(Reuters) - German meal-kit delivery firm HelloFresh (HFGG.DE) on Tuesday forecast growth in 2020 revenues and core profit and confirmed better-than-expected 2019 results, benefiting from strength in the United States and other international markets.
The Berlin-based company posted its first annual adjusted core profit in a preliminary report in January, marking a milestone for an industry which has grown substantially in recent years but found profits elusive.
HelloFresh, which delivers pre-portioned meal ingredients with recipes to its subscribers, expects 2020 revenue growth of 22% to 27% on a constant currency basis on the back of U.S. market strength. The United States accounted for 57% of HelloFresh’s annual sales in 2019.
The coronavirus outbreak, which has killed 3,120 and infected 90,933 worldwide, will not pose a major obstacle to the company’s performance in 2020 thanks to its diversified pool of suppliers as well as a lack of exposure to Asia or other risk areas, CEO Dominik Richter forecast during a conference call.
Founded in 2011, HelloFresh has grown rapidly in the United States, outperforming rival Blue Apron (APRN.N), which said in February it was considering going private after a fall in its full-year revenue.
When asked by an analyst whether HelloFresh might be interested in investing in its rival, Richter said the company did not have any imminent acquisition plans and intended to focus on growing and improving its existing business.
As its brand recognition increases and more orders come in from existing customers, rather than new ones, HelloFresh should be able to further reduce the percentage of revenues it spends on marketing and focus on price incentives, Richter added.
Shares in HelloFresh rose over 200% in 2019, outperforming Germany’s midcap index .MDAXI seven-fold. At 0830 GMT, the stock was up 6.1%, the second biggest rise on Europe’s STOXX 600 index .
The company, whose other markets include Britain, Australia, Canada and the Netherlands, said the margin on adjusted earnings before interest, taxes, depreciation and amortization should reach 4.0% to 5.5% in 2020, up from 2.9% in 2019.
Reporting by Zuzanna Szymanska in Gdansk; Editing by Maju Samuel and Mark Potter