NuWays AG: Marley Spoon Group SE | Rating: BUY

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

Einstufung von NuWays AG zu Marley Spoon Group SE

Unternehmen: Marley Spoon Group SE
ISIN: LU2380748603

Anlass der Studie: Update
Empfehlung: BUY
seit: 15.02.2024
Kursziel: 8.00
Kursziel auf Sicht von: 12 Monaten
Letzte Ratingänderung:
Analyst: Mark Schüssler

Strategic transactions closed; est. & PT chg.

Marley Spoon Group ('MSG') closed the strategic transactions announced on January 31st. Here is what you need to know:

Acquisition of BistroMD. MSG closed the acquisition of BistroMD, a leading doctor-designed ready-toeat (RTE) meal plan company in the US (c. € 35m revenues in 2023), offering MSG an opportunity to use its own data and technology platform to generate synergies and performance improvements over time. While BistroMD should currently be loss-making due to lack of sufficient scale (c. 30% contribution margin, eNuW), fulfilment, G&A, and marketing expenses are seen to decrease significantly from currently c. € 27.5m (eNuW) to c. € 20m by 2025e (eNuW) thanks to the integration into MSG's platform. In sum, we regard BistroMD as a strategically sensible add-on as it adds a double-digit growing RTE business that capitalizes on the increasing health & wellness consciousness of the American consumer.

Depending on the underlying share price assumed, the acquisition price of around € 15m (eNuW) comprises c. € 1113m in debt as well as 1.4m MSG shares, along with an earn-out of up to 1.2m additional shares (12 months post-closing), and 450k warrants with strike prices ranging from € 15 to € 20. Assuming a share price of € 2.00, MSG acquires BistroMD at an EV/Sales FY23 multiple 0.43x, a 48% premium to MSG's own current valuation of 0.29x.

Partnership with FreshRealm. Furthermore, MSG entered into a 7-year strategic partnership for manufacturing and fulfilment with FreshRealm by selling its US operating assets for € 22m to FreshRealm, which will operate the fulfilment centre and become MSG's exclusive operations partner in the US. This provides Marley Spoon with a scalable and capitalefficient way of operating in the US, delegating assetheavy fulfilment and warehouse operations (back-end) to an experienced partner while continuing to focus its investments on customer-facing competencies (front-end). Net cost savings are seen to amount to c. € 12m in G&A and should thus favourably impact margins going forward.

Debt terms & capital raise. Both deals are supported by an c. € 8m equity raise through c. 2m treasury shares at € 4.00 per share. Moreover, Runway, the company's biggest debtholder, supports these transactions and agreed to a 12-months extension of the debt facilities' interest-only period to January 2026 and maturity date to June 2027. Upon closure of the transactions, MSG will repay Runway € 10.3m of the outstanding loan balance. Importantly, the asset sale, capital raise, and debt facility extension provide Marley Spoon with ample breathing room to reinvigorate its meal-kit and adjacent operations as well as time to successfully integrate its recent acquisitions.

Growth outlook. Including the financial impact of the transactions described above, Marley Spoon is well-positioned to return to profitable topline growth, reaching c. € 384m sales (+16.9% yoy, eNuW) and c. € 2m operating EBITDA (+1.4ppts yoy, eNuW) in FY24e. This should mainly be driven by a return to active customer growth to c. 211k (+ 12% yoy, eNuW), and leverage in its multi-region and multi-brand meal kit platform to

1. further penetrate the still vastly underpenetrated $ 7tn global food & grocery market, harnessing deep-seated consumer trends like convenience and wellness;
2. grow basket size via more differentiated service offerings (AI-driven recipe development and ranking for +100 weekly recipe options); 3. and realize revenue and cost synergies from its newly acquired BistroMD and FreshRealm partnerships going forward.

The Group remains attractively priced trading at only 0.28x EV/Sales 2024e, leading us to reiterate our BUY rating with a changed PT of € 8.00 (old: € 8.60) based on DCF.

Die vollständige Analyse können Sie hier downloaden: http://www.more-ir.de/d/28897.pdf
Die Analyse oder weiterführende Informationen zu dieser können Sie hier downloaden www.nuways-ag.com/research.

Kontakt für Rückfragen
Die Analyse oder weiterführende Informationen zu dieser können Sie hier downloaden www.nuways-ag.com/research.
Kontakt für Rückfragen
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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