Australian (ASX) Stock Market Forum

MMM - Marley Spoon AG

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... even as coronavirus ravages the global economy ....[and] amid widespread job losses and tanking share prices, some businesses have found opportunity amid the outbreak.

For some — the supermarkets that were on the receiving end of the panic buying frenzy, the retailers selling home office equipment and chest freezers — the events of the past few weeks have given them a sugar-hit they will help them navigate through the recession ahead.

And for a select few, the events could be the catalyst for a permanent change in the way they interact for their customers.

Among the latter is Marley Spoon, a meal kit delivery service that, amid one of the deepest share market sell-downs in memory, has seen its shares more than double in the past month and has taken on hundreds of extra workers around the world as it tries to keep up with an enormous leap in demand.

Marley Spoon chief executive Fabian Siegel told The Australian that the surge for meal kit deliveries meant the company was now expected to become profitable faster than previously expected.
“Suddenly demand has been surging; there’s unprecedented demand for our product,” he said. He also hopes the experience of customers over the crisis will “catapult” the business as they make a permanent switch to online food shopping even after the coronavirus crisis subsides.
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Before the outbreak, he said, online shopping represented just 2-3 per cent of the total grocery market. That is well below the 20-40 per cent online penetration in other consumer sectors, and closing that gap even partially would be a huge boost for Marley Spoon’s prospects. “I do believe there’s a high chance this behaviour will not go back,” he said.
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(- we receive it, A box; three x2 meals a week. No waste. Company offering a free box to 10 'friends' right now. Data capture of course, but worth a few $$)(IM me if interested!?)
 
Marley Spoon says it is benefiting from coronavirus-induced lockdowns, with demand for its delivery meal kits almost doubling globally.
The ASX-listed German company booked 2020 first quarter revenue of €42.8m ($71.4m), a 46 per cent increase on the previous corresponding quarter, with demand starting to surge as COVID-19 restrictions were implemented in March. Marley Spoon said €22m ($36.6m) of the quarterly revenue had been accrued within a four-week period beginning in the middle of March.
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Chief executive Fabian Siegel believes the current conditions are well suited to its at-home cooking subscription service. “First quarter 2020 saw strong performance for both growth as well as operational efficiency even before the sharp uplift due to the COVID-19 crisis,” Mr Siegel said. “This new environment is a strong tailwind for our business, and as a result, our path to profitability is being accelerated"
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MarleySpoon sells for around 1.5 times forecast sales, despite hitting a record high of $2.25 a share on Tuesday.

One analyst said:
"They position themselves as complementary to Coles and Woolworths because you do not necessarily order your full seven days from Marley Spoon, you order two to four nights of cooking, but during COVID the basket size is increasing. Groceries is an enormous market worldwide and the online penetration of grocery retailers is one of the last frontiers of digital innovation. So they have got this strong position to grow with the market for online penetration."
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Marley Spoon has upgraded its full year guidance, saying a shift to online grocery shopping was driving growth in its customer base. The group said existing customers had increased their order frequency and average size at the onset of the pandemic at the end of the March quarter and into the June quarter, with orders normalising by the end of June. As such, it said it expected 70pc year-on-year revenue growth, up from previous guidance of a 30pc lift.
The new customers acquired during Q2 show equally strong or better retetnion as the company normally experiences for new customer additions. This has allowed the company to continue to build up its back book of recurring revenue bsuiness in Q2, which accounts for the vast majority of Marley Spoon’s revenue.
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Revenue for the quarter was up 129pc versus the previous corresponding period to 73.3 million euros ($120m), while marketing expenses declined, now 13pc of revenue versus 19pc in the pcp
 
Mmm looking to fill the gap perhaps.
Note that they are now advertising on TV (free to air).

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in an interview with CEO (10 minutes) ...

Marley Spoon It’s Only Just Begun

Marley Spoon has been operating for 6 years and currently generates half a billion in AUD$ in runway revenue, it achieved positive operating cash flow 1st half 2020 and became profitable in Q2 this year.

Marley Spoon CEO Fabian Siegel says:
• “We are at the beginning of the journey”
• “We leapfrogged our development as a company by 18 months”
• “We achieved 2 years planned growth in just 3 months”
• “Marley Spoon currently services 180 million households across USA, Europe, and Australia.”
• “That said we would be tripling our capacity in Sydney over the next 12 months”
• “The largest risk going forward is to continue to manage the surge in growth”

Highlights the key drivers to this success:
• 90% of recurring revenue comes from existing customers.
• COVID stopped a lot of business in their tracks; it had the opposite effect on Marley Spoon.
• Supermarkets restricting the purchase of key staple goods.
• The risk of finding empty shelves at the supermarkets
• MMM outgrew all of its direct competitors during this period YOY Q2 +130%

How did Marley Spoon weather the perfect storm?
• Management ensured Marley Spoon was declared an essential service across all our states
• People were forced into lockdown and had to work from home, the desire to cook more frequently went up 10 fold
• MMM target market of busy working professionals were not canceling regular orders due to business travel commitments
• The fear of going to the supermarket and contracting COVID 19
• Throughout this period of extreme disruption Marley Spoon food boxes continued to arrive on doorsteps uninterrupted
• Swiftly integrated stricter health and hygiene standards across all its processing plants
• Empowered its management team to make swift critical decisions and to be entrepreneurial

https://www.sharecafe.com.au/2020/09/04/marley-spoon-its-only-just-begun/
 
I realised that the COVID lockdowns would be good for a company like MMM but it never occurred to me that the share price could rise 600% in such a short time.

The lock downs will ease eventually and people will eat away from home more often. How will MMM continue to grow? IMO the trend is done for now. Look for the next fad trend.

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It's all over red rover.PNG.
 
IMO the quality of pre-cooked packaged meals and their availability has improved significantly this year. Another trend accelerated by the pandemic. Easing of the lock downs will erase the exponential growth rate of this business. Growth will return to normal organic levels provided the quality and availability remain high. Maintaining quality will be key to this sector in the future. This will be a huge challenge when growth returns to normal levels. and the margins collapse.
 
MMM - Germany completed it's A$56M fully underwritten placement. Local shareholders are left with a bout of indigestion after MMM sold off hard today (1st trading day after placement).
 
It's not often I get laugh from reading the AFR (cartoons are dreary) but I did chuckle at this line.

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No doubt there are still plenty of investors who are willing to lose money after the "success" of MMM.

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This "dog" is acquiring Australian "ready to heat" meal company Chefgood.
I assume it's a good deal for the Chefgood owners.

Financed by debt and equity placement.
 
peter2 said:
Woof, woof. Another capital raise at 0.165 to fund general working operations and pay off some debt.
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MMM was one of those COVID-19 stocks that boomed when the market decided in 2020 that everyone would start ordering their meals to be delivered to their home to avoid catching the virus. But reality had other ideas, and MMM has come down to Earth in a big way.

No matter how hard they try, MMM just cannot seem to turn a profit. Too much competition and too much optimism about the future of the sector has conspired against them. I have never seen an investable business here, just a lifestyle fad that has long since worn out its welcome. It smells a lot like the BNPL industry; massively overhyped but ultimately underwhelming.
 
greggles said:
MMM was one of those COVID-19 stocks that boomed when the market decided in 2020 that everyone would start ordering their meals to be delivered to their home to avoid catching the virus. But reality had other ideas, and MMM has come down to Earth in a big way.

No matter how hard they try, MMM just cannot seem to turn a profit. Too much competition and too much optimism about the future of the sector has conspired against them. I have never seen an investable business here, just a lifestyle fad that has long since worn out its welcome. It smells a lot like the BNPL industry; massively overhyped but ultimately underwhelming.
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i was buying YFZ in April/May 2021 ( kinda ) sadly it was taken over ( although i did crystallize a profit )

currently i have a small order in for MFB which has it's own warts ( NZ-based so no franking , and not liquid )

i saw WOW taking an interest in MMM and saw it as a bad thing

( i hold WOW seriously reduced from the inherited holding )
 
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