Cheffelo Ab · OMXSTO:CHEF
Cheffelo Ab — Investor Day (November 2023)
62 slides from Cheffelo Ab's investor day presentation, Nov 14, 2023
Slide 1: Capital Markets Day
Capital Markets Day 14 November 2023
Slide 2: Capital Markets Event Agenda
Capital Markets Event Agenda 1. Cheffelo: the big picture – Walker Kinman, CEO Mealkit market dynamics, business model and strategies, customer behavior and Cheffelo’s plans for profitable growth 2. Financials – Erik Bergman, CFO Financial update, the seasonality of the business, financial outlook 3
Slide 3: Cheffelo in brief
Cheffelo in brief • Founded in 2008 • A profitable leading supplier of mealkits in the Nordic region and a leader in Scandinavian foodtech • Operations in Sweden, Norway and Denmark • Listed on Nasdaq First North Premier Growth Market in March 2021 (ticker: CHEF) ~17 million meals delivered in 2022
Slide 4: Introducing our corporate brand - Cheffelo
Introducing our corporate brand - Cheffelo • New corporate brand: - that represents what we do and who we are - that’s memorable and unique - replacing “LMK Group” • We will create a strong employer brand which: - forms a common identity - creates internal engagement and pride - helps to attract and
Slide 5: Mealkits solving an everyday problem
Mealkits solving an everyday problem Tim ive ≠ ns ec Competitive universe Expe ons failing to eliminate the need for planning, uming shopping and Must: EAT! stressing about meals while providing an enjoyable cooking Want to: experience • cook your own meals and Pla n nin g eat at home together • enj
Slide 6: The meal kit business model
The meal kit business model • Weekly subscription service delivering recipes and ingredients to the customer’s home • Customers choose from a curated selection of balanced, nutritionally calculated recipes • Eliminates the need to plan and shop for ingredients, saving time, and providing inspiration
Slide 7: Opportunity to benefit from mega trends
Opportunity to benefit from mega trends Increasing shift from offline to online – online penetration still limited in the Scandinavian food market, leaving headroom for growth Increasing awareness of food-health relationship - Vegetarianism, Humanitarianism & Environmentalism are on the rise The new
Slide 8: Sustainability at the core of our business
Sustainability at the core of our business • Reducing food waste from soil to table Focus areas connected to the UN • Accurate and timely forecast reducing over- production Sustainable Development Goals • Purchasing only the food customers need Food waste • Working with suppliers to increase use of
Slide 9: The (expanded) Dinner Landscape
The (expanded) Dinner Landscape Many competitors but difficult for any one player to cover the spectrum HOME DELIVERY OF GROCERY MEAL KITS RESTAURANTS & HOME DELIVERY FIXED MEAL ONLINE & PHYSICAL ONLINE FLEXIBLE MEAL KITS KITS Price per category 0,5 1 1,5 2 2,5 3 3,5 4 4,5 Service level Cost of capi
Slide 10: Cheffelo, a pioneer and leader in the Nordic mealkit market
Cheffelo, a pioneer and leader in the Nordic mealkit market Strong number 2 position in the Estimated Nordic market shares attractive Nordic market: “Mealkits” Kokkeløren 1% Other 3% • Strong brand assets Skagenfood 2% • Most personalized 18% Årstiderne 11% • Local profile • Growing Nemlig.com 3% •
Slide 11: Strong brand assets help in driving digital marketing
Strong brand assets help in driving digital marketing (Aided brand awareness for meal kits) Sweden Norway Linas 69% Adams Matkasse 75% Hello Fresh (SE) Godtlevert 66% ICAs Matkasse Hello Fresh (NO) Coops Matkasse Middagsfrid Kokkeløren 0% 20% 40% 60% 80% 0% 20% 40% 60% 80% Denmark Årstiderne Hello F
Slide 12: Customer retention means “long-tail” customer relationships
Customer retention means “long-tail” customer relationships Each line represents the percentage of customers receiving at least one delivery in month Vertical boxes and lines in the diagram represents the distribution of data points for all n in comparison to all customers that received a delivery i
Slide 13: Group revenue retention (all brands)
Group revenue retention (all brands) • High value customers have long-tail relationships and purchase more frequently • This behavior drives a higher revenue retention curve vs customer retention • While 2019 and 2020 have a positive bias, 2021 has a negative bias due to high post pandemic churn • L
Slide 14: Growth potential driven by three key levers
Growth potential driven by three key levers • Expansion of customer segments via increased product and delivery flexibility Increase • Investment in e-commerce sales foundation to optimize acquisition 1 number of customers • Increase retention through improved loyalty and customer care programs Tota
Slide 15: From static, to flexible and personalized
From static, to flexible and personalized Personalization of the mealkit hard to copy and drives differentiation in a crowded market Recipes 85 60 80 60 Portion sizes 1,2,4,6 2,4,6 2,4,6 2,3,4,6 Order cut-off deadline Tues 23:59 Tues 23:59 Tues 23:59 Thur 23:59 Delivery days Sun, Mon Sun, Mon Sun, M
Slide 16: A scalable operational platform
A scalable operational platform Administrative office Production facilities • Proven model providing scalability, high accuracy and Distribution hubs low customer complaints • Integrated operations across Sweden, Norway and Denmark • Complex operational demands and required know-how generate high ba
Slide 17: Erik
Erik
Slide 18: Delivered on EBITDA profitability and positive cashflow
Delivered on EBITDA profitability and positive cashflow + 158% + 292% LTM Q3 2023: Oct 2022 – Sep 2023 LTM Q3 2022: Oct 2021 – Sep 2022
Slide 19: Key factors for being on top of profitability
3 Key factors for being on top of profitability 1 2 3 Disciplined Control of unit Efficiency in approach to economics marketing OPEX Improved Contribution Reduced CAC Reduced cost in margin % (LTM Q3’2023 vs Q3’2022) central functions (LTM Q3’2023 vs Q3’2022) (LTM Q3’2023 vs Q3’2022) +5.7 pp -17.5%
Slide 20: Key Drivers to an efficient contribution margin
Key Drivers to an efficient contribution margin Food cost & packaging 1 • Efficient handling of each meals margin criteria AOV • Efficient coordination of weekly meal plans to 100% Cost breakdown (% of AOV) minimise inventory and cater for seasonal variations • Ordering on demand gives low food wast
Slide 21: Factors behind our strong cash conversion
3 Factors behind our strong cash conversion 1 2 3 Unit economics Light CAPEX Negative & Margins model working capital Contribution margin per delivery 1.4% No structural debt (LTM Q3’2023) CAPEX as % of Net Sales except IFRS 16 leases 260 SEK LTM Q3 2023 Negative working capital -6.7% AEBITDA margin
Slide 22: Solid cashflow
Solid cashflow MSEK • Generated a positive cash flow from operating activities excluding changes in Net working capital • Changes in Net working capital have a large effect on the cashflow
Slide 23: Annual Working Capital Cycle
Annual Working Capital Cycle 1 2 Trade Payables Accounts receivables Follows seasonal cycles Dependent on last weekday of the quarter Timing of supplier payments NWC: Net Working Capital
Slide 24: Looking forward
Looking forward • Expect to see single digit revenue growth continuing in Q4 and on into 2024. • Notice that AOV will not have the same push from price adjustments going forward, as the last price adjustments was made late 2022. • We expect to see contribution margins around 30% on an annual basis •
Slide 25: Walker
Walker
Slide 26: Financial Targets and Near-Term Priorities Communicated early 2023
Financial Targets and Near-Term Priorities Communicated early 2023 Stabilization of revenue Long-term profitable development in 2023 growth • Profitable and self-financing - Net Sales CAGR of 6-8% • Stabilizing and profitably growing thereafter volumes - EBIT margin approx. 4-6% • Must-Win-Battles:
Slide 27: Focus on must-win-battles to drive profitable growth
Focus on 2 must-win-battles to drive profitable growth Increase Marketing Excellence Cultivate Epic Customer Experiences • Sharpen value proposition across markets • Transition to fully personalized subscription • Optimization of performance marketing / • Improve the “non-taste” kitchen experience s
Slide 28: Jeanette
Jeanette
Slide 29: We don’t sell food
We don’t sell food We sell meals that unite families Mealkit category drivers
Slide 30: Consumers want personalized services
Consumers want personalized services • Largest selection of dishes - new dishes added each week • The right meals personalized for our customers’ family’s needs: - classic, inspirational, child- friendly, vegetarian, gluten-free, quick preparation, etc • A common value proposition across the markets
Slide 31: Strong local brands & growing
Strong local brands & growing Price positioning: + Middle mass market Upper mass market We make it easy for An easy way in a hectic life to enjoy you to make and Brand positioning: varied home cooked dinners enjoy amazing meals for all my family’s taste and choice. at home Ett Godare Liv Flere mulig
Slide 32: Gathering around a common value proposition
We are gathering around a common value proposition and are preparing for a common communication platform to increase efficiency in content development, while still keeping the strong local brand names.
Slide 33: Increasing unaided awareness
Increasing unaided awareness • Cheffelo’s brands have the strongest unaided awareness across the markets. • We continue to build strong brand equity and high awareness
Slide 34: Double-digit growth in customer aquisition
Double-digit growth in customer aquisition Index new customers total Nordic 137 We have increased efficiency in our investments and therefore reduced Customer Acquisition 100 Cost (CAC) Marketingspend YTD sep index 90 New customers Ytd oct 2022 Ytd oct 2023
Slide 35: Klaus
Klaus
Slide 36: Efficient customer acquisition throughout the funnel
Efficient customer acquisition throughout the funnel • We utilize the strengths and strong positions of our consumer brands to attract good customers with a high customer lifetime value at a lower cost • We constantly optimize our activities and allocation in the marketing funnel • 60% of our spendi
Slide 37: Reduced customer acquisition cost
Reduced customer acquisition cost • Numerous changes and developments • Improving the foundation: enablers and from which we now see the very clear enhancers effect in terms of reduced customer acquisition cost Server- Conversion side optimization tracking Trustpilot On-site Web ratings lead SEO ana
Slide 38: Improving Marketing Excellence: A Must-Win-Battle
Improving Marketing Excellence: A Must- Win-Battle Customer acquisitions Q3 47% higher vs. same period last year while we reduced customer acquisition cost by 30% and Sales and marketing expenses only increased by 2.9%. Some examples of how we have done it: • Increased our online visibility driving
Slide 39: Achieving marketing excellence by teaming up
Achieving marketing excellence by teaming up • Upgraded tell-a-friend ambassador programmes with incentives for both customers and our ambassadors • Partnerships: WeightWatchers (SE) Roede (NO) • Affiliated partnerships give cost efficient additional traffic, leads and sales
Slide 40: Customer care for improved retention
Customer care for improved retention • AI driven churn prediction and churn prevention program • True loyalty program honoring loyal subscribers • ‘We-love-you-calls’ reducing early churn and improving CLV • Happy customers = long term growth and profitability ☺
Slide 41: Claes
Claes
Slide 42: Key factor for customer retention: the food
Key factor for customer retention: the food We started with fixed meal kits to now have a fully flexible and customer unique subscription that always delivers according to the customers’ preferences In our business model there is no limitation to number of recipes/week: we offer 285 recipes weekly i
Slide 43: The kitchen experience
The kitchen experience • We aim to deliver epic customer experiences. • The kitchen experience includes the “non-taste” elements as well: - how we pack the box - the ingredients - how easy it is to prepare the food - how long time it takes - the number of steps to make the dish - the cleaning up aft
Slide 44: Ingredients & procurement: we work differently
Ingredients & procurement: we work differently • Our way of working is different from e-commerce and retail: • We order on demand after customers have locked their orders • Almost zero inventory and extremely low food waste • Food waste is also reduced at the producer, who produce what we need and n
Slide 45: Sustainability focus at Cheffelo
Sustainability focus at Cheffelo Environmental focus areas Our sustainability Food waste Logistic/ Ingredients Meal planning Packaging Climate change approach transport Social focus areas Customer health Local CSR Responsible Animal welfare employer
Slide 46: Ingredients & procurement: efficiency and profitability
Ingredients & procurement: efficiency and profitability • Working with Nordic procurement while staying locally relevant • The aim is high quality, tailor-made products at a competitive price. • New in 2023: One supplier of vegetables for Sweden and Denmark • Ongoing tenders for additional four cate
Slide 47: Vibeke
Vibeke
Slide 48: 100% Customer unique production
100% Customer unique production • 100% personalized production process in all our facilities since the start of 2022: • 3 lines in Norway, 2 in Sweden and 1 in Denmark • Investment of SEK 25 million to get common, effective and flexible processes – enabling us to make the shift from fixed meal kits
Slide 49: Production efficiency
Production efficiency • Pick-to-light and good optimalization of ingredients enables production of more than 400 boxes an hour/line. • Measuring all-in productivity in Units per Production Hour we have increased our productivity in 2023 compared to 2022 with 40%, packing more than 300 units per hour
Slide 50: Delivering the mealkits to the customers’ door
Delivering the mealkits to the customers’ door • Improved flexibility of the logistic offering during 2023 • Urban customers can choose between 2 or 3 delivery time-slots • Deliveries concentrated to Saturdays, Sundays and Mondays – the service is for everyday meals, customers prefer delivery of the
Slide 51: Operational Excellence
Operational Excellence Take care – be safe Quality Prepare for next step Clarity and feedback ✓ Deliver as promised ✓ Satisfied customers Engagement Flow and productivity ✓ Right Cost Smart Execution to processes meet targets and training We take pride in what we do We challenge the status quo We ar
Slide 52: Health & Safety
Health & Safety • Food safety is our priority #1 • Safety of our workforce • No customer shall have adverse health • Permanent contracts reaction • Predictability, experience to perform • We focus on right temperature, with good engagement, quality, safety cleanliness and quality control and product
Slide 53: Anton
Anton
Slide 54: The secret sauce – a purpose-built platform
The secret sauce – a purpose-built platform • Technology – a core differentiator crucial to our success • The platform powers our 4 brands, including systems for menu planning, purchasing, inventory, production and logistics, customer handling, subscription engine • Another core part of our technolo
Slide 55: In-house development makes us agile
In-house development makes us agile • Nobody knows mealkits like we do • We build what is core for us, what is unique and what is not readily available on the market, such as core meal kit functionality (menu planning, etc.) • Other tools, which are available as SaaS tools, we buy off-the-shelves an
Slide 56: Data & analytics – our largest focus area for technology investments
Data & analytics – our largest focus area for technology investments Throughout the last several years, we have been: • Building a team of data analysts, data scientists, ML & Data Engineers • Building a data platform with all operational and customer data • Establish common practices for building d
Slide 57: Data & analytics fuel our core business
Data & analytics fuel our core business Selected ML&AI use cases: Demand forecasting Personalization & relevance Picking line optimization Churn prediction and prevention CAC/CLV optimization Algorithmic menu planning
Slide 58: Slide 58
Slide 59: Links to Cheffelo Investor Relations Information
Links to Cheffelo Investor Relations Information • Investor relations: LINK • Annual & sustainability report 2022: LINK • Latest interim report (Q1 2023): LINK • Cheffelo leadership team: LINK • Cheffelo Board of Directors: LINK • Links to our brands:
Slide 60: Headquartered in Sweden with subsidiaries in Norway and Denmark
Headquartered in Sweden with subsidiaries in Norway and Denmark Ownership in Cheffelo AB (publ) 1) Shareholder Ownership (%) Petter von Hedenberg 10.2% Cheffelo AB (publ) Niklas Aronsson 8.0% Olle Qvarnström 5.7% 100% Invus 5.4% Cheffelo NewCo AB Carolina Gebäck 5.3% Acton 4.0% 100% Nordnet Pensionf
Slide 61: LiNAS odt fPrLevert
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Slide 62: Slide Graveyard
Slide Graveyard