The subscription-based meal kit provider Marley Spoon had a big week last week, rising 28% in the five sessions. Following a presentation at the ASX CEO Connect conference on Tuesday, the company updated investors on Friday on initiatives and investments to support its positive outlook for further revenue growth in 2021.
Expanding capacity to handle increasing orders
Marley Spoon believes consumers' behaviour of switching to online shopping in the category is still in its early phase, supporting growth for many years to come. To manage this growth and the increasing volume of customers' orders, they are significantly increasing production capacity across its major markets.
The company is scheduled to take possession of its new custom-built Sydney manufacturing centre in Q2 2021, tripling its Sydney manufacturing footprint. They recently took possession of its third Australian manufacturing centre in Perth, WA and launched its Dinnerly brand in the region in December 2020. Its Marley Spoon brand is expected to follow in the first half of 2021.
They are also increasing their presence in California in 2021, again tripling its current US West Coast manufacturing footprint. In addition, they will launch next-generation, computer-aided manufacturing technology in Europe and the US in 2021 in order to increase productivity and picking quality.
Scaling technology platform with enhanced big data capabilities
In 2021 Marley Spoon will increase investments in research and development to further develop its technology platforms and scale its big data infrastructure, supporting the further roll-out of prediction technology across the Marley Spoon value chain. These efforts will be supported by a doubling of Marley Spoon's Digital Team to a headcount of about 100 FTEs in 2021.
Stronger, simpler balance sheet to support growth in 2021
After a successful capital raise in Q4 2020, the conversion of convertible bonds and the retirement of a senior loan facility, the company's balance sheet is significantly improved and simplified, allowing the group to self-fund its organic growth strategy.
Given the continued growth of its subscriber base in early Q4, Marley Spoon reaffirmed its FY20 revenue guidance. Euro reported revenue growth for the full year is expected to be in the middle of the guidance range (90%-100% growth y-o-y), providing a good foundation for the company to continue delivering solid revenue growth in 2021 and beyond.
Marley Spoon CEO, Fabian Siegel, noted, “After an extraordinary growth year in 2020, we have a confident and positive outlook for 2021. With our strengthened balance sheet, we can self-fund investments in technology, capacity and capability to support ongoing solid growth. With a stronger team than ever, we are well placed to execute on our clear infrastructure investment roadmap and take advantage of the growth opportunities presented to us. We believe we are still in the early days of consumer behaviour switching from offline to online shopping in our category, supporting growth at attractive unit economics in 2021 and the years beyond.”