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HelloFresh SE is preparing for Initial Public Offering

Berlin / DE. (hf) German HelloFresh SE, , the leading global meal kit delivery brand, is preparing a listing on the regulated market (Prime Standard) of the Frankfurt Stock Exchange. The planned public offering will consist of a capital increase of c. 250 – 300 million euros, which are primarily earmarked to fund continued investment in the growth of the businessincluding strategic flexibility for new business lines.

«The public listing marks the next logical step to further expand our business, to secure our position as the leading global player and to pursue our long-term growth strategy», says Dominik Richter, co-founder and CEO of HelloFresh. «In 2011, we started with the mission to change the way people eat. Since then, we have built a dynamic, data-driven organization with scalable production processes across ten international markets. We have established a brand loved by millions of loyal customers. We have experienced fast growth and have the strategic goal to reach breakeven across our group within 15 months. Now, the time has come to propel HelloFresh to the next level».

HelloFresh – the largest and only global player of scale

Founded in 2011 by Dominik Richter and Thomas Griesel, HelloFresh is the only meal kit service of scale with an intercontinental footprint. It operates in ten countries – the USA, the United Kingdom, Germany, the Netherlands, Belgium, Luxembourg, Australia, Austria, Switzerland and Canada. HelloFresh offers millions of households the opportunity to enjoy well-balanced home-cooked meals without the associated hassle. With more than 2’000 employees, HelloFresh delivered a total of 33.7 million meals to its about 1.3 million active customers1 in the second quarter of 2017.

Established business model tailored for growth

HelloFresh has established itself as a disruptive direct-to-consumer food company, based on a data-driven business model, a strong brand and an innovative supply chain set-up. With a market size of 7.5 trillion euros2 , food is the largest area of consumer spending, yet one with low online penetration.

«We have pioneered an entirely new category», says Thomas Griesel, co-founder and COO of HelloFresh. «Today, we are in an ideal position to seize the growing potential of our global market by capitalizing on our customer-centric product innovation expertise, our technology platform, our vertically integrated supply chain and our scalable state-of-the-art fulfilment capabilities».

HelloFresh’s unique procurement set-up creates further competitive moat. More than 50 percent of the food is directly sourced from local producers3 , which means fewer intermediaries, fresher food due to less time in storage and transit compared to traditional supermarkets, and lower costs for sourcing and storing the ingredients.

As an integrated food manufacturer, HelloFresh has built up a sizeable infrastructure, optimized to produce meal kits at scale, while accommodating increased choice and flexibility for its customers. Seven fulfilment centers around the globe can accommodate continued strong future growth in all key markets.

One of the fastest growing European companies4

With revenues of more than 230 million euros in Q2 2017 (H1 2017: 435.4 million euros) the quarterly revenue has grown by 26 times since Q1 2014 – making HelloFresh the largest global meal kit service.

Apart from strong customer growth, HelloFresh’s development is driven by a favorable plan-based model, which combines very stable order rates at about 3.7 orders per active customer and quarter5 with increasing order value of currently about 49 euros per the second quarter of 2017.

Strategic goal to reach adjusted Ebitda breakeven within 15 months
HelloFresh shows a strong track record of margin expansion. Following ~14 percent points of contribution margin expansion over the last seven quarters, the contribution margin reached 22.1 percent in Q2 2017. The adjusted Ebitda margin has significantly improved over the same period by 25 percent points to minus 7.4 percent. HelloFresh’s strategic goal is to reach adjusted Ebitda breakeven across its group within the next 15 months and a mid-term adjusted Ebitda margin of 12-15 percent.

Primary capital raise to fund continued investment in growth

«We have a very dynamic market development in our category, which we want to fully capitalize on by raising about 250 to 300 million euros of primary capital through an IPO», says Christian Gärtner, HelloFresh’s CFO.

The Offering, if pursued, will consist of newly issued ordinary bearer shares with no-par value (Stückaktien) from a capital increase.

The Offering, if pursued, will include a primary greenshoe option.

The free float will depend on the number of new shares issued by the Company.

HelloFresh intends to list its shares on the regulated market segment of the Frankfurt Stock Exchange with simultaneous admission to the Prime Standard.

The proposed Offering would consist of initial public offerings in Germany and Luxembourg, as well as private placements in certain other jurisdictions outside Germany and Luxembourg.

Berenberg, BNP Paribas, Deutsche Bank, J.P. Morgan and Morgan Stanley are acting as Joint Global Coordinators and Joint Bookrunners. Rabobank has been mandated as Co-Lead Manager.

  1. Active customers refers to the number of uniquely identified customers who received at least one box within the last 13 weeks, as of June 2017 (including first-time customers, customers who received a free or discounted box and customers who ordered during the relevant period but discontinued their orders and registration with HelloFresh before period end).
  2. Euromonitor International, Economies and Consumers, food represents consumer expenditure on food and catering, value at fixed 2016 exchange rates
  3. Based on HelloFresh’s expenditure for produce in the second quarter of 2017
  4. According to Financial Times, FT 1000: Europe’s Fastest Growing Companies, April 6, 2017