Original-Research: Marley Spoon Group SE (von NuWays AG): BUY

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

01.08.2024 / 09:01 CET/CEST

Dissemination of a Research, transmitted by EQS News - a service of EQS

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Classification of NuWays AG to Marley Spoon Group SE

Company Name: Marley Spoon Group SE

ISIN: LU2380748603

Reason for the research: Update

Recommendation: BUY

Target price: EUR 5.40

Last rating change:

Analyst: Mark Schüssler

Solid Q2 results // FY'24 guidance confirmed; chg.

Marley Spoon Group ('MSG') released solid Q2'24 results with sales coming in

at EUR 87m, % yoy (excluding bistroMD c. EUR 80m; eNuW: EUR 78m). As

anticipated, cautious consumer behavior in the meal-kit segment continued to

weigh on sales as the number of active subscribers fell 17% yoy to 195k

(eNuW: 194k) - the effect of which was more pronounced for Europe and

Australia than for the US - while revenue from bistroMD partially offset

this decline and had a noticeable impact on Q2'24 group sales of c. EUR 7m

(eNuW).

Importantly, after a stabilizing Q1, MSG continued to observe bottoming-out

effects in its subscriber base (% qoq) as well as a recovery in both order

frequency (% qoq to 6.6; % yoy) and basket size (% qoq to EUR 67; %

yoy) indicating a somewhat measured but steady return to healthy KPI levels.

This positive development was overwhelmingly driven by (1) a higher-quality

subscriber base with enhanced retention levels on the back of a rectified

voucher strategy in H2'23, (2) higher-priced and larger-sized plan items and

(3) a consumer sentiment that is beginning to stabilize.

While topline headwinds persisted, MSG managed to yet again expand its

industry-leading contribution margin in Q2 to 34.6% (� yoy, eNuW: 32%)

on account of reduced voucher and promotional activity and first cost

savings in fulfilment (-8% yoy to EUR 12.2m) as a result of the FreshRealm

partnership. Notably, for a third quarter in a row, MSG was able to

translate a higher contribution margin into a solid positive operating

EBITDA margin (EUR 1.1m or 1.2% for Q2) impacted by a more streamlined G&A

setup (-12% yoy to c. EUR 18.5m).

This overall healthy Q2 performance led the company to confirm its FY'24

guidance, expecting sales to grow by a single-digit percentage figure and a

flat contribution margin of c. 31.5%, with operating EBITDA seen to grow to

a positive mid-single-digit figure. While, in our view, this guidance looks

achievable aided by operational progress towards group profitability, we

nonetheless note that the sales recovery to former levels as well as the

operational cost downsizing might take longer than expected and therefore

reduce our estimates accordingly. Having said that and considering the

depressed level at which MSG shares are currently trading at, we reaffirm

the attractive risk reward proposition.

We reiterate our BUY rating with a changed PT of EUR 5.40, based on DCF.

You can download the research here: http://www.more-ir.de/d/30337.pdf

For additional information visit our website: www.nuways-ag.com/research

Contact for questions:

NuWays AG - Equity Research

Web: www.nuways-ag.com

Email: research@nuways-ag.com

LinkedIn: https://www.linkedin.com/company/nuwaysag

Adresse: Mittelweg 16-17, 20148 Hamburg, Germany

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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss

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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben

analysierten Unternehmen befinden sich in der vollständigen Analyse.

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1958687 01.08.2024 CET/CEST

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