Hellofresh: Profit hike expected as cost-cutting drive extended
Hellofresh has warned that its sales are set to fall this year but that its profit is expected to rise as it extended its cost-cutting drive.
The recipe box delivery company, which is headquartered in Germany, said its cost-cutting programme, which was announced in the second half of 2024, would be extended until 2026.
Hellofresh has forecast that its revenue, on a constant currency basis, to fall by between three and eight per cent in 2025.
However, the company is targeting an increase in adjusted earnings before interest and taxes (EBIT), excluding impairment, to between €200m (£168.6m) and €250m, up from €136m in 2024.
It also expects its adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) to rise to between €450m and €500m in 2025.
In a statement, the group said it finished 2024 “with a strong financial profile that is reflective of the company’s focus on pursuing higher profitability and cash flow generation over volume growth”.
For the 12 months, Hellofresh said it had achieved an adjusted EBITDA of €399.4m, down from the €447.6m it achieved in 2023.
Group revenue totalled around €7.66bn in 2024, a 0.9 per cent year-on-year growth on constant current terms.
‘Levelling up the customer experience’
Dominik Richter, co-founder and CEO of Hellofresh, said: “In H2 2024 we entered an efficiency reset period.
“After five years of solid progress, highlighted by a 34 per cent revenue CAGR and an almost 9x increase in AEBITDA, we are now pursuing the next stage of our strategy.
“This stage is initially marked by having to rightsize our cost base across all major categories and improve our unit economics.
“Driving strong AEBIT and free cash flow performance will enable us to make strategic investments in our product quality, variety and deliciousness in 2025 and beyond.
“We are confident that levelling up the customer experience and product will contribute to higher retention of existing customers, and to unlocking new customer segments for the group.”
Hellofresh is set to announce its full set of results for 2024 on Thursday, 13 March.
Mixed picture for Hellofresh UK
At the end of October 2024, Morning Wire reported that Hellofresh was planning to close one of its major UK sites in a move which put 900 jobs at risk.
The business said the Nuneaton distribution centre would remain operational until the middle of 2025.
The 237,000 sqft building was Hellofresh’s second site when it opened in 2020.
A month prior, Morning Wire also reported that the UK arm of Hellofresh significantly cut its pre-tax loss as its turnover edged closer to the £500m mark and it cut 15 per cent of its workforce.
The company reported a pre-tax loss of £755,000 for 2023, according to accounts filed with Companies House, after posting a loss of £22.1m in 2022.
Over the same period, the firm’s turnover increased from £468.4m to £489.9m.
The results also showed that the average number of people employed by Hellofresh UK fell from 2,159 to 1,842 in the year.
The last time the UK arm of Hellofresh made a pre-tax profit was the £8m it reported in 2020. Since then it has lost almost £50m.