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European delivery kit giant HelloFresh has posted another quarter of bumper growth as it increased capacity to meet surging demand during the coronavirus pandemic.

Group revenue more than doubled in the first three months of the year, reaching €1.44bn in the first quarter and representing constant currency growth of 116%.

Its active customer base jumped by a million customers in both its international and US businesses to reach 7.3 million worldwide.

Adjusted EBITDA for the period was €159m, representing a 152% rise from the corresponding quarter last year and an adjusted EBITDA margin of 11% for the period.

CEO and co-founder Dominik Richter commented: “2021 has set off to a strong start. Our teams have been working hard to de-bottleneck the capacity constraints we were experiencing over the majority of 2020, especially in our US market. As a result, we’ve welcomed more customers than ever to HelloFresh.”

“As consumers around the world have been adapting to new habits, like buying groceries online, they’ve also discovered the many advantages of our full meal solutions over traditional grocery shopping. Since we offer our customers great value for money, convenience as well as tasty and healthy meals, I am confident that we will benefit disproportionately from the shift to increased online grocery penetration.”

The company delivered 239 million meals in the quarter across the US, the UK, Germany, the Netherlands, Belgium, Luxembourg, Australia, Austria, Switzerland, Canada, New Zealand, Sweden, France and Denmark.

HelloFresh said US growth, which was up 69% in order numbers and 86% in meals delivered to 113.9m, was boosted by the recently acquired US ready-to-eat meal company Factor, which is already favorably contributing to the group’s success.

Both HelloFresh and Factor have shown exceptionally high growth rates in 2020, growing significantly faster than their overall respective categories, which has continued in the first quarter of 2021.

HelloFresh raised its full year guidance for revenue growth on 15 April based on its continued strong performance, hiking its 2021 revenue growth guidance at constant currency from previously between 20% and 25% to now between 35% and 45%.

The company also narrowed its full year 2021 adjusted EBITDA margin guidance from previously between 9% and 12% to now between 10% and 12%.

HelloFresh is down 4.6% this morning on the news to €66.82, albeit the shares have more than doubled over the past year.

Morning update

Vaping and fmcg supplier Supreme PLC has continued to perform strongly in its 2020/21 financial year, generating “high levels of demand across all core categories”.

In a trading update for the year to 31 March, the company, which sells batteries, lighting, vaping, sports nutrition & wellness, and branded household consumer goods, delivered an “excellent performance”.

Supreme expects to report a 30% increase in revenues to at least £121m during the year.

Adjusted EBITDA is expected to be slightly ahead of expectations at a minimum of £19m, representing an increase of around 20% year-on-year.

Supreme said this tightening of group margin reflect the changes in revenue mix following the acquisition of Provider Distribution in February 2020 which are partially offset by stronger growth in higher margin products in Vaping and Sports Nutrition & Wellness.

The group benefitted from significant demand across Vaping and Sports Nutrition & Wellness during the year, delivering a 35% increase in revenues in its Vaping division with its 88Vape brand continuing to achieve strong customer traction, as demonstrated by the recent announcement regarding its roll-out across McColl’s entire store estate.

Its Sports Nutrition & Wellness category delivered 38% growth underpinned by the success of the acquisition of Battle Bites protein snack bars in October 2020, the expansion of the powdered protein range into meal replacements under the Solo brand and the early success of private label vitamins, which will be further complemented by additional product launches later this year.

It said its performance “reinforces the company’s resilience, the strength of its brands and the importance of its diverse routes to market and extensive retail network”.

It said it maintained high levels of business continuity throughout the year, despite the pandemic, both at its manufacturing site and across its distribution network.

CEO Sandy Chadha commented: “I am delighted to provide our first trading update since our AIM admission in February 2021. We continue to build on our strong track record of growth, with our strategy to focus on high growth categories such as vaping and sports nutrition really coming to fruition.

“Innovation and entrepreneurship continue to be at the heart of what we do and our exciting pipeline of new products, coupled with the potential to increase the penetration of our existing categories, continues to be underpinned by our market leading distribution network.

“The new financial year has started well and we are looking ahead with confidence on delivering on our expectations.”

Domino’s Pizza Group has confirmed the deal to sell its entire shareholding in PPS Foods AB (Domino’s Sweden) has completed.

The group announced in March it had agreed to sell its stake to Eyja fjárfestingafélag EHF, controlled by Birgir Bieltvedt an indirect owner of DP Norway, for around €2m.

The transaction is part of its strategy to exit from all of its directly operated international markets to focus on its core UK and Ireland businesses.

On the markets this morning, the FTSE 100 is up 0.6% to 7,012.7pts after the Bank Holiday.

Risers so far this morning include FeverTree, up 2% to 2,558p, WH Smith, up 2% to 1,846.5p and AG Barr, up 3.2% to 524.2p.

Early fallers include Just Eat Takeaway.com, down 2% to 7,347p, McColl’s Retail Group, down 1.9% to 34.4p and Wynnstay, down 1.8% to 481p.

This week in the City

The shortened week is a relatively quiet one in the UK, although internationally there remain some large fmcg companies still to announce results amid quarterly earnings season.

The main news in the UK will be Nielsen’s monthly grocery sales figures tomorrow morning along with a quarterly sales update from wider retail giant Next on Thursday.

Internationally, there is a flurry of updates on Thursday, including Q1s from Kellogg’s, AB InBev, Casino, Beyond Meat and Post Holdings and Q3s from Hain Celestial.

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