massively into building out our physical infrastructure and a lot of other
• 18:00 - 18:30 capabilities all self- financed through the strong operating cash flow that we produce in our mature business lines At the same time we've also drove an enormous amount of change along basically every single aspect of our value chain We've insourced the vast majority of our fulfillment and cooking operations which we hadn't by 2020
• 18:30 - 19:00 We've grown a massive direct supplier network and we now have close connection and relationships with over 1,700 direct suppliers And we've also launched our own last mile logistics in 10 geographies worldwide That's a massive win for customers supplier network when it comes to freshness and provenence of ingredients um last mile when it comes to service
• 19:00 - 19:30 levels that we're able to offer Most importantly we've already increased the recipe choice available to customers from on average 18 meals per week in 2019 to now about 60 meals in 2024 with a lot of plans to scale that further in 2025 and 2026 That point is really important because the TAM a business operates in is always
• 19:30 - 20:00 determined by the product that you sell So in layman's terms if you think about the product that we had in 2018 with 18 weekly options with much fewer delivery days than I think the total addressable market that we're going after was much much lower than the total addressable market that we're going after today and the total addressable market that we will go after in the future will be multiple times bigger than it is today
• 20:00 - 20:30 given the product investments and the strategy that we're pursuing over the next couple of years We expect that the next five years will also offer a lot of change probably a similar amount of change than what we've seen in the last 5 years And by 2030 we want to be a business whose growth rests on many different legs who has many different consumer brands under
• 20:30 - 21:00 its umbrella and with a TAM even in our most mature product groups in mill kits and RTE that is much bigger than the TAM that we're targeting today Having said that we're of course also painfully aware that the progress in the last 5 years has been anything but linear and that specifically the last two years were underwhelming We've if you look at that chart we've uh
• 21:00 - 21:30 entered 2020 with what we felt was a clear long-term strategy which would have seen us grow our Milkit revenue by about a 25% kagar from about 1.5 billion to about 5 billion by 2025 We all know that obviously with the pandemic coming and the demand shock that this pandemic brought we've actually achieved that growth not in 5
• 21:30 - 22:00 years but in nearly two years and a lot of timelines were compressed a lot At the same time we captured that growth momentum at utilization levels that were far above what we should have had And that meant that we were over earning on that massive revenue line in 2020 and 2021 So revenues scaled a lot profits
• 22:00 - 22:30 scaled a lot not in a linear fashion as we had expected and outlined in our midterm plans but really took a step change during that period As a result during that time we've also accelerated a lot of different projects and projects that were meant to actually take five years to build we've actually executed in two or three years So that involves building out our supply chain
• 22:30 - 23:00 network building out our organization but also building out the customer proposition If you then look at the period of 2023 and 2024 this clearly was a period where we wrongly extrapolated some of the demand that we had seen in 2020 and 2021 And we've with 2020 hindsight spent too aggressively to actually make sure that
• 23:00 - 23:30 we um remain on the same demand trajectory and we underestimated the demand correction in the short term Also due to the buildup of our organization and the buildup um of our supply chain network we've actually seen profits over that period come down and erode And that is something that we now want to turn around Starting in Q2 2024 we challenged
• 23:30 - 24:00 a lot of our prior assumptions that we've articulated during 21 and 22 and 23 And we started a b a plan to rightsize our operations to rebuild profits and cash flows and to ultimately return to a more predictable diversified and sustainable growth profile for the group then at superior margins We started executing on that plan at some point in Q3 and very forcefully
• 24:00 - 24:30 over the course of Q4 already and we're now in the midst of that efficiency reset period for 2025 specifically We're laser focused on two major objectives number one to deliver on that efficiency program that Christian will walk you through in a minute and at the same time to
• 24:30 - 25:00 use the funds that we free up from that efficiency program to make a meaningful step to the customer proposition both in milkits as well as in RTE Even though Milkits and RTE are at very different stages of their growth trajectory and TAM penetration we feel very strongly about the fact that we need to invest into improving the customer offering to
• 25:00 - 25:30 continuously build out the TAM that we go after and that will be the unlock to eventually return to growth in Milkits and extend our runway in ready to eat a lot longer than the runway way that we're currently on Executing on that efficiency program is important both for short term as well as for our long-term success We'd seen a painful decline of
• 25:30 - 26:00 IBITA IBIDA but even more so of free cash flow for three years in a row now So it's really important that in 2025 we turn that around by right sizing our fixed costs improving unit economics and returning to a best-in-class financial profile This will really free up the funds required to self- finance the massive cycle of product improvements that we want to fund
• 26:00 - 26:30 So the success of that efficiency program in 2025 is really important to free up the funds to massively improve the customer proposition and return to growth in a number of quarters What the efficiency program entails is what Christian will share with you in the next couple of minutes Thank you Okay Thank you So as Dominic has just articulated
• 26:30 - 27:00 our plan to fundamentally reset our profit profitability and our free cash flow profile effectively rests on two pillars One is the execution of the efficiency program Second one is reinvesting meaningfully into our product What I want to do now over the next 30 minutes is to take you through the first pillar through um our efficiency program
• 27:00 - 27:30 and both of these pillars are fully under our own control So just to um remind yourself the efficiency program is something that we have started to design mid last year and then communicated it for the first time to the capital markets in August last year in our shareholder letter and then started to execute on the first steps of it actually quite swiftly In terms of the scope it comprises effectively all
• 27:30 - 28:00 aspects of our value chain except for the physical product Yeah Again in the physical product we want to reinvest Everything else is touched by our efficiency program It runs until 2026 and it comprises the following key pillars here So first meaningful increase in our direct labor efficiency across both of our product groups ready to eat as well as me
• 28:00 - 28:30 kits Secondly a rationalization of our production footprint in meal kits Thirdly it also entails meaningful overhead personnel expense savings Going to go through that in a moment in more detail Fourth as you know we've reset the thresholds we apply to our marketing operations to to increase our RARI And then fifth it also includes
• 28:30 - 29:00 indirect procurement savings I'm going going to go through that as well And then it also includes capex savings to down to below 150 million by 2026 and a restructuring i.e downsizing of our sharebased compensation program So when you look at these measures one through five effectively directly pay into both our profitability increase as well as the increase of our free cash flows Six and seven are important to
• 29:00 - 29:30 deliver on our targets in terms of meaningfully boosting our free cash flow per share What I'm going to do now in the next couple of minutes is going through each of these measures one by one Starting with increases in our direct labor productivity Our ops teams have made good progress on their journey to meaningfully improve our production
• 29:30 - 30:00 processes by applying lean production principles Now what does that mean it means effectively eliminating wasteful activities within our or within our production Means removing bottlenecks reorganiz reorganizing some of our production flow effectively meaningfully increasing the throughput per hour that we achieve in our fulfillment centers in and in our production sites
• 30:00 - 30:30 That was the biggest driver already of the contribution margin expansion you've seen from us sequentially in Q3 and Q4 progress on these activities Going forward we plan to reap even more meaningful improvements in these areas So on the ready to eat side we've set ourselves the target to decrease our diet labor costs per meal by another 20%
• 30:30 - 31:00 Between 24 and 2026 and on the medkit side we want to bring down our diet labor costs per order by another 10% Now linked to these improvements is basically a further consolidation of our MIKIT production footprint As you know we've taken certain steps in that direction in 2024
• 31:00 - 31:30 Already there's more that we are planning So we are planning to take out another 25% of capacity out of our mirk production for what we've done in 2024 plus what we are planning for this year We've taken a non-cash impairment charge in our accounts um last year already and we announced announced last year already the first sites that we will take offline The savings that we derive from this are effectively twofold
• 31:30 - 32:00 So one we have less overhead personnel both insights as well as in our central teams here on the upside The second one is we save on ancillary costs Yeah So effectively utilities cleaning maintenance repair workware consumables local taxes all of that goes away when we basically take a site offline
• 32:00 - 32:30 So these are cost buckets we clip quaza instantly when we retire a certain site On top of that we are working with our landlords to discuss with them early ter termination of the sites that are involved or alternatively are in the market with um uh brokers to basically find subtenants for these sites which means over time also our lease expenses will come down um because of
• 32:30 - 33:00 these activities Okay so this is our upsides Next I want to talk about our overhead personnel expense rationalizations What we're targeting is on a gross basis to take out 140 million of our overhead person expense base That basically taking into account salary increases and comp increases over the
• 33:00 - 33:30 next two years results in a 100 million net annual savings that we want to achieve by 2026 The program cuts effectively across all of our major functions So across corks fulfillment marketing or people operations as well as finance How do we get there to achieve that so um number one through more prioritization internally process harmonization automation we also
• 33:30 - 34:00 reorganized ourselves quite a bit so we centralized number of activities more here um in our headquarters in Berlin and we're also using offshoring terms of the tool set to get to our target size we're effectively working with all tools that we've got available to us so this is natural churn This also means that we continue to be very disciplined in terms of our performance management It also means that we're
• 34:00 - 34:30 using forced reductions in certain parts of our organization In terms of when these measures land 20 million worth of initiatives we effectively have implemented back end of last year already There's another 80 million that we are implementing this year and next year The bulk of this is being done this year already
• 34:30 - 35:00 Um terms of financial impact there's a certain time lag involved as you know So there are um termination periods attached to it There obviously seance costs in certain parts There's also the normal run rate effect So in terms of seeing this in full force land in our P&L you will see that in 2026 But the real action um has started to happen back end of last year already and um the rest of the bike is taking place this
• 35:00 - 35:30 year Okay Um next topic that I would like to discuss with you is marketing So before we go um to that let me just go through our equity equity based compensation program as well So effectively the philosophy we had until 2024 was to be very broad in terms of our equity program Yeah So um why did we
• 35:30 - 36:00 do this we wanted to ensure maximum long-term goal alignment between our broad employee base and you our shareholders Now what we've learned is that effectively we didn't do either side justice Yeah some um shareholders were concerned about potential dilution especially as the share price had come down over the last two years and same our um colleagues
• 36:00 - 36:30 especially on more junior career steps complained that they effectively realized losses versus what the target comp was So what we've done now is we meaningfully reduced the scope of our sharebased compensation program i.e We exempt now uh more junior and mid-level career steps from that from that program partly compensated by a raise in their base comp but partly so definitely
• 36:30 - 37:00 not on a one for one basis That means in total from having granted around about 100 million worth of equity based compensation last year that will go down this year to around about 70 million and come down further by 2026 From a P&L perspective there's a bit of a time lag um that you see this in fully reflected in IFS2 Um
• 37:00 - 37:30 but we will also be below 70 million by 2026 from a P&L perspective for equity based compensation So with that let's talk now about um marketing Mid last year we decided to um meaningfully increase the threshold on our marketing RAI We commun communicated that clearly to the capital
• 37:30 - 38:00 markets and then um implemented it result of that you've seen already especially in Q4 is a meaningful reduction in overall marketing marketing expenses for us Yeah So in Q4 alone we reduced total marketing expenses as percentage of revenue by a full 310 basis points Now what happens when you reduce marketing quite drastically
• 38:00 - 38:30 revenue comes down as well Yeah And um so this here shows you our mekit operations but it comes down for us meaningfully less than what we've taken out of our marketing spend So again this is um me kits you've seen So gray line is effectively our yearum um revenue trend coming out of the co period we were trending already at um negative 5 to 7%
• 38:30 - 39:00 baseline because of the normalization effects that were prevalent at that point in time Then from Q2 2024 onwards we started to meaningfully take spend out of um out of marketing based on these higher thresholds where we effectively said marketing spend out on average we want to attract higher value um customers and you see that basically playing through through the back part of um of 2024 But
• 39:00 - 39:30 again the impact on so revenue reacted and there's a certain time lag that you see that reflected in revenue but the revenue impact is meaningfully less than what we've taken out of our marketing spend The reason for that why we achieve to do that is basically our sizable loyal tenant customer base What you see on this page are effectively orders we get every week for
• 39:30 - 40:00 the last um um for the last four years by our customers grouped by customer tenner Yeah So key thing to see here is that by now twothirds of our weekly orders come from customers who have ordered from us already 20 times plus i.e there's a clear product fit for these from these customers Yeah So these that group of our customers does not necessarily care what
• 40:00 - 40:30 we're doing on the performance marketing sites They're much more focused on what Dominic is going to um discuss in the next section I.e how good is our ingredient quality how much do I like the recipes what's the variety that I'm being offered what's the choice that I'm being offered am I as a loyal customer being rewarded for that loyalty that I showed to to HelloFresh this page I want to show you
• 40:30 - 41:00 exactly the same thing but not as a share of revenue um or share of orders but effectively in terms of absolute orders So what you see here are absolute numbers not um not shares grouped into the same buckets So if you focus on this piece here our meaningful reduction in marketing expenses certainly had an impact on our new and recent customer activity Yeah So the top three layers that you see here
• 41:00 - 41:30 because we've reduced marketing quite a bit have come down quite a lot in 2024 Now what's important is what has not moved from 2023 to 2024 is basically the bottom two layers that you see here Yeah So even though we've taken out north of 20 and then close to 30% of our marketing spend in me kits the number of orders that we get from our loyal customers has not decreased Yeah um it
• 41:30 - 42:00 has stayed stable is actually higher than what we clipped from them at peak co in 2021 and 2022 So our strategy is working Yes we have reduced marketing spend in medkits quite meaningfully We have increased our eye on our marketing on our marketing spend We're taking more orders from the customers that we care most about So our most valuable customers the ones who
• 42:00 - 42:30 stand for disproportionate share of our profits and the total number of orders we get every week from these customers is not coming down So that means for this year we will not just we're not just targeting to increase our EBIT margin and EBIT margin in M kids but we're also targeting to increase absolute EBIT and EID um quite meaningfully within Mits We think now about um topline for 2025 So we're planning to take out
• 42:30 - 43:00 further marketing spend and that quite meaningfully and we have done that already in in Q1 Therefore we see further action in i.e downwards draft in these um layers of our customer base That's why we've guided to being down on me kits this year by more than 10% this year Q1 even down by um by mid teens towards the second half we will still reduce marketing but to a lesser degree than
• 43:00 - 43:30 what we are actioning effectively have actioned Q4 last year and Q1 this year If you fast forward then to 2026 we're not necessarily planning to then year on year reduce marketing spend again Yeah So what you should see in 2026 effectively the share that we clip from new customers to stabilize at um level that's lower than what we realized in 2024 but to have a stable revenue profile then from which we can grow the
• 43:30 - 44:00 business again at then FMCG type or FMCG plus margins from EBT and EVA perspective Yeah And um you can make up your your mind what valuation you would put on that business which basically still derived 5 a half billion of revenues last year and where 2/3 of the orders come from super loyal super sticky
• 44:00 - 44:30 customers Okay let's go now into um a territory that some of you will find a bit more mundane but still important for us Yeah So we have gone through a comprehensive review of our indirect procurement spend Indirect procurement for us is effectively everything that is not um purchasing of our ingredients and not of our packaging material So broad set we've reviewed that for effectively all of our um functions and are working
• 44:30 - 45:00 through now through um long list of actions where we can effectively save So on marketing for example there is a number of um a meaningful amount of contracts that we are renegotiating or retendering that cuts across many different buckets um things like printing of our um direct mail drops for example or um what direct sales agencies we we work together There also certain activities that um um we
• 45:00 - 45:30 used to use use agencies for Patrick and his functional effectively insourcing some of these um some of these activities Now going forward on the upside there's quite um an opportunity for us in terms of harmonizing um the specs what we um that we're buying also again consolidating contracts and renegotiating these contracts with 3PL's with some of our logistic partners um
• 45:30 - 46:00 which is ongoing and um in our US operations for example our single biggest business we had quite some win in that area already on the tech side Um probably any company you talk to if they're honest to you they will tell you they have some redundant third party software internally So we have where you have basically two tools who do kind of the same but um still you have certain parts in your organization who fight very religiously why they have to use
• 46:00 - 46:30 that tool and the other one the other tool That is something that we put an end to now So we effectively um discontinuing quite a few um of um licenses which um which overlap and there are also certain pieces where our tech teams effectively can write code better more efficiently which we'll do and um and not rely on on third party tools So some savings here as well And then obviously on the uh GNA side as well um things like T& fall into that
• 46:30 - 47:00 bucket um budgets that we set to to our individual teams to make sure that everyone understands these are hard budgets and not um um and not guidelines and then contract renegotiations again So again this is a relatively comprehensive set that we've we're in full flow I would say to execute on those If you take them all together they add up to a meaningful double digit mill number So um the price is big enough for
• 47:00 - 47:30 us to also focus on this Now when you add up all of our efficiency program levers here together we're targeting to effectively by 2026 on an annual basis realize 300 million euros in 2026 already from that program Of those 300 million e roughly 100 we want to put back into the product and provide a little bit for
• 47:30 - 48:00 contingencies as well So effectively support to our 2026 P&L adjusted EBIT is 200 million out of this efficiency program In terms of the economic impact of the um the levers that have have gone through direct labor productivity increases and optimization on our overhead personnel are the biggest single levers within that But also the other ones that I just took you through again deliver meaningful double digit
• 48:00 - 48:30 savings for us Again we're targeting to have the saving realized in the 2026 P&L i.e the 300 million are not a run rate but what we're targeting um to have there realized in that year already behind these levers are basically um much more granular work streams each with clear responsibility
• 48:30 - 49:00 each with a project plan each with um with clear deadline and milestones there's um reporting back to us on the management board So there is a high level of focus on it The whole program is supervised by our former North America CEO for who acts as our chief transa chief transformation officer So I am super confident that we will deliver the savings in time and in
• 49:00 - 49:30 full Just quickly again from a timing perspective by Q4 um this year we will will have initiated roughly 70% of um the underlying initiatives remaining 30% fall into 2026 Before we come to um the outlook um let's quickly talk about capex This is an area where we have made quite some
• 49:30 - 50:00 progress over the last couple of years already Yeah So in 2022 we are still spending close to 420 million on capex We brought that down into 300 million and then last year to 166 million last year alone we in year took out quite a bit out of incrementally out of our capex plans If you remember initially we were targeting capex spend of 100 million more Then um body effectively then brought that
• 50:00 - 50:30 number down to by 2024 For 2025 we will spend roughly the same amount on capex Key focus area there is our ready to eat product group So um there's a midsized kitchen in Western Canada that we're setting up here in Germany We are um effectively building our central production site which will then serve
• 50:30 - 51:00 Germany the Nordics countries our Benelux countries out of one one site and then there's some bits and bobs within um our North America um ready to eat operation So this year roughly stable to what you've seen last year from us by 2026 we want to take another 20 million out of capex So 2026 capex will be below 150 million Lastly I want to come to our
• 51:00 - 51:30 outlook So um we are accepting a temporary negative topline growth of mid-s single digit in return to sustainably reset the baseline for our profitability as well as for for our free cash flow Yeah And um this is factored into our outlook It's the same outlook effectively that we um communicated last week where um say it's fair to say that
• 51:30 - 52:00 I definitely got a frosty reaction from you to that outlook So let's let me try it once more Firstly on revenue Yeah So we are targeting for the group a negative revenue growth of 3 to 8% on a constant currency basis For the first quarter we will sit around the wide end of that um of that range If
• 52:00 - 52:30 you then go down to our two individual product groups MI kits we are um as we discussed a few minutes ago So we are targeting for the full year growth of worse than negative 10% for the full year in Q1 This will be down mid- teens and then as discussed in the second half gradually getting better somewhat linked to um basically how our marketing trajectory is So the exit rate
• 52:30 - 53:00 will then be somewhat better than what we start the year with on the ready to eat sides We're targeting with low to mines for this year Q1 will be below 10% So we are planning for an acceleration in the in the second half of um of this year Why do we plan with an acceleration in the second half of this year for a number of reasons One quite a few of the product investments features
• 53:00 - 53:30 improvements that Dominic is going to talk about will have landed by then Secondly in terms of our overall mix um of marketing in ready to eat we will shift back after Q1 um more of that mix to our lower final performance channel So Q1 for us was an important point in time to um also dedicate quite a bit to um to brand related campaigns where there's not a one for one
• 53:30 - 54:00 um conversion at the back end of this Q2 will then be more business as usual On top of that we're obviously looking forward to reap those brand investments we've done um over the the coming quarters And then lastly and that pays for 2025 the least into that um in in in terms of absolute importance into that acceleration is effectively um once the site here in Germany is up and running we then definitely want to put um foot
• 54:00 - 54:30 down on the gas pedal in terms of new customer acquisitions to ready to eat in our EU markets as well Yeah So moderate impact from that in 2025 but definitely more important than 26 onwards Okay so this is topline contribution margin I'm going to be relatively brief Biggest driver for that is really what I discussed before in terms of our direct labor productivity increases and um our site rationalizations Against that basically
• 54:30 - 55:00 go go goes a um deleveraging in terms of volume profile on the mekit side and then also importantly quite some investment on the product side But on a net basis we want to expand our contribution margin by 100 basis points year on year and um that applies to the full year and it applies already to the first quarter marketing you have effectively two opposing trends within our um um two
• 55:00 - 55:30 product groups So me kits we went through that down meaningfully and um um especially in Q1 on the ready to eat side we're building a brand We're building our customer base So there is more absolute and relative invest on the ready to eat side Taking both of that together we're still planning to take out 50 to 100 basis points in terms of our marketing span both for the full year as well as for
• 55:30 - 56:00 Q1 GNA will be down The key driver here is basically what I discussed on the overhead personal headcount side However keep in mind overhead personnel for us does not sit all in GNA Yeah So we are allocating quite a few of our colleagues above the line as well So they also sit in marketing in our ops line So not all of it um uh sits here and then um there's some one of severance costs that will sit here as well for this
• 56:00 - 56:30 year So that means for our bottom line for EBIT a quite meaningful improvement that we're targeting for this year Yeah From 136 million last year to 200 to 250 So at the midpoint a growth of 61% uh 65% In 2025 IBIT a similar uplift in absolute terms so to 450 to 500
• 56:30 - 57:00 million by 2025 for this year Free cash flow um effectively at least a doubling of the free cash flow number that we delivered in 2024 So for the risk of sounding a little bit like your favorite Spotify song on auto repeat let me just summarize the same thing in um quas the same thing in
• 57:00 - 57:30 another chart EBIT DA up by 50 to 100 million 12 to 25% that uplift effectively we find on adjusted EBIT as well plus a little bit more given that we're investing less DNA will start to come down this year already from 264 million last year to somewhere 250 to 260 this year so absolute increase here mildly higher than on the adjusted EIA side and um that means with um a
• 57:30 - 58:00 lower baseline effectively that uh 45 to 80% % growth that we that we're targeting on the adjusted EBIT side and that one for one falls through to our free cash flow Um in terms of other relevant free cash flow line items taxes and net interest together are broadly stable um this year versus 2024 Working capital should be more
• 58:00 - 58:30 benign in terms of movement this year than what you've seen from us in 2024 So there will be or there is an extra um inflow from working capital year on year versus um tailwind that we're seeing there versus 2024 So that means we are targeting to more than double absolute free cash flow and then per diluted share game in the market with our share buyback program Diluted number of shares will also not go up this
• 58:30 - 59:00 year Okay that's it So we are just to summarize yes we are effectively projecting from a negative topline growth this year and we don't take that lightly but yes we're also targeting to very meaningfully improve adjusted EIT and to more than double effectively our free cash flows this year From our perspective long-term growth in EIT and
• 59:00 - 59:30 the free cash flow is what ultimately drives value for you for for our shareholders We have tried to communicate that very clearly over the last couple of quarters that this is what we're focused on Um that's how we manage the business how we set our targets and um that's what our whole organization also works towards So I think we've got a break now Yeah Thank you
• 59:30 - 60:00 Okay nonetheless let's get back to the presentation I hope you've had a
• 60:00 - 60:30 refreshing break and are re-energized for the second or third part where we're going to squarely focus on our product and marketing changes that we've started to enact And that should really see us make some changes to the customer experience that um I think uh are the biggest ones that we've driven in the last 10 years over the next 12 months So what does it take to actually return
• 60:30 - 61:00 to growth for the group with more visibility and more predictability less volatility than we've actually um seen over the last 3 four years number one it means we need to stabilize our Milkit revenues or bite at a lower base than what we've seen in the last couple of years but at higher margins Secondly we need to make sure
• 61:00 - 61:30 that we can find the right multi-year growth formula for our RTE business again with less volatility and more predictability And finally we want to invest first slowly but then as we find product market fit more forcefully behind some of our new ventures We're not going to talk in detail about
• 61:30 - 62:00 some of our newer ventures today mostly um because I think the focus is squarely on 25 and 26 and over those years whilst we have actually um seen pretty good progress in those new consumer categories they'll probably not make a big difference to overall revenue growth or overall profitability over this 2-year period I think if we are successful and if we're following our plans then starting in
• 62:00 - 62:30 2728 those new businesses can become a much bigger part of our growth story for the group That's why we're investing in them today and will be investing into them into the future So let's start with Milkits which is our oldest largest and to date most profitable product group Milkitz has in the meantime reached um a scale and operational maturity where we
• 62:30 - 63:00 can produce I think best-in-class attractive margins very close to what you find from the best FMCG companies out there Last year we already came quite close to our midterm EBIDAR target of 10% Ebida margins And I think with some of the stuff that we're going to target and address this year there's further upside to our contribution margin and also to our cash flow profile So we are very
• 63:00 - 63:30 confident that already in 2025 we'll grow ibida for milkits to beyond 10% The biggest question you probably have is less about our relative margins but what's the sort of like absolute profit pool that we're able to capture given that we're coming or we are in the midst of a period where orders for me kits have been declining and obviously we need to kind of like make sure that we don't see too much delever in our apps
• 63:30 - 64:00 in our fixed cost profile So in this section um I'm not going to talk so much about margins um for milkits but I'm going to focus a lot on what are we doing today to initiate growth into the future for milkits What are all the different things that we do today in terms of product and marketing investments that will have us return to growth in milkits eventually
• 64:00 - 64:30 Let me start by taking a look at the attributes of the best Milkit customers that we have out there And when I say best Milkit customers those is usually like um a lot the vast majority of the group that Christian described before Those that have already placed 20 or more orders have for those 20 orders been with us for a number of years um on average and they share a number of attributes that are quite interesting to
• 64:30 - 65:00 visualize because it then helps us to say like what do we need to do to make the product even better for them but also why are there other customer segments that don't find the same value that those customers find currently in our product So they are on average kind of like belong to the um first or second income quartile They tend to lead a busy life So that means um they tend to have
• 65:00 - 65:30 um dual income households very often uh often live in suburbs Um often collides with having a certain weekly routine and really value the health benefits of home cooking as well as spending time together around the dinner table with their family or with their partner At the same time they're not overly restrictive in the type of foods that they eat Yes they really appreciate the health benefits of cooking from
• 65:30 - 66:00 scratch and spending time with the family but usually they're not health nuts or kind of like following a very restrictive dietary or culinary profile So in the following minutes what I'll try to do is describe some of the product investments and I would love for you to keep in mind what our best customers are what it does to their customer experience and then again kind of like how we can improve the customer experience for some audiences that don't
• 66:00 - 66:30 find the same value in the product that we have right now but hopefully will find some similar value in the product of tomorrow Returning to growth for us will really start with refocusing our miss on our mission which is changing the way people eat Um our purpose which is helping millions of customers to make better food choices and empowering them to
• 66:30 - 67:00 master their busy schedules We're going to drive a strong cycle of product investments in the next 12 to 24 months which go hand inhand with a significant change in our marketing strategy That includes investing in better value for our most loyal customer access to a much broader selection of meals on the weekly menu increased personalization which becomes especially important in a
• 67:00 - 67:30 much larger menu and rolling out strong service level improvements We'll combine that with a marketing strategy that attracts a higher share of loyal customers We'll nurture existing customer relationships and our existing customer base better And we want to articulate the benefits and the changes in our product strategy in much more detail in
• 67:30 - 68:00 our advertising As a digital native food business the biggest driver of long-term retention of our customer base is the quality of our meals and the size of our menu What that means is that we can only win in the long term if we're in a position to wow our customers week in week out There's tons of reasons why
• 68:00 - 68:30 customers choose not to order again but there's one very big reason why they do repurchase which is because they like the meals because they find a lot of value in our menu and they have the feeling that they eat better when they eat with HelloFresh with an increasing share of our revenues coming from tenur and loyal customers which are generally more quality sensitive and less price
• 68:30 - 69:00 sensitive We'll seek to invest really into the value that we give with each plate of food Over the last three years we've increased our prices a lot more slowly than overall inflation levels and we fought hard to maintain or keep quality at the same level than we had before But we haven't been able to really increase the quality of each meal or invest as much into better menu selection um as we
• 69:00 - 69:30 wanted In the next phase we now want to put a greater emphasis on noticeably leveling up the quality that we give in each plate of food And that comes in the shape of higher veggie content in each meal free access to some of the highest value ingredients proteins and meal types that we have in our offering and the introduction of new cuisines that drive excitement for consumers
• 69:30 - 70:00 We're confident that the combination of those will make the product better for our loyal customers will really give them a lot of reasons to return to the service and actually increase order rates over time with us Since 2021 we've already driven an ambitious road map in terms of menu selection size increase
• 70:00 - 70:30 If you look at our two examples that I brought both from North America Canada and the US then you can see that we in Canada scaled from an average of 20 weekly options in 2021 to by December 2024 more than 100 unique recipes that customers can choose from In addition we have given customers options to swap certain ingredients proteins or double up portions That's
• 70:30 - 71:00 part of our so-called modularity strategy where we give customers a lot more option to customize certain meals So very concretely right now if you have been a um vegetarian customer there were a lot of the meat dishes that obviously you were not interested in Right now for a lot of the dishes that we have we now start to offer some vegetarian alternatives to the protein cut that you have which means rather than having 10 options in a 50 option menu all of a
• 71:00 - 71:30 sudden you have access to 40 meals that you can choose from So really increasing the relevant choice for you as a customer Similarly in the US we offered about 25 recipes in 2021 per week to our customers and we've increased that recently to around 70 core recipes that we have on top of that additional modular options now for 2025 given
• 71:30 - 72:00 operational feasibility that we tested in Canada and also some of the customer response that we've seen higher order rates um larger baskets that you tend to see in the presence of a larger menu We're going to roll out menu improvements and selection improvement to our North America customers specifically in the US more forcefully in the second half of the year So given that we're investing a lot
• 72:00 - 72:30 into a bigger menu size it begs the question I guess like why is a larger menu so important and I hinted towards it with my example of a vegetarian customer but I think the broader point is customer needs are really diverse At the moment with our menu of 50 to 60 meals on average that we feature in most of our markets I think we do a good job in catering to mass market taste giving customers that
• 72:30 - 73:00 um don't have a lot of dietary restrictions or don't have a lot of um culinary um culinary guidelines that they follow like a good choice of meals within our current menu But given that customer needs are so diverse in a limited menu you always face a lot of trade-offs And so it's really sort of like within the company that our menu teams like fight over who gets to feature what type of meals in the menu which is always some type of
• 73:00 - 73:30 optimization question And where we want to go toward is a vision where we're not constrained by the number of meals that we can put on the menu but rather by the type of culinary preferences cuisines etc that we want to offer to customers Let me may give you one kind of like other very concrete example which um I often um which I often recommend um our colleagues internally to do to really understand the customer
• 73:30 - 74:00 experience Right now as a customer you have access to about 50 60 meal options So if you actually use the filter and sort function and you say you know what I'm a customer who is looking for convenience meals meals that I can do in 20 minutes or less and I don't eat pork Then all of a sudden out of this 50 options you only have six options left maybe six options is enough But then if you also have like a high degree of rotation because you want to feature
• 74:00 - 74:30 meals that customers like a lot then actually you get pretty quickly into a situation where long-term customers actually feel like the meals are too much the same over time and we can't drive enough excitement to them With a larger menu we want to move beyond having those trade-offs in our weekly menu And that's why we're going to invest into this ambitious selection road map into the future but very concretely into 2025 where you will see
• 74:30 - 75:00 double-digit increase in the number of meals that we offer in almost every single geography that we're in What a larger menu also gives us is more opportunities in advertising to bring that to life to actually talk about the chef collaborations that you have the organic proteins that you're featuring the new Italian dishes or Asian dishes that you're having like it gives a lot of more reasons to talk about the product and move away from let's say
• 75:00 - 75:30 financial incentives or monetary incentives much more into a content strategy to talk about that parts of our larger menu will also be dedicated to featuring more ready meals in our HelloFresh core menu Customers have always been asking ever since we started the business for speedier and more convenient options And over the last 18 months our focus has
• 75:30 - 76:00 been for me kits in building out a range of really convenient options that you can cook in 15 to 20 minutes I think we do a good job at that in meal kits Currently if you don't want to cook at all then I think um it's better for you as a customer to go to factor directly and get access to a wide range of ready meals that we have available But a reality for many customers is that they want to eat two three times per
• 76:00 - 76:30 week together around the dinner table with the family but then also kind of like consume certain meals by themselves individually And those meals very often um I think we can do a good job in making sure they have access to a subset of some of the best ready meals on the market that we produce in factor and that we feature either under the HelloFresh readymade or under our factor brand within the core menu as we expand the menu to more meals that customers
• 76:30 - 77:00 can choose from Now in the presence of a much larger menu obviously the discoverability of those meals which are the right ones for you becomes increasingly important We've over the last few years have started to build up a quite interesting firstparty data graph where we understand from customers their meal picking behavior through um some of
• 77:00 - 77:30 their revealed or stated preferences when we ask them what are your dietary preferences what are your favorite proteins meals that they have uh hearted within the app um some uh um meal recom uh sorry some behavior of similar customers lookalike customers So we use all of that to build up like a pretty rich customer data set and customer attribute profile on the back end which in a much larger menu than what we have today we can use to put those meals on
• 77:30 - 78:00 top and recommend those meals which we think customers will be most likely to buy even on the small menu or comparably small menu that we have today Some of those meal recommendation and personalization engines are actually quite powerful So if you easily can find discover and have the right meals recommended to you then on average it's more likely that you go from a paused state into an unpaused state or that you take that additional order um if it
• 78:00 - 78:30 doesn't take a lot of time for you to navigate and browse through the whole menu What you can see um on that page is just a very concrete example of that So all of those three different customer archetypes someone who is a vegetarian someone who is looking for high protein healthy meals and then someone who is looking for more family meals will have access to the same overall large menu But the type of meals that are recommended to you when we ask you to
• 78:30 - 79:00 make meal choice when we ask you to pick your meals etc will be very different And uh a lot of those results have proven quite uh successful for us which is why we want to crystallize that value by rolling out more and more of our meal recommendation and personalization engines to all of the different geographies Finally outside of our product investments we also want to upgrade the
• 79:00 - 79:30 service levels that we have And those service levels um come mostly in two different areas Number one the response times and accuracy of our customer service And secondly um the lead times for delivery So the time between you placing an order and actually having your order in front of your house and being able to start cooking um the more you reduce that lead time the better usually conversion rate because
• 79:30 - 80:00 customers are excited when they buy When they actually see that oh I can only get my first delivery in 5 days or in 7 days then you'll actually tend to see a pretty big pretty big drop off at the final stages of a customer making up their mind whether they should convert and start an order with us or not So last year we piloted next day delivery in the UK If you as a customer place your order before 12:00 p.m on a day you'll have
• 80:00 - 80:30 the box with you on the next day We've seen pretty successful results from that So um we've seen a much higher conversion rate on our checkout page which lowered our CACs Um and it also um we've also seen like a pretty good net promoter scores So customers raving about it And if you actually know that you're going to get your order the next day you're also more likely to put more items in your order because you have much better visibility what you're going to do the next 3 to 5 days in advance
• 80:30 - 81:00 rather than what you're going to do one week from now and two weeks from now which is basically the reality that many customers still face So our strategy here in a first step we're dialing up the volume of new customers that have access to that And over the course of the year we're going to tackle more and more geographies where we want to offer one or two day shipping rather than what we currently have which is 5 to 7 days between placing the order and actually
• 81:00 - 81:30 receiving the order on your doorstep and being ready to cook So all in all I think this is one of the most exciting um product investment and upgrade to the customer experience cycles that we've ever driven all of that self- financed through pushing through on our efficiency program But I'm pretty convinced that 12 to 24 months from now the customer proposition is vastly different than it is today and allows us
• 81:30 - 82:00 to go after a lot larger TAM than what we currently do with the customer proposition that we have All of this will be accompanied by a change in our marketing strategy which my colleague Patrick is going to talk about right now Thank you uh Dominic Um thank you also for the introduction and maybe because I am a somewhat new entity to this audience uh just very briefly My name is Patrick I'm your throat to choke on anything marketing related So if you
• 82:00 - 82:30 ever see one of our campaigns out in the wild and you have an opinion feel free to reach out to me I joined the business um towards the end of 23 or just about before Christian's chart started to move south on the marketing investment side So it's been a very exciting time and I'm very happy to share some of the upcoming initiatives but particularly some of the strategy changes that are were coming up um with you today I'm very excited to be here and after spending the last decade running marketing in high growth high
• 82:30 - 83:00 performance businesses like Uber N26 and other fintexs Um what I found here is an impressive degree of real time data that is actionable for actionable for the teams I found an incredible bias to action and a very focused focus on northstar metrics with a team that really gels together to execute on that It gives me a lot of confidence that the changes that we are putting forward as a leadership team together with the teams will be acted on effectively I'm also
• 83:00 - 83:30 particularly excited about meal kits because despite of what we might be talking about and some of the perceptions out in the market this is a massive opportunity category Gisha mentioned it before but I know that we've done an excellent job competing with other meal kit providers However we today only provide despite the billion meals we delivered last year about only 1% of the dinner category within the markets that we operate in We have a significant room for growth of meal kits And if I couple that with customer
• 83:30 - 84:00 insights large-scale research from last year in our seven largest markets that has told us that 70% or so of our addressable audience wants to spend more time wants to cook more meals at home and knows that there is huge value to them and their families in that But only 20% of them feel that the meals that they cook are actually rewarding to themselves to make and rewarding to their families to eat So what have we we have a large category that we are still underpenetrated in and we have a
• 84:00 - 84:30 significant target audience fact and insight that tells us they need to have a better solution for their options Many of them have yet to discover the value of meal kits for them and their households and we're going to make sure that we get our way into that To do so though we do need to shift our engines and our capabilities and our muscles and I'll talk a little bit about that Now Dominic just introduced the single biggest investment to the customer experience the core product value proposition that this business has ever
• 84:30 - 85:00 made in its history And to couple that and to really make sure that lands with customers in exciting ways we need to accelerate what we're doing on the marketing side in ways that I'll share now Fundamentally we need to move away from what has been a very effective growth engine but slightly more on the discount or tactic side maximizing growth at very low ROI thresholds prioritizing market share consideration within a very small addressable market focus looking at firsttime BA buyers that are already within the category And
• 85:00 - 85:30 trust me today if you show interest in the meal kit category in any market you live in I will find you Our engines are very effective and I am likely to convert you But that's not enough anymore and we do that primarily through discounter tactics and monetary incentives that I'll showcase on the next couple of pages Instead we have to pivot We have to pivot towards a place where we optimize market ROI marketing ROI to drive revenue growth and profit growth for the business overall in time
• 85:30 - 86:00 and in turn to finance some of the incredible investments that we're looking to make to the core customer value proposition We need to prioritize penetrating core target audiences for whom this is a very strong product market fit and with whom we know that we can have a longer term value exchanging relationship We need to improve brand consideration and strength of the entire customer base Not just prospects entering the category but also very importantly those customers that have shown loyalty us to us in the past And
• 86:00 - 86:30 we are going to pivot to using more and more interesting innovative product incentives to drive usage and tenure rather than just the financial and monetary ones that we have had uh to our to our disposal in the past To do so we're going to become stricter with ourselves You've seen some of the strictness in the financial parameters that Christian shared but we're also doing that in the tactics in the pipeline in the product experiences and in our marketing communication A
• 86:30 - 87:00 good example of that is becoming tighter on repeat voucher usage I don't think it's a big secret that people have gified their ability to shop us on a discount That will stop We will still leverage financial incentives to drive trial for those customers that are on the verge of making that decision but we will not allow for unattractive ROI negative repeat voucher usage behavior We will however take investment into
• 87:00 - 87:30 channels that really drive long-term brand recognition and create the demand that we can farm we can convert in the next 6 9 12 18 months going forward And very very importantly we are going to reserve a lot of the capital that we free up as we move from some of the discounter tactics to reinvesting into the core product experience and particularly reinvesting with some of our higher value higher tenure audiences In a nutshell we're going to shift away
• 87:30 - 88:00 from messages around a massive volume of free meals or deeply discounted meals and repeat discounts and always on discounts and always shop us on a discount into incentives that are more meaningful allow us to pull back on the discount elasticity which is meaningful in the category Introduce new innovations there Work with means to create stronger and more relevant midterm and long-term demand and we have started to do so several quarters ago The first evidence that we are seeing
• 88:00 - 88:30 from this is promising This is achievable This is doable And I think if you look at the proportion of discounts as a proportion of gross revenue in the US mekit segments you can see clear evidence of how we've been able to drive that down already It's just the beginning though And though we speak quite a bit about financial discounts we do need to still incentivize people potentially on the wall to try our products and become loyal
• 88:30 - 89:00 customers What I'd like to share is just one example of how we drive innovation within the marketing engine and then are able to playbook that effectively across regions This is still an effective global portfolio of markets businesses and categories And I think part of the strength that we have as a business is our ability to do something in one market and then playbook it across other markets An example here was at the beginning of last year an innovation around incentivization where we promised free breakfast items for the life tenure
• 89:00 - 89:30 of a customer coming into us It allowed us to move financial and monetary discount pressure and was very successful and has been repeated since We have however since then refined that process and incentive mechanism rolled it out to other geographies whether that was uh desserts in France smoothies and school snacks in the Netherlands free breakfast items elsewhere and even been able to accelerate and expand the incentive mechanization to core strategic partners like the partnership
• 89:30 - 90:00 with Careaway Pans for acquiring new customers in North America which was highly successful and uh we are open to more partnerships along the As we do this I think a very important vector underlying all this is the deveraging of what we do in marketing It doesn't mean that we will have the same message to everybody going forward It doesn't mean that we will target everybody on the same channel nationally going forward It does mean we are going to get closer to our target audiences We
• 90:00 - 90:30 will be obsessed about getting the messages right for them And we will also be obsessed about understanding the differences and potential value customers have and the value exchange that they have and the product market fit that they have with our meal kit businesses As we do so we are excited about first data points that we're seeing on success in moving down that avenue of yes investing potentially slightly less absolute value in marketing spend doing so with a closer focus on customer and generating better
• 90:30 - 91:00 returns for the business On the right here you're seeing data on evidence that we've seen and the H2 24 cohorts in coming into our business which after 10 weeks have shown a 6% increase in net revenue a gross revenue per conversion versus a year before And after 20 weeks we're seeing 8.4% higher revenue per conversion come into the mix It's a start but it is a very promising start of the journey that we're going into
• 91:00 - 91:30 Along with that and I think very important to mention here that there is a risk If we were just to go into the marketing engines and reduce the spend we are very likely to move ourselves into a cost cutting spiral That is not the intention That is not the strategy But we are finding efficiencies and we are doing better job at what I think we should be doing around really focusing on the right audiences at the right time and the right value capture What we've done in 24 across our geographies is actually repurpose a significant amount
• 91:30 - 92:00 of the savings that we're finding in efficiency in middle and lower funnel and driving them into more attentiongrabbing mid and upperfunnel investments to drive the brand awareness to drive category consideration and to really bring new audiences into the mix We also believe this is having a meaningful effect on the behavior of active customers But I owe you an data point on that as we become more mature also in our data models to prove out that efficiency along the way By the way you will find that generative AI has had
• 92:00 - 92:30 a little hand in creating the creatives here as we also develop more and more engines to become more efficient in how we create the assets that we prepare for our customer base Long-term demand generation I think is a key focus for us going forward I'm very pleased with the efficiency of our demand conversion engines but we need to build the muscle to grow the category and in doing so create the muscle to create that demand going forward What you're also seeing alongside ROI improvements and alongside
• 92:30 - 93:00 total value reduction in spend you are seeing a proportional increase in the amount of the capital that we spend in marketing on those mid and long-term demand generating channels We're pleased with that trajectory and we're pleased about the fact that we this is an and conversation for us and not yet a trade-off conversation in how we operationalize It is very deeply though for us not only a spend and category of
• 93:00 - 93:30 spend conversation It is fundamentally a capabilities building conversation We have a b business and marketing engine that is very good at driving conversion within the category We are very good at discounting mechanisms We have cracked how to drive promotion in the category We are effective scaled efficient globally at performance marketing and all the way down to the direct customer interactions around direct sales for example And I could expand this list in
• 93:30 - 94:00 terms of aspects of our engine where we have real defendable muscles What we need for the future is to maintain hone and continue to calibrate that muscle but we need to add to it the skill sets and the capabilities to drive real category growth for me kits That means long and midterm demand generation That means understanding and removing barriers to entry for specific target audiences The menu expansion that you were talking about means that we're creating more and more micro funnels with people with
• 94:00 - 94:30 specific culinary taste flavor and dietary preferences within meal kits That's that's removing barriers understanding better how convenience plays in a household where the cognitive load is decreased and understanding how we can help with that Ensuring that every week and every day that they cook with us is a real win That's about removing barriers It's also to a degree about myth busting for rejectors We've done elaborate research in the last year on people that
• 94:30 - 95:00 are rejecting the category audiences You might know people that say "Oh me kits I've heard about that but it's not for me." We really wanted to understand those dynamics and now have strong and firm datadriven insights on things that they believe about me kits that are fundamentally not true One of the surprising ones to us was that there is a significant volume of people that reject the category because they believe they do not have a choice in what they are going to eat that week So there's still a category building and education job to be done about meal kits itself
• 95:00 - 95:30 and the fundamentals of how to choose within the category All of that will allow us to really drive TAM expansion and we will continue to focus with product and physical product expansion and investment with investments into the digital ecosystem on the entire experience design What does it mean to be a meal kit customer with HelloFresh and how does that come to life for a tenured retained customer one key initiative is our loyalty program Our loyalty program has
• 95:30 - 96:00 been piloting in key markets for the last quarter or two Um and it really is a direct answer to a demand of our customers Last year we surveyed customers active customers and 35% of our active customer base said that the biggest pain point they have with HelloFresh meal kits is the lack of a loyalty program They were telling us "I'm an active customer but what do I get back in return?" Our loyalty program and our rewards program is a direct
• 96:00 - 96:30 answer to that It provides premium meal upgrades free shipping opportunities marketplace preferential recipes and potential price lockin Fundamentally what I really like about it it also gives us a mechanism not just to reward active customers and retain them in better ways but also to educate them about marketplace about ways that they can expand their offering with us Ideally for me also expanding my way into their household share of wallet and share of basket Initial results from the program
• 96:30 - 97:00 are very promising We've done this as a beta pilot and we've seen 40% of initial opt-in rate which isn't too far from the 35% I was mentioning from research before We're seeing that it's driving the right types of behaviors in higher projected order rates through lower pause rates and much lower cancel rates So we have yet to roll this out at scale but we're seeing very promising data And what I find particularly pleasing is that the satisfaction of people that are
• 97:00 - 97:30 in this program with the overall brand and mekit experience is been driven up quite significantly So promising first views of what can be and what will be when we roll this out All of this is accompanied as we've said before with a significant I would say almost once in a generation for this business upgrade to the physical and product experience You see a new box design over there which was just launched in the UK moving from our old boxes to completely refresh the external
• 97:30 - 98:00 curbside appeal of our boxes but also the potential layout of the box internally Ingredient packaging that does a better job of helping you construct the meal in an easy fashion does a better job of telling you the provenence of the produce does a better job of making you feel good about the choice that you've made and the choice that you're about to make to feed that meal to your family and rehashing the entire digital experience to make sure that there's more engagement with the product itself More stickiness with that
• 98:00 - 98:30 engagement and really ensuring this is my hope that should you ever make the mistake of canceling your subscription you feel like you're missing out on something I want this to be that good So take it together over the next 12 months we are seeing a massive upgrade to the customer experience What excites me is again that we've surveyed customers and we see that there's this big opportunity for growth
• 98:30 - 99:00 within the category There are so many households for whom meal kits can be a better experience And then there will be so many meal households that have tried meal kits three years two years one year ago to whom this will be novelty that we can go back to them and also ask them to retrial the product The customer offering itself is expanding with over 300 menu choices The integration of ready to eat meals when you have that moment where you just you know it's Friday night the voice your family sitting around the TV it's a guilty
• 99:00 - 99:30 pleasure And that great well-produced ready to eat meal might just be the expansion that we have for another night in your household Meal value upgrades the core ingredient the quality of the proteins the variety of the proteins in these in these meal kits can be elevated still and again we know leads to better customer tenure and better behavior the digital experience with an expanded loyalty program improved design and digital experience and personalization that allows you to eventually navigate
• 99:30 - 100:00 an offering of a much bigger menu choice in a more intuitive way Reducing that cognitive load it takes to decide what to eat next week and get that to your household proportioned easy to prepare and ready for your family to consume in a healthy manner A brand that cuts through the clutter expands the category is an elevated experience and really comes to life across the customer journey Not just looking for new people to join the brand but really making everybody feel better about the brand
• 100:00 - 100:30 especially those that are an active customer to continue to provide that retention halo effect And the new box and packaging design really providing better curb appeal and better friend appeal I want to be in a place that if your friend is standing next to you in the kitchen when you're preparing one of our meals they go "What is that i want it Tell me more." Service level Last but certainly not least you've talked about next day delivery and some of the experience that we're seeing there Flexible box sizes addressing every household composition
• 100:30 - 101:00 and making sure that you can get that box as quickly as possible leaving as little as possible room for buyers regret in that process So with that I hope you have a sense of the type of investment that we're making into the product experience into the marketing engine and strategy that we're deploying and that we're excited about that prospect And I'll hand it back to Dominic to talk a little bit more about factor
• 101:00 - 101:30 Thanks Patrick Um beyond meal kits we obviously also have a lot of plans um in store for how we want to continue to drive up the customer experience in factor and how we want to transition our growth in RTE in factor specifically to a more predictable multi-year growth formula As of
• 101:30 - 102:00 today the RTE players aggregate revenue in the wider food delivery space is still quite small So if you compare RTE to meal kits RTE right now is at about half the number of weekly orders that you actually see for the entire meal kit space So in that sense um still lots of room to grow and meal kits and RTE together make up a lot less than 80% a lot less than 20% of the overall food
• 102:00 - 102:30 delivery volume that you'll see I think we've uh benchmarked here the US data for you one of the obviously one of the most developed food delivery markets but and I think that's already that's specifically true for ready meals Uh the healthy ready meals that we're offering is a really new category So not really a category that has been there before but really a category that we and some other smaller players um developed
• 102:30 - 103:00 in the last couple of years And it's one of the first times that consumers actually break through the trade-offs that they usually have between convenience price um quality and health objectives the rapid development of the market overall but then also of factor as the market leader I think you can see in search volume trends um this year is for factor meals I think the same for healthier ready meals You can see that
• 103:00 - 103:30 over the last four or five years that category has seen a lot of demand growth and some uh spikes that you see here which point back to some massive brand building investments that we've done for RTE in the first quarter this year What's also true is that cooking operations and RTE operations are really hard And I think um I've just had a conversation um during the break and
• 103:30 - 104:00 somebody asked me like uh is it still fun for you are you still learning something new and I think this is one of the one of the examples where over the last couple of years there was tons to learn both for me personally as well as for us as an organization Because while there is a lot of things that are similar to Milkits everything around the technology a lot about um how you win over customers um a lot about logistics customer service etc subscription management so many different parts lots
• 104:00 - 104:30 of learnings and capabilities that we felt really good bringing from me kits into RTE Everything that is around food manufacturing and co cooking operations we had to learn and we've invested a lot into that and we generally also like hard businesses because if done right hard businesses actually give you a lot of defensible modes and it's much much harder for any potential new entrance into the category to actually get some get some traction So just some of the
• 104:30 - 105:00 ones that I wanted to mention here is that aside from building and now efficiently operating two of the three largest commercial kitchens in the US we've also invested a lot into food science for optimal and consistent taste So just as an example it makes a massive difference if you grill a chicken breast for 2 minutes or 2 and 1/2 minutes to then how you actually ship that from one part of your manufacturing process to
• 105:00 - 105:30 the other part of the manufacturing process in terms of the juiciness the tenderness the grill strips that it has And that's basically true for every single component in that food manufacturing process We've also invested a lot into nutrition science and uh my colleague Kono is going to talk about that um a little bit later to explain our nutrition philosophy Shelf life testing and all the different shelf life requirements as you ship those ready meals in different
• 105:30 - 106:00 temperature zones into different states are regulated by different agencies etc Definitely lots of things for us to learn and muscles and capabilities that we've built that we now want to capitalize on more that we've successfully migrated in our two buildings set up those teams and started to build those capabilities I think to a degree that I would probably claim no other um ready meal company has in that same setup that we have mastered those
• 106:00 - 106:30 at the moment So a lot of the last two years was really first scaling customers massively in Q1 last year after moving into our second large facility making sure that we get to certain volume thresholds quickly so that we don't suffer from severe underutilization of those big buildings that we actually moved into and was then followed by strong productivity
• 106:30 - 107:00 improvements that Christian mentioned from Q2 to Q4 With that behind us I think what is now our clear objective is to transition to creating a much more predictable and less volatile multi-year growth formula for factor one that rests on many different legs and channels and that is not subject to as much volatility as what you have seen from us because I
• 107:00 - 107:30 think also a lot of our supply chain buildout has is now behind us and a lot of the capex especially North America has been spent We really want to avoid some of the mistakes that we've did in Milkits which was chasing growth too hard without improving the product in lock step without improving our supply chain capabilities in lock step and not investing as much into the brand for long-term brand desiraability and a much
• 107:30 - 108:00 more predictable growth path So going forward our goal is to invest behind an always improving customer proposition an always improving supply chain network and building a brand which brand strength you can harvest over many many quarters to come which will give you a much more diversified and clear more clearly predictable growth path So we before we dive into each of those
• 108:00 - 108:30 different legs of that growth strategy let me similarly to Milkits remind you of the customer archetype that we currently serve with Factor because once again it'll make you understand why we actually do make some of the investments into our loyal customer base but at the same time also what we need to do so that new audiences find similar value in our menus like our best customers customers do today So factor a lot more of our
• 108:30 - 109:00 customers are either individuals or living in partnership The share of families is actually quite low Most of the meals are consumed individually rather than around the dinner table or around the lunch table And a lot of our customers are very health consscious Of course that's a lot driven by the brand positioning that we've had up to date but compared to Milkits a lot of them follow pretty restrictive diets and
• 109:00 - 109:30 we're in the in the market of actually making sure that they have a shortcut to following those diets without having to understand all of the science behind it They're also very um they're also very interested in nutrition and in ingredient provenence very often making that one of the key components of whether they actually choose you over some competitor or over some alternative meals
• 109:30 - 110:00 Now for 2025 specifically our plans for RTE are number one to double the menu size that we offer Number two to invest beyond those health preferences that we've been active in in the market for the last 3 years which is basically keto high protein and low carb And one of the ones that we are most excited about here is the launch of our GLP1 preference
• 110:00 - 110:30 We're also going to invest into a much wider range of factor branded products first sold in our factor marketplace but with a view to also sell them across different channels going forward And finally to close the feature gap that we still have compared to the Milkits business Those are digital features but also service level features such as delivery days All of these four strategies should very much pay into improving AOVs improving
• 110:30 - 111:00 AOS and allow us to capture new customers and penetrate the market more deeply We see pretty great potential in scaling the number of meals that we're going to offer to customers Like I just mentioned for the last three years and basically since we've acquired factor we've been focused on three main health preferences high protein keto and low carb Keto I think has definitely come
• 111:00 - 111:30 down from the height of its popularity and has been replaced by high protein and lower carb diets as the dominant health trends in the industry With a larger with a larger menu we now want to offer the same depth of selection to other preferences that we already have today such as vegetarian flexitarian or low calorie meals but also really invest into some new
• 111:30 - 112:00 preferences which we haven't offered before And one that we're particularly excited about is our GLP1 range It's a range that we launched on a limited scale in December and I think by months four so in our current months we have about 10% of customers coming to factor which choose to eat primarily GLP-1 meals The GLP1 preference right now only has five meals per week So this is a
• 112:00 - 112:30 small pilot that we've done but we're actually quite excited about the results that we've been seeing And given that we feel there's clear customer demand and clear product market fit what we're going to do over the next six months is build out our recipe database much more deeply so that we can actually have enough and deep selection for customers on the drug or postgp1 usage that are looking for meals that are a shortcuts to still neutriting the body healthy and
• 112:30 - 113:00 in line with recommendations while using or post usage of the We do think that GP1s were one of the most one of the biggest disruptions to the overall food ecosystem and we actually feel that right now there's a strong window of opportunity to build a trusted brand A lot of GLP-1 users don't want to go into the details of the
• 113:00 - 113:30 science and really understand how do I still with a lot less less appetite make sure that I get enough protein intake that I don't eat too many sugars that I have enough fiber-filled nutrition in um in my diet All of those things I think are big big wants from um big big desires from customers on the drug but there's very few trusted brands right now that give you access to trusted meals And this is something that we want to invest in first by focusing on the
• 113:30 - 114:00 food manufacturing part because given our two large commercial kitchens given all of the other things that are really hard about food manufacturing that we have figured out we think that is something where very few others can compete with us But we're also open to partnering with others around supplements um around nutrition advice And um it's something where we definitely feel there's a strong window of opportunity right now to establish yourself as one of the hopefully few
• 114:00 - 114:30 brands that emerge as winners in that GLP-1 category Those are some of the product plans that we have Next up I'm giving the microphone back to Patrick to walk us through some of the plans in terms of brand building and internationalization Great Thank you Dominic And um it's amazing to hear the the focus on dietary preference They're also really yummy Um so you're going to have an opportunity
• 114:30 - 115:00 to try some of the products uh I believe over lunch and Connell is going to tell you a bit more about that Personally uh I have an on andoff factor uh subscription for office lunch So if I'm here for the full week that that's what my factor subscription does for me What I find particularly interesting around factor uh notably in North America where it is already a multi-billion or billion plus revenue scaled business and remember we have a fundamental marketing growth engine that has already scaled to billion plus
• 115:00 - 115:30 revenue businesses globally is that this business still has a lot of runway It is in a category that is scaling and if you just compare from a data perspective the visibility the awareness that this brand right now has versus our mature HelloFresh uh business it's less than half in uh in ada brand awareness in Q1 of this year the North America team has put out an amazing campaign to really introduce factor to a broader audience and to build the mid and long-term awareness consideration and demand that
• 115:30 - 116:00 our existing engines can then go and convert and bring customers into of this product That effect has had a meaningful effect on that campaign has had a meaningful effect on the brand awareness of factor driving it up over 12 percentage points in the first quarter of this year so far So we're seeing promising results there and I think it's a start into a really interesting foray But it's not just about the campaigning Factor is a brand that we believe really has a lot of runway It has runway also
• 116:00 - 116:30 from an expansion perspective from a share of wallet perspective basket size perspective and from a brand stretch perspective We have and will be launching attractive branded ranges to accompany the core meal portfolio there Juices and smoothies are already live as a part of our product offering in a number of the markets that factor is active in as an upsell item high protein desserts So if you're digging for that little snack or the ice cream in the middle of the day this is a choice that
• 116:30 - 117:00 you can make without tradeoffs And I think that continues to be a red thread throughout this brand You can have the choice that you want without a trade-off You can have an amazing ready to eat meal that's ready in minutes that is fresh has great ingredients tastes amazingly and is nutritious All right no trade-offs here And yet in a very controlled environment you could potentially get a fresh meal through takeout or some dark kitchen but the variability in your nutritional intake
• 117:00 - 117:30 the variability of the flavor profile of those meals will not by a long shot be as consistent as what you will experience on factor with these products Protein shakes but also healthy snacks again without trade-offs as additions into this product portfolio either already launched or coming very soon As we look to expansion of the factor business it's not just about expanding the range of factor branded products It's also about its international expansion profile You've seen our ready to eat
• 117:30 - 118:00 revenue scale successfully in the last years first with an acquisition in uh in Australia with the EU foods business the launch of factor into Canada very close to Connell and his story in a second there and since 23 launching into our international European markets with the last of those launches being Germany right at the end of 2025 North America is still the biggest ready to eat growth and profit contributor for us in the midterm and it's naturally where we're placing some of our biggest scaled investments However the other businesses are running
• 118:00 - 118:30 at pace and we're excited about the traction that we're seeing there And particularly we're seeing that both Australia and Canada are starting to scale nicely after insourcing of the cooking experiences and the learnings that Dominic also mentioned before As we continue to expand in Europe we had seen a 10 times um revenue sorry order increase from 23 to 24 and we're going to double that 25 We're doing that
• 118:30 - 119:00 with still a very restricted menu We're doing that in close partnership with co-manufacturing sites and so we are limiting our degree of pace here to make sure we get it right And I think if you look for red thread across some of the businesses that we've built and scaled I think we've proven out that we take our time to understand product market fit we take our time to playbook how to bring a brand and a business into a new market find the right way to make sure that it is scalable and that we can continuously and consistently deliver on the product
• 119:00 - 119:30 and experience quality And then we go and so we're right in the middle of that phase for the European markets We have validated the product market fit We are working on the investments to make sure that we can produce these ourselves alongside co-manufacturing sites to really and uh really capitalize on the larger long-term opportunity But besides range extension and market extension we also believe that there's really exciting opportunities in expanding new ch sales
• 119:30 - 120:00 channels new to us right and so this is a a new territory that we haven't engaged in on the meal kit side One of these is ready to eat for work We know that in office meals are a big deal and that this is a perfect product market fit in geographies where that is largely a warm meal experience and we're looking to understand what the traction is that we can get for benefit and remote first employees as well as in office employees We're looking at non-traditional retail partnerships like universities gyms
• 120:00 - 120:30 selling factor meals as an opportunity And there are thousands of these decentralized sales opportunities But we're also engaging in food as medicine programs and have first traction there in the Australian market with the ready to eat opportunity to make sure that people that are being supported in governance schemes have access to freshly cooked highly nutritious meals again that are very consistently produced at an incredibly high quality level We're excited about this one because of the brand extension and and brand introduction into new channels but
• 120:30 - 121:00 also because of the stickiness of revenue and profit that this gives us alongside the ready to ready to eat and direct to consumer businesses I mentioned the distributed uh non-traditional uh sales locations So we are making forayas into non-traditional retail locations and one-off sales locations with factor as a brand We're looking at higher education in universities hospitality loca locations high-rise residential properties self-operated gyms and so
• 121:00 - 121:30 forth and so forth We have uncovered the requirements and have started to build the supply chain to do this We are starting to go through our first sales cycles learnings and opportunities and once again are seeing a lot of light at the end of that tunnel as we're making the infrastructure investments to do this right From a marketing and brand perspective I'm excited because it gives what would otherwise be a largely digital experience brand alongside the physical product a real physical touch point So Factor is a brand that before
• 121:30 - 122:00 long you'll be able to come across and experience in more and more parts of your customer experience and ecosystem and the world that you live and operate in as a one-off product It's a great solution for somebody that's already on a factor subscription to get a meal if they didn't remember to bring one or they find themselves in a location where they don't have access to a meal But it's obviously also a great way to introduce new shoppers into this brand on a one by one meal scenario to then eventually bring them into a steady subscription state So with all of this
• 122:00 - 122:30 going around the uh going on with the factor brand uh we're continuing to scale we're continuing to invest We're seeing great traction on both the upper end of the funnel and investing into the brand as well as now making sure that distribution is more widely distributed and that the product portfolio stretches the brand into new adjacent categories as well So with that I'll hand it back to Dominic to talk about some of the specific programs and bundles that we're building to better service those customer demands
• 122:30 - 123:00 Exactly So as we're building up the factor branded ranges we want to make sure that we can bundle some of the products that we're creating together to actually be in a position to offer full meal plans and full diet support to different customers Food as a medicine is one of the biggest trends I think at the core of it basically saying like hey it has a really big impact how you feed your body
• 123:00 - 123:30 for a lot of different chronic conditions but also just if you want to build muscle or lose weight and weight management itself as one of the biggest health contributors to your overall health Hence what we're in the process of launching in the second half of the year is that we want to build initially two programs one for building muscle the other one for losing weight And what we do there is ask you a number of different questions around your health
• 123:30 - 124:00 goals how many times per week you want to eat with us how many other meal occasions you want to um you want to be supported and help you track your progress against your macronutrients micronutrients and overall caloric intake So on the example here for building muscle will probably you know we would recommend to you those are the highest protein meals that we have in our assortment Would do you also want whey
• 124:00 - 124:30 protein under the factor form brand can we give you some additional high protein snacks some high protein overnight oats for breakfast etc and basically put that all all together and help you track the progress against those stated health objectives Similarly the same thing for weight management where we want to support you in choosing number one for a range of days throughout the week those
• 124:30 - 125:00 meals which are lowest in calories and lowest in carbs We want to recommend that you replace some of your meals with some of the whey protein shakes and some of the um other snacks that we actually have in our assortment rather than um skipping that meal entirely And once again helping you to track your progress against your overall health goal in a number of years So in a number of uh
• 125:00 - 125:30 number of weeks sorry Why we feel good about that is we've done a bunch of investment into the technology and into coming up with all of those different products and now it's about on the front end making sure that customers can access those products in one subscription and within one meal plan and actually keep track of how they're doing against their stated health goals So this alongside going um to RTE for work going
• 125:30 - 126:00 to non-traditional retail is like a third pillar how we will actually expand the TAM and also better monetize customers through offering them bigger bundles um to consume with factor going forward So before I hand over to Kono just very quickly the one minute summary and bringing all of the different elements together we're going to transition
• 126:00 - 126:30 factor into a more predictable multi-year growth path that doesn't rest on just scaling direct to consumer and chasing conversions but making sure that we build in lock step our capabilities in the supply chain the brand that we have and also the product which will grow a lot already this year The growth strategy hence rests on TAM expansion through internationalization going into new channels TAM penetration through bigger menu size new meal occasion um
• 126:30 - 127:00 and brand building and monetization by extending our factor branded portfolio So all of these taken together should provide us with a long growth runway that we're aiming to capture not only over the next couple of quarters but over the next couple of years and over the course of the year we want to get into that very repeatable and predictable growth pattern that you can then expect for from us to uh to extend
• 127:00 - 127:30 over many many quarters Before we go into the Q&A I want to hand it over to Kono who is going to talk about the nutrition philosophy one of the key pillars of our Factor brand and something that in customer research a lot of people reference that this is really one of the key reasons why they trust Factor as a brand Thanks Dominic And thank all of you for being here today I'm Connell and I've
• 127:30 - 128:00 been for at HelloFresh for nine years now In my last role at HelloFresh I led the launch and then the scale up of the factor business in Canada And now I support the expansion and development of factor here in Europe And today I want to talk a bit about what makes factor factor and that's our commitment to nutrition This commitment extends throughout all corners of our business from our brand
• 128:00 - 128:30 identity to our organizational structure to our product development process and a lot of our manufacturing practices So we'll highlight a few of those aspects today First a quick recap on how it all works from a customer perspective Every week we release a new menu for customers to choose from Our chefs then cook those meals to order We then deliver those fresh meals directly to our customers doorstep and they heat and eat in just a couple of minutes No prep no
• 128:30 - 129:00 mess And there's a lot to be excited about on that menu In the US we currently have over 40 meals available every week rotating every week And we also have a very large selection of other products across breakfast beverages snacks and desserts so that customers can get a healthy nutritious trustworthy option from us for any time of day And obviously we're much earlier in our journey here in Europe so it's a smaller menu that's available here today but this gives a pretty good idea of our
• 129:00 - 129:30 product road map and what's to come Underpinning everything on that menu all the recipes all the add-ons is our nutrition philosophy Factor is about helping people live better We believe that living well starts with nutrition and that nutrition starts with balance Our approach is rooted in using highquality ingredients and evidence-based nutrition principles to
• 129:30 - 130:00 support balanced lifestyles And it's by balancing by balancing these nutrition principles with our focus on making delicious tasting meals that we empower our customers to make healthier choices effortlessly And this focus on nutrition is not new Factor's origin story is rooted in health and wellness The original name factor 75 references the idea that 75% of how you feel and perform is based on what you eat And
• 130:00 - 130:30 although we've since rebranded that nutrition focus is still at the core of every product decision we make And our customers feel strongly about our approach The importance of whole minimally processed foods in their day-to-day diet is something that continues to resonate in customer research This is an example from a recent study where topics like no refined sugars or
• 130:30 - 131:00 refined oils rose to the top of a long list of desirable meal attributes So I'd love to talk a little bit more about the nutrition philosophy that we've developed and that shows up in our product There are three pillars Nutritious well-balanced meals ingredients with integrity and designed by dieticians Every meal is designed with nutrition at the
• 131:00 - 131:30 forefront Every meal is nutritionally complete with a balance of proteins fiber and healthy fats perfectly portioned and satiating In a recipe development process we ensure that every meal is formulated with specific macronutrient targets that support a specific dietary preference or goal And it's through these targets that we ensure that every meal is designed to improve the health and well-being of our customers and designed to manage and prevent nutrition related chronic disease All supported by
• 131:30 - 132:00 scientific research Importantly we're not prescriptive about a single diet or a single way to eat healthfully So we offer a wide range of plans to support a variety of different goals and preferences And each of those plans is filled with meals that fit our nutritional philosophy a balanced macronutrient profile and clean healthy minimally processed ingredients And that brings us to pillar
• 132:00 - 132:30 number two ingredients with integrity We are relentless on our ingredient standards We have an incredibly high bar Every c every meal customers can trust uh from factor reduces or minimizes the use of refined sugars and carbohydrates minimizes inflammatory oils avoids filler ingredients and additives and prioritizes ingredients that have proven researchbacked health
• 132:30 - 133:00 benefits On the right you can see the actual ingredients list from one of our most popular meals our pesto salmon with green beans and tomato butter This is all you're getting when you order this meal Clean whole food ingredients no junk Our ingredient research process is robust and requires multiple levels of approval In particular ingredients must fulfill four criteria in order to be
• 133:00 - 133:30 used in a factor meal There must be a clear purpose for the ingredient There must be a clear metabolic pathway for the ingredient There must be no research demonstrating potential negative side effects And we must be aware of and comfortable with how the ingredient is publicly perceived When the research is unclear our stance is to lean to the side of caution It can be hard deciding which ingredients to say no to And as you can
• 133:30 - 134:00 imagine it complicates our recipe development and manufacturing processes But we are deeply committed to our ingredient standards and we want to continue evolving them with the everchanging dietary landscape To date over 130 ingredients have been banned for use in factor products by our team's research process We are only able to conduct all of this research because of our third pillar which is that every meal at
• 134:00 - 134:30 factor is designed by a dietitian Our internal team of dieticians sets and maintains our ingredient and nutrition guidelines and they continue re-evaluating them with emerging research Every factor recipe is brought to life through a collaborative and iterative process between our in-house culinary chefs and our in-house dieticians At every step of the development cycle
• 134:30 - 135:00 we have different checks and balances to ensure that we are not only delivering meals that fit our nutrition philosophy but we're developing meals that taste great and continue to excite our customers This starts with the recipe briefing process where we ask questions like "What new dietary trends are emerging and show clear benefits in scientific research what new culinary concepts will bring more variety and more excitement to our
• 135:00 - 135:30 menu Then we have several stage gates where we must pass both culinary and nutrition approval in order for a recipe recipe to proceed This often requires several iterations going back and forth to ensure that we are fulfilling both sets of criteria This tension between taste and nutrition is at the core of the product development process at factor Of course none of this matters if
• 135:30 - 136:00 we cannot ensure that every meal is consistent in production from meal to meal And so that's where our commercialization process comes in Here we have a dedicated team that focuses on ensuring every single one of our nutritional and culinary promises translates from the test kitchen to large-scale production This is where we really put our recipes through the paces A recipe cannot be marked ready for production until it has passed a series
• 136:00 - 136:30 of scaling tests process refinements culinary tastings and shelf life testing It takes a crossf functional team of food scientists health and safety experts trained chefs and dieticians to oversee this stage But the result is a meal that our customers can trust They can trust the nutritional accuracy They can trust the quality They can trust the consistency that their favorite meals will taste the same each time they order them And they can trust that each meal
• 136:30 - 137:00 will taste just as good whether on the first day of its shelf life or near the end And we're not done there We look at every customer comment and piece of feedback on every meal that we ship And we do it through both a culinary and a nutritional lens We want to ensure that we are consistently beating our customers expectations on taste but also that we're genuinely supporting them in pursuit of their goals
• 137:00 - 137:30 When it comes to meal selection we really want customers to feel confident in their choices And that's why we offer a free 20inut consultation with one of our dietitians Anyone can sign up for a nutrition coaching session Our dietitians help customers by uh answering questions about the ingredient and nutrition profile of our products or by making recommendations about which meals might be a best fit for them based on their goals and empowering them to
• 137:30 - 138:00 feel confident in their future selections They might help by setting fitness related goals or supporting on other lifestyle changes And they also bust common nutrition myths We're passionate about nutrition and we think that this is a great way for for us to help our customers live better That's our philosophy but of course it's ultimately the meals that matter So we've had some factor meals delivered from this week's production run And after the Q&A I'm excited to let
• 138:00 - 138:30 you experience firsthand how our nutritional philosophy comes to life Thank you [Laughter] Thank you Connor Thank you everyone Um we're ready to take your questions If you've connected via the live stream please email your questions to irofresh.com if you haven't done so already although we have a few already on our email Anyone wants to kick it off with
• 138:30 - 139:00 the first question please islam Okay Uh thank you everyone for your presentations It was a great and informative day as always Um my first question is for Dominic I think people are curious to understand in terms of valuing the TAM for meal kits because you're doing 5 billion of revenue
• 139:00 - 139:30 already How big do you think the underlying global market is and in that context what is your market share right now um and could this expand going forward with all of the initiatives that you've discussed that's question one Um and question two I think there's a lot of curiosity on the customer habits in ready to eat versus meal kits Is the retention better in one category over the other so does it make sense to drive one business more over the other some color there would be great on the two
• 139:30 - 140:00 Thank you So with regard to your first question it's always hard to basically put a number on the overall TAM I think what I showed in the presentation was the TAM for home cooking is obviously really really massive And I think what's super important is to understand that the TAM that you can service So the serviceable market is always very much dependent on the product that you actually have I think one of the references I made I
• 140:00 - 140:30 think with the product that we had in 2019 we would be like way way smaller than we are today and I also think that if we are not continuing to build our product then certainly with the product that we've had like last year that we have this year if we're not going to invest into that product then I think we are very highly penetrated in that space so in order to actually return to growth I'm convinced that we need
• 140:30 - 141:00 to that we need to um invest into the menu selection that we need to not only cater to those customers which already find big value in the menu as we have it right now but also to customers that have other dietary preferences that have other culinary taste um that want to see other cuisines etc If we can offer that paired with better service levels then personally I think midterm the market is going to be bigger than it is today In the short term like very clearly we want
• 141:00 - 141:30 to focus on the core of our loyal customers I think you've seen that um that shape of the of the revenue that we're going through right now with pulling back and marketing But long-term if you just think about the opportunity then my core belief is it's always a function of the product that you have And in my view if our product is much better in two years than it is today then we're also going to be a bigger business by then Thank you And the customer habits between the two categories
• 141:30 - 142:00 Um so the big the biggest driver of long-term retention for customers is always like the quality and the size of the menu So once again it has to do a lot with the customer proposition At the moment I think for you know RTE customers that are following a keto diet a high protein diet etc I think we have a really good offering That's why for those customers we also see like very high retention There are others for example vegetarian flexitarian etc where
• 142:00 - 142:30 I think our offering is okay but I'm not particularly like proud of like the depth of selection etc that we have in there And I clearly think that if we build that out further then we'll also get the benefits of better retention there Right now if you just look at sort of like average um of all customers that we have between meal kits and RTE there are not tons of big differences if you look at an average customer But obviously with the shift to more loyal
• 142:30 - 143:00 customers and mekits we would expect that our retention there for the average customer should increase And the same thing as we build out a deeper menu with more selection for some of the customers in RTE that we're not serving that well um as well I think that should kind of like move um in turn But in the end it's all things that we own like it's it's a derivative of um how good is your customer proposition Thank you Yeah Hi it's Marcus Ste from JP Morgan
• 143:00 - 143:30 and two questions The first one also on meal kits Um and thanks for the slides I think they are the best in the capital day that I've seen Yeah So on on retention I ask every time So so thanks for this Um um but if you can go a bit deeper I mean you could obviously be cynical and say if you don't acquire new customers of course then the share of loyal customers goes up Um if you can just elaborate a little bit more about this loyal customer base Yeah Because there's a lot of focus on this I think Christian you mentioned that they
• 143:30 - 144:00 continue to see very long um lasting order patterns but if you can tell me maybe or give me a bit more information um in terms of yeah their order patterns longer term that I can really sort of underwrite that at some point this starts to to stabilize that's the first question and then I have another question on financials you want to take it yeah um love to so um Marcus that's why I tried to show you both not the share It's clear if we
• 144:00 - 144:30 acquire less new customers then the share of existing customers um should uh should go up but also the absolute numbers Yeah So to your point um if you want to take a super conservative view even if we were to run down which we don't plan forever Yeah um our marketing spend where is kind of a a bot 2/3 of our orders which means more than 2/3s in terms of our revenue are created by these long-term loyal sticky customers and absolute orders so not just their share but the absolute number of orders
• 144:30 - 145:00 has not moved from them from 23 to 24ol we've taken out more than 20% in Q3 close to 30% um of marketing spend for that category okay perfect and then on the financial questions Um the revenue growth from 2027 is that largely driven by mix effect coming through growing business taking a higher share in in the mix or do you also also expect meal kits it themselves to grow in in that year
• 145:00 - 145:30 that's the first question and the second question here um the 200 million net cost savings um is that pretty much the number that we should add to the up to 250 epit um that we get in 25 into 26 you know just a simple math or if I forget anything in terms of re reinvestments So your baseline is 20 maybe I can start with the the cost and um efficiency side your baseline is um is 2024 Yeah So our program started
• 145:30 - 146:00 middle of 2024 the 200 net extra against that um baseline of 136 million EBIT in 2024 And yes yeah to mentally say okay there's a 200 million tailwind from all the um cost measures that um Christian and the company are pushing through That's um that's a good base assumption Yeah With respect to 2026 but you mentioned that like 70% of these savings come in 25 and you guided EBIT EBIT for 25 already So we just take the majority
• 146:00 - 146:30 of these savings this year and then another I don't know 80 or I implemented Yeah And thanks for for clarifying are implemented in 2025 Implementation means from then on we start to um to clip savings But when you look at the individual measures obviously not all of them land on the 1st of January but they land through through throughout um the year of 2025 Some have initial costs attached to it as well So the full run rate of those 70% we will see in 2026 already plus
• 146:30 - 147:00 basically the remaining 30% of measures by value that we're taking in 2026 Those two will add up to a in-ear 2026 saving of 300 g 200 net Yeah And and then lastly and I shut up um revenue growth is also driven by me kits growth in 27 or just mix effect So we're targeting for a stabilization sometimes during 2026 and then based on product enhancement everything that we discussed
• 147:00 - 147:30 um we see a path to positive growth also the meditate side Beyond that you're making a big investment in the offering this year doubling the menu size and and um improving the delivery service and so on Do you once these improvements are
• 147:30 - 148:00 implemented do do you think it would make sense to to to dial back into more performance marketing than this year perhaps in 26 um so has has this improvement I mean are you waiting for that improvement and does this affect at all your decision on on the marketing side or or not or or or the shift is just the structural you want to stay there uh for the coming
• 148:00 - 148:30 years and then specifically on on on the next day delivery rollout um you know um first of all what is the experience in the UK from from that offering and and at what pace are you planning to roll it out thanks Do you want me to take the marketing piece maybe so on the marketing side I I think the the mental model there is if those improvements and they will deliver incremental customer value and also attract a broader range
• 148:30 - 149:00 of highv value customers that gives us a cycle of positive investment on the marketing side So we are not pulling we're not stopping our performance marketing investments today We're bringing them back to levels that we think are adequate for the customer values that we're seeing and targeting less of the quick dip and discounter customer base and more of the people that will trickle down into the healthy long-term tenur customer base So that's a focus question If we see through these improvements and again that is the that is the supposition that is the hypothesis and the investment one
• 149:00 - 149:30 customer value will increase and addressable TAM will increase we are going to increase our marketing spend along those lines to continue to maintain the ROI levels but in absolute volume start to find more customers that fit the mix So that's at the very core of that strategy Next day delivery don't on yeah on next day delivery So I think you need to look at number one our firsttime buyers for whom fast
• 149:30 - 150:00 delivery speed is absolutely crucial and then you have our more tenured customer base who usually have a certain schedule when in the week they actually get their delivery and for them kind of like getting it a day earlier or later they usually have found the week day that works best for them So when we talk about investing into next day delivery then it's mostly to think about the new customers that you have which when you
• 150:00 - 150:30 bring them to your site when you know all of the brand building that you've done before and then you're about to harvest that demand that they actually remain excited as they click the purchase order button and can be sure that the next day after they click that button they can actually like start cooking So if you talk to new customers and potential rejecttor reasons then definitely one thing that you hear is people saying oh you know what I was so excited about that product I felt that
• 150:30 - 151:00 finally sort of like this is a good time to start it but now I have to wait 7 days I actually don't know am I going to be in town or not in town in uh next week etc So very clearly this is something that is a big benefit to new customers and means that for about you know 10 20% of our customer base we need to find ways how we can give them access much much faster from the time of delivery from the time of order to the time of delivery And that's really sort
• 151:00 - 151:30 of like where you where that is visible in conversion rates on your site and in more potential customers actually becoming actual customers Thank you It's Charles Thorn from Jeff First question was on that long tenur customer that's been referenced a few times today Uh it'd be useful to get a sense of how pricing how sensitive to
• 151:30 - 152:00 pricing they are Um over the recent past as I understand it they've been able to get more and more value as you've kept food um meal prices below levels of food price inflation Um are they still there because of that or could you push them harder on price uh and that's absent all the product upgrades you're going to do Second thing is um just looking into the US and and looking at Blue Apron being sold for the first time on a non-subscription basis by New Parent
• 152:00 - 152:30 Wonder Is that an innovation that you'd ever think about and lastly um what's your ambitions Christian for costs after 2026 i already forgot the first question Maybe I can Can you charge your long tenure customers much more without them evaporating on on pricing don't want to get that um or price sensitivity don't get that as one of the attributes on that um on that slide So that customer group is typically much less price sensitive Yeah So for them when we query
• 152:30 - 153:00 them basically what are the key important things for you then it is ingredient quality variety so that they don't get bored given that they are so so long long-term customers for us the choice that we give to them the consistency of the service level and then the last point is they also want to be rewarded for their loyalty Yeah So that we give them now something through um through a loyalty program they find is fair um but um they're not really sensitive to the headline
• 153:00 - 153:30 price So i.e there is quite some pricing power on our side Are you under monetizing them are we what under monetizing them I think first step is to make sure that we provide them with really great value and then we can see if there is um if there are ways to better monetize that willingness to pay I also think the statement that you made that we're not passing potential ingredient inflation on to customers and keeping those prices
• 153:30 - 154:00 steady is is not fundamentally accurate across the portfolio of markets So we we do know what those LSC's are We do have a regular cadence of price increases to those audiences as well as new customers Um feel pretty good about the insight and the knowledge that we have around the ability to do so and balancing off to your point volume versus uh margin debates in that process And then the final question on Blue Apron and and selling on a non on a
• 154:00 - 154:30 non-subscription basis Oh and also costs Yeah I think we've had over the years like a number of competitors that tried to move to nonsubscription models I think there is certainly like a small group of customers that appreciates um the flexibility of not having to flexibly subscribe to a service If you think about the benefits and the power of the business model um
• 154:30 - 155:00 and also like the routine schedule that many many consumers have then I think for the vast majority of people interested in home-cooked meals a subscription works well gives us much better visibility predictability lower waste etc in that made to order model um I don't see it as a as a big threat And I'm sure that there are some customers who appreciate that but I think it's
• 155:00 - 155:30 actually a small part of the customer group interested in Milkit And on a course set beyond 2026 that's quite some time obviously So let us first deliver on everything that um um that I've shown you today Um our midterm margin targets for both product group stands So we want to be north of 10% ebida margin on both of our product groups MI kits we work quaza there last
• 155:30 - 156:00 year already This year we'll push beyond that and um and we'll further grow from there On the ready to eat side we've got at least as good unit economics We're investing we're expanding quite a lot the contribution margin right now At some point we will also take down the marketing spent on a relative basis So the key driver then in terms of further margin expansion beyond 2026 will be on the ready to eat side where we get to that long-term margin target and potentially beyond at some point
• 156:00 - 156:30 Hi uh thanks for taking my question Uh I want to know how do you think about the threat from tariffs and uh what can be done to make the business more antifragile to that yeah thanks for that Um so there are some direct impacts Um I would say a couple of things One is obviously the vast majority of our business and ingredient purchasing is in
• 156:30 - 157:00 market So there is a certain degree of natural hedge that we have in the in the business Beyond that taking our US business for example there are certain vegetables that we source from Mexico for example So if there is a um um a tariff coming in place um April going forward there would be some impact which we can mitigate to a certain extent with never a single source on any ingredient and so forth but there would be some residual impact it would hit us less
• 157:00 - 157:30 than the big grocerers in the US um um which rely on the same supply chain just have a low a lower gross margin compared to us i.e There is probably a scenario where they would then move on to pass these prices on to the consumer which would then create opportunity for us to effectively um yeah make us whole as well But um there is some risk and um that's why we also highlighted that in the annual report that we we published
• 157:30 - 158:00 last week And uh knowing what you already know is it in any way possible to quantify this risk it is but some it's something that we haven't put out but it would be a lower double digit eurom million number in unmititigated fashion Understood Thank you Hi Sam from Bit Capital If I could ask a sort of flip of the previous question Um
• 158:00 - 158:30 I mean in the past you've been somewhat exposed to um a sort of weaker consumer Now that you are more focused on I guess your more higher income um longer tenure customers um do you think that you'll be yeah somewhat less exposed in a potential US recessionary environment and is there anything you can sort of point to in terms of previous uh cycles on on how the newer customers reacted versus yeah your longer more loyal customers
• 158:30 - 159:00 So I think um we've seen in different geographies that we've been operating in over the past 12 years obviously very different economic environments over that time You're absolutely right that you usually tend to see the biggest impact on potential new customers who think twice about starting a new routine or starting something new Um usually for those customers who have found good product value fit who have
• 159:00 - 159:30 actually seen the benefits of the product they're usually much less elastic in saying like hey this is something I don't want to spend on at all I want to make it clear that our strategy to prioritize profits over volume growth this year is a very deliberate strategy like um if there is a weaker US customer etc that certainly like doesn't help but this is not the core driver of the strategy like we want
• 159:30 - 160:00 to own that strategy that's a very deliberate strategy to push the efficiency program invest into product investments and then return to growth at better margins and with a better product Um so that's really sort of like the bulk of also what we've guided towards with some obviously um risk as to what's the US consumer or other consumers doing in a time of uncertainty and maybe one more um you spoke about obviously this brand performance split
• 160:00 - 160:30 could you maybe just give a bit more detail on um I guess the benefits of that there is this sort of perception that brand is just inefficient spend and I'm assume that actually the reality is that there's some sort of trickle down effect and there's a reasoning you want to do this So maybe you could just sort of highlight what you're seeing so far and uh yeah what's pushing you to do make that change definitely the right question for you Patrick I'm challenging him all the time This is uh this is like talking to Dominic on a weekly basis but thanks for the question I think for those that assume their
• 160:30 - 161:00 brand spend doesn't have a value impact on the business they are not investing sufficiently in their measurement models Uh that's not to say that we are 100% there on everything but I think if you really focus on understanding the long-term impact of your brand or upperfunnel demand generation investment on those mid and lowerfunnel channels and therefore eventually on their efficiency and how well they're able to convert that demand and you look at the complete picture over a longer term time
• 161:00 - 161:30 period you should be able to measure out those effects and the ROI of those investments with a pretty high degree of certainty never perfect because some of these are harder to measure than others but we will be able to do that The next question would be what's the ideal mix we're aiming towards because I think that's always kind of a hotly debated topic People will throw numbers out there and say it's a 60 40 50 37 70 I think a lot of that debate is flawed and I think we will find what's
• 161:30 - 162:00 right for us for every individual brand and market within the portfolio and depending on the competitive dynamics of those markets depending on the pricing dynamics of those markets depending on the strength of the customer value product proposition of that market the mix will fluctuate and I think where the mix fluctuates most intensely is actually the maturity of the category in a specific market so where the category is novel where there's a lot of category building efforts from multiple players where there's a novelty around the product market fit Performance marketing
• 162:00 - 162:30 engines perform very very well and we should deliberately continue to build the brand while that's happening but not do so inefficiently But when that starts to pivot you need to start investing in the brand building efforts with the product and everything else ahead of that decline in the natural demand in the category And so that's what we're looking to attempt to do with these engines It's a bit of a long-winded answer but it's a fascinating space and it's one that a lot of advertisers struggle around getting right So I think measurement is number one and then testing your way into the specifically
• 162:30 - 163:00 right mix for longerterm demand generation Yeah that makes sense Uh and just final one to squeeze in Um what would you want to see to start investing more marketing on a sort of year-over-year basis again into Milkits i mean you pointed today to a couple of figures which suggests that maybe CACs are increasing you're seeing better retention Um and so maybe you could just yeah sort of dive a bit into the contributors so far and what's really pushing you to reduce marketing and what you want to see for that to actually start recovering again Take it first Um so in terms of the
• 163:00 - 163:30 reduction I think it's around really identifying inefficient spend at the channel by channel campaign by campaign level customer by customer level making sure that the data infrastructure is correct to be able to do that to identify a campaign spend a trajectory a customer has gone through the value of that individual customers and making sure that if it's subpar you don't acquire more of those lowv value customers There are natural savings to be found as a business moves through that trajectory So that's been exciting with the teams to really dig that deep and identify the inefficiencies Reinvestment has happened to some of the
• 163:30 - 164:00 mid-term high confidence and longer term demand generating uh campaign and sort of more the ATL spend I think an area I'm personally excited about is actually taking a portion of the capital and starting to get deeper and back into the community and some of the non-scalable tactics um that a scaled business sometimes leaves behind So once we now know who these customers are how do we get much closer into those core communities and how do we get that word of mouth and the verality engines to kick back up for these more mature mekit markets
• 164:00 - 164:30 hi uh Yan Beckas here also from Bit Capital and Dominic could you talk a little bit more about the growth opportunity you see in pet food and in vitamins what's the playbook at the moment what's future margin potential and yeah how could this unfold 100% great question um so as you know or as I referenced um we've really been screening over the last couple of years um almost all direct two consumer categories out there in terms of TAM
• 164:30 - 165:00 size in terms of growth but also in terms of profit pools and margin opportunity We felt those two are the most um attractive ones We thought long and hard whether the right way to enter that category is via an acquisition or building it from from from the ground up from scratch up For both categories we have decided to actually like build from scratch which takes longer until it gets to a
• 165:00 - 165:30 meaningful size but obviously should come in terms of cash consumption at a much much cheaper price So I think for us to show a meaningful contribution to the group would have been easier to take on some business similar to what we did with factor If you actually think about the ROI on what you want to spend on then I think it's much much cheaper over longer horizons of time if you build that from scratch Right now um we're about one and a half years one and a
• 165:30 - 166:00 half almost two years into the journey of building Pets Table our pet food business And that business I think as a standalone business is uh doing pretty well We've uh just launched outside of direct to consumer also our retail products We're now listed with Chewy Walmart and will be listed on Amazon which we're going to do to kind of like drive multi-category and multi- channelannel growth for those And after
• 166:00 - 166:30 that initial phase where we were really focused on making sure that we have great product market fit we're now getting into territory where we feel really good about that where we feel good enough about that that we put it actually in retail shelves and also that we put more and more advertising spend behind it And so in my view over the next two years we should see pet food growing from sort of like the small but great customer proposition that it is today into a business line that can then
• 166:30 - 167:00 also become meaningful for overall group growth The reason why we didn't talk about it today is that probably for 25 and 26 it's more of a rounding error to the overall um portfolio But I think starting 27 28 it definitely can become a much much bigger growth driver for the group Similar story for VMS I think similarly attractive market even higher target margins because obviously um the
• 167:00 - 167:30 ingredients in that market are not particularly expensive So a lot of companies there with 80 90% gross margins and selling vitamins and supplements a lot of muscles that we see working similar to what we do see in mail kits but we're much earlier We only launched that six months ago So right now we're squarely in the phase of trying to like really hit product market fit I think out there on YouTube um a lot of influencers etc Um I think the product tastes really good I think there
• 167:30 - 168:00 is um a lot of stuff that were that that looks quite promising and so for the next six months we want to build that range further and then slowly start investing behind that in advertising But for us the first 6 to 12 months are always about nailing the product and making sure that we have a winning proposition that we can then scale in a profitable fashion Okay And then uh lastly for me on a midyear horizon as a D2C brand how do
• 168:00 - 168:30 you think you might leverage in the end the customer communication channel with maybe generative AI and all these upcoming opportunities let's let's say we look to three to five from years from now So it's very hard to um look at any specific time horizon but I definitely do feel that over time if we enable right now a much broader menu that we can produce in our manufacturing network
• 168:30 - 169:00 that we can then and at the same time we capture all of the data points and actually build that first party um taste and customer data graph that we have that I think then in the future It might become much much easier for you as a customer to actually like let us know whether that's via an agent or via other entry forms what type of meal plan what type of um meals you want to consume you want to follow and for us on
• 169:00 - 169:30 the back end to put together the right meal plans and meal recommendations to every single time give you exactly the meal that you want at the right price at the right time So I think AI agents can play a big role in that and I also do think that there are that there is potentially and I have no idea whether that's over three years or 5 years or 15 years a lot of application cases in our supply chain for generative AI for robotics etc nothing that I can nothing
• 169:30 - 170:00 that I can invest behind right now or that I can say like hey that's going to actually like uh uh decrease my cost base by X but I think a lot of those developments are hugely interesting if you think about the business on a 5 to 10 year time frame hello um I have one question here I have one question on the nutrition of RTE
• 170:00 - 170:30 Apologies in advance I know you are managers and not nutrition experts but um is is there any additive or any nutrition inside the RTE meals that make them more durable that increase the shelf life the reason I'm asking is because when I when I order the the factor meals and like probably everyone here we have tried them and they are good but there is a certain time span until they are cooked uh and then they
• 170:30 - 171:00 arrive at our home and then there's another time span until the date until we can't eat it anymore right so we're talking about a time span of I don't know 10 days I guess And if I would cook those meals on my own and then try to warm it up 10 days later it would be different taste than the RTE meals You want to take that Con
• 171:00 - 171:30 so the primary the primary technology that we use to ensure meals taste great all the way through their shelf life is called modified atmosphere packaging So this is it's not uh any kind of chemical preservative or anything like this What we do is at the last stage before we seal the meal shut we remove the oxygen and replace it with inert gases like nitrogen like carbon dioxide
• 171:30 - 172:00 um to which basically prevents the food from oxidizing and breaking down over the next few days So it's a it's a totally clean um and healthy and quite normal actually way to preserve the integrity of those meals uh and get that extra shelf life And we have a very rigorous internal shelf life testing process that we go through for every single meal in every single market before we bring it to life uh to make sure that you as an example internally
• 172:00 - 172:30 when our culinary team is evaluating meal new meals that are ready to go on the menu We taste them 14 days after we cook them to make sure on that last day they still achieve the the expectations that we have of that meal from a texture from a flavor from an aroma perspective I'm so happy you're here I would have not been able to answer that question to the same degree Um many thanks for uh taking my question
• 172:30 - 173:00 Just a thing thanks a lot for giving all the details on the your investment in the product portfolio It makes sense to to understand that you're the own master of your TM and you have to develop in the product to develop your TM on the long term and now it feels as if you are increasing the the manufacturing uh manufacturing complexity uh quite a lot but at the same time you're cutting 25% of your manufacturing platform and meal kits and you're keeping capex at 150
• 173:00 - 173:30 million or around 150 million Is there any risk 26 27 that you see all all the investments and the increase in complexity um might bring you to strong increased capex from there on is there might hawk income or are you comfortable that 150 the next two years is a good base for all your plans that you have okay you take that Yeah um Andre the the um short answer is that we will keep it
• 173:30 - 174:00 round about 150 million level on a sustainable basis that um I feel confident about Yeah Could there be spikes in a certain year where we go a bit above or or under yes Yeah Beyond 2026 But uh to keep it around that level for the foreseeable future and beyond um I feel confident about and the key driver behind this behind that is what I tried to allude um in on the first ops slide is quite a
• 174:00 - 174:30 couple of fundamental changes and tweaks and improvements that our ops teams are doing to our production process which effectively yield us both Yeah um an expansion of our contribution margin but at the same time removing some of those restrictions we had before in terms of the flexibility how we how we can produce Hi this is Andreas from RV Capital Um with all the health focus of factor I was wondering if there is any chance to
• 174:30 - 175:00 leverage um endocrinologists in the marketing of the meals or health insuranceers in the financing of the meals Thank you So great question Um I know that uh so number one um there's a number of clinical studies um that we've actually done putting people on a factor diet and actually understanding how some of their uh chronic uh disease how some of their chronic conditions etc develop So more
• 175:00 - 175:30 and more of those claims and more of more of that muscle to actually come up with clinical studies and use that in our advertising more and more will be used by us The other point that you mentioned around health providers um this is something that is I'd say politically um a quite dynamic space So what I mean by that is that uh every administration has sort of like other rules around what falls under certain
• 175:30 - 176:00 health insurance schemes or not Uh there was definitely over the last two years like a big drive and there is also right now I think in the new US administration the kind of like understanding that food as medicine is something that should be prioritized more in the past kind of like you could not have your health insurance cover food etc Right now I know there is some debate whether there are certain services etc that should be
• 176:00 - 176:30 covered under health insurance plans but um I'd say we're observing that situation closely there are certainly like some opportunities um for that but I would never bet on you know um some policies changing or uh having a big political tailwind or something like that but it's definitely something that is interesting and if I think this general notion food as a medicine that the big impact that actually has on you
• 176:30 - 177:00 and that it should be increasingly covered by certain health plans and insurance plans as well then certainly that could be a big opportunity for Thank you Uh James Reed from from Broad Peak Um I have two questions please The first one is it appears that in the US uh in the ready to eat segment you're coming up against a competitor called Cook Unity Um who seem to have a
• 177:00 - 177:30 slightly different operating model that's more decentralized I think they have over 100 different cooking teams um that sort of batch that up separately Um can you share your thoughts on the strengths and weaknesses of that model versus factor and are there any learnings from Cook Unity's model and the success they seem to be having today that you would look to implement so um I think generally you know you're not going to hear any bad words from me about competitors I think
• 177:30 - 178:00 they're generally in the right space They're um I think generally have a good customer proposition I think we feel much better about a lot of the food manufacturing capabilities that we have developed with a highly centralized model with a model that is all about quality control consistent quality consistent nutrition our health positioning We think that is something that the customers that we're going
• 178:00 - 178:30 after really really appreciate But um I think just on the outset there's certainly like one thing that we can learn I think through a different operating model they're offering a much num much larger number of meals at the moment and this is I think one thing that I'm a little jealous of I would love to be in the situation already today to also be able to offer 200 plus meals to our customers Um we're going to get there I think we have a very
• 178:30 - 179:00 ambitious road map um to getting there Um but with the operating model that we chose I think it's a lot safer a lot more quality control etc But also takes longer to build that up Thanks Pardon me And the second one if I can um is on capital allocation And so if I step back um the the value of HelloFresh today it would seem that the market is placing a high degree of skepticism on the future earnings and cash flow is the destination free cash
• 179:00 - 179:30 flows of the business Um and we've heard today reasons why the management firmly believe earnings and free cash flow are structurally materially rising from here And so um I if that is true every dollar spent purchasing your shares today will generate a very attractive ROI for shareholders Why is management not um actually desperate to be spending all of your free cash flow on on share repurchases today 150 million rather than the 75 we have uh authorized
• 179:30 - 180:00 So we are obviously in the market with a buyback program I think for us it makes sense to first produce the cash then spend the cash and I think every time that we produce cash actually make a decision where do we feel the best IRRa is coming from is that coming from reinvesting into the business is that coming from share buybacks is that coming through potential you know acquisitions or anything like that but for sure we are in the market and um we
• 180:00 - 180:30 feel that right now is a good opportunity to buy back our own shares I think we'll take one question online which is um about the loyalty scheme Why aren't we rolling that out more forcefully or quicker and what would you be looking at um getting in terms of metrics before you take that decision um so let me maybe start and then
• 180:30 - 181:00 Patrick you feel free to add if I forget anything So right now um what do you want from a loyalty program i think the most important thing is that you drive positive behavior among the customers that you want to impact and affect That's something that we're very clearly seeing So we see our most loyal customers having lower pulse rates as a result having much lower cancellation rates and generally having high satisfaction scores Now obviously if you
• 181:00 - 181:30 start giving benefits to your customers then those benefits also accumulate for a long period of time A very bad decision is to give certain benefits and rewards to your customers and then take them away again So something called loss aversion that is something that is pretty bad and that it's much worse than not giving it to them in the first place So right now I think a lot of the order rate impacts a lot of the um impacts from lower pauses and lower cancellation
• 181:30 - 182:00 rate will materialize over the coming quarters But it's an investment in the beginning and the longer that we're in the market and in understanding how much that drives behavior to what degree and how we can over a certain timeline give customers those rewards impact those behavioral metrics positively but still have an ROI on that The longer we have them in the market the more confidence we have on that And so for us it's more
• 182:00 - 182:30 of a risk posture How quickly want to what do we want to dial it up i think we feel pretty good about our initial results but once you dial it up to the whole customer base you're obviously also locking yourself locking yourself in and you're not in a position to massively like change some of the reward mechanisms etc And we believe that before we roll it out to the whole customer base we want to have a very high degree of confidence that we're not only impacting behavior positively but
• 182:30 - 183:00 so positively that we actually making a a good ROI on our investment and not just giving stuff away for free to customers which obviously customers like but we're not in the business of doing that Thank you And then maybe final question from chat and then we can break for lunch Hey guys uh chat from Tenzing Uh thank you for the presentation today Really helpful Um uh first question is about synergies across the portfolio uh
• 183:00 - 183:30 between meal kits RTE and pet food or VMS Um can you just talk about synergies and customer acquisition loyalty capex etc so I think the the the best place to start is to think about along the value chain for each of those brands What are the things where you need to be like really really good at and if I were to compare me kits and
• 183:30 - 184:00 RTE then there are many domains where it requires the same muscles and there are some domains where you need very different muscles We talked about food manufacturing That whole space around food manufacturing is not really relevant for me kits That's why we only built that muscle over the last two three years If you think about pet food for example a lot of it is about building a great brand Um supply chain customer acquisition etc
• 184:00 - 184:30 is obviously really really important but a lot of it is about around building a really really good brand And so wherever we feel that we have developed certain muscles then we usually try to get good operating leverage on those different muscles that we've developed So we don't need sort of like you know um its own finance team and people team and customer acquisition team and um and logistics team whether you ship pet food
• 184:30 - 185:00 or you ship a ready meal or you ship meal kits But when it actually comes to what are the muscles that are only important for that brand or primarily important for that brand then we usually try to set up and focus brand specific teams on those muscles that you need to win in that category Mhm And can you expand loyalty to across the portfolio versus just focused on meal kits or ready to eat so the long-term vision the
• 185:00 - 185:30 long-term vision I I would say on many dimensions is that we built different consumer brands First really being focused on can we offer winning propositions Do we actually have brands and products in the market that resonate with customers and then on a on a longer term um timeline to see how can you make it like more intuitive and easier for your consumers to interact with one account to interact ideally with one
• 185:30 - 186:00 loyalty program etc But right now we're in the stage where we have two mature business lines and we have a number of newer business lines the more mature that whole portfolio gets the more powerful is anything that we do to combine those offerings because you just basically have the same amount of work that you put in but at a much higher um order of volume line And so I'd say you know on a long enough time horizon I think a lot of that stuff is in our
• 186:00 - 186:30 plans for 25 and 26 outside of the integration of a subset of ready meals in our Milkit offering We're not going to it's not one of the priorities for investment Got it And and one more uh more numbers focused uh question Uh you've obviously guided to a substantial improvement in profits uh over the next two years How confident are you that um once we get past the the next couple of years you know and and look to grow meal
• 186:30 - 187:00 kits again in a meaningful way that profits won't degrade from that level on an absolute dollar basis because of the size of our existing customer base So yes when we yeah um if we were to crank it up on the new customer acquisition site in that quarter you would see our marketing expenses rise That's um subject to economic law like everyone else But um um to maintain margins above that 10% level we feel quite good about
• 187:00 - 187:30 Thank you Um so before I pass it back to Dominic for some closing remarks um we have lunch being served at the potluck um on top of sandwiches and salads You'll have the opportunity to try a few of our factor meals I think we have four recipes in total Um there's microwaves there for you to use If you do indeed use the microwaves please poke some holes in the meal and then be careful Uh but there are also some meals that we've already cooked for you So if you want to
• 187:30 - 188:00 choose that option then that's also available for you Also as a reminder we have examples of our um factor form um samples there uh for you to take home Um and then yeah please Dominic take it away for closing remarks Not much to say in addition from uh from uh from my side Um I think we really wanted to share our thoughts around three things Where are we on the longer term journey and what's the long-term opportunity hopefully we shared a sufficient amount of detail
• 188:00 - 188:30 around our cost efficiency program and we also gave you a sneak peek into um a lot of the product investments that are coming over the next two to three years that should massively enlarge the TAM that we're going after and which we feel is really the foundation um that we need to have to then eventually return to growth for the group Um make sure you enjoy lunch um make sure you also um get some of the factor
• 188:30 - 189:00 form products I think generally those products are a small range right now but there's more of those products to come So in future iterations we're also happy to share more of those products then Um I'm sure a lot of you are going to corner me um during lunch So feel feel free to ask any questions that you didn't have the opportunity to ask in this round Thanks a lot for your attendance Thank you