HelloFresh (OTC:HLFFF) SE (HFG) has reported a mixed performance in its first quarter of 2024, with notable growth in its Ready-to-Eat (RTE) segment and a decline in its meal kit business. The company achieved a 3.8% constant currency growth rate, with group revenue reaching €2.1 billion. Despite a decrease in orders, HelloFresh delivered its highest net revenue quarter historically, with positive adjusted EBITDA and a solid contribution margin. The company remains focused on driving cost efficiencies and scaling up RTE operations, especially in the US and internationally.
Key Takeaways
- Group revenue for HelloFresh in Q1 2024 hit €2.1 billion, with a 3.8% growth rate in constant currency.
- Ready-to-Eat segment soared by 56% on a constant currency basis.
- Meal kit segment experienced a 7% decline in constant currency revenue.
- The company reported a positive adjusted EBITDA of €17 million and a contribution margin of 25.2%.
- 32 million orders were delivered in Q1 2024, marking a 2.6% decrease from the previous year.
- Average order value increased by 6.5% on a constant currency basis.
- North America and international revenues grew by 4.6% and 2.3% respectively.
- Marketing expenses rose due to the expansion of RTE and adjustments in marketing budgets.
- The company expects a softer growth in Q2 but maintains its full-year outlook of 2% to 8% constant currency revenue growth.
Company Outlook
- HelloFresh aims to improve customer lifetime values and enhance unit economics.
- The company is focused on creating early consumer demand in new markets and reaching critical mass in new RTE facilities to boost productivity and margins.
- Full-year constant currency revenue growth is projected to be between 2% and 8%, with an adjusted EBITDA range of €350 million to €400 million.
- An indicative adjusted EBITDA margin of 5.5% to 7% is expected for Q2.
Bearish Highlights
- Meal kit segment contracted by 7% in constant currency revenue.
- A slight decrease in orders by 2.6% compared to Q1 2023.
- Increased procurement and cooking expenses, particularly in North America by almost four percentage points.
Bullish Highlights
- RTE segment demonstrated significant growth, with net revenue reaching a run rate of over €2 billion.
- North America and international markets reported revenue growth.
- Fulfillment expenses decreased, benefiting from the higher share of RTE meals.
Misses
- The company experienced a mild decrease in the number of orders delivered.
- The meal kit segment saw negative growth, which contrasts with the success of the RTE segment.
Q&A Highlights
- HelloFresh is experimenting with acquiring customers with higher lifetime values and is observing predictable customer behavior.
- The U.S. RTE business is expected to grow by approximately 50% year-over-year.
- The company did not provide specific details on the trajectory of the meal kit business for Q2 or the performance of specific geographies or brands within the international segment.
HelloFresh SE has navigated the first quarter with a mix of challenges and successes, as evidenced by its Q1 2024 earnings call. While the meal kit segment has faced a downturn, the company's RTE business has shown robust growth, particularly in the US market. HelloFresh continues to adapt its strategy to enhance customer retention and lifetime value, with an emphasis on cost efficiencies and market expansion. With its highest net revenue quarter on record and a positive adjusted EBITDA, HelloFresh is positioned to pursue its growth targets for the year, despite softer expectations for the upcoming quarter.
InvestingPro Insights
HelloFresh SE's first quarter performance in 2024 reflects a company at a crossroads, with its Ready-to-Eat segment showing promise amidst challenges in its traditional meal kit business. InvestingPro data and tips provide a deeper understanding of the company's financial health and stock performance.
InvestingPro Data highlights HelloFresh's market capitalization at $1.27 billion, with a high earnings multiple reflected in a P/E ratio of 62.21. Despite a slight decline in revenue growth over the last twelve months, the company maintains an impressive gross profit margin of 64.78%, indicating strong profitability in its operations. However, the stock price has experienced significant volatility, with a price total return of -73.25% over the last year, signaling investor concerns.
Two key InvestingPro Tips for HelloFresh are its "impressive gross profit margins" and the fact that it is "trading at a low revenue valuation multiple." These insights suggest that while the company is currently efficient in converting sales into profit, its stock may be undervalued relative to its revenue, potentially offering an attractive entry point for investors.
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Full transcript - Hellofresh Se OTC (HLFFF) Q1 2024:
Operator: Good morning ladies and gentlemen and welcome to the HelloFresh SE Q1 2024 Results. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to Dominik Richter.
Dominik Richter: Good morning and welcome everybody. Thank you for joining us today for our first quarter earnings call. We will be discussing our financial and operational performance for the first quarter of the year, but after a more thorough deep dive on strategic priority during our full year results a few weeks back, we will focus primarily on our financial results today, before we will open the floor for a question-and-answer session. Please also note that starting with this release, we provide more visibility on the trajectory of our RTE and meal kit product lines respectively and we will split out net revenue and adjusted EBITDA for meal kits and RTE separately. Overall, our Q1 results came in very closely to what we expected and communicated during our last interaction in early March. Let me briefly share some of the highlights of Q1 2024 with you now before we discuss them in more detail in the remainder of the presentation. First of all, we saw continued group AOV expansion by 6.5% on a constant currency basis, driven by higher AOV in both geographical segments. Group orders are down by 2.6% year-over-year, in line with the trend experienced the previous quarter. Our group revenue amounted to €2.1 billion, which is actually representing the highest ever quarterly revenue we generated as a company and marks a 3.8% constant currency growth rate. RTE continued to grow at a high pace. It amounted to 56% growth on a constant currency basis whereas meal kits saw continued negative constant currency revenue growth of about 7% in the first quarter of 2024. Our contribution margin came in at 25.2%, about 1 point down from the 26.3% in Q1 2023 and this has mostly been influenced by the initial ramp-up costs of selected new fulfillment centers and even more so by the rapid ramp-up of our U.S. RTE business. All-in-all, we generated a positive adjusted EBITDA of €17 million, which is a margin of just shy of 1%. A number of our strategic priorities for the remainder of the year are right now in the early implementation and execution phase and will progress over the remainder of the year. We plan to report back on them as we collect the data on progress made and execute on the roadmap for the envision changes. Just as a reminder, our 2024 strategic priorities revolved around three main vectors. First of all, a strong focus on driving cost efficiencies, so we can start to show a clear path to eventually 10% adjusted EBITDA margins for both meal kits and RTE in the midterm, as well as significant improvements to our ability to generate free cash flow. A range of projects here has been identified and will be executed according to plan. The success of this strategy will be reflected in higher PC2 margins and the lower share of G&A as a percentage of revenues over time. The second priority is to continuously improve the customer lifetime values of our customer base by strengthening the product proposition and shifting investment from acquisition into our products and towards existing customers. This includes a number of initiatives such as menu enhancements with a higher share of customizable meals, a broader assortment in HelloFresh Market, and the launch of our HelloFresh Loyalty program in Q4. All of these initiatives and this strategy is aimed at further positively impacting, both the average order rates and AOV of our customers and hence to increase customer lifetime values. The third strategic priority is a laser focus on the scale-up of our RTE operations in the US and the internationalization of that business line. And this will remain the single biggest growth driver for the group for the remainder of 2024 and also in 2025. On this third big strategic priority, we would like to give you an update already today and also on an ongoing basis in future releases given its growing importance for the group. RTE has progressed well and is on track to reach the goals we have for it in 2024. It's already at a €2 billion run rate revenue in Q1 and we have scaled revenues by 20x over the last five years since we acquired the business in 2020. Our RTE playbooks follow the trite and tested playbook that we have perfected with 18 country launches over the last 10 years in the meal kit space. We now have built a strong nucleus and brands in the US and we'll capitalize on this while moving forward with steady internationalization to provide long-term growth runway for the brand. Specifically for international RTE, we come out of our product market fit faces in Australia and Canada, which is part of North America. We have strong feedback from customers and starts to have solid unit economics for those business units. These markets will receive more investment over the year to scale operations while remaining disciplined on overall cash outflow. Benelux, which we launched mid last year and newly launched Denmark and Sweden marked the first geographies in Europe paving the way for more launches in the future. These entities are currently still loss-making and subscale. Hence our focus is on building towards good unit economics first and creating early consumer demand before they reach the milestone of receiving additional investment to scale operations. I also want to comment on a few notable developments for Factor US to give more color on our near-term plans and strategy here. Our Arizona site was launched in Q4 delayed versus our original launch date by about six to eight weeks and has since been receiving an increasing share of volume since launch. It starts to be at good critical volume now. So our focus shifts very strictly to driving efficiencies here. We're focusing on improving unit economics as we train, associate and push productivity of over the remainder of the year, which should lead to better PC2 margins and ultimately better adjusted EBITDA margins than what you have -- than what you see in the RTE segment for the first quarter and where we are today. We also expanded the coverage of our delivery days to additional regions moving from one to at least three days of coverage. This gives customers a longer shelf life of the product when they receive it at home and obviously also more flexibility for customers to receive the product at the most convenient day of the week. We have also added a significant number of new healthy recipes to our recipe database and as a result feature now a weekly rotating menu of 35 miles per week, which is up about 10 recipes per week or 30% year-over-year compared with the same time last year. It's a proven lever to increase order rates of existing customers and make our product long-term more attractive both in satisfying existing customers and attracting new customers. And finally we have also expanded our Factor marketplace where we follow a similar strategy to what worked well in meal kits. This means adding additional customer value drivers to the overall assortment. Recent Factor private label launches include a range of healthy juices, smoothies, healthy snacks, and our very own protein powder. This assortment expansion should have positive impacts on AOV for the RTE vertical. It's a good opportunity to also use these products as we move towards offering more product incentive and shift our marketing mix away from purely financial incentive. After this short update on our RTE vertical, let me turn back to our most recent quarter and comment in more detail on the financial results we generated. In Q1, 2024 we delivered 32 million orders, a mild decrease compared to Q1 2023 by about 2.6%. The order decline observed in meal kits, whereas our RTE segment grew very materially year-over-year in orders largely offsetting the adverse development in meal kits. This is particularly visible in North America. The decline in orders is driven exclusively by the lower share of new customers given the strategic shift to settle for fewer, but more high-quality new customers, which we started to execute mid-quarter and flagged a few weeks ago. Our existing customers continue to show strong predictable order behavior. And as a result, strong customer lifetime values in line with our communicated strategy. Average order value for the group improved by 6.5% in constant currency year-over-year. It's mostly a continuation of the AOV drivers that we saw in some of the more recent quarters as well with many different drivers contributing. For both geographic segments North America and international, we sell a higher share of premium meals. We have introduced more customizable options and we now feature a broader assortment in HelloFresh Markets all of these being responsible for driving up AOV. Specifically in North America, we also have the positive contribution of a faster-growing RTE business line, which comes at a higher AOV. And for international specifically, we have the run rate effect of some selected price increases. Notably to a certain degree, you already start to see now the impact of fewer financial incentives on AOV, which we have executed as part of the strategy shift in mid Q1. Let me turn to revenue. In Q1, we actually generated the highest net revenue quarter in HelloFresh Group's history. The quarter certainly did not feel like a highlight in the company's history, but it's a good reminder that HelloFresh has been growing very consistently and steadily and profitably for many years in a row with Q1 2024 up another 4% versus the same quarter last year. Starting with this quarterly update, we will also start providing more visibility on the top line and bottom line not only by region, but also by product category. Looking at regions like we did in our past reports exclusively, you see that North America grew by 4.6% and international grew by 2.3% versus the comparable period a year ago. Looking at net revenue development per product category, you'll see RTE growing strongly year-over-year at 56% to over €500 million per quarter, which accounts for a run rate of over €2 billion in net revenue. This was made possible by the fast ramp-up of our new facilities, which as you may remember came online delayed by a few weeks in Q4, but started now to receive more and more volume over the course of Q1. The meal kit segment on the other hand contracted by 7% year-over-year a result of both a soft consumer environment and a strategic shift to aim for higher quality customers and the prioritization of building out our customer proposition, while protecting our adjusted EBITDA margins over chasing more new customers in the short term. With that, let me hand over to Christian to comment on our cost line items and provide you guidance for the remainder of the year.
Christian Gartner (NYSE:IT): Thank you, Dominik. Let me continue with the development of our procurement and cooking expenses. One point upfront as you have just heard, we changed actually the labeling of this cost line to make it more transparent, but this also includes all the cooking-related expenses in our RTE Product Group i.e. we booked to this line item, firstly, all expenses related to procurement. So ingredient expenses, inbound shipping, personnel expenses of our procurement function, and so forth, for both of our product verticals. But also cost related to the actual cooking of our Ready-to-Eat meals, including the associated direct labor and equipment costs. So with that, let's have a look at the underlying trends. We have seen relative procurement and cooking expenses increased by two percentage points. In North America, we've seen an expansion of almost four percentage points, which is driven by number one by a higher share of Ready-to-Eat in the overall mix. And then secondly, by the fact that, COGS within Ready-to-Eat in the US are temporarily elevated because of the significant ramp-up of recently added production capacity namely our Goodyear Arizona site. In international, we actually reduced relative procurement and cooking expenses by 1.5 percentage points, as we realized efficiencies in a somewhat more normal inflationary environment. Let's now turn to our fulfillment expenses. The trend of our fulfillment cost line is to a certain extent the flip side of what we just had discussed, regarding procurement and cooking. Given the higher share of RTE, which has less associated pick-and-pack expenses, overall relative fulfillment expenses are down by circa one percentage point. Our North America segment is the key driver for this. Fulfillment as a percentage of revenue has decreased by 1.7 percentage points compared to Q1 last year. Within international, relative fulfillment expenses are mildly up year-on-year by circa 50 basis points, to a large extent driven by the factors that we have discussed previously i.e. namely the ramp-up of new fulfillment centers in our biggest international markets Germany and UK, which will also be visible for most of the year as we discussed before. And then on top of that some modest volume deleveraging. These trends in our operational cost line items result in a contribution margin of 25.2%. This means that, our North America segment has seen a net reduction of its contribution margin of circa two percentage points to 26.5%. In our International segment, we've seen a net expansion of its contribution by roughly one percentage point. All based on the trends that we've just discussed here. So with that, I'd like to talk about our marketing expenses. There are a couple of points, I would like to highlight on this page. Firstly, as you know, Q1 typically marks the highest level of our marketing activity for us during the year, as we meaningfully step up sequential new customer acquisitions versus Q4. Secondly, this trend is further amplified by the rapid and successful scaling of our Ready-to-Eat business, where we have been delivering with 56% a higher revenue growth rate than what we are targeting for the full year. The year-on-year absolute marketing spend increase you've seen from us in Q1 is entirely down to this rapid RTE expansion. And then thirdly, as flagged just now by Dominik, we have also modestly recalibrated how we split our economic marketing budgets between price incentives and pay channels i.e. weighted more to the latter with an overall beneficial impact on customer quality and retention, but therefore also somewhat increased relative marketing expenses. Okay. When you aggregate all of that let's have a look at our AEBITDA. As you know we initially targeted AEBITDA of circa breakeven in Q1. We actually outperformed this target by delivering €17 million of positive AEBITDA. When you look at our two reporting segments, North America delivered an AEBITDA of €26 million a margin of 1.9 percentage points. Now this compares to a margin of 5.7% in Q1 2023. The key driver of the difference is the effect of our Ready-to-Eat scale-up both in relative marketing expenses but also – but is temporarily on contribution margin. During H2, you should expect to see this combined drag to somewhat reduce. International delivered an AEBITDA of €29 million effectively maintaining its AEBITDA margin at 4.1%, despite the impact of some volume deleverage. Negative AEBITDA contribution from holding expenses stayed broadly flat versus last year, which illustrates overall good cost discipline, which we enforced on our central functions. Before we turn now to our outlook, let me quickly summarize the top and bottom line trends on the next page. We focus first on the top left-hand side on this page. Our North America segment delivered a decent 4.6% revenue growth in Q1. The key driver for this growth was the successful rapid expansion of our Ready-to-Eat product group, which grew bopping 56%, as you see on the bottom left of this page. The bulk of this business represents our US Factor business. Now this rapid growth does not come for free. It also means higher marketing expenses and doing that rapid initial ramp-up phase also temporarily higher production costs. Therefore, our RTE AEBITDA margin was negative in Q1, as you see on the bottom right of this page and also had an impact on our North America AEBITDA margin to be somewhat lower than in the prior year at 1.9% as just discussed and as you also see on the top right-hand side of this page. Our International segment has actually maintained its AEBITDA margin well in Q1 at 4.1%, despite some volume deleverage and the ramp-up of two new fulfillment centers as discussed. The same applies to our meal kit product group overall, which preserved its AEBITDA margin at around about 5%, the split Q1 being the highest seasonal marketing quarter. Let me now conclude by reiterating the full year 2024 outlook that we have provided about a month ago on our full year earnings call of 2% to 8% constant currency revenue growth and an AEBITDA range of €350 million to €400 million. Let me also touch upon account trading and therefore, an indicative outlook for Q2. As you have seen from us from our Q1 numbers, so far everything is shaping up very much in line with our previously communicated expectations. For Q2 and keeping in mind that it's early in the quarter, we specifically expect a slightly softer year-on-year order and revenue growth compared to what you've seen from us now in Q1 that's primarily driven by how we have allocated our marketing budget between the first two quarters of 2024. As a consequence, should also expect meaningfully lower relative marketing spend in Q2 versus Q1. We expect sequentially somewhat higher contribution margins than in Q1 but down year-on-year, driven by the same factors that we have discussed previously i.e. temporarily higher production costs within RTE, during the ongoing ramp-up phase and the temporary impact of the ramp-up of new meal kit fulfillment centers in Germany and increasingly the UK. That would result for Q2 in indicative AEBITDA margin of somewhere 5.5% to 7%. So with that we will open the floor to your questions.
Operator: [Operator Instructions] And the first question comes from Joe Barnet-Lamb, UBS. Please go ahead with your question.
Joe Barnet-Lamb: Hi. Thanks. You announced a shift in your marketing approach towards retention and away from customer acquisition. And Dominik I think you mentioned that that had effectively started midway through 1Q. In the early stages of that can you help us understand what you're seeing from a customer acquisition cost perspective? Presumably you're not seeing a linear relationship between marketing reductions and customer acquisition. Any color you can give on that and how the evolving strategy is impacting CAC? Thank you very much.
Dominik Richter: Certainly. So we're, obviously, experimenting on a few things and also, which product incentives drive most value. The way to conceptually think about it is that we broadly want to target the same CACs, but acquire customers with higher customer lifetime values, making the efficiency of our marketing spend better. So that's really like what we're aiming for. So if you take on board the cost for product incentives, the cost for retention incentives and all other associated costs that we have in acquiring and retaining a customer then we want those to remain broadly stable, but really focused on getting higher quality customers, which is reflected in better order rates and hence better customer lifetime values.
Joe Barnet-Lamb: Dominik, if I may just follow-up. That's really helpful. Thank you. In which case given your cohort chart and your retention charts presumably it will take a few months before you really know where the retention from these new cohorts is sticking at higher levels. Is that fair?
Dominik Richter: So we have invested a lot into our predictive modeling, which also has really served us well in the past in having very high predictability of customer behavior. It usually takes us a couple of weeks until we can really see the impact of these things coming through. But at this point after a few weeks, we actually have very, very high predictability on the remainder of our customers' lifetime and their behavior over time. So I would say yes it's not like that after one or two weeks you can report back and say that this is working and this is exactly how the economics look like, but we're now sort of like six to eight weeks into that journey and we have been experimenting with that also before. It's not like it's the first time that we do that in mid-Q1, but we have decided in mid-Q1 to more forcefully shift towards that model of fewer customers, but with better customer lifetime values. And after a couple of weeks I think we can see that overall the strategy goes according to plan.
Joe Barnet-Lamb: Pretty helpful. Thank you.
Operator: The next question comes from Luke Holbrook, Morgan Stanley. Please go ahead with your question.
Luke Holbrook: Yeah. Good morning, everyone. My question is just on your Q2 guidance. Just to be clear are you guiding around €100 million to €140 million mark of EBITDA in absolute turns in Q2. And if that's the case what gives you the confidence at this stage that reiterating the full year guidance given it would be relatively Q4 weighted? Thank you.
Christian Gartner: Luke it's Christian. So the range that I guided on the two bookends are somewhat wider than what you just referred to, but what you referred to sits inside of that range. So from that perspective it's not of the mark. What gives us the confidence that we are well on track to our full year guidance, I would say two things. One is I try to imply here on the call so far we're tracking very closely to what we have in the plan both from a top line perspective as well as from a bottom line perspective an d so far well on track. When you think about overall how our EBITDA distribution is in a normal year, it is somewhat weighted to the second half just because in the first quarter we are basically leading most forward in terms of deploying marketing budget, going after new customers and so forth. So, from that perspective, we somewhat expect a normal year. Last year as you know was somewhat shaken by, I would say, more one-off effects in Q4, which hopefully we're not going to repeat in Q4 this year. On top of that, we spoke a little bit about the let's say COGS development on the RTE side doing that very strong volume ramp-up that we've just done in the midst of it. And when you look at the sequential ramp-up that is quite impressive not just year-on-year, but also sequentially. As we go into H2, that sequential development is much more gradual, so we can optimize much more for margin there, which will hopefully have its impact as well.
Luke Holbrook: Okay. Understood. Thank you.
Operator: The next question comes from Marcus Diebel, JPMorgan. Please go ahead with your question.
Marcus Diebel: Hi everyone. Just on the North America business, given that you don't split by division between RTE and meal kits just a few questions. The first question in relation to North America. Christian utilization rates in meal kits do you expect they them to go up over the next 12 to 24 months? And then the other question on North America Ready-to-Eat if you can tell us what the revenue growth rate so far in Q2 has been that would be very helpful? Thank you.
Christian Gartner: So, Marcus, on your first point, the meal kits utilization rate really no change to when I think we discussed exactly the same question on our full year earnings call five weeks ago. So, we still sit within the zone of what we target in terms of utilization levels. So, no change to that. On our factor growth rate so U.S. factor growth rate given that that's by far biggest share of our overall RTE product group. Target is roughly in line with what we put out for that global product group. So, if you recall, we are targeting for the full year roughly 50% year-over-year constant currency revenue growth and that applies to it by far biggest components from our U.S. RTE business.
Marcus Diebel: Okay. But let me ask the other way around, do you expect any further country additions in RTE beyond what you said today?
Christian Gartner: It's a -- so it's over a longer period of time, yes. When we launch the next geography we will make that announcement at that point in time.
Marcus Diebel: Okay. Thanks.
Operator: And the next question comes from Nizla Naizer, Deutsche Bank. Please go ahead with your question.
Nizla Naizer: Great. I have two from my end. The first is on the meal kit business, it declined 7% in Q1. Could you kind of tell us what the trajectory is looking like in Q2? You mentioned that the decline is expected to narrow over the course of the year. Is there any evidence that you're seeing with demand picking up, et cetera, that gives you that comfort that it could decline in the gap to sort of close? Some color would be great there. And the second is on the ready-to-eat business. Could you remind us the attractiveness of the RTE customer versus a meal kit customer? Is it better in terms of what you're seeing with customer lifetime value, so it makes the investment more worthwhile? Any color on retention rates? Is it better than meal kits? Some color there as an update would be great. Thank you.
Christian Gartner: Yes. So, what I tried to say on the on my commentary on current trading and in the Q2 outlook is that overall we are targeting a touch softer revenue growth in Q2 versus Q1. In Q1, again, we were at 3.8%. So, we're targeting somewhat for the group somewhat lower year-on-year growth rate in Q2. That is basically driven by what marketing campaigns we allocated in those two quarters and that would apply to both of our global product groups. So, RTE as well as meal kits, year-on-year growth rate you should expect that they will be a touch lower in Q2 than what you've seen from us in Q1. On the RTE unit economics, those are very attractive to us. Right now obviously, contribution margin is temporarily a bit compressed because of the production ramp-up that we've discussed. Now a few times if you basically normalized for that so i.e., assume that we get back to COGS per order towards where we have been before, ramping up the new facility, where there's no reason or whatsoever why we should not do that. Then contribution margin in relative terms is at least as good as for our core US meal kit business, which has a very healthy contribution margin. And then that margin is applied to a higher AOV versus our meal kit business. Retention ordering pattern and so forth at least as good as well our meal kit business. So overall we're quite happy about unit economics where we see those going near term as well as midterm and therefore also lifetime value.
Nizla Naizer: Very helpful. Thank you.
Operator: [Operator Instructions] And the next question comes from Emily Johnson, Barclays. Please go ahead with your question.
Emily Johnson: Good morning. Could you dive into the volume declines in international in a bit more detail? I'm curious to understand a bit more about what the meal kit decline versus RTE growth offset looks like in international relative to North America? And within International, I know you've touched on the past in terms of some specific countries perhaps among the more mature geographies actually being back to volume-based growth. So can you also touch on any specific geographies or brands that are performing relatively better or worse within that international division? Thanks.
Christian Gartner: So Emily, as you know, our international segment is very much weighted towards meal kits. So what you see there in terms of year-on-year order development is effectively not dissimilar from what we see from meal kits for that geographic segment, overall. So that's around about 3% negative year-on-year, order growth is ballpark in line with what you should expect the meal kit piece of that to look at as well. In terms of single market commentary, we are not doing that as in the past – as we've done in the past.
Operator: Okay. As there are no more questions from the audience, this will conclude the Q&A session and I hand back over for closing remarks.
Dominik Richter: Thank you for joining our Q1 earnings call today. We wanted to definitely give you an update on some of the progress that we're making in RTE. Just as a reminder because there were a couple of questions asked there for us with a new facility it's really important that we get that facility to a certain critical mass. At that critical mass, we can start pushing productivity. That is something that you should see coming through more and then also with improved margins in RTE. So the fact that we had both in Q4, as well as in Q1 now for RTE a negative AEBITDA margin was very much expected and according to plan. But that should definitely with now more volume and a strict focus on driving productivity change significantly and materially for the remainder of the year and be one contributor to actually achieving our AEBITDA guidance that we reiterated today. That's just as a small point given the different questions asked on that. Thank you for joining today and we look forward to reporting back in the summer on our Q2 results and with an update on the progress on our strategic priorities as well. Thank you.
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