Welcome everyone to our Q1 Earnings Call. Today, I'd like to quickly refresh your memory on our vision and mission for the company, before covering the highlights of the first quarter, and then heading over to Christian for our financials and our updated guidance.

It was less than 10 years ago when we actually started HelloFresh from a blank sheet of paper. Shortly thereafter, we sat down with - by then I think it was a five person team, and articulated what our mission should be.

And as we now go into our 10th years of existence, our mission remains as relevant as on our first day. It says we change the way people eat forever.

And what we mean by that is that we offer our consumers an affordable, convenient, and delicious way to cook the best meals at home, and hence fundamentally changing the home cooking experience. Seven of 10 dinners globally and five in 10 dinners in the US are cooked and consumed at home.

This is one of the largest consumer spend categories, and at the same time, a category that has seen very little innovation and disruption in the last couple of decades. And that's what we're here to change.

In our Capital Market Day in December, we also outlined our vision for the group, which is to evolve from a leading meal kit company to a fully integrated food solutions group. Already today, you can see our broad suite of product offerings to consumers.

We are not only the undisputed market leader in meal kits, but have also added innovative new meal kit brands, like Green Chef and EveryPlate to our roster, we have very successfully expanded into ready meals with the acquisition of Factor. And we've made first forays into online grocery by scaling up our HelloFresh marketplace in Benelux.

So from a portfolio perspective, I think as of today, we already touched a lot of the different buckets of a consumer’s food budget. And we will increasingly continue to do so going forward.

Over the course of the year, we should get too close to $1 billion in cash on our balance sheet. And I can promise you that we will continue to focus relentlessly on making our value proposition to consumers better and better over time.

With more meals on the menu, better service levels, more competitive pricing, we will go after the huge home cooking TAM, while adding many more exciting products to our offering, and hence allowing us to capture a larger part of our consumer’s food budget. With that quick refresher, let's turn to the near past and actually focus on what happened in the recent first quarter of 2021.

First of all, we continued with our impressive customer growth rates. We added sequentially, about 1 million customers both in the US and international to 7.3 million customers from 5.3 million customers in Q4 2020.

Most of that was driven by unlocking new capacity in our footprint. Secondly, we also saw a beneficial impact from the ongoing pandemic with both order rates and AOV up year-on-year, but slightly down sequentially, very much in line with our projections that we gave on the Capital Markets Day in December.

Q1 also marked the highest ever net revenue quarter amounting to €1.44 billion in a single quarter, with €159 in adjusted EBITDA, that's an 11% EBITDA margin. This was also among our most successful quarters ever and outperforming some of our internal plans.

Moreover, the team delivered on-time, in-full and on-budget four new large manufacturing sites, two in the US and two an international, more specifically in the Netherlands and in the UK. We also saw our recent acquisition Factor at 75 doing very well in the first quarter.

Our synergy plans came to live and we managed to scale the business quite successfully and continue to see good momentum, which gives us a lot of - which gives us a lot of conviction that we're able to execute M&A deals very successfully. Finally, given the positive trading year-to-date, as well as the robust outlook across all markets, and all future growth initiatives that will be landing over the course of this year, we have upgraded our guidance, and now expect revenue growth between 35% and 45% for 2021.

Now focusing on customer growth, Q1 is typically the seasonally most favorable period of the year for us, with customers staying home, the weather usually not that great in large parts of the Northern Hemisphere. And hence, that's where we usually focus our marketing - our marketing initiatives disproportionately, over the course of the year.

This has paid off quite a bit. So customer counts has gone up by about 74% year-over-year from 4.2 million customers same period last year to 7.3 million customers in the first quarter of 2021.

That's not only very strong year-on-year growth, but also very strong sequential growth, because we added both in the US, as well as in international about 1 million households. And so sequentially, we grew by about 2 million from 5.3 to 7.3 million customers.

This also sets us on a very strong trajectory for the remainder of the year. So as we go into the second quarter, the third quarter and the fourth quarter, we also expect very robust year-on-year growth, given the customer base that we have now attracted, and that continues to order at high rates.

Order rates have been up by about 14% year-over-year from 3.5 orders to now about 4 orders. That is slightly less than what we have seen in the fourth quarter.

And can be explained by the fact that number one, markets have been opening up post-pandemic in large parts of our geographies. And secondly, that we also had an influx of new customers.

If you think about customers, on average, joining about halfway through the quarter, that is also something that some what drives down the average number of order that every customer can get in a given quarter. Its still meaningfully above pre-pandemic levels though, and we expect over the course of the year, it will stabilize or slightly go down from the level that we've seen right now.

But the exact and the right way to look at it is always on year-over-year numbers rather than sequentially because there is some seasonality in our business. On AOV, we also increased AOV year-over-year by about 4%.

At the height of the pandemic, we had average order values up by about 10% to 12%. So you can see that it has been slightly coming down.

Again, this is partly due to the fact that we've actually increased and brought in a lot of new customers over the course of the quarter, new customers usually come with price incentives. Nonetheless, if you look at it compared to pre-pandemic, you can see that baskets have remained larger.

And that also we have benefited from actually broadening our product portfolio and customers attaching more and more products to their order. So not only meal kits, but also from the suite of products that we offer most prominently in the Benelux in our HelloFresh market, but also in other geographies, our offering has just become quite a bit larger, and that is reflected in higher AOVs compared to pre-pandemic levels.

Now if you put all of these three things together, very strong customer growth, high - continued higher order rates, better AOV then pre-pandemic levels. You can see how we've also achieved the best ever revenue quarter of the company because we've grown revenue from about €700 million last year, all the way to €1.44 billion in the first quarter of 2021.

That's a 116% increase in constant currency. And something that I believe is really a testament to the fact how much consumers love the product, and how well we actually hit the nerve of consumers.

Key drivers have been, as I just reiterated, the strong customer growth, supported by ongoing high order rates AOV. With that, I'd like to hand over to Christian to lead you to the rest of the presentation before being back for Q&A.

Great. So let me turn now to our key profitability metrics.

Starting with contribution margin. Our contribution margin is down year-on-year by around about 60 basis points to 28.2%.

This is the result of a number of partly offsetting effect. On the one side, we saw an improvement in procurement expenses as potential revenues by 0.6%.

But at the same time, our fulfillment expenses increased as percentage of revenues by 1.2%. Now, why is that?

That's been driven by a number of factors. Number one, as Dominik had alluded to, in his intro, we ramped up multiple new fulfillment centers during the quarter, both in the US, as well as in international.

Secondly, in our US business in February, we saw meaningful weather disruptions. Two out of those four weeks in February were impacted by heavy snow storms.

And that's somewhat impacted also our production expenses in those weeks. And then thirdly, given that we've added a lot of new customers to our service in Q1, and new customers typically come with a certain level of price incentives that we offer, that has a certain impact on margins as well.

Looking forward into Q2, you should assume that contribution margin as we continue to ramp up new fulfillment centers and also on the packaging side basically have - when the weather gets warmer, also have a certain increase in all packaging costs, you should assume that contribution margin for Q2 remains broadly stable to slightly up versus what you've seen from us in Q1. And that also means from a year-on-year perspective, so versus Q2 last year, contribution margin should be meaningfully higher, given that Q2 last year was impacted on the contribution margin level meaningfully by COVID effect.

Let me turn now to our marketing expenses. Our marketing expenses as percentage of revenue are lower by 1.8 percentage points compared to last year.

With that, we sit at the low end of the range that we had guided for the full year i.e., the 15% to 17%. And we managed to end up there at the low end, despite us adding 2 million customers sequentially in this quarter.

We've achieved this because customer acquisition costs are still at attractive levels and give us very strong ROI on that marketing spend. And on top of that, we still see high order rates and strong retention by our existing customers and existing customers obviously generate revenues and profits without us having to target them through marketing initiatives.

With that, let’s have a look at our EBITDA. Despite us ramping up for new fulfillment centers, despite us meaningfully expanding our customer base, actually, the biggest sequential expansion that we ever delivered is what we've delivered in Q1.

And despite us spending, new adjacent verticals, our ready-to-eat business, our HelloFresh markets business, despite all of that, we generated a very strong EBITDA margin of 11%, two points better than in Q1 last year. That represents €159 million absolute EBITDA in that quarter.

This industry-leading profitability is very broad based, which you see when you look at the profitability of our two segments, all segments delivered double-digit EBITDA margins with our US segment with a margin of 11.5% and our international segment with 13.3%. So that's a summary of our P&L in q1.

Let me now switch gears a little bit and talk about our cash flows. In Q1, we achieved again very strong cash flow from operations of €209 million.

This is driven by based on profitability, so the €159 million EBITDA that we just looked at. And on top of that, given the strong sequential growth that we have delivered in Q1, we also saw meaningful cash inflow from working capital of close to €100 million in that first quarter.

Let's also talk about our investment cash flow. We deployed €27 million in CapEx in that first quarter.

That's a number that you should expect to continue to rise over the coming three quarters. Given that our growth is now even stronger than we initially anticipated, we also want to bring forward certain investment projects.

That means we're planning now for 2021 with CapEx of €200 million instead of the €150 million we had initially guided for this year. To also talk about our cash flow from financing.

This comprises primarily two parts. One is the business as usual amortization payments of our financial leases, around about €7 million in that quarter.

On top of that, this also includes €39 million cash payments for the settlement of share based compensation. Now for share based compensation, we have the choice to settle those either in shares or in cash.

Given that this time, at the time when those share based compensation became due, or share price was in the low 60s, we decided it was better value for our shareholders to settle actually this in cash rather than creating dilution at that share price level for our shareholders. But in sum, if you put all of this together, despite us investing meaningfully into the infrastructure capabilities of our business, and at the same time deploying active capital management, we continue to increase our cash position, by around about €150 million alone in this first quarter of 2021.

Let me conclude now, by repeating our guidance for the full year 2021, which we had increased on April 15. We have increased our constant currency revenue guidance for the year from previously 20% to 25%, to now 35% to 45%.

All that I had said previously with respect to our expected average order value for the full year being between €48 and €49 and our average order rate on a quarterly basis to be between 3.7 to 3.8. For the full year, that still holds true, so no changes to what we discussed in our Capital Markets Day.

Same applies to that we still expect our customers to revert back to a normal seasonality pattern this year, i.e., lower order rates, lower customer acquisition activity from late June through the end of August. So no changes to that.

But given the strong increase in our customer base, which we've achieved already by Q1 that basically has led us to increase our revenue guidance for the year to those levels. Given a decent EBITDA performance that we've delivered in Q1, we also decided to narrow our EBITDA margin guidance from previously 9% to 12%, so now 10% to 12%.

With that, we look forward to your questions.

Good morning, everyone. Three questions for me.

First of all on the active customer growth was clearly very strong in the first quarter. Can you touch on the mix between new customers and reactivations in the quarter and going into second half and perhaps even into next year are you assuming overall retention will remain above pre-COVID levels?

Second on the different geographies, can you share with us what are some of the fastest growing markets at the moment? And are there any remaining capacity issues across your market?

And lastly on Factor, now that you've had a few months with Factor, how have your expectations for the prepared meal segment changed? How big of an opportunity do you think it can be?

Would you seek to do similar acquisitions in international? And lastly, can you share whether Factor is already profitable?

Thank you.

Okay. Thanks, Shaked.

Let me take your first question. So on active customer’s and share of reactivation – reactivations, we’re around about in the mid-20s, low to mid-20s across the group, so somewhat lower than what we have seen pre-pandemic and this is especially driven by strength that we’ve seen basically also on the activation front than anything else.

In terms of growth differential between our geos that growth that we've experienced also in Q1 is really very broad based. So in substantially each of our markets, you've seen very strong year-on-year growth.

With respect to capacity, I would say, the overall situation is much better than what had experienced during last part of 2020. Having said that, there were still a couple of markets where we had to actively steer demand, especially in the first half of Q1, Germany, for example, is one example, where we added throughout the quarter, and further production line.

So they are at least until the end of February, we still had to be quite careful to not generate more demand than what we could fulfill.

Yeah, to be fair, I think that also applies in large parts of the US. Not that we were trading at 100% capacity utilization, but very close to it.

And so certainly, like not as much an issue as it has been over the past 12 months. But we're also nowhere near to be fully deep bottlenecks and there's like a number of initiatives, et cetera that we're holding back on.

And with regards to Factor, I think overall, it's very - it's been very good, it's been very strong. The teams have been working together very closely.

We have seen a lot of synergies comes to life. We've seen a very strong growth momentum in the first quarter.

I think it underscores our ability to do M&A, and then also to very quickly leverage our growth playbook. I think, you know, the team and the team's motivation has been great.

But really bringing a lot of the - sort of like growth playbook that we like, and that we have to place in the last couple of years, is something that we have certainly seen can drive a very big difference in a short amount of time. So if you think as of today, our smaller brands sector, EveryPlate, Green Chef, I think each of those brands is on track to become a very large part.

And so to be fair, in private markets, I think each of those brands would probably be valued at much, much higher multiples, than as part of the group at the moment.

Great. Thank you.

Good morning. Three quick questions from my side.

The first one regarding your marketing spend, it was higher in the US and in international, does it means that you're using more price incentive strategy for the international part of your business. And this is a way to look at it for the remaining part of the year?

Second questions would be, can you remind us how the add-ons are working in your new countries or consumer reacting to that, as well how consumer reacted to your grocery offering in the Benelux? And finally, how should we think about potential wage inflation in the US going forward?

Thank you.

So in terms of marketing spend, I think over the whole of Q1, we saw overall pretty, good environment. Customer acquisition cost has come back to levels that we've seen towards the end of 2019, and the beginning of 2020, so pre-pandemic levels.

At the same time, that means that it's extremely attractive to us. So for every marketing dollar that we spend, we actually make that back in less than six months.

And we make close to 100% return on every marketing dollar that we spend within 12 months. So that's pretty much unheard of.

If you think of US versus International, then I think in the US, we basically opened up two new facilities. And with those two new facilities, we actually also wanted to scale them up and get them to a certain scale to operate them efficiently.

That's why we have sort of like, also invested slightly more in the US compared to International. And we've also seen that obviously pent-up demand has been quite strong in the US.

So I think that's sort of like a little bit the story on marketing. We were quite happy with what we've seen.

And we think that puts us on a very good trajectory for the remainder of the year. In terms of add-ons, which I think was the second question, we have continued to - so first of all, there's, you know, our normal add-on store, which we have in literally every market.

And then there is the advanced version, our HelloFresh marketplace, which we have in Benelux. So in Benelux we have continued to add more products to our HelloFresh marketplace, it now stands at close to 150 products.

With those 150 products, we have seen that as we add more products, we also get higher attach rates from consumers. And we actually have seen a beneficial impact both on AOVs, as well as on the average profits that we clip per order.

And for the remainder of the year, we will certainly continue to add more products to it. And then observe and monitor how these relationships hold true.

The more products we add, the more attach rates and the higher baskets we get, we will be monitoring that closely. And at the same time, we will also start rolling out our HelloFresh marketplace in some of the other countries.

In most of our other countries right now we have about 25 products on offer. And we'll scale that up in a number of other markets to over 100 products over the course of this year, which puts us on a very good trajectory to scale it up further in the outer years.

And really sort of like eat into consumers food budget, capture a larger part of consumers food budget over time.

And Fabienne on your third question, the wage inflation question, there is a certain element of that as the economies come back, including the US. We also see a certain effect in our direct labor, wages.

But all of that is priced into the margin guidance that we've put out.

Okay, thanks a lot.

Yeah. Hi, everyone.

Three questions if I can. The first is perhaps a little tedious.

But you mentioned many of your markets have started reopening. Can you just give us some examples of what you've seen still in Australia, New Zealand, regions of the US, those that are perhaps more open than others, both in terms of the customer growth in Q1, but also perhaps more interestingly, the order frequency and the basket size there?

The second question on Green Chef’s you launched recently in the UK, interested to know what appealed to you about the UK. And I assume it's too early to say how it's going.

But maybe some comments on initial interest. Anything, any color you could give there, and maybe remind us how many countries you expect to add either Green Chef or EveryPlate in 2021?

And the third question is around seasonality of margin. Q1 typically, the lowest margin quarter of the year, your guidance implies it's not the case this year.

How should we be thinking about the seasonality of market through 2021? Thanks.

So very quickly on Green Chef, so what appealed to us in the UK is, I think, a very developed markets. It's a market where we also have different competitors, where we have a build out our menu quite strongly over the last couple of years.

So UK customers have in the HelloFresh brands amongst the largest choice already. And we think that sort of like to expand TAM further in the UK.

There was sort of like a strong desire in the markets that we seen in customer research for also more premium offerings for more specialty diet. And so we felt very well equipped in terms of our re-sourcing, in terms of all fulfillment center infrastructure, the state of automation and our manufacturing sites that we can deliver a great product to consumers.

And that's why we picked UK as the first market for Green Chef to internationalize. With regards to EveryPlate and we have that live in the US, we have that live in Canada.

And we have that live in Australia. So that already covers sort of like around 70% or 75% of our sort of like a geographic coverage.

So in every place we’re a step further and over the remainder of the year, we’ll see if we further internationalize that there are certainly more country launches coming. But yeah, as you said, in terms of performance, it's very early.

We just launched, I think two or three weeks ago. And hence, I think we're in the phase where we're really trying to understand the market.

We're looking very closely at customer feedback, if the type of meals, the advertising, the messaging resonates with customers, and as we see proof points for that, we're then also willing to scale it up. With regards to the first part of your question, reopening of economies, I think I can only underline what we said on our Capital Markets Day, which is that Australia and New Zealand's have obviously returned to normalcy quite a while ago.

And here we can see them going back to sort of like normal seasonal patterns. So in summertime, slightly low order rates and lower AOV as we've come out of the pandemic, stabilizing nicely, I think, very much in line with the projections that we have, which is no surprise to me, because we have a 20 [ph] person, demand forecasting team that looks at customer level data, and is usually very good at making accurate predictions.

And so we can only underline what we said during the Capital Markets Day, that there haven't been any surprises. Same for the US.

We want to refrain from giving like a state-by-state data. But certainly, in the US, I would say about half of the country has been wide open.

And if you look at our Q1 numbers, I think you can be very bullish on the future outlook. I think overall, customers just having, you know, switched to buying more online over the course of the pandemic, have seen that there are clear advantages in not using an online grocery service, but using a full meal solution, like HelloFresh.

And that you can see in continued very robust order rates. And we don't see like, huge differences between the states that has opened a little more up and the ones that are more close.

And then Rob, on your question on margin seasonality, if you, say leave out some of the COVID special effects that we saw in 2020, typically, from a contribution margin perspective, our weakest quarter is Q3. So Q3 peak holiday season in most of our markets, i.e., order rates during that - during the quarter, we still obviously have the same fixed cost base, and that basically impacts our contribution margin somewhat, also highest temperature in most of our markets, i.e., more insulation materials and higher packaging costs during the quarter.

So Q3 typically from a contribution margin perspective the softest quarter and similar on the EBITDA margin, so that falls through to the EBITDA margin as well. And on top of that, in terms of our marketing invest in September, we dialled up [ph] that meaningfully in the back to school period in most of our markets where the benefit of that then is mostly seen in Q4, but expenses are front loaded into September already.

So that means when you think about this year, Q2, similarly healthy margins to what you've seen from us now in Q1, Q3, you should assume margins are seasonally somewhat lower. And then Q4, basically back up again.

Perfect, thank you.

Great, thank you. I have three questions as well.

Firstly, on the guidance for 2021. I am just trying to understand what your thinking is in terms of what needs to happen for you to hit the other end of the range.

And what sort of incorporated in the lower end of the range when it comes to revenue growth. And how we should think of the next three quarters of the year in terms of customer additions, given in my calculations to even hit the upper end, we're likely to see the customer base sort of decline over the next couple of quarters.

Is that the right assumption, given the seasonality you’re incorporating, some color there would be great. My second question is on the capacity expansion.

Could you remind us again, how much of incremental revenue capacity did you add in the US with the two new sites that you opened? And how much more can we expect over the rest of the year?

If I'm not mistaken, there's one other facility coming up in the US, any color - some color would be great. And my third question is on current trading as well.

If you look at consensus, you know, there's a 30% plus sort of growth assumed for Q2 which is still you know, I guess, great, given the comp from last year. But is that still too conservative in your view, some color there would also be great.

Thank you.

Okay, great. Maybe Nizla, let me take your first and your third question together.

So what defines the two bookends of our guidance, I would say the upper half is effectively continuing in terms of, let’s say underlying trends, as we do right now with the normal seasonality baked in, and then the lower end, it takes a couple of sensitivities around seasonality potentially being a bit more pronounced than or somewhat more pronounced than what we would consider as a completely business as usual environment. So that's ballpark, what defines the two bookends of our guidance.

What does that mean for our customer development, so into Q2, you should assume our customer number to be broadly at the account level, potentially even a touch up from where we sit right now. Q3 then as we dive back on new customer acquisitions, typically for at least two months out of the three months in Q3, you could see that going down a little bit, and then up again, in Q4, that's going to be the seasonal pattern that we foresee on our customer development.

So what does it mean in terms of quarterly revenue development? For Q3, you should assume down versus current levels because of lower order rates, as we have discussed before, from a seasonal perspective.

In terms of your question on capacity expansion, we had outlined in our Capital Markets Day, that we effectively wanted to - versus Q3 last year, as a baseline, we wanted to substantially double that capacity by Q1 2022. And we are by now we are well on track towards that door.

And I would say from a capacity perspective, between one third and half towards that direction. What you should see in the US is basically another site in Texas, coming on stream now relatively soon, towards the end of the second quarter.

And then there's another site going live by the end of the year, and also in international, Australia, Canada, other geographies, we have a number of new fulfillment centers, which are still going to come on stream between now and in Q1 2022.

Great. Thank you.

Operator The next question is from Marcus Diebel, JPMorgan. Your line is now open.

Please go ahead.

Hi, everyone. Also three questions from my side.

The first one maybe on Factor again? Could you maybe tell us a bit more how you - what the experience is so far, but how you sell it?

I mean, i.e., how many boxes in those areas where you sell it in the US have already a ready-made meal there? Is it all incremental?

Or are consumers choosing two meal kits and just one ready made meals that will be quite helpful. I assume you retention is improving effectors included, but that would quite helpful.

The second question is on something I asked before is the question, how much of your customers both new customers and reactivations actually pay the original price? Yeah, and I'm - I know, you don't disclose this.

But if you could maybe help us a little bit to understand is that actually a relevant question? Is that something to think about?

Or do you think running on a longer term based on discount is actually okay for the business? So that would be quite interesting, just to see where the levels of discount boxes actually are in the mix.

And then the third question, if you can just update us again on new markets, where are we in terms of launches? What new markets can we expect in the next two, three quarters for launch?

Norway, Italy, and you said last time, I think Japan takes it a bit. But just an update, what we can see as incremental markets throughout the year it could be helpful.

Marcus, let me try to tackle your questions. Going back to Factor.

I think the logic behind the acquisition was to expand our TAM. Because if you look at the customer base that the sector has, we can see that they over-indexed on singles that they over-indexed mail, and that they over-indexed on using the products for lunch rather than for dinner.

That's what we really liked about it. Right now, we only sell it as a standalone product, meaning you need to subscribe to Factor, you cannot use your HelloFresh account to actually be subscribed with Factor, you need to register from scratch.

We also don't sell any of the Factor meals into our HelloFresh customer base. That's something that we think is very promising, but which we will only be able to do potentially next year.

At the moment, we've been laser-focused in improving the underlying fundamentals of the business of Factor, and hence allowing it to scale very efficiently and at great customer acquisition costs. Again, if you think about the broader context, expanding TAM, and then kind of like how big is the ready-to-eat space, then I'm very convinced that number one in the private markets, I think with the growth momentum, et cetera that we're seeing, it would already be valued at very, very, very - much higher valuation than what we paid for it in a couple of months ago.

And secondly, that there is a lot of growth runway. If you think about our goal to achieve €10 billion in revenue over the next couple of years, then I think Factor in the US as a standalone in the US and selling it into the HelloFresh customer base, and then eventually internationalizing it can contribute meaningfully to that €10 billion revenue goal.

So that's really the logic around Factor. And we're just in the very first innings about what we wanted to do with the brand, and what we wanted to do with them in that space.

But we do think it's very attractive. Secondly, your question on customers that paid the - I think you call it original price.

So number one…

Undiscounted price, yeah.

Undiscounted price. So customers have different price incentives.

So some customers have a high price incentive on the first orders. Other customers have smaller price incentives on multiple orders.

But if you look at our overall customer base, than the vast majority of customers is in any given week, not subject to any price incentives. Price incentives, however, are a very important measure for us.

We'd much rather give a price incentive to customers to try out our service and form a habit over the first couple of weeks, then giving that same money to Facebook or Google or anyone else to do advertising, we much rather convince customers to come in at a very attractive price point, try out the service, form a habit, and then basically go on to pay sort of like an undiscounted price. But if you look at our profitability, I think we could discount a lot more or give a lot more incentives.

And we just don't need to because after customers have formed a habit and understand the value of the products at an undiscounted price, they usually become quite sticky. And so with the pricing structure that we have at the moment, to use price incentives mostly to get customers through the door, and then to allow them to form a habit at a very advantageous price.

That is something that has proven very successful over and over again over the last couple of years, and more successful than spending the same amount of money on advertising on TV, Facebook, Google or any other platform.

Okay, very clear. So from your answers, I would - I should assume it's the vast majority I think as you said, so 80% plus is that fair?

Pay the undiscounted price, roughly?

I can't give you that answer top of my head. It's not something that I look at as a regular basis.

Okay.

In terms of country launches, I think again, what we had disclosed at the Capital Markets Day is that we wanted to scale our new brands over the course of the year. So that's what we did with the Factor acquisition.

And with the Green Chef UK launch. We also said, we'll be launching new geographies over the course of the year.

There are two that are in the mix for this year. And when we have updates on fixed launch dates, we'll make sure you'll be among the first to hear about them.

But they're certainly on the plan for the rest of the year.

Good morning. Thank you.

I've got two questions for my side, if I may. The first one is on retention rates, and especially early in the US, what's your view on this rate?

Is it still at levels versus pre-COVID levels are now flat? And my question is on raw materials, have inflation.

I know that this big food manufacturers are already highlighting in [indiscernible] What's your view on this? And do you intended to absorb it or not pass it on to others?

Thank you.

So in terms of retention rates, we have seen over time over the last couple of years, that we have structurally improved order rates from our customers, as we have invested in better pricing, as we have invested in better service levels, and as we have invested in more choice for our consumers. So if you compare customers from 2017 to 2018 to 2019 to 2020, I think over all those years, we have seen that our retention rates have structurally improved.

As we have improved the product, and basically created more value for each consumer that we serve. I think it's also important to note that if you look at our average retention rate, that they're - that we benefit from very high order rates right in the beginning and then kind of like sector on the same page as other leading e-commerce companies.

So putting the two together, making our payback periods much, much quicker, and making the overall cash efficiency much, much better than in foods delivery or an overall e-commerce site. So that is something that is I think structurally really important to understand.

Now, in the US, I think you definitely have seen that, during COVID you know, these sort of like structural trends have seen or has gained further momentum, and as customers have been staying home more, as customers have been working more from home, they've also ordered sort of like more frequently. Now, as we've seen sort of like some of the states, sort of like more opening up.

And as we've seen more countries moving back to sort of like, you know, a pre-pandemic environment over time, we've also seen that there is some impact on our retention rates. But structurally, we continue to see the same trend.

So if we compare the first quarter of 2019, with the first quarter of 2020, and the first quarter of 2021, that you still see structurally us improving, because we're just adding more and more value to our offering to consumers.

And Clément, on your second question on ingredient price inflation. So there's a certain level of that, having said that, if you look at our track record of decreasing procurement expenses as percentage of revenues, I would say that track record is based on and you should expect from us that that's not going to fundamentally change going forward i.e., the levers that we have ourselves in terms of optimizing our supplier conditions in terms of our menu planning.

Also, if there's a certain price inflation in attached to a certain category of ingredients, we have much higher flexibility to just bring different recipes, use different ingredients and are not exposed to those kind of inflation's as let's say, a normal general grocer. And that will continue.

So you should expect us to be able to maintain a very attractive procurement expense as a percentage of revenues. And for us, it's also not an automatism in terms of passing on price inflation to our customers.

We set our pricing effectively at the levels where we - based on our prices can optimize for total cumulative profits that we achieve in those markets. It's not one-for-one linked to underlying food price inflation.

With that, we probably have to wrap it up here and let you go to your other commitments, already seven minutes overtime. But thank you very much everyone.