Nov 4, 2020
Operator
Good day, and welcome to the HelloFresh Q3 2020 Results Conference Call. Today's conference is being recorded.
At this time, I would like to turn the conference over to CEO, Dominik Richter. Please go ahead.
Dominik Richter
Hi, and good morning, everyone. I'm really excited to share HelloFresh third quarter earnings results with you today.
High level, it's been a quarter that's turned out very well for us despite continuing to see a challenging operating environment. Given our global footprint, we've been dealing with a variety of different circumstances in the different markets that we're active in.
For example, during the quarter, we noted quite severe government-imposed measures in the U.K. and in parts of Australia; whereas in Germany, Canada and most parts of the U.S., some kind of normalization took place over summer, albeit with the fewer customers breaking up their routine and going on vacation.
On a positive note, we have accumulated a lot of knowledge on consumer behavior and its sensitivity towards external factors, such as the varying degree of lockdowns that we've seen, the seasonality impact in times of COVID as well as on a type of habit formation that's been going on among our customers. With regards to that habit formation, not only we, but the whole e-commerce industry from fashion, beauty and furniture and food, has really seen a tremendous acceleration of the shift from online -- from offline to online players.
Due to our customers continuing to spend more time at home, working from home and consequently, eating and cooking more times at home, we've observed strong data signals that point to sustainable habit formation. Among others, we've seen strong early order rates from new customers' strong customer satisfaction levels.
We've collected a lot of feedback from consumers that they intend to continue to order at very high rates into the future, irrespective of external circumstances. For today's call, we want to keep it rather brief and focus predominantly on the third quarter numbers, which Christian and I will lead you through in a moment.
Before that, I'd like to make sure you all know about our Capital Markets Day on December 10. It's going to be all virtual.
And the focus of that day will be squarely on our long-term growth opportunity over the next 5 years and what we're really excited about to achieve over those next 5 years. But now, though, let me start by quickly reviewing the highlights of the third quarter with you.
Firstly, during the third quarter, we conducted a refresh of our corporate identity. That's something that we really wanted to do every 4 to 5 years to stay relevant with consumers.
You might have seen our new logo and some selected brands updates already. And by the end of the year, we wanted to have our new corporate identity fully rolled out so that you'll recognize that across every single customer touch point we have from advertising to packaging, to rebranding all of our creative assets that we actually use.
Secondly, and very importantly, we reached 5 million active customers for the first time in the third quarter. That's up 91.5% versus the same period last year.
We've also delivered a record number of orders, 19.5 million, an increase of 114% from last year; and a record number of meals, more than 162 million meals, up 135% from the same period last year. Taken together, that constitutes a Q3 revenue of over €970 million, which again constitutes a year-on-year revenue growth of over 120%, actually 127% in constant currency.
We've also achieved a continued strong free cash flow generation and generated in 1 quarter alone €118.5 million. And finally, our adjusted EBITDA margin has also been up by 8.3 points year-over-year to just short of 12% adjusted EBITDA margin.
So all in all, I think very, very strong results, and we're going to take a deeper look at each of those numbers right now. First of all, group customer base has been up strongly and not only year-on-year but also sequentially.
We've achieved delivery to over -- to exactly 5 million active customers in the third quarter and added more than 800,000 additional customers sequentially. So 800,000 additional households that ordered in the third quarter over the second quarter sequentially, which I think has been a very, very strong achievement, and due to the fact that we could add a lot of capacity in our International segment, not so much in the U.S.
segment, but also being able to slowly scaling it up in that segment as well. We've also seen structurally higher order rates despite a varying degree of lockdown measures in Q3 across several markets; and especially in Continental Europe and U.S., a return to some kind of normal over the summer months.
So our order rates are still up 11% compared to pre-COVID compared to last year and -- but down a little bit from the second quarter when we were really facing peak COVID in all our markets. If you look into the different segments, then the U.S.
is up about 19% compared to the same period last year; whereas International is also up over 4% year-over-year. That's something that really speaks to the fact that in the U.S., we were capacity constrained and focusing mostly on existing customers; whereas in International, we had added enough capacity to really take advantage of a very benign customer acquisition environment and could add a lot of customers during that quarter.
If you look at customer orders in the third quarter, they were also up very significantly, up 114% compared to last year and also up sequentially compared to the second quarter. It's been driven by both an increase in the number of active customers as well as a continued high order rate, as we just spoke about.
Average order value has also been up compared to last year by 7% on a constant currency basis. That's been primarily driven by our larger assortment of add-ons that we have and a higher take rate of those add-ons and an increased number of meals per order.
So as customers are spending more time at home, they have more opportunities to cook at home, and that's also where we come in and where we obviously offer a very strong alternative for their home cooking needs. It's been down sequentially from the peak of COVID in the second quarter but like I said, still very, very strongly up compared to last year and now normalizing at a level that we think we can sustain for the next quarters as well.
If you take all of that together, you get about 128% in constant currency revenue growth for the third quarter. That's about the same that we had in Q2 in absolute amounts and just shy of that in euro reported currency, 120% in that.
And I think really positive that we've been able to stabilize at that same level that we've been in the second quarter when I think we were benefiting from very, very high order rates, very high AOV. And so by adding more customers in the third quarter, we could more than counterbalance the effects of order rates and AOV slightly coming down sequentially.
It's really been a consequence of the successful ongoing debottlenecking and creation of new production capacity across both segments. So if you look at the two different segments, then you can see that they both developed very strongly about to the same tune of growth.
In the U.S., we've grown 125% in constant currency versus the same period last year; and in International, even slightly higher, 132% in constant currency. So really both segments contributing strongly to the exceptional performance that we've seen throughout the third quarter.
Christian Gaertner
Okay. With that, let's talk about our contribution margin.
Our contribution margin is still down year-on-year, driven by an increase in fulfillment expenses to COVID. The good news is that compared to Q2, we are up sequentially.
Also that the delta versus the same period last year is much smaller. It's around about 80 bps versus more than 3 percentage points in Q2.
From a geographic perspective, our U.S. segment is most exposed for this cost increase, especially in production and partly in logistics.
Our International business, on the other hand, has actually expanded its contribution margin year-on-year to over 30%. Here, savings on the procurement side and fixed cost leverage has outweighed the effect of COVID.
With that, let's have a look at our marketing expenses. Our marketing expenses as a percentage of revenue are more than 7 percentage points below last year.
The 12.7% of revenues still sit quite a bit below the 15% to 17% midterm guidance we've provided previously but are somewhat up from Q2. So this quarter, we have achieved both very strong sequential growth in active customers by still maintaining our marketing expenses at low levels.
We've achieved that because we maintained our customer acquisition costs at very attractive levels for the full period across both of our segments. So very attractive customer acquisition costs.
And on top of that, continued leverage on our G&A side means we again achieved a very strong EBITDA this quarter of €114.7 million EBITDA. This is approximately 10x of what we generated in Q3 last year and corresponds to a margin of 11.8%.
Let's also have a quick look at both of our segments. What's remarkable here is that both segments have again generated best-in-class e-commerce margins with more than 10% in Q3.
But even more impressive is that each segment has operated at 10% plus margin for each quarter of this year, including Q1 which was still largely unaffected by any COVID impact. Our International business, which you see on the right-hand side here and which, on balance, has our more mature markets, actually is operating at a double-digit EBITDA margin already for the last 6 quarters in a row.
Let me now turn to the development of our liquidity position. We've generated again a very strong free cash flow in Q3 of €118.5 million.
In each quarter this year, we have generated free cash flow of more than €100 million. In Q3, we also had some adverse FX translation effects on our non-euro cash holdings, which if you put that together with €118 million free cash flow, means we've increased, in euro terms, our cash position by €111 million to €723 million at the end of the quarter.
I will now conclude by actually repeating our guidance for the full year, which we have raised a couple of weeks ago. So on revenues, on constant currency revenue growth from previously 75% to 95%, we've increased that range to now 95% at the bottom end to 105%.
This is in constant currency. In euro reported at current exchange rates, that would be around about 3 to 4 points lower than that range.
Right now, i.e., after the first 4 weeks or so of the fourth quarter, it's trending towards the upper half of that revenue guidance provided. In terms of EBITDA margin, we increased the range from previously 9% to 11% to now 11.25% to 12.75% in terms of full year EBITDA margin.
There, I would say the midpoint of that range is probably a good base case. Also, keep in mind that in Q4, December, the last 2 weeks, we will see some seasonal slowdown.
Also, Thanksgiving week is in that quarter. And also, not lastly, we, as you know, are ramping up quite a few fulfillment centers in that fourth quarter.
With that, we would conclude our presentation and look forward to your Q&A.
Operator
[Operator Instructions]. We will take the first question from Shaked Atia from Morgan Stanley.
Shaked Atia
Three for me. First of all, on the demand and just the general lockdowns that we're seeing.
Can you give us an update on the current demand, specifically in these countries that have tightened restrictions or reentered lockdowns? And would you say that the current guidance takes into account these additional lockdowns across your markets?
Second, you showed impressive customer growth in the quarter. So of the new customers, can you maybe give us a rough split of how many of these are reactivations versus customers who are completely new to the category?
And then lastly, on the contribution margin side. So you called out temporary reductions in productivity in the U.S.
fulfillment centers as the driver for lower margins. So should we expect contribution margins to go back perhaps closer to 2019 levels once the new fulfillment center is online in the fourth quarter?
Or is this more of a first half '21 story?
Dominik Richter
Thanks for your questions. On the demand side, so as I tried to point out in my opening statement is that also in Q3, we've actually seen a varying degree of lockdowns, soft lockdowns, governmental-imposed measures throughout the different markets that we have.
So especially in the beginning of Q3, a lot of the U.S. was still kind of like spending a lot of time at home.
U.K. still has quite -- some quite severe measures.
Parts of Australia had some quite severe measures, whereas sort of like the summer season in Continental Europe was mostly free of those type of measures. Right now, we obviously see in Continental Europe that in the U.K., in Germany and France, et cetera, you have additional measures being discussed and being implemented in parts.
We definitely have some sensitivity to those. So when we see that those are imposed, we do see that there is some additional orders coming in, existing customers ordering more meals, et cetera.
So this is certainly something that we see. But on the other hand, right now in the U.S., right now in Australia, right now in Canada, which are some of our other very, very large markets, that is not the case.
And so I think in parts of our business, we definitely do see some additional tailwind through that. But in others where we had seen that, for example, in Q3, we don't see it.
So that I would say that the overall numbers should not massively be different to what we guided towards.
Christian Gaertner
And on the -- Shaked, on your reactivations point. So if you recall, prior to COVID, reactivations trended at around about high 20s of our total conversions in a given quarter.
We then bring Q2 back quite a bit on reactivations to somewhat managed effectively demand and bring that in line with the capacity that we had available. But during Q3, I would say the share of reactivation sits somewhere in the middle of those two, call it posts.
On the contribution margin outlook, I think it's important to keep 2 things in mind. First one, structurally, our productivity has not changed.
Yes. So if you basically take out those temporary effects, if anything, our productivity continues to clock higher, and that's what you will see structurally in the midterm.
More near term, i.e. this quarter and most likely still the next one, social distancing is still a reality.
And that then is somewhat reflected in our production costs. On top of that, in Q4 as well as H1, we are ramping up quite a number of fulfillment centers, both in our U.S.
segment as well as in our International segment, which will basically have a certain impact on contribution margins as well. So you will see both of those a more temporary effect still certainly in Q4 but also in H1 next year.
But structurally, we are still targeting the same contribution margins if we have discussed in the past, and there's no -- we don't see any structural impediments to that.
Operator
The next question comes from Robert Berg from Berenberg.
Robert Berg
A couple of questions, please. The first around new customer behavior.
You've now had in March, April, what maybe we would call peak COVID customers for over 6 months now. And you mentioned new habit formation as a theme, but any comments on those initial customers in recent months and how their behavior has developed.
And the second question is more conceptual. You've seen a decent amount of normalization in Q3.
Basket sizes, average order value heading back towards normal levels, particularly in the international region. While you've mentioned just now there were obviously restrictions in certain markets, most of all, restaurants, grocery stores, all provide lots of options.
And it's maybe an impossible question to answer. But if you can compare maybe different markets, how much of your current growth do you think is perhaps COVID-related versus regular kind of structural growth that's here to stay?
Maybe you can't answer, but it would be interesting to hear your thoughts, nevertheless.
Christian Gaertner
Rob, on your first question, so in terms of customer behavior. So there, we see a continuation of the positive trend that we discussed last time.
So when you look at customer engagement metrics, retention order rate that you also see in this presentation here, we see a very positive trend and a trend above the baseline of what we've seen is baseline a year ago, for example. So there, continued strong behavior.
Dominik Richter
Yes. And I think, as you indicated, it's hard to answer that question.
And maybe one data point that I can point you towards were obviously our Q1 results, which were also up very strongly. We're only in the last 10 days of March.
We've actually been affected by COVID. So during that period, I think we were up over 40% year-on-year.
So that was sort of like the going growth rate before we had any impact of COVID affecting the business. That is certainly something that we felt we could have probably driven forward throughout the year.
I think as of today, as you actually look into the -- into Q3, as you look into Q4 and some normalization going on, it's very hard to put one number down. But I think conceptually, and I guess that was the sort of like question that you had, I would say that roughly half the growth is growth that we would also have had organically.
And another sort of like half is that now customers spending a lot more time at home and actually bringing forward certain behaviors. So some of the customer behavior that we've also seen is that -- some of the data points that we collected is that there were a lot of people that were considering buying from HelloFresh.
But then, for one reason or another, either lack of time or never sort of like got around to ordering, et cetera, have never tried it out, and those are actually customers that respond very positively and also have very strong order rates. So that's something that we can see in qualitative feedback, and that's also what makes us quite confident that this is behavior that will, to some degree, remains sticky over the next couple of years as well.
Operator
The next question comes from Andrew Gwynn from Exane BNP Paribas.
Andrew Gwynn
Two questions. I mean, you've talked about it a little bit, but some of the data you mentioned on the habit formation, I'm just wondering if you could elaborate a little bit more.
Maybe I'm preempting some of the CMD there, but a little bit of help would be good. And then, secondly, just something I've noticed myself, as a customer, but you've maybe seen a couple of points where there's been a few operational challenges, and I'm thinking particularly sort of ingredient shortages, that kind of stuff.
I'm just wondering how widespread that is. You obviously mentioned already very strong customer satisfaction data.
So maybe it's something you could not think, but just any sort of more detail on maybe some of the operational constraints that you're seeing?
Dominik Richter
So on habit formation, Andrew, I think what we've seen is, number one, that we always look at the behavior of a group of customers in the early weeks very, very detailed. So what we've seen is that a lot of customers that joined us over the last 6 months have had very strong early order rates.
So that's one signal that we track very closely because it usually gives a lot of indication how those customers actually behave in the mid and in the long term. Another data point is we've been polling a lot of customers and asking them for feedback, especially customers that joined during that period about their plans, what is it that they're replacing, where would they have spent their food budget otherwise, and how do I think about that spend going forward, what do they intend to buy more from, what they do intend to buy less from.
And the results that we've gotten were actually very much in line with other external studies that we've seen. I think there were studies from Piper Sandler, from Morgan Stanley, from a couple of others, which also were very close to the results that we got when polling our own customer base.
So I think those are just 2 of a few data points that we have. And as you said, there's more of that, that we're also going to be talking about at our Capital Markets Day.
On the second question of yours, operational challenges. I think especially in the U.K., we were basically also maxed out in terms of capacity.
And we're bringing on new capacity now until end of the year. There have certainly been some weeks when our sort of like structural failure rates or error rates was higher than we would have liked.
I think as of today, we've come down to the levels that we've been operating at pre-COVID. But definitely, I mean, I don't want to sugarcoat anything.
There have been weeks where we've also been suffering from some challenges in our operations, whether that's ingredient shortages or also sometimes carriers that have been maxed out. And so we had to basically deal with the carriers not being able to sometimes deliver some of our boxes.
I think, all in all, that's something that all e-commerce companies have seen. And it's been quite widespread but certainly not at a level that we're fully satisfied with.
But I think the positive note is that a lot of that had normalized over the last couple of weeks again.
Andrew Gwynn
Okay. And just the other thing that's sort of intrigued me at the moment is your carbon neutral decisions.
So I'm just wondering if you could elaborate a little bit more on that. It seems to be that you're keen to get involved in specific projects rather than maybe just buying credits on the market.
So just maybe the reason for the change and how important is it to consumers, and perhaps, give a little bit more color on what you're doing.
Christian Gaertner
Sure. Look, so the carbon offset that we've decided to do now is really the third step that we -- of our CO2 policy.
First one is to -- just by our business model, be more sustainable compared to any other realistic food model that you've got out there. Second one is then to optimize within our business model.
And then, what's left here is really what we decided then this year to offset. You're right, we took the, let's say, slightly more expensive and work-heavy route by not just buying certificates, but really with 2 partners going out there and selecting projects, reforestation and the like that we think fits best to us and have a good impact.
Operator
We'll take the next question from Marcus Diebel from JPMorgan.
Marcus Diebel
Very impressive customer numbers there, I have to say, so congratulate to that. One question is on churn.
The disclosure you gave in the past was one number that you highlighted that you retain about 20% of cohort revenues after 8 quarters. I think that's the number you've given a while ago, and obviously, well pre-COVID.
Could you tell us roughly, if you would give this today -- or where would that be roughly in terms of the percentage? I'm just trying to find out what really the change in consumer behavior so far has been.
So if you can just update us on this, that would be helpful. And then if you could let us know maybe broadly where we are tracking on customer acquisition costs for in the third quarter.
Christian Gaertner
Marcus, it's Christian here. So on your 2 points, first one on net revenue retention after eight quarters.
Sort of one thing that we can say and also confirmed period in the past is that certainly, it's not worse, yes, than what we had put out there 3 years ago at the time of our IPO. On your second question on customer acquisition costs, we don't give that out on a quarterly basis.
But as I've mentioned in my presentation, certainly, very attractive, also attractive versus some of the historic levels that we had discussed. Certainly, COVID has helped, but on top of that, this is something you've really seen from us over the last 5 quarters now.
That from the very strong customer acquisition cost levels we had sometimes beginning of 2019, we, since Q2 2019, brought that down successively every quarter, and Q3 was basically a continuation of that trend.
Marcus Diebel
Okay. But I won't get anything more, Christian, on the numbers.
Just not worse than the IPO.
Christian Gaertner
So I think the...
Marcus Diebel
Just trying to -- yes. Just trying to work out, basically, is there a meaningful change from March onwards, i.e., those customers that you acquired pre-COVID, have they stayed also a lot more resilient or not?
I'm just trying to work out how that works over the last 4, 5 months.
Dominik Richter
I think whether you talk about contribution margin, whether you talk about revenue retention or customer acquisition costs, those -- all of those metrics, obviously, have seen some change during COVID. I think what we want to be focused on is the midterm and long-term opportunity.
And there, we actually don't think that anything has majorly changed structurally. But rather that the performance that we had seen in Q1 is indicative of what we will see as sort of like the world returns to normal.
I don't want to boast about the lowest customer acquisition costs that we ever had or that revenue retention is now better than pre-COVID because I think that is certainly something that has been sensitive to some of the exogenous factors. But what we really wanted to focus on is the more midterm and long-term opportunity.
And to be successful in the midterm and long term, we don't need to have that tailwind or that positive change from the exogenous factors, as we've seen in the last two quarters.
Operator
We will now take the next question from Alastair Birkby from Citi.
Alastair Birkby
Three, if I may. Firstly, EveryPlate looks to be performing really strongly in the U.S.
Can you please share some comparisons between customer behavior across the U.S. prices and outline the level of penetration of new EveryPlate customers who have reactivated after using the core HelloFresh offer?
Second question, please, could you disaggregate the moving parts of gross margin from an operational and discounting perspective and also outline the relationship between top line promotions and direct marketing costs and how this has evolved through COVID? And finally, the international holding fee looks to be relatively high as a proportion of profit.
Please, could you explain what has driven the increase and how we should frame our expectations going forward?
Dominik Richter
Let me comment on EveryPlate U.S. So EveryPlate has definitely been a good growth driver of the course of this year.
It's obviously our value tier, so we have lower AOV. What we tend to see with the lower AOV is that when you look at food costs, they're probably, percentage-wise, in line with what we also see in HelloFresh.
Fulfillment costs are structurally slightly higher compared to our HelloFresh business, but we more than make up for that by also seeing lower customer acquisition costs. In simple terms, the cheaper a product, the easier it is to win people over for that.
And so I think if you then look at customer profitability, every customer that we get into EveryPlate in the U.S. gets us the same ROI on that investment that we actually get bringing in a customer into Green Chef for HelloFresh.
So the band in which we operate in terms of customer profitability and in terms of ROI on our marketing spend is really quite comparable across those 3 brands.
Christian Gaertner
And on your...
Alastair Birkby
And in terms of customer recap -- sorry. Go ahead.
Christian Gaertner
No. Yes.
Alastair Birkby
Yes. In terms of customer recapture, just what's the kind of flow of customers between your price tiering?
It'd be good to get a sense there.
Dominik Richter
So there is actually -- it's one of many drivers that we have to have people that, for example, at HelloFresh have at some point canceled or paused and told us that they felt that the product was too expensive, that we then sort of like funnel them towards our EveryPlate U.S. brand.
But that's only a sort of like a smaller minority. I wouldn't say that this is like a very large part of our customer acquisition for EveryPlate.
It's certainly something that we think is a good side effect that we can leverage that pool of customers better and funnel them to a price points where they can order in a more sustainable fashion. But the vast majority of customers that we acquire into EveryPlate are customers that have not been with HelloFresh.
Because if you just look at the price points at EveryPlate, the $5 price point is really the median price point that we have for U.S. consumers and how much they spend for home cooked dinners.
That is a slightly different target group than our classic HelloFresh target group. And in the end, what we found out is that customers are quite good in opting in the type of meals and in the type of price points that they also usually have at home.
Christian Gaertner
Okay. Great.
Alastair, so I didn't want to cut you off there on your previous questions. On your other two questions that you had, relation of top line discounting versus direct marketing, it's a good point.
It's effectively something that you have seen from us, say, pre the second quarter this year that during the 3, 4 quarters before that, we somewhat shifted our marketing budget from, let's say, paid marketing into more price incentives during Q2, given the very heavy capacity constraints that we had to manage against to. We dialed back a lot on those price incentives in our Q3, started to normalize more towards -- not fully, but towards the levels that are more normal for us that we've observed effectively pre-Q2, i.e., there were more price incentives given in Q3 than what we certainly did in Q2.
And that, you're absolutely right, has a certain impact on the AOV as well that we've put out. On your other question on holding fee, there, I would almost beg you not to lose too much headache about our holding fees.
This -- from your perspective, you should consider it almost as a, let's say, intra-group dividend that we get from our individual segments and geographies once they basically have used up all their tax loss carryforward, which is now the case pretty much this year also for our U.S. business.
That's why we also putting a lot of focus on to give you the segmental data also on a pre-holding fee. So we show it to you post-holding fee but also pre-holding fee.
Let's say, the economic performance of our segments, you certainly look -- see better when you look at the EBIT, EBITDA, excluding holding fee as we give it to you in our segmental disclosure.
Operator
We'll now take the next question from Victoria Petrova from Crédit Suisse.
Victoria Petrova
Congratulations on strong results. I have three short questions.
First, I'm looking at your Slide 13, where there is basically a different dynamics between EBITDA in the U.S. and the International EBITDA differential.
Is there any structural reason why U.S. EBITDA is sort of lower long term?
And what would be the explanation between this first, second, third quarter dynamics of the trend? My second question, you mentioned that with entering Australian market with EveryPlate, you increased your TAM by 25%.
Is it fair to assume that other international markets are subject to also 20% to 25% total addressable market increase -- in case you're internationalizing your brands? And my third question, you were guiding mid to high teens revenue growth in 2021, but it was based on your previous guidance.
Now the guidance is upgraded. Obviously, the base is higher.
Are you keeping your sort of 2021 expectations in terms of growth unchanged?
Dominik Richter
Victoria, on your questions around EBITDA margins, I think the simplest explanation here is really time on the market and maturity of the markets that we have. So in the U.S., we only started really scaling the business in 2014 in most of our European markets, which make up the bulk of our International segment.
We already did so in 2011, 2012. So you can basically see all the way up to the first quarter that U.S.
was lagging the international markets by pretty much 12 to 18 months in their overall development, and that's really just a question of maturity. The longer we are on the market, the more opportunity we have to optimize margins.
The more orders are coming from our established customer base versus new customers, and all of that taken together means that you had seen slightly different EBITDA margins in U.S. and International.
Long-term structurally, they should all be trading sort of like at the same levels because the differences are not very large between the markets that we have, a more sort of like business model inherent that we should be able to get them to a very attractive double digits. On EveryPlate Australia and the TAM increase, I think as you rightly indicated that usually, the price points that we wanted to choose for EveryPlate is so that we can open up an additional TAM of about 20% to 30%.
And so also in Australia, with the price point that we have chosen, that meant that according to all our estimates, that was a TAM increase of about 25% in Australia. And you can expect the same if we were to launch every plates in any other international markets that we choose a price points that allows us to make a good margin, but at the same point, allows us to push for at least 20% to 30% higher TAM.
Question, just remind me?
Victoria Petrova
The last one was on your 2021 growth, mid- to high teens, if you are still sort of guiding around the same levels despite guidance upgrade for 2020.
Dominik Richter
So we want to provide sort of like a more detailed picture during our Capital Markets Day. We'll be mostly focused on the long-term opportunity in the next 5 years, but definitely also on the guidance for 2021.
I think here, what we previously said, we stick to. I think right now, we see very encouraging behaviors of customers in all different geographies as certainly been a huge acceleration throughout this year, but we'll carry forward a very large customer base into next year.
And if you think about the U.S., where we haven't really been able to add a lot of new customers for any of the last 6 months and also now are only very slowly opening up new capacity, we should be able to capture a lot of that latent demand into next year. And here then, we haven't even talked about internationalization of some of our brands as well as further geographic expansion.
So all of those are additional growth levers, and all of them taken together, we still feel very confident with what we've previously stated. But please bear with us until the Capital Markets Day, where we will provide more detail on that.
Operator
We will take the last question from Fabienne Caron from Kepler.
Fabienne Caron
Two quick questions from my side. The first one, how shall I think about the cost of reactivating customers?
Is it only discounts? Or do we have some marketing costs in this?
And the second question is about your cash position. You've got a decent cash position.
You're now a profitable business. You're not very capital-intensive.
So what's your view about cash potentially, about potential dividend or buying back your bonds or doing some M&A or share buyback, please?
Christian Gaertner
Fabienne, on your first question, cost of reactivations, it is more geared towards price incentives, yes, so there's a little bit of paid marketing attached to it as well, but substantially affecting the price incentives that we're giving. On your second question, the luxury topic that we will deal with how to best deploy our €723 million of cash.
I would say, near term, we will first focus on the CapEx spending at hand, yes, so we are ramping up a number of fulfillment centers now for Q4 alone. And we still stick to the around about €70 million CapEx guidance for this year.
So you should expect for Q4 around about €30 million CapEx in that quarter alone. And then H1, given the capacity and capability expansion that we're doing, there will be quite a bit in H1 next year as well.
And anything beyond that is a little bit premature, what we -- how we want to deploy that cash.
Dominik Richter
Thanks, everyone, for attending the third quarter earnings call. Definitely looking forward to engaging with you individually and then see you again to our fourth quarter results that we'll be publishing towards the first quarter next year.
Thanks, everyone. Bye, bye.
Operator
Thank you. That will conclude today's conference call.
Thank you for your participation, ladies and gentlemen. You may now disconnect.