APPENDIX 4E
PRELIMINARY FINAL REPORT 2020
ABN 625 684 068
IMPORTANT INFORMATION:
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1 Reporting period
Report for the twelve months ended 31 December 2020. The comparative period is the twelve months ended 31
December 2019.
2 Results for announcement to the market
Marley Spoon AG’s (“Marley Spoon” or “the Company “) and its subsidiaries’ (together “the Group”) consolidated results
for announcement to the market are detailed below:
2020
EUR thousands
254,033
2019
EUR thousands
129,558
Change
EUR thousands
124,475
(86,239)
(34,549)
(51,690)
Change
%
96%
(150%)
Revenue
Net profit / (loss) after tax
Attributable to members
Dividends
The Group has not recognized or authorized any dividends during the presented periods.
Explanation of results
In 2020 revenues increased EUR 124.5 million or 96% to EUR 254.0 million compared with the 2019 financial year (EUR
129.6 million). The year-over-year growth was driven by all regions with the US leading at +126% growth (+133% on a
constant currency basis), complemented by growth in Australia of +76% growth (+81% on a constant currency basis), and
Europe +66% growth, compared to 2019. The business recorded elevated order frequency and average order sizes, as
well as overall better unit economics, compared to the period before the COVID-19 pandemic.
EBIT was EUR (7.4) million in 2020, compared to EUR (34.8) million in 2019. This smaller loss was due to higher sales
volumes and improved contribution margin (+4%) from the previous corresponding period (PCP).
Financing income and expenses, including the impact of derivative instruments, increased from EUR (0.1) million in the
PCP to EUR (78.8) million in 2020, primarily driven by changes in the fair value of convertible bonds. Net loss after tax
attributable to members for the period increased accordingly, from EUR (34.5) million in 2019 to EUR (86.2) million in
2019.
3 Statement of Comprehensive Income
Please refer to the Statement of Comprehensive Income, and the accompanying notes to the statement, in the attached
Financial Statements.
4 Statement of Financial Position
Please refer to the Statement of Financial Position, and the accompanying notes to the statement, in the attached
Financial Statements.
5 Statement of Cash Flows
Please refer to the Statement of Cash Flows, and the accompanying notes to the statement, in the attached Financial
Statements.
6 Statement of Changes in Equity
Please refer to the Statement of Changes in Equity, and the accompanying notes to the statement, in the attached
Financial Statements.
IR.MARLEYSPOON.COM A
7 Dividends or Distributions
The Group has not recognized or authorized any dividends during the presented periods.
8 Dividend or Distribution reinvestment plans
There are no dividend or distribution reinvestment plans in operation.
9 Net tangible assets per security
Net Tangible Assets per ordinary Share
(12.45)
(247)
31 December 2020
EUR
31 December 2019
EUR
The calculation of Net Tangible Assets per ordinary Share is based on the total number of issued Shares as at 31 December
2020 of 256,025 Shares and as at 31 December 2019 of 158,520 Shares.
10 Details of entities over which control has been gained or lost during the period
There are no changes in control of the Company’s entities in the current period.
11 Details of associates and joint venture entities
The Company has no associates or joint venture entities.
12 Other significant information
Please see Management’s evaluation of the Company’s performance in “Group financial position and performance” in the
attached Management Report section of the Annual Report.
13 Applicable accounting standards
The Appendix 4E Preliminary Final Report has been prepared in accordance with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB) as adopted by the European Union (EU).
14 Commentary on results of the period
1. Earnings per security and the nature of any dilution aspects
Please refer to note 15 in the attached Financial Statements
2. Returns to Shareholders including distributions and buy-backs
Not applicable
3.
Significant features of operating performance
Please refer to the “Group financial position and performance” in the attached Management Report section of
the Annual Report.
4. The results of segments that are significant to an understanding of the business
Please refer to note 2 in the attached Financial Statements
IR.MARLEYSPOON.COM B
5.
Discussion of trends in performance
Please refer to the “Group financial position and performance” in the attached Management Report section of
the Annual Report.
6.
Any other factors which have affected the results in the period or which are likely to affect results in the
future, including those where the effect could not be quantified.
Not applicable
15 Audited Information
This preliminary financial report under ASX Listing Rule 4.3A covers Marley Spoon and its controlled entities and is based
on the consolidated financial statements and financial report which have been audited by Ernst & Young. An unqualified
opinion has been issued by the auditors.
Sign here:
Fabian Siegel, Chief Executive Officer,
Chairman of the Management Board and Founder
Date: 24 February 2021
Sign here:
Jennifer Bernstein, Chief Financial Officer
Member of the Management Board
Date: 24 February 2021
IR.MARLEYSPOON.COM C
APPENDIX 4E
PRELIMINARY FINAL REPORT 2018
ARBN 625 684 068
IR.MARLEYSPOON.COM
ANNUAL REPORT 2020
ABN 625 684 068
1
2
3
4
1
2
3
4
MARLEY SPOON KEY PERFORMANCE INDICES (KPIs) .......................................................................................................... 1
Group Financial KPIs ............................................................................................................................................................... 1
Segment Financial KPIs ........................................................................................................................................................... 1
Other Key Performance Indicators ......................................................................................................................................... 2
LETTER BY THE MANAGEMENT BOARD .............................................................................................................................. 3
REPORT OF THE SUPERVISORY BOARD ............................................................................................................................... 5
GROUP MANAGEMENT REPORT OF MARLEY SPOON AG .................................................................................................... 7
Business model and strategy .................................................................................................................................. 7
Economic position & position of the Group ......................................................................................................... 11
Risk and Opportunities Report ............................................................................................................................. 16
Outlook ................................................................................................................................................................. 22
OTHER REPORTING ITEMS ................................................................................................................................................ 24
Remuneration Report ........................................................................................................................................... 24
Directors’ Report .................................................................................................................................................. 32
Shareholder information ...................................................................................................................................... 37
Corporate Governance Statement ....................................................................................................................... 40
GROUP CONSOLIDATED FINANCIAL STATEMENTS ............................................................................................................ 41
Financial Statements ............................................................................................................................................ 41
Description of the business & segment information ............................................................................................ 46
Revenue ................................................................................................................................................................ 48
Other income and expense items ......................................................................................................................... 48
Income Tax Expense ............................................................................................................................................. 49
Financial assets and financial liabilities ................................................................................................................ 50
Non-financial assets and liabilities ....................................................................................................................... 59
Equity .................................................................................................................................................................... 65
Critical estimates and, judgements and errors ..................................................................................................... 68
Financial risk management ................................................................................................................................... 68
Capital management ............................................................................................................................................ 71
Group structure .................................................................................................................................................... 71
Contingencies & commitments ............................................................................................................................ 72
Related party transactions ................................................................................................................................... 74
Earnings per Share ................................................................................................................................................ 76
Assets pledged as security .................................................................................................................................... 76
Summary of significant accounting policies .......................................................................................................... 76
Events occurred after the reporting period .......................................................................................................... 83
RESPONSIBILITY STATEMENT ........................................................................................................................................... 85
INDEPENDENT AUDITORS’ OPINION ................................................................................................................................. 86
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
MARLEY SPOON KEY PERFORMANCE INDICES (KPIs)
Group Financial KPIs
Group
€ millions
Net revenue
Net revenue on constant currency basis
CM %
Operating EBITDA
Operating EBITDA %
Group financial position
Cash flow from change in net working
capital
Cash flow from operating activities (CFOA)
Cash & cash equivalents
Fixed assets
Segment Financial KPIs
Australia
€ millions
Net revenue
Net revenue on constant currency basis
Contribution Margin (CM)
CM %
Operating EBITDA
Operating EBITDA %
United States
€ millions
Net revenue
Net revenue on constant currency basis
Contribution Margin (CM)
CM %
Operating EBITDA
Operating EBITDA %
2020
254.0
260.2
29%
(0.5)
(0.2%)
4.9
4.4
34.4
16.1
2020
86.0
88.3
31.4
36%
9.7
11%
2020
127.2
131.0
32.7
26%
4.1
3%
2019
129.6
129.6
25%
(29.7)
(23%)
0.8
(30.3)
5.4
11.2
2019
48.8
48.8
16.1
33%
(1.7)
(3%)
2019
56.2
56.2
11.4
20%
(13.0)
(23%)
+/- (%)
96%
101%
4 pts
98%
23 pts
4.1
34.7
29.0
4.9
+/- (%)
76%
81%
15.3
3 pts
11.4
14 pts
+/- (%)
126%
133%
21.3
6 pts
17.1
26 pts
IR.MARLEYSPOON.COM 1
Europe
€ millions
Net revenue
Contribution Margin (CM)
CM %
Operating EBITDA
Operating EBITDA %
Global head office costs included in Europe
segment
Operating EBITDA excluding global head
office costs
Other Key Performance Indicators
Active customers (thousands)
Active subscribers (thousands)*
Average basket size (EUR, gross)
Average basket size (EUR, gross) at constant
currency
Average basket size (EUR, net)
Total orders (thousands)
Portions sold (millions)
Average portions per order
Cost per acquisition (CAC, EUR)
% revenue from repeat customers
2020
40.8
10.1
25%
(14.3)
(35%)
(12.4)
(1.9)
2020
327
227
51.3
52.5
45.2
5,622
46.7
8.3
40
93%
2019
24.6
4.9
20%
(15.1)
(61%)
(7.4)
(7.7)
2019
182
124
49.0
48.4
43.6
2,969
22.4
7.5
62
92%
+/- (%)
66%
5.2
5 pts
0.8
26 pts
(5.0)
5.8
+/- (%)
80%
83%
2.3
4.1
1.6
89%
108%
0.8
-22
1 pt.
*Active Subscribers are customers who have an active subscription (i.e., ordered or skipped a delivery) on an average
weekly basis during the quarter. Figures in this table represent Q4 2020 and Q4 2019.
IR.MARLEYSPOON.COM 2
LETTER BY THE MANAGEMENT BOARD
Dear Shareholders,
Berlin, February 2021
2020 was a year to remember. A year which impacted all of us in profound ways.
The year started with bushfires in Australia, undeniably reinforcing the fact that we face a global climate crisis. This was
followed by the COVID-19 global pandemic. During this year of crises, the Marley Spoon team responded by coming
together in the shared ambition of continuing to do what we do best: helping to provide a home cooked meal to our
subscribers’ families. We successfully shipped millions of meals across three continents amidst the pandemic and all the
challenges that came with it. We delighted our existing loyal customers while welcoming many new customers to our meal
kit brands throughout the year.
Marley Spoon offers a convenient and competitively priced alternative to shopping in grocery stores, leading to more and
more customers shifting a substantial portion of their monthly grocery spending to Marley Spoon’s meal kits. The ongoing
direct relationship with our customers and the individual data we collect about their recipe choices and food preferences
allow us to continuously improve our service offering for each individual customer, which in turn further strengthens
customer loyalty. With our customers at the center of everything we do, driving our decision-making every day, we will
continue to innovate and evolve our business model.
Impact of COVID-19
Our business has been growing rapidly over the past years due to the consumer shift to online shopping for groceries, one
of the largest verticals of consumer spending. Due to COVID-19 we witnessed an acceleration of that trend throughout the
year, enabling us to double revenue on a constant currency basis year over year. This growth was driven by existing
subscribers increasing their order sizes and order frequency, but also by a consistent and sequential growth in satisfied
subscribers over each quarter in 2020. All regions contributed to that growth which led to more than 45 million meals
delivered to our customers in 2020. As a result of the pandemic, we saw an acceleration of the shift in consumer behavior
from offline to online shopping for groceries. Given the early stage of adoption of online shopping in our category, we
expect this trend to continue.
Capacity expansion and operational challenges
As a result of the foundations laid in 2019, we were able to rapidly scale up production in all regions and navigate supply
chain disruptions, all while implementing increased safety measures to keep our team members healthy and safe.
We expanded cool room capacity in our manufacturing centers in Melbourne, New Jersey, Texas, and the Netherlands. We
launched a new manufacturing center in Perth, and we began major expansion projects in California and Sydney, where we
expect to move into new facilities in 2021.
Improved contribution margin
Despite our rapid expansion in 2020 we succeeded in increasing our global contribution margin by 4 percentage points, the
same increase seen in the prior year. The increase to 29% was mainly driven by our US business, which turned profitable in
2020, one year after Australia, and by our European business which is approaching breakeven (excluding headquarter
costs). We continue to focus on improving our margins throughout 2021 as we leverage our scale.
Sustainability
Marley Spoon has an advantage compared to the traditional supermarket retail model. Whereas supermarkets contend
with food waste given the short shelf life of perishable items they have in stock, Marley Spoon’s made-to-order supply
chain avoids most food waste. Additionally, according to a 2019 study by the University of Michigan, cooking with a meal
kit reduces greenhouse gas emissions on average by one-third, compared to a traditional supermarket’s emissions. Marley
Spoon is committed to sustainability efforts, continuously looking for ways to reduce the Company’s carbon footprint,
including offsetting all direct corporate emissions in 2020, enabling Marley Spoon to operate as a carbon neutral company
for the first-time last year.
Product development
We constantly aim to improve our services in order to delight our customers. Our research data shows that customers
want more choice to suit their individual taste preferences and circumstances. We increased choice to 30 or more recipes
IR.MARLEYSPOON.COM 3
per week in 2020 for Marley Spoon and more than 20 weekly choices for Dinnerly, depending on the market. Furthermore,
we launched our taste profile algorithm which ranks recipes individually based on each of our customers’ taste profiles. We
plan further menu personalization throughout the coming year, providing a competitive advantage in the global meal kit
segment.
Outlook 2021
2020 was a very pivotal year for Marley Spoon with massive growth which transitioned our business to profitability, to
which all regions contributed. In 2021 we will continue to invest in additional capacity to respond to customer demand and
further growth.
2020 provided a step-change in customer adoption for online shopping in general and for groceries specifically. The team
at Marley Spoon is excited to leverage this growth momentum, to continue fulfilling our vision of bringing delightful,
market-fresh, and easy cooking back to the people.
We believe this is still day one for our company which is aspiring to solve recurring consumer everyday problems in a
sustainable and personalized way. We appreciate your continued trust and support. We would also like to thank the team
at Marley Spoon for their hard work and dedication.
Fabian Siegel
Founder & Chief Executive Officer
Jennifer Bernstein
Chief Financial Officer
IR.MARLEYSPOON.COM 4
REPORT OF THE SUPERVISORY BOARD
Dear Shareholders,
The year that has passed has seen Marley Spoon:
Sydney, February 2021
•
•
•
Substantially grow its subscriber base and more than double its revenue year on year on a constant currency
basis;
Reach positive Operating EBITDA for the first time in Q2 2020 and sustain that trajectory in Q3 and Q4 of 2020;
Raise capital, providing a springboard for future growth and improving the balance sheet
In addition to these significant milestones for the business, the Supervisory Board, the Management Board and the
workforce of Marley Spoon are proud to have overcome the challenges of an operating environment impacted by COVID-19
during this last year.
Marley Spoon has delivered ready-to-cook and ready-to-heat meals, as well as snacks, for a rapidly increasing number of
customers in the United States, Australia and Europe. The reliability and convenience of weekly home deliveries of Marley
Spoon’s online subscription service helped meet their household food requirements at a time of incredible disruption.
We are also proud that Marley Spoon’s workforce was able to support each other working from home and careful measures
were taken to maintain a healthy working environment for those who had to be on-site.
Marley Spoon continues to adapt to local operating conditions, expanding capacity by continuing to scale, and to providing
a consistent level of service. These efforts are reflected in the steady improvements in contribution margin over the period,
making Marley Spoon a leader amongst its industry peers.
Financial Results
For the full year, Marley Spoon posted the following results:
•
•
•
•
Revenue of EUR 254.0 million as compared to EUR 129.6 million versus 2019
Contribution Margin of 29% versus 25% in 2019
Operating EBITDA at EUR (0.5) million, a EUR 29.2 million improvement versus 2019
Net loss of EUR (86.4) million versus a loss of EUR (34.9) million in 2019
Financing Activity
In 2020, Marley Spoon successfully completed two fully underwritten institutional placements for a combined amount of
EUR 43.8 million. In addition to funding growth, the capital raised was used to retire EUR 6.8 million in senior secured debt.
Finally, the Company saw the conversion of interest-bearing bonds to equity, for an amount of EUR 88.7 million, which
contributed to simplifying and deleveraging the Company’s balance sheet.
Board Composition
The Supervisory Board consists of four Directors, each elected for a three-year term. Christoph Schuh, a current Director,
will not seek renewal this May at the end of his three-year term. Christoph has been a significant contributor to the
Supervisory Board and to the Management team over many years. As a partner in Lakestar, which continues to be an
investor in Marley Spoon, he has shepherded Marley Spoon from its venture capital beginnings, through IPO to its current
growth phase. The Supervisory Board sincerely thanks Christoph for his guidance and support.
The Supervisory Board has undertaken an international competitive search with an external search firm to replace
Christoph with a Director who will bring similar, direct-to-consumer expertise as well as a thorough understanding of online
FMCG fulfilment especially in the US and European markets. We expect to announce a new Board appointment in advance
of our Annual General Meeting in May.
The other three Directors, Robin Low, the Chairman of the Audit and Risk Committee, Kim Anderson, the Chair of the
Nominations and Remuneration Committee and myself, Chairman of the Supervisory Board, are seeking re-election in May
2021.
IR.MARLEYSPOON.COM 5
The Management Board
This year Fabian Siegel, Founder and Chief Executive Officer of Marley Spoon, has continued to deepen his leadership team
to keep pace with the increased size and growth of the organisation.
In particular, with the retirement of Julian Lange, we welcomed Jennifer Bernstein, previously a senior finance executive
with PepsiCo, as our new CFO, adding to the Management Board and the leadership team her experience in scale FMCG
enterprises.
Looking forward
With the accelerated the growth of Marley Spoon in 2020, and continued expansion of the market for online groceries, we
see growth opportunities in all our key markets, in particular in the United States where we are experiencing the greatest
growth and which is our largest segment.
The changes that are happening in the online retail environment have prompted us to ensure that our technology and
capacity can meet future demand. Equally, we are evolving our customer-facing platforms to improve our engagement and
to expand our product range.
This has been a difficult year for all our people. On behalf of all Directors, we recognize the efforts and resilience of the
team at Marley Spoon.
Thanks also go to our Shareholders for your ongoing support. And thanks to our customers, whose household cooking
needs continue to be the focus of our inspiration and effort.
Deena Shiff,
Chairman/Vorsitzende
IR.MARLEYSPOON.COM 6
GROUP MANAGEMENT REPORT OF MARLEY SPOON AG
1
Business model and strategy
1.1
Marley Spoon meal kits are provided to its customers through a simple four step process:
How it works
Step 1: Marley Spoon’s culinary team designs a range of varied recipes
• Each week Marley Spoon chefs and nutritionists select 30+ recipes, depending on the market and brand. These
recipes may be existing recipes or new recipes which have been developed in-house.
• Recipes are selected:
o with regard to the availability of seasonal fresh produce and quality proteins;
o
to provide a variety of meal options to meet different dietary requirements, tastes and preferences (for
example: healthy, express recipes, kid-friendly, non-pork and vegetarian); and
to offer different cuisine options.
o
Step 2: Customers decide what to cook and when
• Marley Spoon’s products are predominantly “soft” subscriptions, e.g., customers sign up for weekly deliveries
unless they skip a delivery or cancel their subscription.
• Up to 6 days before the delivery day (the 'order cutoff'), the customer selects:
o the number of meals from meal kits in the coming week(s) - generally between 2 and 6 meals per week;
o the desired recipes he or she wishes to make;
o the number of portions required (generally either between 2-12 portions per recipe); and
o a delivery day and time (options vary depending on by region).
• The above selections are submitted through Marley Spoon’s website or its mobile applications.
Step 3: Marley Spoon sources ingredients and delivers to the customer’s door
• Marley Spoon sources the meal kit ingredients for each meal kit from producers or suppliers generally on a ‘just-
in-time’ basis, who deliver the ingredients to the Company’s manufacturing centers. Marley Spoon then
assembles the meal kits with the required quantity of each ingredient. Fresh produce in particular is typically
sourced on a 'just-in-time' basis. This allows for fast turnaround to ensure of quality, fresh produce to customers,
with little time spent sitting on shelves as can occur at traditional supermarkets.
• Meal kits are typically delivered weekly (with multiple delivery windows) in recyclable boxes with perishables
protected to ingredients packed in insulated liners with ice packs to keep those items cool and to preserve their
freshness.
Step 4: Customers cook and enjoy
• The meal kits deliver fresh pre-measured ingredients, ready for the customer to cook at his or her convenience.
• Each box contains the requisite ingredients for each meal, separated into bags (referred to as 'dish bags') for
convenient, ‘grab and go’ cooking.
• A recipe card is included with each meal, on paper or digitally, which provides the step-by-step instructions
(generally a maximum of only a few steps to prepare the meal.
• To cook each meal the customer needs only include a few pantry staples (e.g., oil, salt and pepper) and their
preferred kitchen equipment (e.g., oven, stove and common cooking items like pots, pans, knives, grater, baking
paper etc.) to complete their selected meal.
IR.MARLEYSPOON.COM 7
1.2
Two-Brand Strategy
Marley Spoon
Marley Spoon is the Company’s original brand and is present in all of the Company’s markets. The product offering consists
of approximately 30 or more meals per week, depending on the country, with customers being able to choose between 2
and 12 portions. Marley Spoon is targeted at customers who desire a greater variety of meals with more ingredients,
flexibility, and choice.
In the US, Marley Spoon has a licensing and promotion agreement with Martha Stewart Living Omnimedia, which it
extended in Q2 2020 until the end of Calendar Year (CY) 2023. Through this agreement, Marley Spoon offers the co-
branded ‘Martha Stewart and Marley Spoon’ meal kit.
Dinnerly
In July 2017, Marley Spoon introduced its second brand, named Dinnerly, launching in the United States. Dinnerly is a
lower cost meal-kit designed to broaden the customer base by targeting more cost-conscious consumers. Dinnerly
currently offers 12-27 set meals per week, depending on the market, with customers able to choose between 2 or 4
portions per meal.
Dinnerly uses the same supply and distribution chain as Marley Spoon with a similarly simple subscription and order
process.
Following the successful launch of Dinnerly in the United States, Marley Spoon launched Dinnerly in Australia in March
2018, followed by the launch of Dinnerly in Germany in July 2020.
Dinnerly’s lower price point relative to the traditional Marley Spoon meal kit is achieved through a reduction in the number
of individual ingredients in a meal, by designing lower priced recipes, by using digital recipe cards instead of paper and by
employing simple packaging.
Dinnerly was specifically designed and distinguished from Marley Spoon to appeal to a different customer than those
serviced and targeted by Marley Spoon. The rationale was to enlarge the Group's overall appeal to a greater number of
customers, rather than cause the Marley Spoon customer to move over to Dinnerly. While both brands provide a simple,
fresh and home-cooked meal experience, Dinnerly is targeted at customers who seek easy, fast and affordable meals.
IR.MARLEYSPOON.COM 8
1.3
Marley Spoon’s business model is based on six key elements:
Key features of the Marley Spoon Business Model
1. Customer acquisition
• Marley Spoon acquires customers through a combination of online marketing, offline
2. Customer data
insights
marketing and referrals. Marley Spoon is able to compare multiple customer acquisition
channels across different regions, setting many of its marketing activities in real time. In
the United States, customer acquisition benefits from Marley Spoon's association with
Martha Stewart.
•
Customer acquisition is supported by high service levels and ensuring customers have a
clear understanding of why they should purchase Marley Spoon meal kits (the customer
value proposition).
• Marley Spoon uses data collected in each region through its websites and applications
relating to customers' buying patterns, feedback and recipe ratings to provide insights
into recipe design and weekly selection. Marley Spoon believes there is potential to use
this data to further tailor the suggested recipe selections for customers and weekly
menus, in accordance with applicable data privacy laws.
• Marley Spoon’s in-house chefs and nutritionists in conjunction with the food
•
procurement team regularly develop new easy-to-cook recipes.
Recipes differ across Marley Spoon’s different operating regions to cater to different
customer demands and seasons.
3. Preference for direct
sourcing
• Marley Spoon seeks to source as many of the meal kit ingredients as possible directly
from producers to deliver the freshest produce possible to customers. Other ingredients
are sourced from trusted wholesale suppliers.
4. In-house
manufacturing
• Marley Spoon focuses on manufacturing excellence to offer choice as well as variety and
drive margin expansion, efficiency and quality.
• Marley Spoon’s meal kits are prepared and packed utilizing proprietary and non-
proprietary standardized processes at its seven manufacturing centers in its three
regions of operation.
5. Outsourced logistics
• Marley Spoon currently uses outsourced logistics to provide 'long haul' and 'last-mile'
6. Customer
communication
delivery to its customers.
•
•
Excellent customer experience and communication are important components of
generating new customers by word of mouth and retaining existing customers. Marley
Spoon designs its processes, including its website and apps, manufacturing centers and
delivery chain to best ensure customers receive the meal kits they desire, on time.
Customer support is offered through a call center as well as via email and chat-based
support.
IR.MARLEYSPOON.COM 9
1.4
Research and development
Marley Spoon continuously strives to improve its products and service levels, optimize its operations, reduce costs, and
pursue projects that will create a future economic benefit. Marley Spoon’s Digital team, reporting to the Chief Marketing
and Product Officer, is focused on developing software tools for use by the wider business across all functions.
During 2020, Marley Spoon further rolled out the Company’s Microsoft Dynamics NAV enterprise resource planning (ERP)
software to Australia and the United States, aggregating to EUR 1.0 million in related software assets in the current year.
The set-up, management, integration and customization of the ERP system has enabled the business to grow by creating a
reliable and scalable back end for Operations and Finance. The Company has expanded the data warehouse through the
integration of multiple operational databases, manually created lists and data from tools used internally by different
departments, which are then aggregated, transformed and accessible through a visualization tool that helps create reports
and dashboards to enable process optimization.
Marley Spoon continued to invest in its centralized recipe and menu management tool to allow all culinary processes to
run through a single culinary platform. The Company also invested in software called Cookbook to facilitate order and
customer management processes associated with the Company’s Customer Communications team, which will be further
built out to handle complaint and incident management. Furthermore, Marley Spoon completed the first phase of its
menu personalization project, including the development of a recipe recommendation algorithm, an associated sales
forecast model to improve supply chain accuracy and the collection of explicit taste preferences through a customer-facing
taste profile. Finally, Marley Spoon launched its new iOS app for all Marley Spoon customers.
Marley Spoon capitalized EUR 3.3 million of self-developed software in fiscal year 2020, while a total of EUR 1.8 million of
this was amortized. Total research & development expense for 2020 was EUR 2.7 million (2019: 2.9 million).
1.5
Performance Measurement System
In line with Marley Spoon’s strategy, the Company continues to hone its internal performance measurement system and
define and measure appropriate performance indicators. Marley Spoon differentiates between financial and non-financial
performance indicators and measures both on a monthly, quarterly, and annual basis to evaluate the health and progress
of the company. These indicators are, or can be, so-called non-GAAP financial measures. Other companies, which use
financial measures with a similar designation, may define them differently.
1.5.1 Financial Performance Indicators
Marley Spoon uses several financial performance indicators, as listed below, but the most significant ones are net revenue
(on a constant currency basis), contribution margin (as a % of net revenue), and operating EBITDA (as a % of net revenue).
Net revenue
Represents the receivable for goods supplied i.e., gross revenue net of
promotional discounts, customer credits, refunds and VAT.
Net revenue on a constant
currency basis
Represents net revenue adjusted for EUR fluctuations against USD & AUD year
over year
Contribution margin
Operating EBITDA
Net working capital
Represents gross profit less fulfilment expenses, where gross profit means net
revenue less cost of goods sold
Represents earnings before interest, tax, depreciation and amortization
(EBITDA), excluding non-cash Share-based expenses and intercompany charges
(for the segments); this is an indicator for evaluating operating profitability
Represents the sum of current trade and other receivables, inventories, accrued
revenue and prepayments, less the sum of trade and other payables, current
provisions, deferred income and other current creditors.
Cash flow from operating activities Represents an indicator of the operating cash flows generated by the business. It
is calculated as net income adjusted for all non-cash income/ expenses
plus/minus cash inflow/outflow from net working capital
Fixed assets
Represent property, plant & equipment and intangible assets
IR.MARLEYSPOON.COM 10
1.5.2 Non-Financial Performance Indicators
To complement financial performance indicators, the below non-financial indicators are relevant to the evaluation of
Marley Spoon’s business performance, customer focus and cash generated. They are employed in addition to financial KPIs
for managing the business.
Active customers
Active subscribers
Active customers are customers who have purchased a Marley Spoon or
Dinnerly meal kit at least once over the past three months
Active Subscribers are customers who have an active subscription (i.e., ordered
or skipped a delivery) on an average weekly basis during the quarter
Average basket size gross/net (on
constant currency basis)
The average monetary value of one (Martha Stewart &) Marley Spoon or
Dinnerly order i.e., gross or net revenue divided by the number of orders in a
given period (excluding the impact of foreign currency fluctuations versus prior
period)
Total orders
Portions sold
Number of customer orders in a given time period
Number of total portions or individual meals sold within a specified period.
Average portions per order
Number of portions sold in a given time period divided by the number of
customer orders in that same period
Customer acquisition costs (CAC)
Costs of acquiring a customer (i.e., marketing expenses such as media spend or
commissions) calculated over a period per new customer acquired during that
period
Revenue from repeat customers
Net revenue from orders in a certain time period from customers who are not
first-time customers, i.e., these customers have ordered the same brand in the
same country before (not necessarily in the same period)
2
Economic position & position of the Group
2.1
Economic environment
General economic conditions
According to the International Monetary Fund’s (IMF) January 2021 World Economic Outlook, the global economy is
projected to grow 5.5% in 2021 and 4.2% in 2022 after an estimated 3.5% contraction in 2020. The rollout of vaccinations
that began late last year in some countries combined with further vaccine approvals raise hopes of an eventual end to the
pandemic. The sizable fiscal support announced for 2021 in some countries, including in the United States, together with
the unlocking of Next Generation EU funds, should help lift economic activity among advanced economies with favorable
spillover to trading partners. Consistent with a recovery in the global economy, global trade volumes are forecast to grow
about 8% in 2021, before moderating to 6% in 2022.
Economic conditions by market segment
Following a sharp fall in 2020 GDP, the US economy is expected to recover, with estimates at 3.2% growth in 2021 and 3.5%
in 2022 according to the 2020 OECD Economic Outlook. GDP growth is expected to accelerate through 2021, reflecting an
assumed additional fiscal package that is meant to support household incomes and consumption. Nevertheless, until an
effective vaccine has been deployed successfully in the latter part of 2021, containment measures will temper business
confidence. Labor market conditions will show further steady improvement in 2021, however the unemployment rate is
expected to remain elevated as compared to the pre-pandemic period.
IR.MARLEYSPOON.COM 11
In the EU, after a projected GDP decline of 7.5% in 2020, growth is expected to be 3.5% and 3.25% in 2021 and 2022,
respectively, according to the 2020 OECD Economic Outlook. Containment measures will continue to hamper business
activity until a vaccine is widely implemented. Unemployment is projected to rise until mid-2021, approaching double-digit
rates, and fall only gradually afterwards. Investments and private consumption are projected to be below pre-pandemic
levels with an inflation rate around 1%. The impact of the pandemic is projected to remain asymmetric across the
Eurozone, potentially widening the gap in prosperity between countries.
Australia has been hit by the coronavirus pandemic less severely than other countries however its real GDP is also expected
to contract by 3.8% in 2020. The outlook for 2021 and 2022 is growth of 3.2% and 3.1%, respectively, according to the
2020 OECD Economic Outlook. The easing of lockdowns and strong fiscal support are expected to boost GDP growth in the
near term. The infrastructure-led economic recovery in China should sustain commodity exports and mining investment.
However, the unemployment rate is expected to increase due to the phasing out of job retention programs and increased
labor force participation.
Food market condition
The global grocery market is estimated to be worth nearly $7 trillion (Source: Euromonitor) and is one of the largest
segments of consumer spending. However, grocery remains one of the lowest consumer categories in terms of online
penetration. In the US, online grocery sales accounted for only 3-4% of the total grocery market, according to a 2019
McKinsey study, suggesting large market potential as the shift from offline to online continues.
When you consider that the meal kit market sits within the intersection of two sub-segments of the global food market,
namely the grocery and restaurant markets, the addressable market is even larger. According to Euromonitor, the
combined value of the grocery and restaurant (foodservice) markets is estimated at $9 trillion.
IR.MARLEYSPOON.COM 12
2.2 Marley Spoon Share and Share Capital Structure
Marley Spoon’s issued capital (Grundkapital) as of 31 December 2020 amounts to 256,025 Shares (Aktien).
Since July 2018, Marley Spoon has been listed as a foreign company on the Australian Securities Exchange (ASX) under the
symbol “MMM”. Rather than the Shares, securities called Chess Depositary Interests (CDI) are publicly traded on the ASX.
1,000 CDIs are equivalent to one Share in the Company. Consequently, 256,025,000 CDIs have been issued as of 31
December 2020.
As of 31 December 2020, Marley Spoon’s authorized capital (genehmigtes Kapital) and conditional capital (bedingtes
Kapital) amount to 92,719 Shares (Aktien) in aggregate. A portion of this authorized capital / conditional capital is reserved
to back-up convertible bonds (Wandelschuldverschreibungen) issued by the Company (see IFRS note 6.7 for details) and the
Company’s post-IPO Share Option Programs (SOPs).
Basic Share data
Type of Shares
Stock exchange
Shares issued
CDIs issued
Subscribed Share capital
ISIN
ARBN
Ticker symbol
Share performance 2020 1
CDI price as at 31 December 2020
High (28/08/20)
Low (13/03/20)
Market capitalization as at 31 December 2020
Average daily trading volume (in A$)
Average daily trading volume (in CDI)
1 Source: ASX
CHESS DEPOSITARY INTERESTS (1,000 CDIs:1 Share)
Australian Securities Exchange (ASX)
256,025
256,025,000
256,025.00 EUR
AU0000013070
625 684 068
MMM
A$ 2.70
A$3.80
A$ 0.21
A$ 691 million
A$ 1,749,517
1,007,609 CDIs/day
IR.MARLEYSPOON.COM 13
2.3 Group financial position and performance
EUR in millions
Assets
Current assets
Non-current assets
Total assets
Equity and liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Total equity and liabilities
31 December 2020
31 December 2019
44.1
29.0
73.1
37.0
28.0
65.0
8.1
73.1
12.0
25.0
37.0
25.6
47.1
72.7
(35.7)
37.0
Current Assets increased from EUR 12 million to EUR 44.1 million mainly due to the higher cash position of EUR 34.4 million
(2019: 5.4 million) and an EUR 2.8 million increase in inventories in 2020. Inventories increased by 76%, from EUR 3.7 million in
2019 to EUR 6.6 million in 2020, which was achieved despite 96% net revenue growth year-on-year thanks to operational
improvements.
Non-current Assets increased by EUR 4.0 million to EUR 29 million in 2020. This includes a EUR 2.6 million decrease in Right-of-
Use Assets due to the asset depreciation. Property, Plant and Equipment (net) increased by EUR 3.4 million to EUR 11.2 million,
mainly related to build outs of the Company’s manufacturing centers in Australia and the US, the opening of the Company’s
third fulfillment center in Australia and investments into manufacturing automation globally. Furthermore, intangible assets
increased by EUR 1.5 million mainly due to the capitalization of internally developed software.
Current Liabilities increased from EUR 25.6 million to EUR 37.0 million, mainly driven by an EUR 7.1 million increase of accounts
payable and related accruals and the EUR 3.4 million of borrowings payable in the next twelve months.
Non-current Liabilities decreased by EUR 19.1 million due to an EUR 18.6 million decrease in long-term debt, mainly driven by
the conversion of convertible loans to equity (see note 6.7 of the Consolidated Financial Statements) and the repayment of a
EUR 6.8 million senior secured loan in 2020.
Equity increased by EUR 43.8 million mainly driven by the gross impacts of issuance of Share Capital (43.8 million), conversion
of convertible loans (72.7 million), exercise of Warrants (16.0 million) and stock options (0.1 million), partially offset by the
increase of accumulated losses from EUR 140.2 million to 226.5 million.
Earnings position of the Group
For the 12 months ended 31 December 2020, net revenues were up EUR 124.4 million or 96% (101% on a constant currency
basis) to EUR 254.0 million as compared to the prior comparative period (PCP), the twelve months ended 31 December 2019
(EUR 129.6 million). By segment, the major growth occurred in the US with 126%, followed by Australia with 76% and Europe
with 66%. This topline performance significantly surpassed the previous year’s outlook, which was to grow ~30% YOY.
The revenue growth was driven by a strong increase in Active Subscribers which totaled 227 thousand at the end of 2020, up
83% from the PCP. The number of orders delivered to customers increased from nearly 3 million in 2019 to 5.6 million in 2020,
which was an improvement of 89% year on year. Average net basket size increased from EUR 43.6 in 2019 to EUR 45.2 in 2020.
This was largely driven by greater choice in the Company’s offering and the subsequent increase in average portions per order,
which went up from 7.5 in 2019 to 8.3 in 2020. Revenue from repeat customers was 93% for the period, up 1 point vs. 2019, a
continued sign of strong customer loyalty and the high recurring revenue base the Company has built over time.
Contribution margin (CM) of the Company as a % of revenue increased by 4 percentage points from 25% to 29% over the
course of 2020, in line with the previous year’s outlook. This was mainly driven by a 6 point increase in the US segment from
20% to 26%. The main drivers for this were economies of scale in purchasing as well as higher labor productivity, leading to US
Cost of Goods Sold that decreased by 4 points and Fulfillment Expenses which fell by 2 points, both as a % of revenue. In the
Australia segment, CM rose by 3 points year-on-year to reach 36% at the end of 2020. Cost of Goods Sold and Fulfillment
Expenses in Australia each declined as a % of revenue by 2 percentage points compared to the PCP.
IR.MARLEYSPOON.COM 14
In Europe, CM increased from 20% to 25% of revenue, primarily driven by economies of scale in purchasing, leading to Cost of
Goods Sold decreasing by 4 points as a % of revenue in 2020.
The increase in Marketing Expenses was driven by the Company’s ability to acquire new customers at attractive unit
economics. Marketing expenses as a % of revenue decreased 11 points compared to the previous year, reaching 15% of
revenue in 2020. The US segment showed the greatest marketing efficiency, dropping by 15 points to 14% of revenue.
General & Administrative (G&A) expenses grew 29% in 2020 versus the PCP, owing to Marley Spoon’s investments in its team
and infrastructure across all three regions. Overall, as a % of revenue G&A decreased 8 points from 25% in 2019 to 17% in
2020.
Earnings Before Interest & Tax (EBIT) was EUR (7.4) million in 2020, compared to (34.8) million in 2019. This lower loss was due
to higher sales and contribution margin.
Financing Income & Expenses increased from EUR (0.1) million in the PCP to EUR (78.8) million in 2020, mainly driven by fair-
market value adjustments on derivatives related to convertible bonds.
The Company’s net loss for the period increased from EUR (34.9) million in 2019 to EUR (86.4) million in 2020 predominantly
due to the higher financing expenses.
Operating EBITDA for the full year was breakeven and as a % of revenue improved 23 points year on year to (0.2)% in 2020.
This was driven by the Company’s robust net revenue growth as compared to 2019, the improvements in CM as well as G&A
expenses growing slower than revenues. In the previous year we had anticipated achieving positive Operating EBITDA by the
end of the year, a milestone we hit as of Q2 2020.
EUR in millions
Revenues
Cost of Goods Sold
Gross profit
Fulfilment Expenses
Contribution margin (CM)
CM as % of revenues
Marketing Expenses
General & Administrative Expenses
Operating expenses
EBIT
Financing Income & Expenses
Earnings before taxes (EBT)
Tax (Expense) / Benefit
Net loss for the period
Operating EBITDA
Operating EBITDA as % of revenues
Cash Flows and Cash Position
2020
254.0
(133.3)
120.7
(46.6)
74.1
29%
(39.3)
(42.3)
(128.2)
(7.4)
(78.8)
(86.2)
(0.2)
(86.4)
(0.5)
(0.2%)
2019
129.6
(71.8)
57.8
(25.5)
32.3
25%
(34.2)
(32.9)
(92.6)
(34.8)
(0.1)
(34.8)
(0.0)
(34.9)
(29.7)
(23%)
% change
96%
86%
109%
83%
129%
+ 4 pts
15%
29%
38%
(79%)
n/a
148%
n/a
148%
(98%)
+23 pts
Cash flow from operating activities (CFOA) increased by EUR 34.7 million compared to the previous corresponding period,
reaching EUR 4.4 million in 2020. The main drivers of the positive CFOA were improved operational performance in all regions
as well as positive working capital development.
The Company had a negative cash flow from investing activities of EUR 8.6 million in 2020, mainly driven by EUR 5.3 million in
buildouts of its manufacturing centers in Australia and the US, the opening of its third fulfillment center in Australia and
investments into manufacturing automation globally. Additionally, EUR 3.3 million were spent on software development and
other intangible assets.
IR.MARLEYSPOON.COM 15
Marley Spoon had various financing events in 2020 that contributed to funding its growth:
•
•
•
•
•
•
•
•
In January, the Company issued two unsecured convertible bonds to USV for an aggregate amount of USD 2.5 million;
In May, the Company issued Share capital in the amount of AUD 16.6 million and issued 15,852 Shares;
In July, Woolworths Group Ltd exercised its right to convert its convertible bond with the principal amount of AUD
2.95 million into 5,900 Shares of Marley Spoon;
In August, Kreos Capital V (Expert Fund) LP exercised its right to subscribe to Shares in the Company pursuant to the
Warrants agreements, leading to the issuance of 478 Shares in the Company;
In September, the Company issued 8,462 new Shares to Western Technology Investment against payment of AUD
3.3m based on the exercise of two warrant instruments issued by Marley Spoon;
In October, the Company launched a A$56 million institutional placement and issued 17,437 Shares;
In November, Union Square Ventures and Acacia Conservation Fund, LP and Acacia Conservation Master Fund
(Offshore), LP converted EUR 61.2 million of interest-bearing bonds to equity;
Additionally, the Company repaid EUR 6.8 million of senior secured WTI debt.
As at 31 December 2020, the cash and cash equivalents on balance amounted to EUR 34.4 million (prior year: EUR 5.4 million).
EUR in millions
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the end of the year
31 December 2020
31 December 2019
4.4
(8.6)
33.7
29.5
34.4
(30.2)
(6.3)
33.3
(3.2)
5.4
Overall Statement regarding the Earnings, Financial and Asset Position of the Group
The reporting period, the twelve months ended 31 December 2020, was characterized by continued strong growth, amplified
by an accelerated shift from offline to online grocery shopping during the COVID-19 pandemic. Marley Spoon managed to
improve its key financial KPIs and other key performance indicators in all segments over the course of the year. As such, the
Company is satisfied with the progress made in 2020 and sees a solid foundation for continued growth and improvement in
2021.
3
Risk and Opportunities Report
Overall Statement regarding the Earnings, Financial and Asset Position of the Group
In the course of its business, Marley Spoon AG and its subsidiaries (“Marley Spoon Group” or “the Group”) face risks and
opportunities that can have either negative and positive effects on its results of operations, financial position, and net assets.
Marley Spoon Group deploys transparent, bottom-up management and control systems to identify risks and opportunities at
an early stage and manage them accordingly. This report presents the most important risks and opportunities applicable to the
Group.
3.1 Internal control system
Whereas each member of the Marley Spoon team is expected to anticipate and mitigate risks, the Management Board
(Vorstand) of Marley Spoon AG bears overall responsibility for the establishment and operation of an effective risk
management framework across the organization. According to the Management Board’s Schedule of Responsibilities
(Geschäftsverteilungsplan), the Company’s Chief Financial Officer (CFO), previously Julian Lange, now Jennifer Bernstein, is
responsible for overseeing the risk management framework. The CFO is supported by the Company’s General Counsel and the
Head of Reporting & Audit in this endeavor. As with its other responsibilities, the Management Board is advised and supervised
by the Company’s Supervisory Board (Aufsichtsrat) in relation to the effectiveness of the internal control system and the
Company’s overall risk management. Given the importance of this matter, the Supervisory Board has established the Audit and
Risk Committee (ARC) as a standing committee. During the reporting period, the ARC was chaired by Robin Low, who replaced
Patrick O’Sullivan as of 29 January 2020.
As a part of its management of risk, Marley Spoon implemented a system of internal controls over its financial reporting,
aiming to identify, evaluate and mitigate any risks that could influence the proper preparation of the Company’s individual and
consolidated financial statements (Jahresabschluss, Konzernabschluss). The system of internal controls over financial reporting
is at the core of Marley Spoon’s accounting and reporting processes.
IR.MARLEYSPOON.COM 16
It includes preventive and investigative monitoring/detective measures in both accounting and operational functions to
facilitate a structured process for the preparation of financial statements. The internal control system governs the internal
processes that have a significant impact on financial reporting.
These financial reporting control processes and the relevant risks are regularly analyzed and the preventative and detective
procedures taken to mitigate the identified risks are documented. The control mechanisms implemented affect multiple
processes and thus frequently overlap. These mechanisms, among other things, include determining principles and procedures,
defining processes and controls such as month-end closing checklists and variance analyses and introducing approval
guidelines. The foundation and the effectiveness of the Company’s system of internal controls are regularly reviewed by the
CFO and the ARC.
3.2 Risk reporting and methodology
The CFO leads the identification of key risks to the Company and the efforts to analyze, evaluate, and mitigate these identified
risks with the appropriate countermeasures. A risk management framework is used to support Marley Spoon’s business
operations, to provide consistency in addressing risks, and ultimately to facilitate the Company’s compliance with regulatory
requirements. As part of this framework, relevant risk items are documented in an internal risk register (RR). The Company’s
General Counsel continually updates and develops the RR based on the input of the Company’s various team leads. The RR is
reviewed by the CFO, considered by Marley Spoon’s Management Board, and made available to the ARC, the Supervisory
Board, and the Company’s auditors.
Preventive and detective countermeasures for each identified risk in the RR are designed and allocated to various personnel
across the organization. Based on the RR, a comprehensive risk assessment is performed and illustrated in a risk management
matrix (RMM) which forms another key element of the risk management framework. The RMM aims to provide the
Management Board and Supervisory Board (acting through the ARC) with relevant information on Marley Spoon’s risk
exposure and its mitigation activities, allowing for informed decision-making and an appropriate response to the identified
risks. The cyclical reporting process is supplemented by ad-hoc reporting, in the case that critical issues arise.
As part of the risk management framework, all relevant risks identified and documented in the RR are quantified based on their
likelihood of occurrence (shown as likelihood in the RMM) as well as their potential impact (shown as consequence in the
RMM) and entered into the RMM. This quantification is assessed within the context of materiality thresholds, helping to guide
an assessment of the severity of the risk and recommended remedial actions.
The likelihood of occurrence refers to the statistical or estimated probability of a risk occurring during the time horizon
under review (usually one year after the assessment date). It is stated as a percentage. The likelihood of the occurrence
is determined by choosing one of the given probability ranges which are shown in the table below:
Likelihood
Certain
Likely
Possible
Unlikely
Rare
Assessment
80% ≤ Risk ≤ 100%
60% ≤ Risk < 80%
40% ≤ Risk < 60%
20% ≤ Risk < 40%
0% < Risk < 20%
The potential consequence of a certain risk is considered as deviation from the Company’s objectives. The assessment
is preferably conducted on a quantitative scale. Alternatively, if a risk cannot be quantified or qualitative aspects
predominate (e.g., for compliance risks), a qualitative scale is applied.
Consequence (i.e., impact on business operations, financial status, profitability
and/or cash flows)
Assessment
Catastrophic
Major
Moderate
Minor
Insignificant
Risk ≥ EUR 10 million
M€ 5 ≤ Risk < EUR 10 million
M€ 2.5 ≤ Risk < EUR 5 million
M€ 0.25 ≤ Risk < EUR 2.5 million
M€ 0 < Risk < EUR 0.25 million
IR.MARLEYSPOON.COM 17
Based on the assessment of the likelihood of occurrence and the consequence, all identified risks are classified and
visualized in the RMM as follows:
The RMM facilitates the comparison of the risks’ relative priority and increases transparency over Marley Spoon
Group’s total risk exposure. The categorization of risks from “LOW” to “VERY HIGH” is used to determine which risk
information needs to be provided in more detail to the Management Board as well as to the Supervisory Board. Risks
that could impact Marley Spoon’s ability to continue as a going concern are reported immediately once identified.
3.3 Areas of risk
With just over six years in business, Marley Spoon Group has a limited operating history and operates in a nascent,
albeit growing, category. As such, the Group faces competition from a different cross-section of industries, including
offline grocery retailers, online/offline grocery delivery service providers, alternative meal kit companies and potential
new market entrants, either within the meal kit space or in adjacent categories. This diverse competitive set makes it
difficult to evaluate future risks and challenges the Company may encounter. If the Group fails to maintain and increase
demand for its products or to adapt its services effectively to changes in customer behavior, it may not be able to retain
active customers and attract new ones. The same applies if Marley Spoon Group does not manage to cope with the
increased demand for its services, e.g., due to operational challenges. Also, the Group continues to rely on third parties
for the supply of ingredients and the delivery of its meal kits to customers, which could lead to material adverse effects
on its business and reputation (e.g., in case suppliers fail to comply with regulatory requirements).
The Management Board determines the overall risk situation by assessing the following risk categories as the result of a
consolidated consideration:
•
•
•
•
•
Financing risks,
Credit and fraud risk,
Regulatory and legal risks,
Financial and reporting risks,
Operational risks (including those associated with the COVID-19 pandemic).
Financing risks
Marley Spoon is capitalized with substantial equity financing coming from public capital markets. As such, the Company
can be directly affected by developments and risks inherent in such capital markets. Nevertheless, the Company believes
it is currently in a position to fund its organic growth with the substantial improvements to its free cash flow position
and the simplification of the Company’s balance sheet in 2020. Given that Marley Spoon remains as high-growth
company, it is continuously exploring external funding opportunities in order to have the flexibility and agility to
accelerate its growth even further.
Marley Spoon’s ability to promptly provide full and verified information on the status and development of the Group is
another critical success factor. Providing incorrect or incomplete information can result in – inter alia – reputational
damage. In the current market environment, this might negatively impact the investor relations or even result in the
loss of investors.
IR.MARLEYSPOON.COM 18
Marley Spoon had several financing events in 2020, including equity raises and debt retirement. For details see section
Management Report 2.3, sub-section “Cash flows and cash position”.
While Marley Spoon currently has a sufficient cash position to fulfil its capital requirements for the ongoing operations of the
business, the Management Board considers the financing risks to be medium given the Company’s stage of growth.
Credit and fraud risk
Customers who order through Marley Spoon Group’s websites and mobile apps may choose from a range of payment
methods, including, without limitation, credit cards, direct debit, and invoice. Due to the variety and complexity of
payment methods, the Group faces the risk of operational failures in its checkout process. This could adversely affect
the number of visitors who decide to purchase a Marley Spoon meal kit.
Marley Spoon also faces potential risks relating to customer claims if purchases or payments are not properly
authorized or are transmitted in error. Furthermore, there is the risk that customers have insufficient funds or that
customers themselves are subject to fraud (e.g., through identity theft conducted by third party imposters). Failure to
avoid or limit losses caused by fraudulent transactions could negatively affect the Company’s operations and result in
increased legal expenses and fees. Permitting further online payment options or increasing levels of payment card
fraud could result in Marley Spoon having to comply with additional security requirements and/or higher payment
processing fees or even fines.
Given the fraud detection capabilities of Marley Spoon’s payment service provider partners as well as the Company’s regular
review of payment methods, the Management Board considers the risk of credit and fraud to be low.
Food safety and other regulatory and legal risks
Certain legal and other risks are inherent in the sale of food products for human consumption. In particular, perishable
and fresh products constitute a significant proportion of the ingredients in Marley Spoon’s meal kits. It is possible that
these perishable products may spoil or be rendered unsafe to consume if the team fails to put in place adequate
temperature control mechanisms, miscalculates delivery times, or fails to accurately notify customers of anticipated
delivery times. There is also a risk of contamination of food products that could potentially happen at any point
throughout the supply chain. Marley Spoon’s internal legal team as well as its Quality & Safety function constantly
enhance compliance with the relevant legal and regulatory requirements through continual monitoring and reviews.
Against this background, the Management Board considers this risk to be low.
Financial and Reporting Risks
The Management Board of Marley Spoon has implemented a system of internal controls around financial reporting to
manage and reduce the finance and reporting risks to a moderate level.
Marley Spoon considers the following as forming part of the financial risk: input cost risk (i.e., changes in ingredient or
packaging prices), foreign currency risk, interest rate risk, credit risk and liquidity risk.
•
•
Input cost risk
Input cost risk is the risk that changes in market prices of key ingredients or packaging used by the Group
will affect the Group’s results of operations. The Group manages the risk of rising input costs with a detailed
menu design and planning process which is aligned with predetermined cost targets negotiated with
suppliers. As an example, significant increases in produce or protein prices are mitigated using alternate
ingredients or producers or changing future recipes.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because
of changes in foreign exchange rates. Financial instruments, which are denominated in a currency other than
the measured functional currency of the Company (i.e., the Euro), are subject to foreign currency risk. The
Group operates in international markets through locally established subsidiaries which mainly complete
their transactions in the respective local currency. As such, material depreciation of those foreign currencies
could present a risk to Marley Spoon, however the Company’s addition of a treasury function within finance
ensures ongoing liquidity oversight and management.
IR.MARLEYSPOON.COM 19
•
•
•
Interest rate risk
Interest rate risk is the risk that the future cash flows of financial instruments will fluctuate because of
changes in market interest rates. The Group has exposure to movements in interest rates arising from its
portfolio of interest rate sensitive assets and liabilities. These principally include debt and cash. The Group
manages its interest rate risk by mostly having fixed interest rates on loans and does not enter into any
derivative financial instruments to manage its interest rate risk.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the Group. Credit risk can arise as the Group offers various payment methods and other transactions
with counterparties. The exposure to credit risk in its operating activities exists primarily in the form of trade
receivables and security deposits with banks and financial institutions. The nature of the business limits the
exposure towards trade receivables, since customers usually pay before delivery, and hence no relevant
information is disclosed.
Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with
financial liabilities. The Management Board monitors cash balances and movements in cash regularly. The
objective of liquidity risk management is to maintain a balance between continuity of funding and flexibility
through the use of bank overdrafts, credit cards and bank loans. The Group’s liquidity management involves
projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these
outflows, monitoring balance sheet liquidity ratios and maintaining equity and debt financing plans. As
previously mentioned, the Group has established a dedicated treasury role overseeing liquidity and FX risks.
The financial risks are also discussed in note 10 of the notes to the Consolidated Financial Statements. The
Management Board considers the financial and reporting risks to be low to medium.
Operational risks
Dependence on customer acquisition and retention
Marley Spoon’s growth is substantially dependent on the acquisition of new customers and the retention of existing
customers. Consequently, the Group depends, in particular, on access to marketing channels allowing it to acquire
customers at commercially attractive rates. Once acquired, these customers depend on high fulfillment rates of the
Group's manufacturing centers and logistics partners to ensure the satisfactory delivery of their orders. Marley Spoon
Group operates in three regions with a total addressable market of approximately 190 million households. Comparing
this to Marley Spoon’s 227,000 Active Subscribers (as of the last quarter of 2020), the Group’s market penetration is
still relatively low. Whilst this should provide for further growth opportunities, any slowdown in market penetration
could adversely impact the Group’s growth and financial profile.
Only a happy customer base is loyal and active which is crucial to Marley Spoon’s continued growth. Thus, the
Group’s customer communications service must perform well, ensuring that customer complaints are dealt with in a
timely and sustainable manner. Marley Spoon Group responds to customer requests and complaints by email, chat,
through telephone hotlines and social media. Any actual or perceived unsatisfactory response by the customer
communications team could negatively affect customer loyalty and retention.
Against this background the Management Board considers this risk to be medium.
Sourcing from third parties and product perishability
Perishable products (protein, vegetables etc.) account for a significant proportion of Marley Spoon’s meal kits’
ingredients. Whilst constantly enhancing the Company’s direct relationship with producers, Marley Spoon Group still
depends on wholesalers to deliver these products on a just-in-time basis. Failure to accurately anticipate the time it
will take to obtain new products or to calculate the quantities of products needed for food boxes may result in order
levels not being appropriate and could affect the freshness of ingredients. Marley Spoon Group seeks to mitigate
these risks through a carefully planned ordering process. Its suppliers are subject to a standardized, comprehensive
onboarding process and ongoing assessment by the internal Quality & Safety team. Ingredients are quality inspected
upon receipt and are kept within continuous temperature controls until delivered to Marley Spoon’s customers.
Against this background, the Management Board considers this risk to be low.
IR.MARLEYSPOON.COM 20
Key Personnel, Operational Excellence
Marley Spoon continues to depend on the strong commitment of its founder and CEO Fabian Siegel. The same is true
of its CFO, Jennifer Bernstein, and the other members of the executive leadership team. The unanticipated departure
or loss of any of them could have an adverse effect on Marley Spoon’s business, financial condition, and results of
operations. The same is true for any unexpected decline in their professional performance.
Competition for talent may lead to the Group’s inability to attract suitable replacements for such personnel and/or
suitable candidates for newly established positions in a timely manner or at all. To mitigate these risks, Marley Spoon
has set up recruiting and onboarding processes and tools to efficiently evaluate and manage candidates and
employees. Furthermore, the Group has introduced salary/benefit schemes to adequately reflect and compensate the
team for their personal contributions to the Company’s continuous success.
Against this background, the Management Board considers this risk to be low.
Dependence on technology
Operating exclusively through online channels (website, mobile apps) rather than physical outlets, makes Marley
Spoon Group dependent on software and hardware technology. Furthermore, giving customers both extensive choice
between a variety of recipes and the flexibility to adjust or cancel their meal kit until a few days before the scheduled
delivery date, comes with challenges to Marley Spoon’s supply chain management. Marley Spoon Group, therefore,
relies on its technology and data to forecast demand and predict its customers’ orders. This technology is key to
determining required amounts of ingredients and other supplies as well as to optimizing the logistics for delivering
Marley Spoon’s meal kits to its customers. If this technology fails or produces inaccurate results, Marley Spoon could
experience shortages in key ingredients or increased food waste, for instance. Also, the operational efficiency of
Marley Spoon’s supply chain may suffer, or its customers may experience delays or defects in its meal kits (e.g., missing
ingredients).
Marley Spoon is investing substantial amounts into modular (semi) automation of its production processes and its
digital platforms. Material delays or roll-out issues could adversely impact growth and margins despite solid project
management and production process experience. The Company has a phased roll out of various technologies and
enhancements and employs technical advisers as appropriate.
Against this background the Management Board considers this risk to be low.
COVID-19 related risks
Given the high degree of uncertainty surrounding the extent and duration of government and regulatory responses to COVID-
19, it is not currently possible to assess the full impact of COVID-19 on Marley Spoon’s business or the economy generally. The
adoption of unprecedented preventative measures by governments and other authorities, including a prolonged period of
social distancing, quarantines, travel restrictions, work stoppages, and the closure of stores and businesses, lockdowns, and
other related measures, or an escalation of existing measures, may directly or indirectly impact a number of aspects of Marley
Spoon's business.
However, over the last year Marley Spoon has incorporated additional health and safety measures in its office facilities and
manufacturing centers to protect its workforce, customers and to be compliant with new government guidelines, including the
temporary closure during the summer of the Melbourne fulfillment center during the city’s lockdown. The Company has
adapted to address work outages, supply disruptions and other COVID-19 consequences.
There are also other changes in the domestic and global macroeconomic environment associated with the events relating to
COVID-19 that are beyond the control of Marley Spoon and may be exacerbated in an economic recession or downturn. These
include, but are not limited to, changes in inflation, interest rates and foreign currency exchange rates and changes in
employment level and labor costs.
Against this background the Management Board considers this risk to be medium.
3.4 Overall risk assessment
Marley Spoon Group performs systematic and regular analyses of its business risk, utilizing early risk detection frameworks
across all functions and supplementing its risk prevention methods with risk insurance. As the Company continues to automate
IR.MARLEYSPOON.COM 21
more of its activities and invest in capabilities, it further minimizes the potential for risk. Further, Marley Spoon managed to
deliver a strong financial year in the context of a particularly turbulent and uncertain climate, giving the Company confidence
that it can weather challenging times. Coming from a significantly improved financial position as compared to previous years,
the Company views its overall risk exposure to be low to medium.
3.5 Opportunities
The grocery sector remains one of the biggest categories of consumer spending. However, unlike other sectors, most grocery
spending happens offline. 2020 saw a perceptible shift in the growth of online grocery shopping, potentially signaling an
acceleration of online adoption and the development of the grocery category toward other sectors that have greater online
traction. Nevertheless, the percentage of households currently buying groceries online remains small, creating an opportunity
for Marley Spoon, which is able to service approximately 190 million households across the three regions in which it operates.
As Marley Spoon positions itself at the forefront of innovation in serving personalized consumer cooking needs, the Company
should be positioned well to benefit from an accelerated channel switch.
Over the past years, there has been a trend toward consumers seeking convenient and healthy options for dinner. Cooking
from scratch yields many health benefits versus eating fast-food or highly processed food. Marley Spoon aspires to having its
brands recognized for their health advantages as well as for their convenience and should benefit from the continuation of this
health and wellness trend.
Marley Spoon’s make-to-order supply chain often allows it to source directly from food producers based on order forecasts
derived from observable consumer behavior. This supply chain, compared to traditional grocery supply chain models, yields
benefits such as reducing food waste, reducing intermediaries between the Company and suppliers, and shortening delivery
times, ultimately leading to lower costs and higher margins. As the Company continues to develop its supply chain, it sees the
potential to find additional margin upside and/or cost savings.
The Company continues to enhance its service to customers by increasing choice, improving personalization and introducing
additional delivery options. Such improvements could help increase the total addressable market by better serving customers’
preferences, thereby also increasing retention and customer lifetime value.
4 Outlook
Marley Spoon’s mission is to solve recurring everyday consumer problems in personalized and sustainable ways. As a direct-to-
consumer brand company, Marley Spoon builds long term relationships with its customers, whose daily life the Company tries
to enrich and make easier with its services.
Marley Spoon meal kits offer a convenient and competitively priced alternative to cooking with groceries purchased from the
supermarket. In the Company’s competition with supermarkets, it benefits from an overall change in consumer behavior,
namely using online shopping for more and more aspects of daily consumption needs.
Marley Spoon’s strategy over the past years has been to capitalize on this trend by growing its business in a disciplined manner,
acquiring new customers at the right price and targeting a good return on the investment in the Company’s customer base.
This strategy and the infrastructure created over the past years allowed the Company to take advantage of the growth
opportunity that 2020 presented, which led the Company to double its business. At the same time, the Company was able to
increase its contribution margin while navigating a difficult operational environment. After a year of rapid growth in 2020,
Marley Spoon intends to continue to grow in 2021 while at the same time build operational foundations for additional capacity.
Growth through market penetration
After COVID-related GDP contractions in 2020, the countries Marley Spoon operates in are expecting GDP growth in 2021, even
though risks associated with the pandemic, such as the impact and speed of the global vaccine campaign, remain. Also, the
outlook on consumer spending behavior, while strong in 2020, remains unclear for the current year. That said, Marley Spoon
believes that the COVID-19 pandemic has accelerated the consumer switch from offline to online shopping in all categories, but
specifically for groceries. In the fourth quarter of 2020, Marley Spoon had 227,000 active subscribers, compared to a total of
approximately 190 million households that can potentially be serviced across the Company’s three operating regions. Marley
Spoon sees the potential to continue significantly growing its business within those geographies as consumer online spending
accelerates.
IR.MARLEYSPOON.COM 22
Growth through increased customer value proposition
Over the past years, Marley Spoon has collected millions of data points which can help in understanding customers’ individual
tastes and preferences. The Company has used this data to offer recipes tailored to consumers’ individual likes, which has had
a positive influence on customer lifetime value. In 2020 Marley Spoon developed a taste profile prediction algorithm that
allows the Company to rank recipes based on individual taste.
Going forward Marley Spoon intends to further invest into data science and artificial intelligence. The resulting predictive
capabilities will allow the Company to increase the flexibility and choice for all of its brands. Marley Spoon believes this will help
delight customers even more, further increase customer lifetime value, and maintain a high repeat customer revenue share.
In addition to improving the core value proposition of Marley Spoon meal kit brands, the Company will explore further growth
by providing adjacent solutions to customers, such as ready-to-eat meals as well as breakfast or lunch options.
Improve financial metrics through scale and operational improvements
Marley Spoon intends to continue developing its manufacturing capabilities by introducing improved automation technology as
well as optimizing manufacturing processes. The 2020 operational improvements to the business have demonstrated that such
investments yield higher productivity and positive margin impact. As its business grows, Marley Spoon expects to benefit from
additional scale leading to reduced input costs for its meal kits.
All in all, the Company expects contribution margin to improve to between 30-31% versus the prior year as the Company plans
to invest into improving the product experience for an even better customer value proposition.
While Marley Spoon expects to continue to benefit from operating leverage effects, 2021 will be a year of further investment
into software engineering teams as well as overall operating capabilities. Hence, General and Administrative costs are expected
to grow year over year.
Maximizing growth while operating at breakeven
The meal kits industry is still young and at an early stage of market adoption in an overall very sizable food/groceries category.
Because of Marley Spoon’s direct customer relationship and direct-to-order supply chain, the Company believes it can serve its
customers’ weekly cooking needs better and less expensively, while being more sustainable than supermarkets at the same
time.
The Company’s strategy for 2021 will be to take advantage of the favorable market dynamics coming from accelerated online
shopping adoption. Marley Spoon plans to optimize for growth at attractive unit economics while navigating operating EBITDA
and cash flow from operations at breakeven levels. At the same time Marley Spoon intends to continue to innovate within the
category in order to continuously improve the customer service offering.
Given the continued global strong growth in online meal kit adoption and retention of customers acquired in 2020, Marley
Spoon is expecting to grow revenue between 25-30% YOY in 2021.
IR.MARLEYSPOON.COM 23
OTHER REPORTING ITEMS
1 Remuneration Report
The Directors of Marley Spoon present this Remuneration Report for the year ended 31 December 2020. This
Remuneration Report outlines Marley Spoon’s remuneration policy and practices, explains how the Company’s 2020
performance has driven executive remuneration outcomes, and provides the details of specific remuneration
arrangements that apply to key management personnel (KMP) in accordance with the requirements of the
Corporations Act 2001.
The information in this Remuneration Report has been audited as required by section 308(3C) of the Corporations
Act 2001. Marley Spoon’s KMP are assessed each year and comprise the Non-Executive Directors (being the
members of the Supervisory Board (Aufsichtsrat) of the Company) and the Executive Directors, namely the Chief
Executive Officer (CEO) and the Chief Financial Officer (CFO) (being the members of the Management Board
(Vorstand) of the Company). Marley Spoon’s KMP for 2020 are outlined in the table below:
Non-Executive Directors, Supervisory Board
Deena Shiff, Chairman, appointed June 2018
Christoph Schuh, Deputy Chairman, first appointed April 2018
Kim Anderson, Chair of the Nominations and Remuneration Committee, appointed June 2018
Robin Low, Chair of the Audit and Risk Committee, appointed January 2020
Executive Directors, Management Board
Fabian Siegel, Chief Executive Officer (CEO), first appointed April 2018, reappointed December 2020
Jennifer Bernstein, Chief Financial Officer (CFO), appointed October 2020
Julian Lange, Chief Financial Officer (CFO), resigned as of December 2020
The Non-Executive Directors / members of the Supervisory Board have been elected to those positions for a period
terminating at the end of the Company’s annual general meeting in CY2021 (Supervisory Board Initial Term).
During the Reporting Period, Ms. Robin Low was appointed effective 29 January 2020 for the remainder of the
Supervisory Board Initial Term, succeeding Mr. Patrick O’Sullivan.
Mr. Christoph Schuh announced that he will not stand for re-election after the Supervisory Board Initial Term, i.e., in
May 2021. The Supervisory Board, acting through the Nominations and Remuneration Committee (NRC), has
undertaken an international competitive search with an external search firm to replace Mr. Schuh with a Director who
will bring similar, direct-to-consumer expertise as well as a thorough understanding of online FMCG fulfilment
especially in the US and European markets.
Additionally, the former CFO, Julian Lange, resigned from the Management Board of the Company effective 31
December 2020. He was succeeded by Jennifer Bernstein.
There were no other changes to the KMP during the Reporting Period, or after the reporting date up to the date the
financial report was authorized for issue.
The structure of the Remuneration Report is outlined as follows:
Section 1. Remuneration Governance
Section 2. Remuneration Framework
Section 3. Remuneration of the Management Board (Executive Directors) and outcomes
Section 4. Senior Executive Contract Details
Section 5. Remuneration of the Supervisory Board (Non-Executive Directors)
Section 6. Other information (Movement in KMP Performance Shares and Equity Holdings)
IR.MARLEYSPOON.COM 24
SECTION 1 – REMUNERATION GOVERNANCE
The Supervisory Board has established the NRC. It is primarily responsible for making recommendations to the Supervisory
Board on:
-
-
the overarching executive remuneration framework
operation of the incentive plans that apply to senior executives, including the key performance indicators and
performance hurdles
remuneration levels of senior executives
succession planning for the Chief Executive Officer (CEO) and other members of the Management Board
Supervisory Board succession planning
induction and continuing professional development programs for members of the Supervisory Board
the development and implementation of a process for evaluating the performance of the Supervisory Board, its
committees and members
Non-Executive Director fees
-
-
-
-
-
-
The NRC’s objectives are to ensure that remuneration policies and structures are also aligned to participants and that it is fair,
competitive and aligned with the strategic objectives and long-term interests of the Company. The NRC charter can be found at
https://ir.marleyspoon.com/investor-centre/?page=corporate-governance.
Involvement of Independent Advisors
The Nominations and Remunerations Committee operates independently of the Executive Directors and engages directly
with remuneration advisors. The requirement for external advisors’ services is assessed annually in the context of
remuneration matters that the NRC needs to address, and external advisors’ recommendations are used as a guide.
Remuneration recommendations
No remuneration recommendations as defined by the Corporations Act 2001 were received from remuneration advisors in
2020. During 2020, the Supervisory Board consulted with Egon Zehnder International on industry benchmarking of KMPs.
SECTION 2 – REMUNERATION FRAMEWORK
The Company’s remuneration framework is designed to attract, motivate and retain high caliber executives and employees
to ensure delivery of the business strategy. The framework is designed to ensure that remuneration is market competitive,
performance-based, consistent, transparent and aligned with Shareholders’ interests. Economic profit is a core component
of the framework’s design.
The Company’s KMP and other employees are remunerated on the following basis:
•
•
•
•
•
capability, experience and performance,
recognition for contribution to operational performance,
achieving key financial outcomes,
sustained growth in Shareholder return, and
key non-financial drivers of value such as innovation and culture.
The Management Board compensation and reward framework has two components:
i.
ii.
Fixed remuneration
At-risk remuneration
2.1 Fixed Remuneration
Initially, during the early stages of the Company, Executive Directors, senior managers and certain other employees
elected to receive equity in return for approx. 20% of salary sacrifice. These employees are now paid at market rates.
Fixed remuneration levels are considered annually through a remuneration review that considers market data, the
performance of the Company and of the individual.
2.2 At-risk remuneration
Executive Directors, senior managers and certain other employees are offered to participate in the Company’s Share
Option Program.
IR.MARLEYSPOON.COM 25
Share options (Options) are granted on the following basis:
•
•
•
•
•
Options are granted based on two performance measures, namely EBITDA and contribution margin. The weighting of
each measure can be up to 70% of the total grant.
The Performance Period after which the achievement of the respective performance measures is tested ends after
two years.
The Vesting Period is spread over four years inclusive of the Performance Period.
Options can only be exercised after the Waiting Period of four years from the grant date.
The Strike Price is calculated using a one-month VWAP prior to the date of the grant of the Options.
The exercise of Options is subject to the achievement of certain performance targets as established in the 2020 and
2019 Share Option Program (SOP) Terms & Conditions.
The Company is planning to review performance targets for the 2022 LTI that better align with the Company’s
strategy and Shareholder outcomes.
If a Participant ceases employment prior to the Options vesting, the treatment of their Options will depend on the
circumstances of their cessation. Where the Participant ceases employment due to termination for cause (including
gross misconduct), or other predefined Bad Leaver events, all of their vested and unvested Options will automatically
lapse.
SECTION 3 – REMUNERATION OF THE MANAGEMENT BOARD AND OUTCOMES
3.1 Framework
Components
Remuneration Component
Strategic Purpose
Fixed Remuneration
Cash
Salary and other benefits (including
employer superannuation)
Designed to attract and retain employees
with required capabilities and experience
At-risk remuneration
Cash STI
Currently not awarded until the Company is
continuously cash flow positive
To motivate and reward performance
within a year
LTI
Provided as a grant of Options
(performance rights)
Vests over a period of four years
To align the interests of Senior Executives
with those of Shareholders
To align Senior Executives' remuneration
with longer-term financial performance of
the Company
To assist in attracting and retaining
outstanding executive talent
3.2 Statutory remuneration of the Management Board
Statutory Remuneration
Name
Year
Fixed
Remuneration
€
Other Fixed Benefits
€
Cash
STI
€
Fabian Siegel (CEO)
Jennifer Bernstein (CFO)
(joined Oct 2020)
Julian Lange (CFO until
Dec 2020)
2020
2019
2020
2020
2019
164,850
149,106
62,500
96,354
88,848
162,500
138,307
7,620
13,713
12,500
-
-
-
-
-
LTIB
€
84,651
-
-
87,312
27,424
Total
Remuneration
€
412,001*
287,413
70,120**
194,379^
128,772
*Mr. Siegel’s total statutory remuneration for the year ended 31 December 2020 is equivalent to A$ 654,905 in aggregate. This includes base
salary and other fixed benefits (travel and living away from home allowance (LAFHA)) and the following LTI: Mr. Siegel has been granted 700
Options, as approved by the annual general meeting of the Company on 30 July 2020.
**Ms. Bernstein was appointed as an additional Executive Director and member of the Management Board (Vorstand) in October 2020 and
succeeded Mr. Lange as CFO in December 2020. Ms. Bernstein’s total statutory remuneration for the year ended 31 December 2020 is
IR.MARLEYSPOON.COM 26
equivalent to A$ 111,463 in aggregate. This includes base salary and other fixed benefits (employer share in certain Swiss statutory social
contributions). Although Ms. Bernstein’s employment commenced in October 2020, she did not participate in the 2020 SOP.
^Mr. Lange's total statutory remuneration for the year ended 31 December 2020 is equivalent to A$ 308,979 in aggregate. This includes base
salary and other fixed benefits (employer share in certain German statutory social contributions and travel allowance), and the following LTI:
Mr. Lange’s 210 Options granted in 2020.
B LTI are valued at grant date as described further in Note 8.2 and are expensed in accordance with the award’s graded vesting scheme.
Realized remuneration of the Management Board – Voluntary Disclosure
The following table has been prepared to supplement the statutory requirements in Section 3.2. The purpose of this table is to
provide Shareholders with an outline of total actual remuneration which has been received by the members of the Management
Board during 2020 and 2019.
Realized Remuneration
Name
Year
Fixed
Remuneration
€
Other Fixed Benefits
€
Cash
STI
€
LTI
€
Total
Remuneration
€
Fabian Siegel (CEO)
Jennifer Bernstein (CFO)
(joined Oct 2020)
Julian Lange (CFO until
Dec 2020)
2020
2019
2020
2020
2019
164,850
149,106
62,500
96,354
88,848
150,000
138,307
7,620
13,713
12,500
-
-
-
-
-
17,471
834
-
332,321*
288,247
70,120**
1,239,956
1,350,023^
38,808
140,156
*Mr. Siegel’s total realized remuneration for the year ended 31 December 2020 is equivalent to A$ 528,249 in aggregate. He did not make use
of his statutory travel allowance (equivalent to A$ 19,870). Mr. Siegel’s realized LTI is valued at the market value at vesting date.
**Ms. Bernstein was appointed as additional Executive Director and member of the Management Board (Vorstand) in October 2020 and
succeeded Mr. Lange as CFO in December 2020. Ms. Bernstein’s total realized remuneration for the year ended 31 December 2020 is
equivalent to A$ 111,463 in aggregate. This includes base salary and other fixed benefits (employer share in certain Swiss statutory social
contributions). Although Ms. Bernstein’s employment commenced in October 2020, she did not participate in the 2020 SOP.
^Mr. Lange's total realized remuneration for the year ended 31 December 2020 is equivalent to A$ 2,145,959 in aggregate. This includes base
salary and other fixed benefits (employer superannuation and travel allowance). To acknowledge his past contributions and salary sacrifices
and his willingness to work as a consultant for the Company until September 2021, the vesting of any unvested virtual Share Options granted
under the pre-IPO VSP and the 761 Options granted in 2019 has been accelerated to 31 December 2020. Also, the vesting of 210 Options
granted in 2020 has been accelerated to 31 December 2021. Mr. Lange’s realized LTI is valued at the market value at vesting date.
LTI (Options) granted in 2019 and 2020
Executive
Directors
Grant Date
Granted
Options
Equivalent Number
of CDIs
Exercise
Price €
Fabian Siegel*
03-Aug-20
CEO
27-May-19
Julian Lange**
04-Feb-20
CFO (until Dec 2020)
05-Feb-19
Jennifer Bernstein
CFO (joined Oct
2020)
-
700
53
700
761
-
700,000
53,000
700,000
761,000
-
1.53
0.27
0.18
0.27
-
Value €
Full Vesting Date
1,070,728
01-Jan-24
14,310
37,784
01-Jan-23
01-Jan-24
326,615
31-Dec-20
-
-
* As of 31 December 2020, 667.1 Options / 667,100 CDIs granted to Mr. Siegel were still unvested.
** As of 31 December 2020, 140 Options / 140,000 CDIs granted to Mr. Lange were still unvested.
IR.MARLEYSPOON.COM 27
LTI Outcome
KMP
Fabian Siegel
(CEO)
Julian Lange**
(CFO)
Jennifer
Bernstein
(CFO)
Grant
Date
Granted
Options
#
CDIs
Exercise
Price €
Performance
Test Date
Perf.
Target
EBITDA
Perf. Target
CM
Retained
Options
Vested
Options*
17-May-
19
5-Feb-
19
53
53
0.27
31-Dec-20
Achieved
Achieved
53
761
761
0.27
31-Dec-20
Achieved
Achieved
761
15.9
761
-
-
-
-
-
-
-
-
-
*Vesting occurs over 4 years in accordance with the vesting schedule (see Section 2 Framework).
**To acknowledge his past contributions and salary sacrifices and his willingness to work as a consultant for the Company until September
2021, the vesting of the 761 Options granted in 2019 has been accelerated to 31 December 2020.
SECTION 4 – MANAGEMENT BOARD CONTRACTS
Members of the Management Board have each entered into a service agreement with Marley Spoon AG. Under these
service agreements, each Executive Director (Vorstand) is employed for approximately 3 years. In 2020, the service
agreement with Mr. Lange was mutually terminated by his resignation from the Company effective 31 December 2020.
Ms. Bernstein, who succeeded Mr. Lange as CFO, was appointed as a member of the Management Board (Vorstand)
effective as of 26 October 2020 with a fixed term until 30 September 2023. Additionally, effective as of 4 December
2020, Mr. Siegel has been re-appointed as member of the Management Board (Vorstand) and CEO for a fixed term until
31 December 2023.
The following table sets out key terms of Mr. Siegel and Ms. Bernstein’s current service agreements:
Fabian Siegel (CEO)
Jennifer Bernstein (CFO)
Effective Date
1 January 2021 (superseding the terms of Mr. Siegel's
previous service agreement dated 26 June 2018).
1 October 2020.
Fixed Term
Until 31 December 2023 (CEO Term).
Until 30 September 2023 (CFO Term and together
with the CEO Term, the Term).
Total
annual
fixed
remuneration (Base Salary)
€480,000 gross salary per annum
(including
superannuation equivalents).* Base Salary is subject
to an annual review by the Supervisory Board.
€250,000 gross salary per annum
(including
superannuation equivalents). Base Salary is subject
to an annual review by the Supervisory Board.
Other Benefits
Allowance for health and long-term care insurance,
accident insurance.**
Employer share in certain Swiss statutory social
contributions.
Short-term incentive (STI)
At the Supervisory Board's discretion. To date no STI
has been included in the Company’s remuneration
structure.
At the Supervisory Board's discretion. To date no STI
has been included in the Company’s remuneration
structure.
Long-term incentive (LTI)
As approved by
the LTI
performance rights (Options) stated in Section 3.2
have been granted to Mr. Siegel.
the Shareholders,
No LTI performance rights (Options) have been
granted to Ms. Bernstein in 2020.
Notice Period
During the Term, a notice period of up to 3 months
applies where the CEO resigns or is revoked as
member of the management board (Vorstand) for a
“compelling reason” pursuant to Sec. 84 of the
German Stock Corporation Act, namely gross breach
of duty, inability to manage the business properly or
withdrawal of confidence by the general meeting.
During the Term, a notice period of up to 3 months
applies where the CFO resigns or is revoked as
member of the management board (Vorstand) for a
“compelling reason” pursuant to Sec. 84 of the
German Stock Corporation Act, namely gross breach
of duty, inability to manage the business properly or
withdrawal of confidence by the general meeting.
IR.MARLEYSPOON.COM 28
Termination Provisions
In certain cases of the Service Agreement being
terminated before the end of the Term, the CEO is
entitled to a performance-based severance, subject
to the following limitations:
In certain cases of the Service Agreement being
terminated before the end of the Term, the CFO is
entitled to a performance-based severance, subject
to the following limitations:
•
•
•
•
The amount of the severance package shall (a)
not exceed
two years’
the value of
compensation and (b) at most correspond to
the remuneration for the remaining Term of the
Service Agreement.
The maximum severance payable to the CEO,
together with any other termination benefits
granted or severance package owed to another
member of the Management Board of the
Company, must not cumulatively exceed 5% of
the equity interests of the Company as stated in
the most recent annual report given to ASX.
The amount of the severance package shall (a)
not exceed
two years’
the value of
compensation and (b) at most correspond to
the remuneration for the remaining Term of the
Service Agreement.
The maximum severance payable to the CFO,
together with any other termination benefits
granted or severance package owed to another
member of the Management Board of the
Company, must not cumulatively exceed 5% of
the equity interests of the Company as stated in
the most recent annual report given to ASX
Non-compete
During the Term, non-compete and non-solicitation
provisions apply.
During the Term, non-compete and non-solicitation
provisions apply.
Post-employment restraint
A 12-month non-compete restraint provision applies,
subject to a monthly compensation in the amount of
50% of the respective remuneration.
A 12-month non-compete restraint provision applies,
subject to a monthly compensation in the amount of
50% of the respective remuneration.
* As a result of his new contract, his salary is now commensurate with market rates.
** Mr. Siegel no longer receives a travel or living away from home allowance.
SECTION 5 – REMUNERATION OF THE SUPERVISORY BOARD (Non-Executive Directors)
Each Non-Executive Director (Aufsichtsrat)* receives fees to recognize her/his contribution to the work of the
Supervisory Board and the associated committees that she/he serves. Non-Executive Directors do not receive any
performance-related remuneration.
5.1 NON-EXECUTIVE DIRECTORS FEES
Annual Remuneration (€)
Chair
Member
Board
81,782
(A$ 130,000)
50,327
(A$ 80,000)
ARC
12,582
(A$ 20,000)
NRC
12,582
(A$ 20,000)
-
-
Directors fee pool. The maximum annual aggregate remuneration of Non-Executive Directors shall not exceed in
aggregate in any financial year the amount resolved by the Shareholders from time to time at the Annual General
Meeting (currently €500,000 (A$795,000)).
Termination payments
The Non-Executive Directors do not receive retirement benefits or termination payments.
Equity Based Remuneration
During the Supervisory Board Initial Term (i.e., until the Company’s 2021 AGM), the following Non-Executive Directors
receive 50% of their base compensation in CDIs in the Company (calculated at the Offer Price of A$ 1.42 per CDI and
issued to the respective Non-Executive Director for a subscription price of €1.00) and the remainder in cash: Ms. Deena
Shiff, Ms. Kim Anderson. The same applied to Mr. Patrick O’Sullivan who departed as a Non-Executive Director in
January 2020. Ms. Robin Low, who was appointed a Non-Executive Director in January 2020, does not receive any
portion of her compensation in CDIs in the Company. She rather receives 100% of her compensation in cash.
CDIs in respect of the entire Supervisory Board Initial Term have been issued to the respective Non-Executive Director
upon completion of the Company’s IPO (on 2 July 2018). If any of the aforementioned Non-Executive Directors do not
IR.MARLEYSPOON.COM 29
serve in that capacity for the entire Supervisory Board Initial Term, a proportion of such member’s CDI will be
transferred back by the member as directed by the Company (that proportion reflecting the proportion of the
Supervisory Board Initial Term not served as a Non-Executive Director). This applies to Patrick O’Sullivan who departed
as a Non-Executive Director in January 2020.
For the financial year ending 31 December 2020, the cash fees (including superannuation) payable to the current
members of the Supervisory Board amount to approximately €123,000 (A$206,000) in aggregate (excluding in respect
of the CDIs awarded to Ms. Shiff, Ms. Anderson, and Mr. O’Sullivan). See table below.
5.2 NON-EXECUTIVE DIRECTORS REMUNERATION
NON-EXECUTIVE DIRECTORS
Year
Base Salary
Superannuation
Deena Shiff
Kim Anderson
**Robin Low
***Christoph Schuh
****Patrick O'Sullivan
2020
2019
2020
2019
2020
2020
2019
2020
2019
€
36,612
(A$ 58,198)*
37,112
(A$ 59,361)*
28,163
(A$ 44,768)*
28,548
(A$ 45,662)*
48,226
(A$ 76,659)
-
-
4,144
(A$ 6,588)
28,548
(A$ 45,662)
€
3,842
(A$ 6,109)
3,526
(A$ 5,639)
2,956
(A$ 4,699)
2,712
(A$ 4,338)
5,062
(A$ 8,047)
-
-
435
(A$ 692)
2,712
(A$ 4,338)
*Excludes equity payments, see Section 5.1 (Equity Based Remuneration).
**Robin Low was appointed a Non-Executive Director in January 2020 and receives the entirety of her compensation in cash,
unlike the Directors appointed under the Supervisory Board Initial Term (Ms. Shiff, Ms. Anderson, and Mr. O’Sullivan) who
receive 50% of their compensation in CDIs in the Company.
***Christoph Schuh is currently a Partner at Lakestar and Lead Partner of the Lakestar I LP, where the Company is included
beside 24 other investments, and may be entitled to receive participation of the Lakestar I LP return in total, not on the
individual performance of the Company. He has agreed to forego his entitlement to any of the above fees (including CDIs)
during the Supervisory Board Initial Term.
****Patrick O’Sullivan departed as a Non-Executive Director in January 2020 and was only paid up to 31 January 2020
accordingly.
SECTION 6 – OTHER INFORMATION (MOVEMENT IN KMP PERFORMANCE SHARES AND EQUITY HOLDINGS)
6.1 Performance Shares - movements during the year ending 31 December 2020
The table below shows the details of the number and value of performance Share / Option grants issued over CDIs in Marley
Spoon during the year by each KMP, including their personally related parties. Performance shares / options granted in
2019 are subject to vesting and meeting certain performance targets in 2019/20 which have been achieved (see below).
Performance Shares / Options granted in 2020 are subject to vesting and meeting certain performance targets in 2020/21.
A waiting period of four years applies to all Options. No Options were granted to Jennifer Bernstein in 2020.
IR.MARLEYSPOON.COM 30
Executive Directors
Grant Date
Granted
Options
Equivalent Number of
CDIs
Exercise
Price €
Number Options /
CDIs Vested
Full
Vesting
Fabian Siegel
27-May-19
CEO
Total
Julian Lange
CFO
03-Aug-20
01-Dec-14
01-Apr-15
01-Oct-15
01-Apr-17
05-Feb-19
04-Feb-20
53
700
753
375
32
498
88
761
700
53,000
700,000
753,000*
375,000
32,000
498,000
88,000
761,000
700,000
0.27
1.53
-
-
-
-
0.27
0.18
15.9 / 15,900
01-Jan-23
70 / 70,000
01-Jan-24
85.9 / 85,900
375 / 375,000
32 / 32,000
30-Nov-18
31-Mar-19
498 / 498,000
30-Sep-19
88 / 88,000
31-Dec-20
761 / 761,000
31-Dec-20
70 / 70,000
01-Jan-24
Total
2,454
2,454,000**
2,454 / 2,454,000
* As of 31 December 2020, 667.1 Options / 667,100 CDIs granted to Mr. Siegel were still unvested.
** As of 31 December 2020, 630 Options / 630,000 CDIs granted to Mr. Lange were still unvested.
6.2 KMP HOLDINGS OF EQUITY INTEREST IN MARLEY SPOON YEAR ENDING 31 DECEMBER 2020
KMP NAME
Non-
Executive
Directors
Deena
Shiff
Kim
Anderson
Robin Low
Christoph
Schuh*
Patrick
O'Sullivan
KMP
NAME
Executive
Directors
Fabian
Siegel***
Julian
Lange****
Jennifer
Bernstein
Balance at
Beginning of
2020
Equivalent
Number of
CDIs
Vested in
2020
Purchased
in 2020
Sold
in 2020
137
137,000
106
106,000
-
-
-
-
106
106,000
17,953
17,953,000
1,088
1,088,000
-
-
-
-
-
-
-
82
767
-
-
-
134
-
-
-
-
-
Equivalent
Number of
CDIs (balance
purchased/so
ld)
-
-
134,000
-
-
-
-
-
-
As at end of
2020
Equivalent
Number of
CDIs
137
137,000
106
134
-
106,000
134,000
-
106
106,000
(750)
(668,000)
17,285
17,285,000
(100)
667,000
1,755
1,755,000
-
-
-
-
* Christoph Schuh is currently a Partner at Lakestar and Lead Partner of the Lakestar I LP, where the Company is included beside 24 other
investments, and may be entitled to receive participation of the Lakestar I LP return in total, not on the individual performance of the
Company. He has agreed to forego his entitlement to any of the above fees (including CDI) during the Supervisory Board Initial Term.
** Patrick O’Sullivan departed as a Non-Executive Director in January 2020 and shall transfer a portion of his CDIs or the cash equivalent to
the Company in due course.
*** Numbers do not include CDIs held to satisfy granted obligations under the Company's Existing Option Rights Plan (as defined in the IPO
prospectus dated 6 June 2018).
**** Mr. Lange has been granted Options that can be exercised into CDIs, subject to vesting and other terms & conditions. He does not
hold any Shares or CDIs in the Company. Mr. Lange has exercised a portion of his vested virtual Share options granted under the pre-IPO
VSP in Q4 2020 and received the proceeds of the underlying CDIs.
IR.MARLEYSPOON.COM 31
2 Directors’ Report
For the period January 1 to December 31, 2020
The Executive Directors of the Management Board and the Non-Executive Directors of the Supervisory Board present their
report together with the financial report of the Marley Spoon Group, which consists of Marley Spoon AG (Marley Spoon) and
its subsidiaries, for the financial year ended 31 December 2020, and the auditor’s report.
2.1
Directors‘ roles and profiles
In accordance with German law, Marley Spoon has both a Supervisory Board (Aufsichtsrat) and a Management Board
(Vorstand). These boards are separate; an individual may not be a member of both. The Supervisory Board appoints the
members of the Management Board and supervises the activities of the Management Board. The Management Board
represents Marley Spoon and is responsible for the management of its affairs.
2.2
Supervisory Board (Non-Executive Directors)
Names and profiles of the people who served on the Supervisory Board during fiscal year 2020:
Deena Shiff was appointed Independent Chairman of the Supervisory Board of the Company in June 2018. Deena is currently
a Non-Executive Director of Appen Ltd. (ASX:APX), Pro Medicus Ltd. (ASX: PME) and Infrastructure Australia. She is also on
the Boards of not-for-profit organizations including Opera Australia. Deena was until February 2018 on the board of the
Citadel Group (ASX:CGL) where she chaired the Audit and Risk committee (ARC).
Deena was the first female Group Managing Director at Telstra, running Telstra Wholesale and then Telstra Business. In 2011,
Deena established Telstra’s corporate venture capital arm, Telstra Ventures. In the 1990s, Deena was a Partner at Mallesons
Stephens Jaques (now King & Wood Mallesons) and prior to that was an in-house counsel and regulatory advisor. Deena
received a B.Sc. (Econ) Hons from the London School of Economics and a BA (Law) Hons from the University of Cambridge.
Deena was admitted as a barrister at the Inns of Court (Gray’s Inn, UK) and as a solicitor in Australia. Deena is also a Fellow
of the Australian Institute of Company Directors and is a graduate of the International Company Directors Course (A.I.C.D.,
Hong Kong).
Kim Anderson was appointed to the Supervisory Board of the Company in June 2018. Kim is a Non-Executive Director of ASX
listed companies Carsales.com Ltd (ASX: CAR), WPP AUNZ (ASX: WPP) and Infomedia Ltd (ASX: IFM). She is also a director of
the Sax Institute. Kim has worked for a variety of book publishers and media proprietors, including John Fairfax and Sons,
Publishing and Broadcasting Limited, HarperCollins New York and the Nine Television Network, and has also played a key role
in the online portal Ninemsn. In 2004, Kim joined Southern Star Entertainment as chief executive officer, before moving to the
US as chief executive officer and founder of The Reading Room, Inc. Kim attended the University of Sydney (BA) and UTS
(Postgraduate Diploma in Library and Information Science). Kim chairs Marley Spoon’s Nominations and Remuneration
Committee (NRC).
Christoph Schuh was appointed to the Supervisory Board of the Company in April 2018, having served as a member of the
advisory board of the Company prior to its conversion to a German stock corporation. Christoph Schuh has more than 20
years of experience investing in and operating digital companies. He is currently a Partner at Lakestar, a European Venture
Capital firm, where he represents the company on multiple corporate boards, including Marley Spoon’s. Christoph has been
a co-founder and previous Management Board member of Tomorrow Focus AG, an internet portfolio player listed on the
Frankfurt Stock Exchange. Fix spacing Previously, he worked for the media conglomerates Bertelsmann and Burda in various
management roles and acted as an advisor at different companies, such as the private equity firm BC Partners and the
investment bank GC Altium. Christoph received a diploma with distinction in Business Administration and Economics from
the University of Cologne.
Robin Low has been an appointed member of the Supervisory Board, effective 29 January 2020, for the remainder of the
Supervisory Board’s Initial Term. Robin currently holds ASX listed directorships with Appen Ltd. (ASX:APX), AUB Group Limited
(ASX:AUB) and IPH Limited (ASX:IPH). Until February 2020, Robin was on the board of CSG Limited (ASX:CSV) where she chaired
the Audit and Risk Committee. She was with PricewaterhouseCoopers for over 28 years where she was a partner specializing in
audit and risk management. Robin is past deputy chairman of the Auditing and Assurance Standards board and has also been a
member of the Australian Reinsurance Pool Corporation. Her not-for-profit directorships are Guide Dogs NSW/ACT, Primary
Ethics and Public Education Foundation. Robin chairs Marley Spoon’s Audit and Risk Committee.
IR.MARLEYSPOON.COM 32
2.3 Management Board (Executive Directors)
Names and profiles of the people who served on the Management Board during fiscal year 2020:
Fabian Siegel founded Marley Spoon in May 2014 with Till Neatby and is the current Chief Executive Officer (CEO) of the
Company. Fabian has an entrepreneurial background, having co-founded global online restaurant food delivery service Delivery
Hero in 2010 (listed on the Frankfurt Stock Exchange in June 2017). He also co-founded Germany’s first online auction business
(Auktionet in 1996), served as CTO in Europe’s online payments services brands (ClickandBuy in 2000), co-founded a financial
services startup (Strateer Inc. in 2008), and served as President & COO of a browser technology company (Klikin Inc. in 2009).
Immediately prior to Marley Spoon, Fabian was a Partner at Global Founders Capital.
Jennifer Bernstein was appointed to the Management Board in October 2020 and serves as Marley Spoon’s Chief Financial
Officer (CFO). Jennifer’s responsibilities as CFO at Marley Spoon include accounting, controllership, financial reporting and
analysis and treasury. Prior to joining Marley Spoon, she spent nearly 13 years in consumer goods at PepsiCo in various senior
finance leadership roles in the US and in Europe.
Julian Lange served as a member of the Management Board of Marley Spoon until his resignation became effective on 31
December 2020.
2.4
Supervisory Board meetings (including committee meetings)
The number of scheduled Board and committee meetings held during the year ended 31 December 2020 and the number of
meetings attended by each Director is set below:
Supervisory Board
ARC
NRC
A
14
14
14
14
B
14
14
14
14
A
4
-
4
4
B
4
-
3
4
A
3
3
-
3
B
3
3
-
3
Deena Shiff
Kim Anderson
Christoph Schuh
Robin Low
A: Meetings eligible to attend B: Meetings attended
2.5
Nomination and Remuneration Committee meetings
The Nomination and Remuneration Committee is chaired by Kim Anderson. In 2020, Deena Shiff and Robin Low were members
of the NRC.
In 2020 two NRC meetings were held on 29 January and 25 February as part of the Supervisory Board meetings held at these
dates. A third NRC meeting was held on 28 October. All members attended these meetings.
2.6
Audit and Risks Committee meetings
In 2020, the ARC was chaired by Ms. Robin Low. Members were Deena Shiff and Christoph Schuh.
In 2020 four ARC meetings were held on 25 February, 15 May, 26 August and 23 November as part of the Supervisory Board
meetings held on those dates. All members attended three of these meetings. In one of the meetings, Christoph Schuh was
excused.
2.7
Remuneration Practice
Supervisory Board (Non-Executive Directors)
2.7.1
The remuneration practice for the Supervisory Board is discussed in detail in section 5 of the Remuneration Report.
IR.MARLEYSPOON.COM 33
2.7.2 Management Board (Executive Directors)
The remuneration practice for the Management Board is discussed in detail in section 3 of the Remuneration Report.
2.8
Operating result
In 2020 revenues were up EUR 124.4 million or 96% to EUR 254.0 million compared with the 2019 financial year (EUR 129.6
million), or 101% on a constant currency basis. By segment, the major growth was in the US +126%, followed by AU +76% and
EU +66%. The revenue growth was driven by an increase in active subscribers totaling 227 thousand at the end of the fourth
quarter of 2020, up 83% from the previous corresponding period. Strong repeat purchases also contributed to the
Company’s growth.
EBIT was EUR (7.4) million in 2020, compared to (34.8) million in 2019. This lower loss was due to the increase of global
contribution margin to 29% in 2020 compared to 25% in 2019.
2.9
Review of operations
2020 was a historic and challenging year, starting with Australia’s bushfires followed by the global COVID-19 pandemic. Marley
Spoon responded to a range of operational challenges, including rising input costs, labor shortages stemming from a surge in
ecommerce, and supply disruptions. Despite these headwinds, the Company delivered outstanding performance, responding
to an acceleration of customer adoption of online shopping which led to a very favorable customer acquisition environment.
Revenue for the full year grew 101% on a constant currency basis, reaching EUR 254.0 million, with every operating segment
contributing. Contribution margin expanded 4 percentage points to 29%, as a result of increased scale and operational
efficiencies. The significant growth in both topline and margin enabled Marley Spoon to deliver positive Operating EBITDA for
the first time in Q2 2020, a performance it repeated in the subsequent two quarters, achieving breakeven for the full year. The
US delivered three quarters of positive Operating EBITDA alongside Australia. Excluding headquarter costs, Europe was close to
breakeven. Marley Spoon also achieved a first in the Company’s history, delivering positive Cash Flow from Operating Activities
for the full year.
We invested in proprietary digital technology that will enable greater choice and personalization. We realized marketing
efficiency by reducing our marketing budget as a percentage of Net Revenue from 26% to 15%. Finally, we expanded our
manufacturing capacity with the opening of the Company’s 7th fulfillment center while laying the groundwork for further
capacity expansion in Australia and the US.
In addition, we launched the Dinnerly brand in Germany in 2020, advancing our portfolio expansion strategy.
2.10
Significant changes in the State of Affairs
In April 2020, Marley Spoon extended its licensing partnership with Martha Stewart Living Omnimedia until the end of 2023
and restructured its royalty payments leading to reduced annual payments. Marley Spoon opened its third fulfillment center in
Australia in December 2020 in Western Australia (Perth). We also began construction on an expanded fulfillment center in
Sydney, scheduled for completion in 2021.
In addition, Marley Spoon successfully completed two equity funding rounds, providing capital to finance the further growth of
the business, the proceeds of which enabled the Company to retire its senior secured debt facility. Finally, three convertible
bondholders exercised their conversion rights of interest-bearing bonds to equity. Please see note 6.7 to the Consolidated
Financial Statements for details.
2.11 Principal Activities
Marley Spoon is a subscription-based weekly meal kit service that services customers in three primary regions: the United
States, Australia and Europe (servicing Austria, Belgium, Denmark, Germany, the Netherlands and Sweden). A meal kit is a box,
usually sent directly to a customer’s home, which includes the required quantity of ingredients to cook, typically two or more
meals, along with step-by-step recipe instructions.
No significant change in the nature of these activities occurred during the year.
2.12
Events after the balance sheet date
EUR 2.5 million loan repayment to Berliner Volksbank (BVB)
On 29 January 2021, the Company retired the 2018 unsecured loan in its entirety, repaying the outstanding aggregate
amount of EUR 2.5 million.
IR.MARLEYSPOON.COM 34
New Market
In February 2021, Marley Spoon began deliveries of Dinnerly to the Netherlands. The meal kits are shipped from
the Company‘s fulfilment center located in the Netherlands.
New Leased Facility
On 3 February 2021 the Company signed a 10-year lease for a new fulfilment center facility in Tracy, California, adding
additional capacity which will enable the US segment to respond to continued demand for Marley Spoon's products.
2.13
Environmental issues
The Company is compliant with all relevant national and local laws as well as regulations in relation to environmental
performance, management and reporting. In 2020, there was no reportable incident recorded.
2.14 Dividends
Marley Spoon did not pay any dividends in 2020.
2.15
Share Options
The Company has set up a Share Option plan for employees and members of the Management Board. Please see note 8.2 to
the Consolidated Financial Statements for details.
As at 31 December 2020, the Company had 2 convertible bonds (Wandelschuldverschreibungen) issued and outstanding to the
following holders:
•
Two secured convertible bonds, in the principal amount of AUD 4,047,250 (WOW II Bond) and in the principal amount
of AUD 23,000 thousand (WOW I Bond, tranche 2) outstanding with Woolworths Group Ltd. (WOW).
Please see note 6.7 to the Consolidated Financial Statements for details.
2.16
Indemnifying office or auditor
During the financial year 2020, Marley Spoon has paid insurance premiums in respect of directors’ and officers’ liability
insurance contracts (D&O). The D&O insures each person who is or has been a director or officer of the Company or its
subsidiaries against certain liabilities arising in the course of their duties to the Company and its subsidiaries.
2.17 Proceedings on behalf of the Company
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceedings to
which the Company is party for the purpose of taking responsibility on behalf of the Company for all or any part of those
proceedings. Marley Spoon Group was not party to any such proceedings during the year.
IR.MARLEYSPOON.COM 35
Berlin, 24 February 2021
For the Supervisory Board: Deena Shiff (Chairman)
For the Management Board: Fabian Siegel (CEO)
IR.MARLEYSPOON.COM 36
3 Shareholder information
Shareholder information required by the Australian Securities Exchange Limited (ASX) Listing Rules and not disclosed elsewhere
in this document is set out below.
The Share capital of the Company is divided into 256,025 no-par-value Shares (Shares without nominal value) (Shares). In
accordance with the Company’s prospectus dated 6 June 2018, 1,000 CHESS Depositary Interests (CDIs) equates to 1 Share in
the Company. As at the date of this Report, 256,025,000 CDIs are issued which represent all 256,025 Shares in the Company.
The following information is provided on a consolidated basis:
3.1
Link to Marley Spoon’s Corporate Governance Statement
In accordance with the 4th edition of the ASX Corporate Governance Council’s Corporate Governance Principles and
Recommendations (Governance Principles), the 2020 Corporate Governance Statement, as approved by the Supervisory
Board, is available on the Company’s website at: https://ir.marleyspoon.com/investor-centre/. The Corporate Governance
Statement evaluates the extent to which Marley Spoon has followed the Governance Principles during the 2020 financial year.
3.2
Substantial Shareholders
The number of securities held by substantial beneficial Shareholders is set out below:
Shareholder
Conifer Capital Management/Acacia (New York)
Union Square Ventures (New York)
Mr. Fabian Siegel (Berlin)*
Perennial Value Management (Sydney)
% IC
18.89
16.78
9.61
8.49
* A total of 7,416,982 CDIs is held to satisfy up to an equivalent number of granted obligations under the Company's Existing Option Rights Plan (as defined in the
CDIs
48,368,423
42,962,000
24,613,433
21,729,993
IPO prospectus dated 6 June 2018)
3.3
Number of security holders and securities on issue
Marley Spoon has issued the following securities:
a.
256,025 no-par-value Shares (Shares without nominal value) held by 1 Shareholder (Chess Depositary Nominees Pty Ltd.;
“CDN”);
256,025,000 CDIs held by 3,277 CDI holders (as of 31 December 2020) representing 256,025 Shares of (a);
7,417 Employee Share Options (Options) held by 278 Option holders;
2 convertible bonds (Wandelschuldverschreibungen) held by 1 bondholder.
b.
c.
d.
3.4
Voting rights
Shares
The voting rights attached to Shares are one vote per Share, which can be exercised in person or by proxy at the Company’s
general meeting following registration with the Company and presentation of proof of ownership / representation right of the
respective Shares.
CDIs
CDI holders may attend and vote at the Company’s general meeting by doing any of the following:
•
•
•
Instructing CDN to vote the Shares underlying the CDIs in a particular manner;
Informing CDN that they wish to nominate themselves or another person to be appointed as CDN’s proxy with
respect to their Shares underlying the CDIs for the purpose of attending and voting at the general meeting; or
Converting their CDIs into Shares and voting these at the general meeting. CDI holders will be entitled to one vote for
every 1,000 CDIs they hold.
IR.MARLEYSPOON.COM 37
Warrants
Warrant holders do not have any voting rights on the Warrants held by them.
Options
Option holders do not have any voting rights on the Options held by them.
Convertible Bonds
Bondholders do not have any voting rights on the convertible bonds held by them.
3.5
Distribution of security holders
Range
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Category
No. of CDIs
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
101,000 and over
Total
CDIs (as at 31 December 2020)
Securities
238,042,435
11,500,431
3,015,356
2,771,480
695,298
256,025,000
%
92.98
4.49
1.18
1.08
0.27
100.00
No. of holders
74
389
382
1.066
1,370
3,281
Unquoted Convertible Bonds
(as at 31 December 2020)
No. of CDIs
-
-
-
-
9,755,734
9,755,734
Total Holders
-
-
-
-
1
1
%
2.26
11.86
11.64
32.49
41.76
100.00
%
-
-
-
-
100
100
3.6
Unmarketable parcel of Shares
The number of CDI holders holding less than a marketable parcel of securities (being A$500) is 170 (as of 31 December 2020).
3.7
Twenty largest Shareholders
Details of the 20 largest direct CDI holders by registered Shareholding are as follows:
Rank
Name
31-Dec-20
% IC
1
2
3
4
5
6
7
8
9
10
11
12
13
14
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
NATIONAL NOMINEES LIMITED
AKW CAPITAL GMBH
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
LAKESTAR I LP
QD INVESTMENTS LTD
BNP PARIBAS NOMINEES PTY LTD
MARLEY SPOON EMPLOYEE TRUST UG
BNP PARIBAS NOMS PTY LTD
CS THIRD NOMINEES PTY LIMITED
MEXATTAX GMBH
51,821,167
43,393,692
18,436,338
16,571,272
16,406,451
14,816,528
11,856,503
9,008,000
7,455,000
6,813,028
6,618,246
5,634,399
3,460,195
3,016,000
20.24
16.95
7.20
6.7
6.41
5.79
4.63
3.52
2.91
2.66
2.58
2.20
1.35
1.18
IR.MARLEYSPOON.COM 38
15
16
17
18
19
20
OMPL PTY LIMITED
CBC CO PTY LIMITED
UBS NOMINEES PTY LTD
BOND STREET CUSTODIANS LIMITED
VOSTOK NEW VENTURES (CYPRUS) LIMITED
MR KENNETH JOSEPH HALL
Total
Grand total
3.8
Name of the entity’s secretary
2,462,000
1,514,812
1,001,200
1,000,000
996,000
960,000
223,240,831
256,025,000
0.96
0.59
0.39
0.39
0.39
0.37
87.19
100.00
Dr. Mathias Hansen (General Counsel) has been appointed to act in a company secretarial role.
Address and telephone number of the company’s registered office in Australia; and of its principle
3.9
administrative office, if both are different
The Company’s registered office and principal place of business is: Paul-Lincke-Ufer 39/40, 10999 Berlin, Germany (P:
+491716115916). The Australian office is located at c/o MarleySpoon Pty Ltd (AU), Suite 2.03, Building 2, Sydney Corporate
Park, 190 Bourke Road, Alexandria NSW 2015 (P: +612 6145 2910).
Address and telephone number of each office at which a register of securities, register of depositary
3.10
receipts or other facilities for registration of transfers is kept
Link Market Services, Locked Bag A14, Sydney South NSW 1235, P: +61 1300 554 474 (toll free within Australia).
3.11
A list of other stock exchanges on which any of the company’s securities are quoted
Marley Spoon’s securities are not listed on any other stock exchange.
The number and class of restricted securities or securities subject to voluntary escrow that are on issue
3.12
and the date the escrow period ends
There are no restricted securities or securities in escrow as of period end.
3.13
Unquoted securities
Shares
None
Warrants
None
Options
7,417 Employee Share Options (Options) held by 278 Option holders.
Convertible Bonds
There are 2 unquoted convertible bonds held by 1 bondholder. Details of holders of 20% or more of the convertible bonds are
as follows:
Name
W23 INVESTMENTS PTY LIMITED*
* an affiliate of Woolworths Group Limited (ASX: WOW)
Number
2
%
100
IR.MARLEYSPOON.COM 39
3.14
On market buy-back
There is no current on market buy-back.
3.15
Statement regarding use of cash assets
During the period between 1 January 2020 and 31 December 2020, the Company used its cash and assets readily convertible to
cash in a way consistent with its business objectives set out in the 2019 Annual Report dated 25 February 2020, in public
disclosures made during the reporting period, and in this annual report.
The following is a summary of any issues of securities approved for the purposes of Item 7 of section
3.16
611 of the Corporations act which have not yet been completed.
N/A
3.17
N/A
If during the reporting period any securities were purchased on-market:
3.18
Other
In accordance with the ASX decision confirming Marley Spoon's admission to the ASX, Marley Spoon provides the following
information:
•
•
•
names of all substantial holders in the Company: see Sec. 3.7 above;
the place of the Company’s incorporation is Berlin, Germany;
the Company is not subject to chapters 6, 6A, 6B and 6C of the Corporations Act 2001 (Cth) dealing with the
acquisition of its Shares (including substantial holdings and takeovers);
there are no limitations on the acquisition of securities imposed by the jurisdiction in which the Company is
incorporated or registered;
there are no limitations on the acquisition of securities imposed under the Company’s constitution.
•
•
4
Corporate Governance Statement
The Company's Corporate Governance Statement for the financial year 2020 is published separately from the
management report on the Company's website: https://ir.marleyspoon.com/investor-centre/
IR.MARLEYSPOON.COM 40
GROUP CONSOLIDATED FINANCIAL STATEMENTS
1
Financial Statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
EUR in thousands
ASSETS
Non-current Assets
Property, plant, and equipment
Right-of-use assets
Intangible assets
Non-current financial assets
Total non-current assets
Current Assets
Inventories
Trade Receivables
Other non-financial assets
Cash and cash equivalents
Total Current Assets
Total Assets
LIABILITIES AND EQUITY
Lease liabilities
Interest bearing loans and borrowings
Derivative financial instruments
Total non-current liabilities
Current liabilities
Trade and other payables
Derivative financial instruments
Contract liabilities
Interest bearing loans and borrowings
Lease liabilities – current
Other financial liabilities
Other non-financial liabilities
Total Current Liabilities
Equity
Share capital
Capital reserve
Other reserves
Currency translation reserve
Accumulated net earnings (losses)
Equity attributable to equity holders of the
parent
Non-controlling interests
Total Equity
Total Liabilities and Equity
Note
2020
2019
7.1
7.2
7.3
6.4
7.5
6.5
7.7
6.6
7.2
6.7
6.2
6.8
6.2
7.8
6.7
7.2
6.9
7.8
8.1
8.1
8.2
8.3
11,163
9,878
4,939
3,044
29,024
6,570
697
2,356
34,438
44,061
73,085
6,746
17,725
3,479
27,950
17,472
215
944
3,433
4,591
7,864
2,488
37,008
256
229,671
6,166
(550)
(226,485)
9,058
(930)
8,127
73,085
7,716
12,432
3,439
1,356
24,943
3,736
522
2,352
5,433
12,044
36,987
8,192
36,369
2,521
47,082
12,919
62
234
773
5,143
5,279
1,213
25,622
159
99,417
5,736
17
(140,246)
(34,916)
(800)
(35,716)
36,987
IR.MARLEYSPOON.COM 41
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Note
2020
2019
254,033
(133,287)
120,746
(46,601)
(39,294)
(42,279)
(7,428)
64
(7,450)
(71,414)
(86,229)
(140)
(86,369)
(86,239)
(130)
(567)
(567)
129,558
(71,763)
57,795
(25,463)
(34,243)
(32,873)
(34,784)
37
(5,635)
5,540
(34,841)
(31)
(34,872)
(34,549)
(324)
1
1
(86,936)
(34,872)
(86,806)
(130)
(0.46)
(34,548)
(324)
(0.24)
3
4.1
4.1
4.1
4.1
4.2
4.2
4.2
5
8.3
EUR in thousands
Revenue
Cost of goods sold
Gross profit
Fulfilment expenses
Marketing expenses
General & administrative expenses
Earnings before interest & taxes (EBIT)
Financing income
Financing expenses
Derivative Instruments
Earnings before taxes (EBT)
Income tax expenses
Loss for the year
Net income / (loss) for the year attributed to:
Equity holders of the parent
Non-controlling interest
Other comprehensive income / (loss) for the
year
Items that may be subsequently reclassified to
profit or loss
Foreign exchange effects
Total comprehensive income / (loss) for the
year, net of tax
Total comprehensive income attributable to:
Equity holders of the parent
Non-controlling interests
Basic and diluted earnings per Share
15
IR.MARLEYSPOON.COM 42
STATEMENT OF CHANGES IN EQUITY 2020
EUR in thousands
Note
Share
Capital
Treasury
Shares
Capital
Reserves
Other
Reserves
Accumulated
Net Earnings /
(Losses)
Currency
Translation
Reserve
Total
Attributable
NCI
Equity
Attributable to Owners of the Parent
Balance as at 1 January 2020
Net income / (loss) for the period
Other comprehensive income (loss)
Total Comprehensive Income
Issuance of Share capital
Conversion of bonds
Exercise of Warrants
Receipt of Shares for employee option
exercise
Shares transferred to Employees
Cash on Exercise of employee options
Employee Share-based payment expense
Transaction costs for issuance of Shares
Balance as at
31 December 2020
8.1
8.1
8.1
8.1
8.1
8.1
8.2
159
-
-
-
33
55
9
-
-
-
256
STATEMENT OF CHANGES IN EQUITY 2019
99,417
-
-
-
43,785
72,661
15,965
1,667
(1,667)
119
-
(2,276)
5,736
-
-
-
-
-
-
430
-
(2)
2
(140,246)
(86,239)
-
(86,239)
-
-
-
17
-
(567)
(567)
-
-
-
(34,916)
(86,239)
(567)
(86,806)
43,818
72,716
15,974
-
-
-
-
-
-
119
430
(2,276)
(800)
(130)
(130)
-
-
-
-
-
-
(35,715)
(86,369)
(567)
(86,936)
43,818
72,716
15,974
1,667
(1.667)
119
430
(2,276)
229,671
6,166
(226,485)
(550)
9,058
(930)
8,127
EUR in thousands
Balance as at 1 January 2019
Net income / (loss) for the period
Total Comprehensive Income
Issuance of Share capital
Employee Share-based payment
expense
Balances as at
31 December 2019
Attributable to Owners of the Parent
Note
Share
Capital
Capital
Reserves
Other
Reserves
Accumulated Net
Earnings /
(Losses)
Currency
Translation
Reserve
Total
Attributable to
NCI
Equity
140
95,458
5,368
-
-
18
-
-
-
3,959
-
-
-
-
369
(105,692)
(34,554)
(140,246)
-
-
8.1
8.2
17
-
17
-
-
(4,709)
(34,554)
(39,262)
3,977
369
(477)
(323)
(800)
-
-
(5,186)
(34,877)
(40,061)
3,977
369
159
99,417
5,736
(140,246)
17
(34,916)
(800)
(35,715)
IR.MARLEYSPOON.COM 43
STATEMENT OF CASH FLOWS
EUR in thousands
Operating activities
Net income for the period (loss)
Adjustments for:
Note
2020
2019
(86,369)
(34,872)
Depreciation and impairment of property, plant, and equipment
Depreciation of right-of-use assets
Amortization and impairment of intangible assets
Increase (decrease) in Share-based payments
Financing income and expense
Interest paid
Other non-cash movements
7.1
7.2
7.3
8.2
4.2
4.2
8.3
Working capital adjustments:
Decrease (increase) in inventory
Increase (decrease) in accounts payable and accrued expenses
Decrease (increase) receivables
Increase (decrease) in other assets and liabilities
7.5
6.8/6.9
6.5
6.4/7.7/7.8
Net cash flows from operating activities
Investing activities
Purchase of property, plant, and equipment
Purchase/development of intangible assets
Net cash flows used in investing activities
Financing activities
Proceeds from the issuance of Share capital
Proceeds from exercise of Warrants
Proceeds from employee Option exercise
Costs from the issuance of Share capital
Proceeds from borrowings
Cost from borrowings
Paid interests
Repayment of borrowings
Lease payments
Net cash flows from/ (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Net foreign exchange difference
Cash and cash equivalents as at 1 January
Cash and cash equivalents as at 31 December
7.1
7.3
8.1
8.1
8.1
8.1
6.7
6.7
6.7
7.2
1,227
3,510
1,755
430
78,801
(288)
470
(2,834)
7,466
(175)
413
4,407
(5,234)
(3,333)
(8,568)
43,827
2,013
119
(2,276)
3,464
(474)
(749)
(7,563)
(4,668)
33,694
29,533
(527)
5,433
34,438
948
2,986
688
369
58
(974)
(292)
(296)
664
26
422
(30,273)
(4,405)
(1,848)
(6,253)
4,072
-
-
(95)
43,199
(653)
(469)
(9,068)
(3,679)
33,308
(3,218)
8
8,643
5,433
IR.MARLEYSPOON.COM 44
How numbers are calculated
This section provides additional information about those individual line items in the financial statements that the Directors
consider most relevant in the context of the operations of the group, including:
Description of the business and segment information
Revenue
Other income and expense items
Income tax expense
Financial assets and liabilities
Non-financial assets and liabilities
Equity
Critical estimates, judgments and errors
Financial risk management
Capital management
Group structure
IR.MARLEYSPOON.COM 45
2
Description of the business & segment information
These financial statements are for the Group consisting of Marley Spoon AG and its subsidiaries (hereafter “the Group”). The
Group’s principal business activity is to create original recipes, which are sent along with fresh, high-quality, seasonal
ingredients directly to customers for them to prepare, cook, and enjoy. Customers can choose which recipes they would like to
receive in a given week, and receive the pre-portioned ingredients delivered to their doorstep by third-party logistics partners.
The Company is registered in the commercial register of Charlottenburg (Berlin) under HR B 195994B. It is domiciled in
Germany and has its registered office at Paul-Lincke-Ufer 39/40, 10999 Berlin (Germany).
The activities currently span nine countries: Australia (AU), Austria (EU), Belgium (EU), Denmark (EU), Germany (EU), the
Netherlands (EU), Portugal (EU), Sweden (EU) and the United States of America (US). These activities comprise three operating
segments which are Australia (AU), Europe (EU), and the United States of America (US).
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision
Maker (CODM). The CODM is responsible for allocating resources and assessing performance of the operating segments and has
been defined as the Global Chief Executive Officer (CEO) and Chief Financial Officer (CFO).
Segment results that are reported include items directly attributable to a segment as well as those that can be allocated on a
reasonable basis.
The accounting policies of the operating segments are the same as those described in note 17 (“Summary of significant
accounting policies”). The Group accounts for inter-segment sales and transfers as if the sales or transfers were to third parties
where the arm’s length principle applies.
The Group does not separate operating segments based on the type of products, since the nature of the product, production
processes and the method used for distribution are similar across all product ranges. In addition, no segmentation is provided
on the Group assets and liabilities since these amounts are not regularly reviewed by the CODM.
Segment reporting
The reported operating segments are strategic business units that are managed separately. The Group’s CODM reviews the
segment as per the region. The “Holdings” column represents royalty charges paid to the Group and interest income on loans
with subsidiaries. The Group consolidation (“Conso” column) eliminates intercompany transactions.
Operating EBITDA, a measure of segment performance, excludes the effects of special items such as equity-settled Share-based
payments, unrealized gains or losses on financial instruments, as well as significant items of income and expenditure that are
the result of an isolated, non-recurring event.
EUR in thousands
Total revenue
Internal revenue
External revenue
Australia
USA
127,220 85,981
Europe
40,832
2020
Total
254,033
-
-
-
-
127,220
85,981
Contribution margin 1
32,695
31,358
Operating EBITDA
4,084
9,713
(14,303)
40,832
10,093
254,033
74,146
(506)
Internal charges &
royalties
Special items2
Depreciation and
amortization
(7,380)
(4,502)
(2,640)
(14,523)
-
-
(430)
(430)
(2,688)
(1,504)
(2,300)
(6,492)
EBIT
Intercompany interest
(5,985)
(3,125)
3,707
(1,024)
(19,673)
(900)
(21,951)
(5,049)
IR.MARLEYSPOON.COM 46
Holdings
19,572
19,572
-
Conso
(19,572)
(19,572)
Group
254,033
-
-
254,033
19,572
(19,572)
74,146
(506)
-
-
-
-
-
-
14,523
-
-
-
(430)
(6,492)
14,523
5,049
(7,428)
-
Interest on lease
liabilities
(1,188)
(127)
(448)
(1,763)
External financing costs
(1,433)
108
(4,299)
(5,624)
-
-
Fair value changes
Derivative financial
instruments
-
(187)
-
(187)
(71,226)
-
-
-
(1,763)
(5,624)
(71,414)
Earnings before tax
(11,731)
2,477
(25,320)
(34,575)
(71,226)
19,572
(86,229)
2019
EUR in thousands
USA
Australia
Europe
Total
Holdings
Conso
Group
Total revenue
56,122
48,830
24,605
129,558
12,157
(12,157)
129,558
Internal revenue
-
-
-
-
12,157
(12,157)
-
External revenue
56,122
48,830
24,605
129,558
-
-
129,558
Contribution margin 1
11,356
16,053
4,924
32,332
12,157
(12,157)
32.332
Operating EBITDA
(13,023)
(1,688)
(15,088)
(29,799)
Internal charges &
royalty
Special items2
Depreciation and
amortization
(3,404)
(2,994
(1.030)
(7,429)
-
-
(369)
(369)
(2,229)
(889)
(1,503)
(4,621)
EBIT
(18,657)
(5,571)
(17,990)
(42,218)
Intercompany interest
(3,108)
Interest on lease
liabilities
(1,165)
(889
(229)
(732)
(4,729)
(199)
(1,593)
External financing costs
(343)
(62)
(3,599)
(4,004)
-
-
-
-
-
-
Fair value changes
derivative financial
instruments
-
-
-
-
5,540
-
(29,799)
7,429
-
-
-
(369)
(4,621)
7,429
(34,784)
4,729
-
(1,593)
(4,004)
5,540
-
-
Earnings before tax
(23,273)
(6,751)
(22,520)
(52,544)
5,540
12,157
(34,841)
(1)
(2)
Contribution margin consists of revenue from external customers less cost of goods sold and fulfillment expenses.
Special items consist of the following items: employee stock option program (ESOP) expense EUR 430 thousand
(2019: EUR 369 thousand).
The 2020 revenues generated within Germany amounted to EUR 15,355 thousand (2019: EUR 7,568 thousand). Revenues from
2020 for all other countries amounted to EUR 238,678 thousand (2019: EUR 121,989 thousand). The Group recognizes its
segments based on geographical region. The United States of America and Australia represent the largest markets and are
separately segmented. Revenues in the Netherlands, Belgium, Denmark, Sweden, Portugal, Austria, and Germany are
segmented as Europe.
The Group has intercompany transactions that cross continents relating to intercompany financing transactions between the
parent and the subsidiaries, the associated interest, royalty charges, and group performed low value-added services. The
royalty and interest charges are based on independent benchmark studies.
IR.MARLEYSPOON.COM 47
Revenue
3
Marley Spoon provides delightful, market fresh, and easy cooking solutions to its customers in eight countries. The product is a
meal kit, which is delivered on a weekly basis directly to customers at their designated delivery time and it contains all key
ingredients required to prepare delightful homemade meals.
The business model differs from the conventional grocery supply chain by eliminating the need for intermediaries, such as
wholesalers or distributors, and connecting producers directly with the customer. Ingredients can be purchased just-in-time,
are packed in temperature conditioned manufacturing centers, and are delivered from there with insulated packaging and/or
chilled transportation.
External revenue includes income from the core activities of the Group, which are sales of meal kits to customers. Internal
revenue results from inter-company recharges of goods or services between Group companies. No single customer accounts for
more than 10% of external revenue.
The Group complies with IFRS 15 requirements to disaggregate revenue from contracts with customers by geographical region
(refer to Note 2).
Other income and expense items
4
This note provides a disaggregation of the items included in financing income and financing expense in the Statement of
Comprehensive Income and an analysis of operating expenses by nature. Information about specific profit and loss items (such
as gains and losses in relation to financial instruments) is disclosed in the related balance sheet notes.
4.1
Breakdown of expenses by nature
EUR in thousands
Raw materials and direct fulfillment costs
Other operating expense
Depreciation and amortization
Employee benefits expenses
Wages and salaries
Social security costs
Defined contribution plan expenses
Share-based payment expense
Cost of Goods
Sold
Fulfilment
Expense
Marketing
Expense
2020
107,754
-
3,706
20,130
762
936
-
46,601
-
-
-
-
-
-
-
35,870
-
3,158
119
147
-
Total
133,287
46,601
39,294
General &
Administrative
-
15,226
2,786
21,946
848
1,042
430
42,279
2019
Fulfilment
Expense
Marketing
Expense
General &
Administrative
EUR in thousands
Raw materials and direct fulfillment costs
Other operating expense
Depreciation and amortization
Employee benefits expenses
Wages and salaries
Social security costs
Defined contribution plan expenses
Share-based payment expense
Cost of
Goods Sold
58,122
-
2,504
9,727
726
684
-
25,463
-
-
-
-
-
-
-
31,030
-
2,852
186
175
-
Total
71,763
25,463
34,243
IR.MARLEYSPOON.COM 48
-
9,161
1,278
19,585
1,277
1,203
369
32,873
Financing income and expenses
4.2
Financing income and expenses are those associated with the interest paid on borrowings, derivative financial instruments and
the adjustments for loans which are valued at amortized costs. The Group measures financial instruments such as derivatives, at
fair value at each balance sheet date. The changes in the fair value of the derivative instruments are recognized on the Group’s
earnings before tax.
EUR in thousands
Interest earned on bank balances
Currency translation gains (losses)
Financing Income
EUR in thousands
Nominal interest expense on borrowings
Interest on lease liabilities
Retirement cost on borrowings
Effects of effective interest method on borrowings
Financing Expense
2020
2020
31
33
64
(1,707)
(1,763)
(474)
(3,506)
(7,450)
2019
2019
EUR in thousands
2020
2019
Derivative financial instrument changes in fair value
Derivative Instrument
(71,414)
(71,414)
29
8
37
(3,070)
(1,593)
-
(972)
(5,635)
5,540
5,540
Income Tax Expense
5
This note provides an analysis of the Group’s income tax expense, deferred tax position and how the tax expense is affected by
non-assessable and non-deductible items. It also explains significant estimates made in relation to the Group’s tax position and
effective tax rate.
EUR in thousands
Current tax expense
Deferred tax
EUR in thousands
EBT
Tax calculation at domestic tax rates applicable to results in the respective
jurisdiction
Tax impact of non-deductible expenses
Share-based payment expense
-
Fair value adjustments derivatives
-
Other
-
Taxes for prior years
Unrecognized tax losses for the year
Income tax benefit (expense) for the year
Effective tax rate
2020
(140)
-
2020
(86,229)
25,140
129
21,037
(183)
(114)
4,131
(140)
-%
2019
(31)
-
2019
(34,841)
9,513
109
(1,629)
15
0
8,039
(31)
-%
The weighted average applicable tax rate for the year ended 31 December 2020 was 29.2% (2019: 27.3%) which was derived
from the tax rate in each jurisdiction weighted by the relevant pre-tax loss. No numerical reconciliation of income tax expense
to prima facie tax payable has been calculated since no positions have been recognized in 2020.
IR.MARLEYSPOON.COM 49
6 Financial assets and financial liabilities
This note provides information about the Group’s financial instruments, including:
-
-
-
an overview of all financial instruments held, including specific information about each type of instrument
related accounting policies
information about determining the fair value of the instruments, including judgements and estimation uncertainty
involved.
6.1
Financial assets and financial liabilities
The Group holds the following financial instruments:
Financial Assets (EUR in thousands)
Notes
31 December 2020
31 December 2019
Financial assets measured at amortized cost
Non-current financial assets
Trade and other receivables
6.4
6.5
Total
3,044
697
3,741
1,356
522
1,878
Financial Liabilities (EUR in thousands)
Notes
31 December 2020
31 December 2019
Financial Liabilities measured at amortized cost
Borrowings (current & non-current)
Trade and other payables
Other financial liabilities
Financial Liabilities measured at fair value
Derivative financial instruments
Total
6.7
6.8
6.9
6.2
21,157
17,472
7,864
46,495
3,694
50,189
35,522
12,919
5,279
53,720
2,583
56,303
In accordance with IFRS 7.20 (a), net gains and losses of financial instruments are to be disclosed for each measurement
category in line with IFRS 9. The net results of the individual measurement categories pursuant to IFRS 9 are as follows:
Financial Assets and Liabilities (EUR in thousands)
2020
2019
Financial assets measured at amortized cost
Financial liabilities measured at amortized cost
Financial liabilities measured at fair value through profit and loss
Total
31
(7,417)
(71,414)
(78,801)
29
(5,306)
(5,220)
(57)
Derivative financial instruments
6.2
The derivative financial instruments break down as follows:
EUR in thousands
Warrant agreements
Forward derivatives
Derivative financial instruments – current
Convertible right on the bonds
Derivative financial instruments – non-current
Balance as at 31 December
31 December 2020
31 December 2019
-
215
215
3,479
3,479
3,694
6
56
62
2,521
2,521
2,583
IR.MARLEYSPOON.COM 50
Warrant agreements
The Group granted Warrants, which are classified as a derivative financial liability at the date of initial recognition and
recognized at fair value. An option pricing model is used to determine the fair value of the warrant agreements at the relevant
dates (level 3). Public market data, e.g., the risk-free interest rate (December 2019: 0.00%) and other input data were used.
Especially relevant is the Share price at valuation and balance sheet date (AUD 270 per Share as at 31 December 2019) and the
volatility (31 December 2019: 56.01 %). Gains and losses arising from changes in fair value are recognized in the Statement of
Comprehensive Income in the period during which they arise.
Forward derivative
The derivative financial instruments also include a forward exchange contract, and the fair value is defined by the current
exchange rate and the contractual terms (level 2).
Convertible bonds agreements
The Group issued convertible bonds during 2020 and 2019, which are partly classified as derivative financial liabilities at the
date of initial recognition and recognized at fair value. An option pricing model is used to determine the fair value of the
conversion rights at the relevant dates (level 3). Public market data, e.g., the risk-free interest rate (31 December 2020: 0.00%)
and other input data were used. Especially relevant is the Share price at valuation and balance sheet date (AUD 270 per Share),
the volatility (31 December 2020: 79.24%) as well as the maturity. Gains and losses arising from changes in fair value are
recognized in the Statement of Comprehensive Income in the period during which they arise. Please also refer to note 6.7.
Fair value of financial instruments
6.3
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to
sell the asset or transfer the liability takes place either:
-
-
in the principal market for the asset or liability or
in the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is
measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market
participants act in their own economic best interest.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the
fair value hierarchy. This is described, as follows, based on the lowest level input that is significant to the fair value
measurement as a whole:
Level 1 — quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 — valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable
Level 3 — valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable
For assets and liabilities that are recognized in the financial statements at fair value on a recurring basis, the Group determines
whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input
that is significant to the fair value measurement as a whole) at the end of each reporting period.
Set out below is a comparison by category for carrying amounts and fair values of all the Group's financial instruments that are
included in the financial statements.
IR.MARLEYSPOON.COM 51
EUR in thousands
Financial assets
Other non-current financial assets
Trade and other receivables
Cash and cash equivalents
Total
Financial liabilities
Borrowings (current & non-current)
Trade and other payables
Forward
Derivative financial instruments (non-
current)
Other financial liabilities
Total
Note
31 December 2020
31 December 2019
6.4
6.5
6.6
6.7
6.8
6.2
6.2
6.9
Fair Value
Hierarchy
n/a
n/a
n/a
Fair Value
Hierarchy
n/a
n/a
2
3
n/a
Carrying
Amount
3,044
697
Fair Value
3,044
697
34,438
34,438
38,180
38,180
Carrying
Amount
21,158
17,472
215
Fair Value
21,158
17,472
215
3,479
3,479
7,864
7,864
Carrying
Amount
1,356
522
5,433
7,311
Carrying
Amount
37,142
12,919
56
2,521
5,279
Fair Value
1,356
522
5,433
7,311
Fair Value
37,142
12,919
56
2,521
5,279
50,189
50,189
57,917
57,917
For liquid assets, other short-term financial instruments and other non-current financial assets, the fair values equal
approximately their carrying amounts at closing date. The Group measures derivatives at fair value at each balance sheet date.
The following table shows a reconciliation from the opening balances to the closing balances for Level 3 fair values including the
profit and loss impact.
EUR in thousands
2020
Convertible Options
Warrant
Balance as at 1 January
Issuances
Gains / (losses) included in profit & loss
Net change in the fair value
Transfers
Balance as at 31 December
EUR in thousands
Balance as at 1 January
Issuances
Gains / (losses) included in profit & loss
Net change in the fair value
Transfers
Balance as at 31 December
(2,521)
(927)
(57,308)
57,277
(3,479)
2019
Convertible Options
-
(8,027)
5,506
-
(2,521)
(6)
(929)
(13,017)
13,952
-
Warrant
(12)
-
6
-
(6)
For those financial assets and liabilities held at fair value at the end of 31 December 2020, a negative effect of EUR (56,870)
thousand was included in financing income in the Statement of Comprehensive Income which was attributable to financial
instruments that were already exercised during the period (31 December 2019: EUR 6 thousand).
IR.MARLEYSPOON.COM 52
Sensitivity analysis Warrant
Derivative financial liabilities resulting from warrant agreements are measured at fair value. The most significant parameter in
the applied option pricing model is the Share price of the company observable on the Australian Stock Exchange (ASX). The
sensitivity analysis for the Share price as at 31 December 2020 shows no impact to earnings as all Warrants were exercised
(2019: EUR 2 thousand, if the Share price was 10% higher).
Sensitivity analysis convertibles
Derivative financial liabilities resulting from convertible agreements are measured at fair value. The most significant parameter
in the applied option pricing model is the Share price of the company observable on the Australian Stock Exchange (ASX). The
sensitivity analysis for the Share price as at 31 December 2020 shows a potentially negative earnings effect of EUR 86 thousand
(2019: EUR 354 thousand) if the Share price was 10% higher.
Financial assets
Non-current financial assets
6.4
Other non-current financial assets are mainly driven by security deposits for leased properties and bank guarantees. These
deposits are subject to contractual restrictions and are therefore not available for general use by the Group and increased from
EUR 899 thousand at the end of 2019 to 3,018 thousand on December 31, 2020.
EUR in thousands
Other non-current Financial Assets
31 December 2020
31 December 2019
3,044
1,356
Trade receivables
6.5
Trade receivables are amounts due from customers for goods sold in the ordinary course of business. If collection of the
amounts is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets.
The Group’s trade receivables are generally due for settlement within 30 days and therefore are all classified as current. The
Group’s impairment policy for trade and other receivables is outlined in note 10.2.
EUR in thousands
Trade and other receivables
31 December 2020
31 December 2019
697
522
The Group has EUR 26 thousand receivables against related parties. The Group has not recorded an allowance for uncollectible
amounts collected by Payment Service Providers (PSPs), which charge customers prior to delivery of the product, rendering the
collectability risk minimal. For amounts not collected by PSPs we refer to Note 10.2.
Cash and cash equivalents
6.6
Cash and cash equivalents are comprised as follows:
EUR in thousands
Cash at banks
31 December 2020
31 December 2019
34,438
5,433
The above figures reconcile to the amount of cash shown in the Statement of Cash Flows at the end of the financial year.
IR.MARLEYSPOON.COM 53
Financial Liabilities
Interest bearing loans and borrowings
6.7
The following table shows a reconciliation from the opening balances to the closing balances for loans and borrowings:
EUR in
thousands
Opening
Balance
1 January
2020
Proceeds
from
borrowings
Derivative
instruments
Repayments of
borrowings
Conversion
of bonds
Accrued
interest
and fees
Effects of
effective
interest
method on
borrowings
Retirement
cost
Transactions
costs
Exchange
rate
differences
BVB C
USV I
Acacia I
2,500
6,689
1,424
WOW I
14,322
1,799
2,321
6,459
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(6,824)
-
(8,536)
(1,773)
-
56
58
(1,425)
331
(2,133)
23
44
-
-
1,791
290
802
311
147
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
474
199
(308)
-
2,267
(927)
-
(1,573)
69
164
1,557
1,097
67
4
100
-
-
-
-
(666)
(68)
(4)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
29
2,017
-
-
98
-
37,141
3,464
(927)
(7,563)
(15,439)
581
3,506
474
199
(279)
21,157
Opening
Balance
1 January
2019
6,898
2,500
-
-
-
-
-
-
-
-
78
-
Proceeds from
borrowings
Derivative
instruments
Repayments of
borrowings
Conversion
of bonds
Accrued
interest
and fees
Effects of
effective
interest
method on
borrowings
Retirement
cost
Transactio
ns costs
Exchange
rate
differences
-
-
-
-
10,008
(4,204)
(844)
2,008
2,000
(6,898)
-
-
-
-
(2,000)
15,885
(1,951)
2,500
2,500
6,676
1,557
60
4
(800)
(228)
-
-
-
-
-
-
-
(87)
-
-83
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
607
122
-
340
52
46
64
-
11
-
-
-
736
138
-
47
47
3
-
-
-
-
1,241
972
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(458)
-
-
-
-
-
(194)
-
-
-
(653)
-
-
-
-
-
-
-
-
-
-
-
-
-
9,476
43,199
(8,027)
(9,068)
A - Moneda: Effective 16 August 2017, the Group entered into a EUR 6,000 thousand unsecured loan agreement with an affiliate of certain Shareholders. This
loan was repaid in full in 2019.
B - Loan 4 is associated with the financing of intangible assets. Total contract duration is three years and the loan remains outstanding at 31 December 2020.
C - Loan 8 or BVB: In December 2018, the Company entered into and fully drew an unsecured loan in the amount of EUR 2,500 thousand. The term of the loan
was January 2021, with interest payable on a quarterly basis in arrears. The loan was paid in full on 30 January 30 2021
IR.MARLEYSPOON.COM 54
Closing
Balance
31
December
2020
2,500
-
-
14,030
-
2,512
-
-
Closing
Balance
31
December
2019
-
2,500
6,689
1,424
-
14,322
1,799
2,321
6,459
1,557
67
4
37,141
USV II
WOW II
WTI
USV III
AU Asset
Financing
Loan 4 B
Other
Total
EUR in
thousands
Moneda A
BVB C
USV I
Acacia I
WC loan
WOW I
USV II
WOW II
WTI
AU asset
financing
Loan 4 B
Other
Total
Group’s total borrowing of EUR 21,158 thousand (2019: EUR 37,141 thousand) is comprised of the following arrangements:
USV I
USD 11,400 thousand Commercial Loan with Union Square Ventures
Effective as of 25 January 2019, the Company as the borrower, and two funds administered by Union Square Ventures (USV) as
the lenders, entered into an unsecured commercial loan agreement (USV CLA I) in the aggregate amount of USD 11,400
thousand. On 22 March 2019, the Company exercised its right to substitute the USV CLA I by issuing to USV two convertible
bonds (Wandelschuldverschreibungen) in the aggregate amount of USD 11,400 thousand (see directly below for details). These
convertible bonds were issued against the repayment and other claims under the USV CLA I being contribution in kind
(Sacheinlage) into the Company. Consequently, the USV CLA I was fully repaid and ceased to exist on 22 March 2019.
USD 11,400 thousand Convertible Bonds with Union Square Ventures
On 22 March 2019, the Company issued to USV two unsecured convertible bonds (Wandelschuldverschreibungen), one in the
amount of USD 10,888,140 (USV I A Bond) and one in the amount of USD 511,860 (USV I B Bond, and together with the USV I A
Bond, USV I Bonds) against contribution in kind (Sacheinlage). Until USV exercised their rights to convert USV I Bonds, the
following terms applied: The USV I Bonds have a term of 3 years from the issue date. They bear interest in the amount of USD
LIBOR + 5% p.a. payable at the end of the term, unless USV exercises its right to convert the USV I Bonds into securities in the
Company. The USV I Bonds can be converted into an aggregate amount of 32,127 Shares / 32,127 thousand CDIs in the
Company at any time during their term, subject to certain excluded periods being observed. In case a change of control occurs
prior to conversion, an additional prepayment fee of USD 11,400 thousand has to be paid to USV if the Company elects to
terminate and redeem the USV I Bonds.
On 13 November 2020, USV exercised their rights to convert USV I Bonds. The Company issued a total of 32,127 Shares / 32,127
thousand CDIs.
Acacia I
USD 2,276 thousand Convertible Bonds with Acacia
On 22 March 2019, the Company further issued to two unsecured funds administered by Conifer Management, LLC (Acacia)
two convertible bonds (Wandelschuldverschreibungen) in the aggregate amount of USD 2,276 thousand (Acacia Bonds) against
contribution in cash (Bareinlage). Until Acacia exercised their rights to convert Acacia Bonds, the following terms applied: The
Acacia Bonds have a term of 3 years from the issue date. They bear interest in the amount of USD LIBOR + 5% p.a. payable at
the end of the term unless Acacia exercises its right to convert the Acacia Bonds into securities in the Company. The Acacia
Bonds can be converted into an aggregate amount of 6,414 Shares / 6,414 thousand CDIs in the Company at any time during
their term, subject to certain excluded periods being observed. In case a change of control occurs prior to conversion, an
additional prepayment fee of USD 2,276 thousand has to be paid to Acacia if the Company elects to terminate and redeem the
Acacia Bonds.
On 13 November 2020, Acacia exercised their rights to convert the Acacia Bonds. The Company issued a total of 6,414 Shares /
6,414,000 CDIs.
WOW I
AUD 25,950 thousand Secured Commercial Loan Agreement with WOW
Effective as of 7 June 2019, the Company and an affiliate of Woolworths Group Ltd. (WOW) entered into a secured commercial
loan agreement (WOW SCLA I) in the aggregate amount of AUD 25,950 thousand. Subsequently, the Company exercised its
right to substitute the WOW SCLA I by issuing to WOW two convertible bonds (Wandelschuldverschreibungen) in the aggregate
amount of AUD 25,950 thousand (see directly below for details). These convertible bonds were issued against the repayment
IR.MARLEYSPOON.COM 55
and other claims under the WOW SCLA I being contribution in kind (Sacheinlage) into the Company. Consequently, the WOW
SCLA I was fully repaid and ceased to exist on 26 September 2019.
AUD 25,950 thousand Convertible Bonds with WOW
On 26 September 2019, the Company issued to WOW two secured convertible bonds (Wandelschuldverschreibungen), one in
the amount of AUD 23,000 thousand (WOW I Bond, tranche 1) and one in the amount of AUD 2,950 thousand (WOW I Bond,
tranche 2 and together with the WOW I Bond, tranche 1, disclosed as the WOW I Bonds), against contribution in kind
(Sacheinlage). The WOW I Bonds have a term of 5 years from the issue date. The tranches bear interest in the amount of 7%
p.a. payable at the end of the term, unless WOW exercises its right to convert the WOW I Bonds into securities in the Company.
The WOW I Bonds are secured by a pledge of the Shares in Marley Spoon’s Australian operating entity, a security interest over
that entity’s assets and a guarantee by that entity. The number of Shares / CDIs in the Company to be issued to WOW under the
respective WOW I Bond differs:
The WOW I Bond, tranche 1 can be converted by WOW into a certain number of Shares / CDIs in the Company after two years
from the issue date until the end of its term, subject to certain excluded periods being observed. On conversion of the WOW I
Bond, tranche 1, the number of Shares / CDIs to be issued to WOW will (subject to the Cap I and Cap II (each as defined below))
be calculated as follows (WOW Conversion Formula):
AUD 23,000 thousand x AustCo Growth Factor 1
Conversion Price 2
The number of number of Shares / CDIs in the Company to be issued to WOW pursuant to the WOW Conversion Formula is
subject to specific limitations: if either of the following calculations results in a number of Shares / CDIs which is lower than the
number of Shares / CDIs resulting from the application of the WOW Conversion Formula, then the number of Shares / CDIs to
be issued to WOW will be the lower number of Shares / CDIs calculated as follows:
•
•
AUD 23,000 thousand / AUD 0.384 (Cap I)
AUD 23,000 thousand / AUD 0.30 (Cap II)
In the event that the calculation of Cap I results in a lower number of Shares / CDIs than the lower of the number of CDIs
resulting from the WOW Conversion Formula and the calculation of Cap II, the Company is obliged to pay WOW an additional
cash amount which is calculated as follows:
In the event that the number of Shares / CDIs resulting from the calculation of Cap II is higher than the number of
(a)
Shares / CDIs resulting from the WOW Conversion Formula: by multiplying (i) the result of the difference between the
number of Shares / CDIs resulting from the WOW Conversion Formula and the number of Shares / CDIs resulting from the
calculation of Cap I with (ii) the Conversion Price.
In the event that the number of Shares / CDIs resulting from the WOW Conversion Formula is higher than the
(b)
number of Shares / CDIs resulting from the calculation of Cap II: by multiplying (i) the result of the difference between the
number of Shares / CDIs resulting from the calculation of Cap II and number of Shares / CDIs resulting from the calculation of
Cap I with (ii) the Conversion Price.
The WOW I Bond, tranche 2 can be converted by WOW into 5,900 Shares / 5,900 thousand CDIs in the Company at any time
during its term, subject to certain excluded periods being observed.
If on conversion of the WOW Bonds, the Shares / CDIs to be issued to WOW result in WOW holding more than 24.9% in the
Company, then the Company can elect to settle the exceeding portion in cash rather than in Shares / CDIs.
1 Defined as the net revenue growth rate of Marley Spoon’s Australian business as determined by the most recent reported half year
net revenue divided by the net revenue of the first half of 2019.
2 Defined as the 30-trading day volume weighted average price (VWAP) of Shares / CDIs preceding the conversion event, which has not
occurred yet.
IR.MARLEYSPOON.COM 56
On 11 August 2020, WOW exercised its right to convert WOW I, tranche 2 Bond with principal amount of AUD 2,950 thousand.
The Company issued 5,900 Shares / 5,900 thousand CDIs.
USV II
USD 2,776 thousand Commercial Loan with Union Square Ventures
Effective as of 25 September 2019, the Company and USV entered into another commercial loan agreement, this time in the
aggregate amount of USD 2,776 thousand (USV CLA II). The USV CLA II has a term of 3 years. It bears interest at a fixed rate of
12% p.a. which will only become payable if the Company does not elect to substitute the USV CLA II by two additional
convertible bonds (Wandelschuldverschreibungen) in the aggregate amount of USD 2,776 thousand (USV II Bonds).
On 29 January 2020, the Company exercised its right to substitute USV CLA II by issuing to USV two convertible bonds
(Wandelschuldverschreibungen) in the aggregate amount of USD 2,776 thousand. These convertible bonds were issued against
the repayment and other claims under the USV CLA II being contribution in kind (Sacheinlage) into the Company. Consequently,
the USV CLA II was fully repaid and ceased to exist on 29 January 2020.
USD 2,776 thousand Convertible Bonds with Union Square Ventures
On 29 February 2020, the Company issued to USV two unsecured convertible bonds (Wandelschuldverschreibungen), one in the
amount of USD 2,651,892 (USV Marley Spoon A, LLC) and one in the amount of USD 124,594 (USV Marley Spoon B, LLC) against
contribution in kind (Sacheinlage). Until USV exercised their rights to convert USV I Bonds, the following terms applied: The USV
II Bonds have a term of 3 years from the issue date. They bear interest in the amount of USD LIBOR + 5% p.a. payable at the end
of the term, unless USV exercises its right to convert the USV II Bonds into securities in the Company. The USV II Bonds can be
converted into an aggregate amount of 8,421 Shares / 8,421 thousand CDIs in the Company at any time during their term,
subject to certain excluded periods being observed.
On 13 November 2020, USV exercised its right to convert and the Company issued 8,421 Shares / 8,421 thousand CDIs.
USV III
USD 2,500 thousand Commercial Loan with Union Square Ventures
Effective as of 29 January 2020, the Company and USV entered into another unsecured commercial loan agreement, this time in
the aggregate amount of USD 2,500 thousand (USV CLA III). The USV CLA III has a term of 3 years. It bears interest at a fixed rate
of 12% p.a. which will only become payable if the Company does not elect to substitute the USV CLA III by two additional
convertible bonds (Wandelschuldverschreibungen) in the aggregate amount of USD 2,500 thousand (USV III Bonds).
On 29 July 2020, the Company exercised its right to substitute USV CLA III by issuing to USV two convertible bonds
(Wandelschuldverschreibungen) in the aggregate amount of USD 2,500 thousand. These convertible bonds were issued against
the repayment and other claims under the USV CLA III being contribution in kind (Sacheinlage) into the Company (see next
paragraph). Consequently, the USV CLA III was fully repaid and ceased to exist on 29 July 2020.
USD 2,500 thousand Convertible Bonds with Union Square Ventures
On 29 July 2020, the Company issued to USV two unsecured convertible bonds (Wandelschuldverschreibungen), one in the
amount of USD 2,387,750 (USV MS A) and one in the amount of USD 112,250 (USV MS B) against contribution in kind
(Sacheinlage). Until USV exercised their rights to convert USV I Bonds, the following terms applied: The USV III Bonds had a term
of 5 years from the issue date. They had a fixed interest rate of 12% p.a. payable at the end of the term, unless USV exercised
its right to convert the USV III Bonds into securities in the Company. The USV III Bonds could be converted into an aggregate
amount of 2,414 Shares / 2,414 thousand CDIs in the Company at any time during their term, subject to certain excluded
periods being observed.
On 13 November 2020, USV exercised its right to convert and the Company issued 2,414 Shares / 2,414 thousand CDIs.
IR.MARLEYSPOON.COM 57
WOW II
AUD 4,047 thousand Secured Commercial Loan with WOW
Effective as of 26 September 2019, the Company and WOW entered into another secured commercial loan agreement, this
time in the aggregate amount of AUD 4,047,250 (WOW SCLA II). The WOW SCLA II had a term of 6 months, interest at a fixed
rate of 7% p.a. which would have only become payable if the Company did not elect to substitute the WOW CLA II by one
additional convertible bond (Wandelschuldverschreibung) in the amount of AUD 4,047,250 (WOW II Bond).
AUD 4,047 thousand Convertible Bonds with WOW
On 29 February 2020, the Company exercised its right to substitute WOW SCLA II by issuing one secured convertible bond
(Wandelschuldverschreibung), in the principal amount of AUD 4,047,250 (WOW II Bond). The WOW II Bond has a term of 5
years from the issue date. It bears interest in the amount of 7% p.a. payable at the end of the term unless WOW exercises its
right to convert the WOW II Bond into securities in the Company. The WOW II Bond is secured by a pledge of the Shares in
Marley Spoon’s Australian operating entity, a security interest over that entity's assets and a guarantee by that entity.
The WOW II Bond can be converted by WOW into a certain number of Shares / CDIs in the Company within its term subject to
certain excluded periods being observed. On conversion of the WOW II Bond, the number of Shares / CDIs will be calculated
based on the formula1 which results in the lower number of conversion Shares, i.e., either:
(a)
(i) by multiplying the principal amount with a growth factor for the Company’s Australian business and (ii) dividing
the resulting product by the 30-day arithmetic volume-weighted average price per CDI of the Company
immediately preceding the day on which a relevant conversion event occurs, multiplied by 1,000 since one (1) CDI
represents the economic ownership of 1/1,000th in one Share of the Company;
AUD 4,047 thousand x AustCo Growth Factor 2
Conversion Price
(b)
by dividing the principal amount by AUD 300.00.
The maximum number of conversion Shares to be issued to Woolworths Group would amount to 13,490 Shares.
WTI
USD 15,000 thousand Senior Secured Loan with Western Technology Investment
Effective as of 20 November 2019, MMM Consumer Brands Inc. (formerly Marley Spoon Inc.), the US operating entity of the
Group, as borrower and two funds administered by Western Technology Investment (WTI) as lenders entered into a senior
secured loan agreement (WTI SLA) in the aggregate amount of USD 15,000 thousand. A first tranche of the WTI SLA of USD
7,500 thousand has already been disbursed in 2019. A second tranche in the same amount is due for disbursement in 2020,
subject to the Company meeting certain revenue and general & administrative expense targets. The term of the WTI SLA is 42
months. The interest rate is 12% p.a. plus a final payment amounting to 2.5% of the loan amounts funded. As additional
consideration, the Company granted WTI certain Warrants allowing the holder to subscribe for an aggregate of 11,286 Shares /
11,286,000 CDIs in the Company. The Warrants are exercisable from the issue date and five years from the termination of the
WTI SLA. In lieu of exercising such Warrants, WTI is entitled to receive a cash settlement of USD 5,750 thousand upon the
earlier of a change of control and 31 December 2024. WTI has been granted a comprehensive security package, comprising of a
pledge over certain assets and a guarantee of the Company, the assets of the US operating entity of the Group and, subject to
1 Defined as the 30-trading day volume weighted average price (VWAP) of Shares / CDIs preceding the conversion event, which has not occurred
yet.
2 Defined as the net revenue growth rate of Marley Spoon’s Australian business as determined by the most recent reported half year net
revenue divided by the net revenue of the first half of 2019.
IR.MARLEYSPOON.COM 58
certain limitations, the assets and a guarantee of the Australian operating entity of the Group. By the end of this reporting
period MMM Consumer Brands Inc. did not exercise the second tranche available on this agreement.
Effective as of 13 November 2020, the Company retired its outstanding debt to WTI under this loan agreement.
AU asset financing
AUD 3,000 thousand Asset Financing Agreement with National Australia Bank
Effective as of 14 November 2019, Marley Spoon Pty Ltd., the Australian operating entity of the Group, as borrower entered
into an asset financing agreement (AFA) with National Australia Bank Ltd. (NAB) as lender in the aggregate amount of up to AUD
3,000 thousand. Funds borrowed under the AFA are to be used to finance certain production equipment which is pledged to
NAB as security. AUD 2,500 thousand were paid out in November 2019 at an interest rate of 4.15% p.a. This facility has a 36-
month term. The AFA replaced a temporary working capital facility extended by NAB in March 2019 (under which AUD 1,977
thousand were drawn at 5.79% p.a.).
Effective as of February 2020, AUD 500 thousand were paid out at an interest rate of 4.41% p.a. Another AUD 1,316 thousand
were drawn at an interest of 3.58% p.a. Both facilities have a 36-month term.
Trade and other payables
6.8
Trade and other payables are unsecured and are usually paid within 30 days of recognition. The carrying amounts of trade and
other payables are considered to be the same as their fair values, due to their short-term nature. Trade payables are primarily
comprised of balances payable to food and packaging suppliers, transportation carriers and marketing partners.
EUR in thousands
Trade and other payables
31 December 2020
31 December 2019
17,472
12,919
Other financial liabilities
6.9
Other current financial liabilities are associated with payroll accruals and accrued costs for which the goods or service have
been obtained, but the Group has not obtained the respective invoices.
EUR in thousands
Other financial liabilities
31 December 2020
31 December 2019
7,864
5,279
7 Non-financial assets and liabilities
This note provides information about the Group's non-financial assets and liabilities.
Property, plant and equipment
7.1
Movements in the carrying amount of property, plant and equipment were as follows:
EUR in thousands
Year ended 31 December 2020
Opening net book value
Exchange rate differences
Additions
Disposals
Transfer of asset under construction
Depreciation charge
Closing net book value
As at 31 December 2020
Cost
Plant and
machinery
Furniture and
office equipment
Assets under
construction
Total
7,286
(21)
2,757
(56)
531
(1,034)
9,464
12,815
203
8
330
(30)
(6)
(192)
311
726
227
7
1,985
(308)
(525)
-
1,387
7,715
(5)
5,072
(394)
-
(1,227)
11,163
1,387
14,927
IR.MARLEYSPOON.COM 59
Accumulated depreciation
Net book value
(3,350)
9,464
(414)
311
-
1,387
(3,765)
11,163
EUR in thousands
Year ended 31 December 2019
Opening net book value
Exchange rate differences
Additions
Disposals
Transfer of asset under construction
Depreciation charge
Closing net book value
As at 31 December 2019
Cost
Accumulated depreciation
Net book value
Plant and
machinery
Furniture and
office equipment
Assets under
construction
Total
4,296
68
4,257
(547)
155
(944)
7,286
9,602
(2,316)
7,286
168
2
36
-
-
(4)
203
424
(222)
203
382
-
-
-
(155)
-
227
227
-
227
4,846
71
4,293*
(547)
-
(948)
7,716
10,252
(2,537)
7,716
* Additions comprise EUR 277 thousand (2019: EUR 206 thousand) unpaid as at 31 December 2020.
Leasehold improvements for offices and manufacturing centers as well as production equipment are included under plant and
machinery above. Furniture and office equipment include computers, electronics, office furniture and equipment.
Plant and machinery include production equipment that are financed by National Australian Bank (NAB) and are pledged as
security.
During the year ended 31 December 2020, there was no identified impairment of property, plant, and equipment.
All property, plant and equipment are recognized at historical cost less depreciation. Depreciation is calculated using the
straight-line method to allocate their cost, net of their residual values, over their estimated useful lives as follows:
Computers & Electronics
Office Equipment / Furniture
Machinery & Warehouse Equipment
Leasehold Improvements
3 years
3-7 years
3-10 years
5-15 years
Right-of-Use Assets
7.2
The Group recognized Right-of-Use Assets and lease liabilities for leases previously classified as operating leases, except for
short-term leases and low-value assets. Lease liabilities were recognized based on the present value of the remaining lease
payments, discounted using the incremental borrowing rate at the date of initial application.
The Group also applied the available practical expedients wherein it:
•
•
•
Used a discount rate for leases on contracts where implicit rates are not readily determinable
Relied on its assessment of whether leases are onerous immediately before the date of initial application
Applied the short-term leases exemptions to leases with lease term that ends within 12 months at the date of initial
application
Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application
Used hindsight in determining the lease term where the contract contains options to extend or terminate the lease
•
•
Set out below are the carrying amounts of right-of-use assets and the movements during the period:
IR.MARLEYSPOON.COM 60
As at 1 January 2019
Additions
Depreciation Expense
As at 31 December 2019
Additions
Exchange Rate Impacts
Depreciation Expense
As at 31 December 2020
Buildings
Equipment
Total
9,347
4,744
(2,670)
11,421
1,026
(443)
(2,980)
9,023
-
1,321
(310)
1,011
521
(147)
(530)
854
9,347
6,065
(2,980)
12,432
1,546
(590)
(3,510)
9,878
Set out below are the carrying amounts of lease liabilities (included under interest-bearing loans and borrowings) and the
movements during the period:
As at 1 January
Additions
Exchange rate
Interest Expense
Payments
As at 31 December
The following are amounts recognized in profit or loss:
EUR in thousands
Depreciation Expense of right-of-use assets
Interest Expense on lease liabilities
Expense related to short-term leases
Expense related to leases of low-value assets
Total amount recognized in profit or loss
2020
2019
13,335
1,536
(629)
1,763
(4,668)
11,337
2020
2019
3,510
1,763
515
128
5,915
9,347
6,065
-
1,593
(3,670)
13,335
2,980
1,593
972
982
6,527
Right-of-use assets - The Group recognizes right-of-use assets at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and
impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount
of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less
any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the
lease term, the recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful
life and the lease term. Right-of use assets are subject to impairment.
Lease Liabilities - at the commencement date of the lease, the Group recognizes lease liabilities measured at the present value
of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts
expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option
reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the
Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognized
as expense in the period on which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement
date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying
IR.MARLEYSPOON.COM 61
amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed
lease payments or a change in the assessment to purchase the underlying asset.
Short-term leases and leases of low-value assets - The Group applies the short-term lease recognition exemption to its short-
term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption
to leases of office equipment that are considered of low value. Lease payments on short-term leases and leases of low-value
assets are recognized as expense on a straight-line basis over the lease term.
Significant judgement in determining the lease term of contracts with renewal options - The Group determines the lease term as
the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably
certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be
exercised. The Group has the option, under some of its leases to lease the assets for additional terms. The Group applies
judgment in evaluating whether it is reasonably certain to exercise the option to renew.
Payment schedule for the next 12-months
The Company expects to pay-out EUR thousand 4,591 based on agreed lease commitments in the next twelve months. This
amount was evaluated based on the current present value of lease liabilities minus the expected present value of lease
agreements in the next twelve months. This amount does not take into account new lease agreements and commitments that
may be signed during the next period starting on 1 January 2021.
7.3
Intangible assets
EUR in thousands
Balance as at 1 January 2020 (net)
Additions
Exchange rate differences
Amortization charge
Closing net book value (net)
As at 31 December, 2020
Cost
Accumulated amortization
Net book value
2020
3,439
3,252
3
(1,755)
4,939
7,734
(2,795)
4,939
Intangible assets are measured at their historical costs less accumulated amortization, impairment losses and reversal of
impairment losses. Intangible assets are amortized on a straight-line basis over their expected useful life, which is between
three and five years. If there is an indication of impairment, the intangible asset is tested for impairment. The expectations
regarding the residual value are updated annually. The adequacy of the selected amortization method and the useful lives are
subject to an annual review.
The Group notes that during the current and prior periods, development activities have been ongoing in establishing a global
Enterprise Resource Planning (ERP) software. The software is currently operational across the global organization. Current
carrying value is EUR 987 thousand (2019: EUR 875 thousand) with an estimated useful life of five years.
The Group tests whether the intangible assets have suffered any impairment on an annual basis for assets with an infinite
useful life or on occurrence of an impairment indicator for all other intangible assets and property, plant, and equipment items.
The recoverable amount of a cash generating unit (CGU) is determined based on value-in-use calculations which require the use
of assumptions.
During the year ended 31 December 2020, management has not identified indicators of impairment of the intangible assets.
The Group amortizes intangible assets with a limited useful life using the straight-line method. Software is determined to have
useful life of 3-5 years.
IR.MARLEYSPOON.COM 62
Deferred taxes
7.4
Deferred tax assets are recognized for unused tax losses and deductible temporary differences to the extent it is probable that
taxable profit will be available against which the losses or temporary differences can be utilized. Significant management
judgement is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and
the level of future taxable profits, together with future tax planning strategies.
EUR in thousands
Non-current Assets
Property, plant and equipment
Intangible assets
Right of use asset
Non-current Liabilities
Lease liability
Long term debt / derivative financial
instruments
Tax loss carryforward (TLCF)
Total
Netting
Total after netting
DTA on temporary differences (not
recognized)
DTA (not recognized) on TLCF
31 December 2020
31 December 2019
DTA
DTL
DTA
DTL
-
-
-
-
714
2,707
-
-
-
3,029
3,706
2,806
3,198
6,227
6,227
(6,227)
(6,227)
-
-
34,537
-
-
-
1,230
4,936
(4,936)
-
-
32,515
-
693
3,508
-
735
-
4,936
(4,936)
-
-
-
The total historical income tax losses (corporate and trade tax) accumulate to EUR 129,419 thousand as at 31 December 2020
(31 December 2019: EUR 123,572 thousand) resulting in a potential deferred tax asset of EUR 34,537 thousand as at 31
December 2020 (31 December 2019: EUR 32,515 thousand). These losses relate to subsidiaries that have a history of losses, do
not expire, and may not be used to offset taxable income elsewhere in the Group.
The subsidiaries currently have no taxable temporary differences or any tax planning opportunities available that could partly
support the recognition of these losses as deferred tax assets. On this basis, the Group has determined that it cannot recognize
deferred tax assets on the tax losses carried forward.
All deferred tax assets are considered as non-current as at 31 December 2020 (2019: non-current).
Inventories
7.5
The inventory balance contains food, packaging and marketing items with a net balance of EUR 6,570 thousand (2019: EUR
3,736 thousand).
For non-sold inventory items, the Group designs new recipes to ensure that inventories are consumed, short shelf-life items
ordered are directly included in cost of goods sold and not put into inventory. Therefore, the Group did not incur or reverse
previous inventory write-downs during 2019 or 2020.
Inventories recognized as an expense during the year ended December 31, 2020 amounted to EUR 133,287 thousand (2019:
EUR 71,763 thousand).
IR.MARLEYSPOON.COM 63
EUR in thousands
Raw materials
31 December 2020
31 December 2019
6,570
3,736
Employee benefit obligations
7.6
The Group does not contribute to or offer any defined benefit plans (only defined contribution plans), nor any postemployment
benefits that require recognition on the Group’s Statement of Financial Position.
Details regarding the Group’s Employee Stock Option Program (ESOP) and Stock Option Program (SOP) have been provided in
note 8.2.1. The associated credit is recognized in equity under “Other reserves” on the Statement of Financial Position.
The total employee benefit costs (including defined contribution and social securities) are allocated to the various functional
lines in the consolidated Statement of Comprehensive Income as listed in note 4.1.
Other non-financial assets
7.7
Other non-financial assets are driven by prepayments to suppliers and tax authorities.
EUR in thousands
Other non-financial assets
31 December 2020
31 December 2019
2,356
2,352
7.8
Contract liabilities and other non-financial liabilities
Contract liabilities and other non-financial liabilities amounted to EUR 3,432 thousand as of December 31, 2020 (2019: EUR
1,447 thousand) and are related to contract liabilities, VAT, other tax and social security payables as well as vacation
allowances.
EUR in thousands
Contract liabilities
Current other non-financial liabilities
Total
31 December 2020
31 December 2019
944
2,488
3,432
234
1,213
1,447
Contract liabilities relate to consideration received from customers for which delivery has not occurred at balance date. The
Group expects to recognize the revenue of the amounts deferred within 30 days.
7.9
Other disclosures according to German GAAP
Number of Employees
The average headcount of the Group in the reporting period was 1,273 employees (2019: 892)
Auditors' Fees
Principal auditors' fees recognized as an expense in the reporting period were EUR 380 thousand (2019: EUR 193 thousand) for
Audit and EUR 91 thousand (2019: EUR 87 thousand) for tax consultations.
IR.MARLEYSPOON.COM 64
8 Equity
8.1
Share capital and capital reserve
In thousands
As at 1 January 2019
Issuance of Share Capital
As at 31 December 2019
Issuance of Share Capital
Conversion of Bonds
Exercise of Warrants
Transaction Costs for issuance
of Shares
Receipt of Shares for employee
option exercise
Shares transferred to
Employees
Cash on exercise of Share
Options
As at 31 December 2020
Share Capital
Treasury Stock
Number of
Shares
Nominal
amount
(EUR)
Number of
Shares
Paid in
(EUR)
140
19
159
33
55
9
-
-
-
-
140
19
159
33
55
9
-
-
-
-
(2)
(1,667)
2
1,667
Capital
Reserve
Paid in
(EUR)
95,458
3,959
99,417
(9,443)
72,661
15,965
Total
(EUR)
95,598
3,977
99,576
43,818
72,716
15,974
(2,276)
(2,276)
-
-
-
-
119
119
256
256
-
-
229,671
229,927
As at 31 December 2020, the issued registered Share capital is EUR 256,025 (2019: 158,520) in nominal Shares. The
Management Board is authorized to increase the registered Share capital upon consensus of the Shareholders. The total
amount of payments above the par value of 1 Euro have been recorded as capital reserve in the Statement of Financial Position
with a value of EUR 229,671 thousand as at 31 December 2020 (2019: EUR 99,417 thousand).
The group has not recognized or assigned any dividends during the presented periods. All issued and outstanding Shares are
fully paid as of December 31, 2020 (2019: all issued and outstanding Shares are fully paid).
During the period
In 2020 97,505 Shares were issued. The issuances were attributed to two cash capital increases (“Barkapitalerhöhungen”), and
the exercise of convertible rights on bonds and Warrants in 2020.
Transaction costs attributable to issuance of Shares (included in cash flows from financing activities, net of tax) stem from the
issuance of Share capital (33 Shares), the conversion of Bonds (55 Shares) and the exercise of Warrants (9 Shares). The capital
attributable costs of the issuance of the Shares have been charged directly to equity as a reduction in Share premium.
The Company’s two cash capital increases, one in May 2020 (15,852 Shares issued) and one in October 2020 (17,427 Shares
issued), resulted in recording a total consideration of EUR 43,785 thousand in Capital Reserves. Current year conversions of
Bonds and exercise of Warrants resulted in the issuance of 64,216 Shares and a total consideration of EUR 88,690 thousand in
Capital Reserves.
The Group has two Share option schemes under which options to subscribe for the Group’s Shares have been granted to
employees. Refer to Note 8.2.1 for further details. For Share Options granted prior to the IPO of Marley Spoon (the ESOP plans),
beneficiaries who exercised in 2020 have been settled using the treasury Shares of the Group. The treasury Shares were
contributed by the entities Marley Spoon Employee Trust UG and Marley Spoon Series A UG & Co. KG (Note 14.2), which are
holding Shares in the Company, inter alia, for the benefit of employees to be released under the circumstances stated in the
ESOP plans.
IR.MARLEYSPOON.COM 65
The reduction in the treasury Share equity component is equal to the fair market value of the Shares on the date of
contribution. Any excess of the cash received from employees over the reduction in treasury Shares is recorded in Capital
Reserves. The exercise of stock options by employees in 2020 added a total consideration of EUR 119 thousand in Capital
Reserves (see note 8.2).
During the previous period
During 2019, 18,050 Shares were issued as part of two cash capital increases (“Barkapitalerhöhungen”), one in June 2019 (8,200
Shares) and one in December 2019 (9,850 Shares). Total consideration of EUR 3,977 thousand was recorded in equity.
Other reserves / other Share-based payments
8.2
The total costs of Share-based payments in 2020 is EUR 430 thousand (2019: EUR 369 thousand) of which EUR 430 thousand is
reflected in other reserves (2019: EUR 369 thousand).
8.2.1
Employee Stock Option Program (ESOP) and Stock Option Plan 2019 & 2020 (SOP)
The other reserves include a balance for the Employee Stock Option Program (ESOP) and the Stock Option Plans (SOP 2019 &
2020) which are equity-settled Share-based payments.
Prior to the IPO, the Company issued rights under historical “virtual Share plans” to most of its salaried employees (the ESOP
plans). Following the listing on the ASX, all of these then outstanding rights (whether vested or unvested) were consolidated
and replaced with substantially equivalent rights over Shares (or CDIs) referred to as “Option Rights” under a plan referred to as
the “Existing Option Rights Plan”. Unvested rights will continue to vest in accordance with their current vesting schedule. No
further rights were or will be issued under the Existing Option Rights Plan (or the historical “virtual Share plans”) following the
IPO. This replacement of the former plan by the new Plan is accounted for as a modification. However, the replacement did not
result in any incremental fair value to be recognized.
All options and rights for employees have remained the same. The Share-based payments have remained equity-settled under
the new program. Generally, employees are granted stock options which have a vesting period of up to 48 months with a cliff
period of 12 months. No owner rights, e.g., voting rights, are associated with the program. There are no performance
conditions embedded in the program with vesting occurring based on the tenure of the employee. Having passed the two-year
post-IPO restriction period, normal exercise conditions began in 2020 whereby employees are entitled to exercise their vested
options semiannually as determined by the Group. No new Shares were issued for these exercises as the Shares were already
outstanding and held in trust for the employees. Cash received by the Group, in excess of the Shares’ par value, was recognized
in equity as an increase in Capital Reserves. The cost of equity-settled transactions is recognized in employee benefits expense
(see also note 8.2), together with a corresponding increase in equity (Other Reserves) over the period in which the service and,
where applicable, the performance conditions are fulfilled (the vesting period).
For equity-settled transactions, the total amount to be expensed for services received is determined by reference to the grant
date fair value of the Share-based payment award. The options are granted without consideration of an exercise price. The fair
value determined at the grant date is expensed on a graded vesting scheme, with a corresponding credit in equity.
During the period, the following transactions occurred in the ESOP plans:
Number of awards outstanding 31 December 2018
Thereof: exercisable/vested
Granted during 2019
Forfeited during 2019
Exercised during 2019
Expired 2019
Number of awards outstanding 31 December 2019
Thereof: exercisable/vested
Granted during 2020
Number of awards
6,669
6,115
-
(360)
-
-
6,309
6,208
-
IR.MARLEYSPOON.COM 66
Forfeited during 2020
Exercised during 2020
Expired 2020
Number of awards outstanding 31 December 2020
Thereof: exercisable/vested
(3)
2,161
-
4,145
4,218
As at 31 December 2020, all Share options outstanding except 273 Share options (31 December 2019: 528 Shares) have an
exercise price equal to EUR 0.00.
The company entered two new employee Stock Option Plans (“SOP”) in February 2019 and August 2019, followed by
subsequent grants in February 2020 and August 2020, granting employees Share-based payments similarly structured as the
ESOP. For equity-settled transactions, the total amount to be expensed for services received is determined by reference to the
grant date fair value of the Share-based payment award. The fair value determined at the grant date is expensed on a graded
vesting scheme, with a corresponding credit in equity.
Number of awards
Number of awards outstanding 31 December 2018
Thereof: exercisable/vested
Granted during 2019
Forfeited during 2019
Exercised during 2019
Expired 2019
Number of awards outstanding 31 December 2019
Thereof: exercisable/vested
Granted during 2020
Forfeited during 2020
Exercised during 2020
Expired 2020
Number of awards outstanding 31 December 2020
Thereof: exercisable/vested
-
-
5289
(691)
-
-
4,595
487
6,255
(1,105)
-
-
5,150
2,257
The fair value measurement at grant date for the SOP plans is determined by applying an option pricing model (Black-Scholes-
Model), with the main determinates being the Share price, risk-free rate and volatility. These accounting estimations have a
significant influence on the valuation of the options.
Inputs to the Model
Value per Common Share (EUR)
Exercise Price (EUR)
Expected Volatility
Expected Term (in months)
Expected dividend yield
Risk-free interest rate
2020
2019
0.28 - 3.23
0.18 - 1.53
57% - 80%
48
-
0%
0.36 - 0.59
0.27 - 0.40
45%
48
-
0%
Total expenses arising from Share-based payments to employee programs (ESOP, SOP 2019 & SOP 2020) recognized during the
period were EUR 430 thousand (2019: EUR 369 thousand).
IR.MARLEYSPOON.COM 67
Currency translation reserve
8.3
Other comprehensive loss or income is associated with foreign currency translation (FCTA). Exchange differences arising on
translation are recognized as described in note 17.3.1 and accumulated in a separate reserve within equity. The cumulative
amount is reclassified to profit (loss) when the respective asset or subsidiary is disposed of.
The total balance of the currency translation reserve as at December 31, 2020 is EUR 550 thousand (December 31, 2019: EUR 17
thousand). All other comprehensive loss or income is classified as equity.
9
Critical estimates and, judgements and errors
9.1
Significant estimates or judgements
Key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year,
are described in the respective notes of this document.
The Group based its assumptions and estimates on parameters available when the consolidated financial statements were
prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or
circumstances beyond the control of the Group. Such changes are reflected in the assumptions when they occur.
Areas that involve significant estimates or judgements in the years ended as at December 31, 2020 and December 31, 2019
are disclosed in the list below, more specific details on the respective balances are included in the mentioned notes.
-
-
-
Employee stock option program (note 8.2)
Derivative financial instruments (note 6.2)
IFRS 16 Leasing (notes 7.2)
Going concern
9.2
These consolidated financial statements have been prepared on a going concern basis, which assumes that the Group will be
able to meet all its financial commitments.
10 Financial risk management
This note explains the Group’s exposure to financial risks and how these risks could affect its future financial performance.
Current year profit and loss information has been included where relevant to add further context. The Group’s risk
management is carried out by the Finance and Legal teams under supervision of the CFO.
Principal financial liabilities are comprised of loans and borrowings, trade and other payables. The main purpose of these
financial liabilities is to finance and provide guarantees to support operations. Principal financial assets include trade and other
receivables, cash and cash equivalents that derive directly from operations.
The Group is exposed to market risk, credit risk and liquidity risk. Financial risk management is carried out by the Finance
department, which is overseen by senior management. The objective of financial risk management is to establish limits and
ensure that the risk exposure stays within these determined limits. The usage of this method does not guarantee that the
company prevents all losses higher than these limits. Senior management reviews and agrees on policies for managing each of
these risks.
10.1 Market risk
The Group has exposure to the following market risk:
-
-
-
Produce price risk
Foreign currency risk
Interest rate risk
IR.MARLEYSPOON.COM 68
Produce price risk
Produce price risk is the risk that changes in market prices of key ingredients used in the production of our products will affect
the Group’s results of operations.
The Group manages produce price risk with a detailed menu design and planning process which is aligned with pre-determined
cost targets. Significant increases in produce prices are mitigated using alternative ingredients or by leveraging the Group‘s
extensive database of recipes to change the offerings for future recipes.
Sensitivities to produce price risk:
EUR in thousands
5% increase in produce prices
5% decrease in produce prices
Foreign currency risk
2020
2019
(1,315)
1,315
(762)
762
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in
foreign exchange rates. Financial instruments, which are denominated in a currency other than the measured functional
currency, are subject of foreign currency risk. The Group operates in international markets through locally established
subsidiaries. Our international operations seek to match the expenses incurred and revenue generated in the respective
currency, and thus the foreign currency risks we face that could be material to our results at the Group level are primarily
translational, not transactional.
Since all entities only held balances in their functional currencies (intercompany transactions are settled by month end) there is
no foreign currency risk and therefore no disclosure is required.
Derivatives are only used for economic currency hedging purposes and not as speculative investments. However, where
derivatives do not meet the hedging criteria, they are classified as “financial liabilities at fair value through profit or loss” for
accounting purposes.
The Group entered in loan agreements which are nominated in AUD or in USD. For those loans the risk that the fair value or
future cash flows of an exposure will fluctuate because of changes in foreign exchange rate is as follows:
EUR in thousands
(2019: 3.3%) 5.3% increase of the FX rate AUD / EUR
(2019: 3.3%) 5.3% decrease of the FX rate AUD / EUR
3.9% increase of the FX rate USD / EUR
3.9% decrease of the FX rate USD / EUR
Interest rate risk
2020
2019
801
(801)
-
-
559
(559)
482
(482)
Interest rate risk is the risk that the future cash flows of financial instruments will fluctuate because of changes in the market
interest rates. The Group has exposure to movements in interest rates arising from its portfolio of interest rate sensitive assets
and liabilities. These principally include debt and cash.
The Group mostly has fixed interest rates on loans and does not enter into any derivative financial instruments to manage its
interest rate risk. As at 31 December 2020, the Company no longer has loans that have a variable interest rate. Therefore, no
interest rate risk was calculated.
EUR in thousands
1% increase in LIBOR
1% decrease in LIBOR
2020
-
-
2019
(124)
124
IR.MARLEYSPOON.COM 69
Credit risk
10.2
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
Credit risk can arise as the company offers various payment methods and other transactions with counterparties. The exposure
to credit risk in its operating activities exists primarily in the form of trade receivables and security deposits with banks and
financial institutions. The nature of the business limits the exposure towards trade receivables, since customers usually pay
before delivery, and hence no relevant information is disclosed. The maximum exposure to credit risk at the end of the
reporting period is the carrying amount of each class of financial asset listed below:
EUR in thousands
Other non-current financial assets
Cash and cash equivalents
Total
31 December 2020
31 December 2019
3,044
34,438
37,482
1,356
5,433
7,311
Credit risk related to doubtful accounts that are subject to legal action or those overdue is monitored centrally on a regular
basis. In certain countries, external collection agencies are engaged to pursue outstanding amounts.
The composition of trade and other receivables by geographic location of amounts due from payment service providers (PSPs)
and corporate customers, net of any allowances for uncollectible amounts, was as follows:
EUR in thousands
31 December 2020
31 December 2019
Europe
Australia
USA
Total
PSP
422
18
121
561
Customers
44
-
92
136
Total
466
18
213
697
PSP
301
54
-
355
Customers
49
21
97
167
Total
350
75
97
522
Liquidity risk
10.3
The liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities.
Management regularly monitors the Company’s cash balances and movements in cash throughout the period.
The objective of liquidity risk management is to maintain a balance between continuity of funding and flexibility through the
use of bank overdrafts, credit cards and bank loans. The company’s liquidity management involves projecting cash flows in
major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios
and maintaining equity and debt financing plans. As at 31 December 2020 the Group’s current assets of EUR 44,061 thousand
(2019: EUR 12,044 thousand) exceeded current liabilities of EUR 37,008 thousand (2019: EUR 25,622 thousand) by an amount
of EUR 7,053 thousand (2019: EUR (13,578) thousand). The Group’s cash flow from operations in 2020 was a positive EUR 4,407
thousand (2019: EUR (30,273) thousand), and the Group held a cash position of EUR 34,438 thousand (2019: EUR 5,433
thousand) as at 31 December 2020.
The Company’s non-current financial liabilities, which are mainly long-term borrowings, reached EUR 27,950 thousand in the
year ended 31 December 2020 (2019: EUR 47,082 thousand)
Maturity analysis
The table below summarizes the maturity profile of the financial liabilities based on contractual undiscounted payments
including interest:
EUR in thousands
31 December 2020
31 December 2019
1-3
months
4-12
months
1-5 years
1-3
months
4-12
months
1-5 years
Trade payables & other payables
Other financial liabilities
17,472
7,864
-
-
-
-
12,919
5,279
IR.MARLEYSPOON.COM 70
Borrowings
Derivative financial instrument
Total
2,730
-
28,066
702
215
918
17,725
3,479
21,204
702
-
18,900
71
62
133
36,369
2,521
38,890
11 Capital management
The Group’s objective is to sustain a strong capital base, which maintains the confidence of investors and business partners and
helps to serve customers and develop the business. The Group considers its current position with reference to the stated equity
ratio in determining the sources of new funding.
EUR in thousands
Total equity
Total liabilities
Total equity and liabilities
Equity ratio in %
31 December 2020
31 December 2019
8,127
64,958
73,085
11%
(35,716)
72,704
36,987
-96%
The Group had no mandated capital targets imposed in the current year. However, provisions in the currently
outstanding facilities contain terms that required prior consent from existing lenders / holders before further debt
financing activities could be completed. The Group sought and received prior consent from these lenders / holders (note
6.7) before entering into debt financing arrangements. Total liabilities in 2020 contain EUR 20,021 thousand convertible
bonds (2019: EUR 26,555 thousand), which may convert into equity in the future.
12 Group structure
12.1
Subsidiaries
The Group’s principal subsidiaries at 31 December 2020 are detailed below. Unless otherwise stated, they have Share capital
consisting solely of ordinary Shares that are held directly by the Group, and the proportion of ownership interests held
equals the voting rights held by the Group. The country of incorporation or registration is also their principal place of
business.
Name
Marley Spoon Pty Ltd.
Marley Spoon Finance Pty. Ltd.
Marley Spoon GmbH
Marley Spoon BV
Marley Spoon Ltd.
MMM Consumer Brands Inc.
Marley Spoon Unipessoal Lda
Country
Australia
Austria
The Netherlands
United Kingdom
Country of Incorporation
Australia
Australia
Austria
The Netherlands
United Kingdom
United States of America
Portugal
% equity interest
2019
2020
100
100
100
100
100
99
100
100
100
100
100
100
99
100
Principal Activities
Operations
Financing
Operations
Operations
Operations
Operations
Operations
Address
Sydney Corporate Park 190 Bourke Road Alexandria, New South Wales 2015
Sterneckstraße 33, 5020 Salzburg
Industrieweg 1, 3433 NL Nieuwegein
69 Great Hampton Street, Birmingham, B18 6EW
United States of America
519 8th Avenue, 19th floor New York, New York 10018
Portugal
Avenida da Liberdade 38, 2 piso, 1269-039 Lisboa
IR.MARLEYSPOON.COM 71
Marley Spoon AG in its capacity as parent company of Marley Spoon Limited (company number 09189130 registered in England
& Wales) issued a guarantee in favor of the subsidiary under the terms of Section 479A of the Companies Act 2006 with
reference to financial year ended 31 December 2020 so that Marley Spoon Limited be exempted from auditing its financial
statements.
13 Contingencies & commitments
The Group has no material legal claim contingencies recognized nor have any (material) claims been raised against the Group or
any of its subsidiaries.
IR.MARLEYSPOON.COM 72
Other Information
This section of the notes includes other information that must be disclosed to comply with the accounting standards and other
pronouncements, but that are not immediately related to individual line items in the financial statements.
Related Party transactions
Earnings per Share
Assets pledged as security
Summary of Significant Accounting Policies Changes
in accounting policies and disclosures
Events occurred after reporting table
IR.MARLEYSPOON.COM 73
14 Related party transactions
Parties are considered to be related if they are under common control or if one of the parties has the ability to control the other
party or can exercise significant influence or joint control over the other party in making financial and operational decisions. In
considering each possible related party relationship, attention is directed to the substance of the relationship, not merely the
legal form. In addition, a related party is any executive officer, director (or nominee for director), including any of their
immediate family members and any entity owned or controlled by such person.
Parent entities
14.1
The Group does not have a senior or ultimate holding company but has various security holders. The table below shows all
significant beneficial securityholders who have an accumulated interest greater than 10% of the Shares / CDI as at 31 December
2020. No entities have significant influence over the Group other than the one-vote-one-Share structure as listed below:
Shareholder
CDIs
% IC
Conifer Capital Management/Acacia (New York)
Union Square Ventures (New York)
Mr. Fabian Siegel (Berlin)
Other Security Holders (under 10%)
48,368,423
42,962,000
24,613,433
140,081,144
18.89
16.78
9.61
54.71
14.2
Balances and transactions with entities with significant influence over the group
Acacia
On 22 March 2019, the Company issued to two unsecured funds administered by Conifer Management, LLC (Acacia) two
convertible bonds (Wandelschuldverschreibungen) in the aggregate amount of USD 2,276 thousand (Acacia Bonds) against
contribution in cash (Bareinlage). Both bonds were converted by Acacia in 2020.
Union Square Ventures
On 22 March 2019, the Company issued to two unsecured convertible bonds (Wandelschuldverschreibungen), one in the
amount of USD 10,888,140 (USV I A Bond) and one in the amount of USD 511,860 (USV I B Bond) to Union Square Ventures
against contribution in kind (Sacheinlage). Both bonds were converted by USV in 2020.
Mr. Fabian Siegel
Mr. Siegel holds a significant interest in the Company through his personal entity AKW Capital GmbH, solely held and controlled
by Fabian Siegel. Mr. Siegel is also the controlling direct or indirect Shareholder of several other entities including Marley Spoon
Employee Trust UG (MSET) and Marley Spoon Series A UG (haftungsbeschränkt) & Co. KG, which hold Shares in the Company,
inter alia, for the benefit of employees to be released under the circumstances stated in the employee stock option programs
(ESOP) of the Company. As they are jointly controlled, these entities exercise their voting and other Shareholder rights in the
Company along with AKW Capital GmbH. In addition, the Group employs the Managing Director of AKW Capital GmbH (Fabian
Siegel) as the Global CEO for the Group as well as Managing Director of all of the Group’s subsidiaries. In 2020, when
employees exercised Options in the ESOP program, Shares held by the other entities of Mr. Siegel were transferred to the
beneficiaries.
All transactions listed with entities with significant influence over the Group are made at terms equivalent to those that prevail
in arm’s length transactions.
IR.MARLEYSPOON.COM 74
Key management personnel compensation
14.3
Key executive management personnel include the Chief Executive Officer and the Chief Financial Officer (“Management
Board”), the former Chief Financial Officer, and the Supervisory Board.
Key Executive Management / Management Board
The total remuneration is listed in the table below:
EUR in thousands
Short-term employee benefits
Share-based payments
Total compensation
2020
487
306
793
2019
398
43
441
The former CFO, Julian Lange, resigned from the Management Board of the Company effective 31 December 2020. He was
succeeded by Jennifer Bernstein. Although Mr. Lange will not receive a severance payment from the Company, 210 (of 700)
Options granted to him under the 2020 SOP will fully vest effective 31 December 2021, and the cliff period of 12 months is
waived on these Options. Mr. Lange will not receive further instruments under any long-term incentive programs of the
Company. Subsequent to his resignation, Mr. Lange has been hired as a part-time external consultant to the Company through
30 September 2021.
Supervisory Board
The Supervisory board was appointed in June 2018. The members of the Supervisory Board have been elected to their positions
for a period terminating at the end of the Company’s general meeting in CY2021 (Supervisory Board Initial Term) and contain
the members as listed in the Directors’ Report.
The Chairman and two other members will be entitled to receive base compensation of EUR 82 thousand (AUD 130 thousand)
and EUR 51 thousand (AUD 80 thousand), respectively, per annum during the Supervisory Board Initial Term. Further, the chair
of the Audit & Risk Management Committee and the chair of the Nomination & Remuneration Committee will each be entitled
to receive additional compensation of EUR 12.5 thousand (AUD 20 thousand) per annum during the Supervisory Board Initial
Term.
During the Supervisory Board Initial Term, the Members (other than Ms. Robin Low) received (a) 50% of their base
compensation in Shares (calculated at the offer price of EUR 899 per one thousand CDIs (CHESS Depositary Interests) whereby
1,000 CDIs represent 1 actual Share) and issued to the respective member for a subscription price of EUR 1 and (b) the
remainder in cash. Shares in respect of the entire Supervisory Board Initial Term were issued to members upon the completion
of the settlement of the IPO, but if the member does not serve in that capacity for the entire Supervisory Board Initial Term, a
proportion of such member’s Shares will be transferred back by the member as directed by the Company (that proportion
reflecting the proportion of the Supervisory Board Initial Term not served as a member).
For the financial year ending 31 December 2020, the cash fees payable to the current members of the Supervisory Board will
amount to approximately EUR 123,000 (AUD 205,000) in aggregate.
EUR in thousands
Short-term employee benefits
Share-based payments
Total compensation
2020
123
-
123
2019
132
-
132
Transactions with other related parties
14.4
Apart from the related party transactions disclosed in note 14 and note 6.5, no other such transactions have occurred. As the
Group reports at the highest level of consolidation, all transactions between the Parent Company and its subsidiaries are
eliminated in consolidation.
IR.MARLEYSPOON.COM 75
15 Earnings per Share
Basic earnings per Share (EPS) are calculated by dividing the loss for the period attributable to Shareholders of the ordinary
Shares by the weighted average undiluted Shares in the respective year.
The weighted average number of ordinary Shares is calculated from the number of Shares in circulation at the beginning of a
period adjusted by the number of Shares issued during the period and multiplied by a time-weighting factor.
In accordance with IAS 33 Earnings per Share, the effect of anti-dilutive potential Shares has not been included when calculating
diluted earnings per Share for the year ended 31 December 2020 and 31 December 2019. The Group currently has Shares held
under trust pertaining to the Employee Share Option Program (ESOP) that could, if not for the anti-dilutive effects, dilute basic
earnings per Share in the future. As a result, the diluted loss per Share is the same as the basic loss per Share.
Loss for the year (EUR thousand)
Weighted average number of ordinary Shares in issue
Basic loss per Share
(86,369)
187,155
(0.46)
(34,872)
146,074
(0.24)
31 December 2020
31 December 2019
16 Assets pledged as security
As at 31 December 2020, in addition to customary supplier / landlord liens, the following assets of the Group are pledged as
follows:
•
•
•
All Shares in MarleySpoon Pty. Ltd. as security for WOW (EUR 4.8 million);
Specific production equipment used by MarleySpoon Pty. Ltd as security for NAB (EUR 1,566 thousand);
All personal property of MarleySpoon Pty. Ltd. except those pledged to NAB as security for WOW (EUR 2,950
thousand);
Certain financed production equipment used by Marley Spoon Inc. as security for CSC Leasing (EUR 109 thousand).
•
Summary of significant accounting policies
17
This note provides a list of the significant accounting policies adopted in the preparation of these consolidated financial
statements to the extent they have not already been disclosed in the other notes above. These policies have been consistently
applied to all the years presented, unless otherwise stated. The financial statements are for the Group consisting of Marley
Spoon AG and its subsidiaries.
The Group’s financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as
adopted by the European Union.
17.1 Basis of preparation
The Group’s consolidated financial statements are prepared in accordance with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB) and adopted by the European Union (EU) and the
additional requirements of German commercial law pursuant to Sec. 315e (1) HGB.
The consolidated financial statements have been prepared on a historical cost basis, except for the derivative financial
instruments that have been measured at fair value.
The consolidated financial statements are presented in Euros and all values are rounded to the nearest thousand (EUR
thousand), except where otherwise stated. The fiscal year corresponds to the calendar year.
17.2 Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 31 December
2020. Subsidiaries are all companies over which Marley Spoon AG has direct or indirect control as defined by IFRS 10. Control is
achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee.
IR.MARLEYSPOON.COM 76
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses
control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are
included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to have
control of the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the Group and
to the non-controlling interests (NCI), even if this results in the NCI having a deficit balance.
17.3 Accounting policies
The following are the significant accounting policies applied by the Company in preparing its consolidated financial statements:
17.3.1 Foreign currency translation
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment which the entity operates in (‘the functional currency’). The consolidated financial statements are
presented in Euros, which is the Group’s reporting currency.
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of
monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in the
Statement of Comprehensive Income.
The results and financial position of all the Group entities that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:
-
-
-
assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance
sheet and equity positions are translated at historical rates
income and expenses are translated at month-end exchange rates (unless this is not a reasonable approximation of
the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are
translated at the dates of the transactions), and
all resulting exchange differences are recognized in other comprehensive income
17.3.2 Current versus non-current presentation
The Group presents assets and liabilities in the Statement of Financial Position based on a current/non-current classification.
An asset is current when it is:
-
-
-
-
expected to be realized or intended to be sold or consumed in the normal operating cycle
held primarily for the purpose of trading
expected to be realized within twelve months after the reporting period, or
cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months
after the reporting period
All other assets are classified as non-current.
A liability is current when it is:
-
-
-
-
expected to be settled in the normal operating cycle
held primarily for the purpose of trading
due to be settled within twelve months after the reporting period, or
there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period
The Group classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and
liabilities.
IR.MARLEYSPOON.COM 77
17.4 Financial instruments
Initial recognition and measurement
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument
of another entity.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics
and the Group’s business model for managing them. With the exception of trade receivables that do not contain a significant
financing component or for which the Group has applied the practical expedient, the Group initially measures a financial asset
at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention
in the marketplace (regular way trades) are recognized on the trade date, i.e., the date on which the Group commits to
purchase or sell the asset.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly
attributable transaction costs. The Group’s financial liabilities include trade and other payables, loans and borrowings, and
derivative financial instruments.
Financial liabilities
Financial liabilities are classified as measured at amortized cost or FVTPL.
Financial liabilities at amortized costs are subsequently measured at amortized cost using the EIR method. Gains and losses are
recognized in profit or loss when the liabilities are removed from the balance sheet as well as through the EIR amortization
process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are
an integral part of the EIR. The EIR amortization is included as financing expense in the Statement of Comprehensive Income.
Accounts payable amounts represent liabilities for goods and services provided to the Group prior to the end of financial year
which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are
presented as current liabilities unless payment is not due within twelve months after the reporting period. They are recognized
at their fair value. If they are long term in nature they are measured at amortized cost using the effective interest method.
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through profit or loss.
Gains and losses on disposals are determined by comparing proceeds with carrying amounts. These are included in the
Statement of Comprehensive Income. When revalued assets are sold, it is the Group’s policy to transfer any amounts included in
other reserves relating to these assets to retained earnings in the Statement of Financial Position.
17.5 Operating leases
Where an entity within the Group is a lessee in a lease which does not transfer substantially all the risks and rewards incidental
to ownership from the lessor to the entity, the total lease payments are charged to the Statement of Comprehensive Income
(net of any incentives received from the lessor) on a straight-line basis over the lease term. Lease agreements longer than
twelve months and subject to the IFRS 16 requirements follow specific presentation and accounting procedures disclosed in
note 7.2.
17.6 Intangible assets
Intangible assets, which are not acquired as part of a business combination, are measured on initial recognition at cost. Assets
acquired in a business combination are recognized at fair value at the acquisition date. Following initial recognition, intangible
assets are carried at cost less accumulated amortization and accumulated impairment losses, if any.
The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite lives are amortized
over their useful economic lives and assessed for impairment whenever there is an indication that the intangible asset may be
impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at
least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future
IR.MARLEYSPOON.COM 78
economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate,
and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized
in the Statement of Comprehensive Income in the expense category consistent with the function of the intangible assets.
Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at
the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life
continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognized in the Statement of Comprehensive Income when the asset
is derecognized.
Trademarks, licenses and customer contracts
Acquired trademarks and licenses are shown at historical cost. Trademarks, licenses and customer contracts acquired in a
business combination are recognized at fair value at the acquisition date. Acquired brands and customer contracts in general
have a finite useful life. They are subsequently carried at cost less accumulated amortization and impairment losses.
Software
Purchased software solutions are recorded as intangible assets and amortized from the point at which the asset is ready for use.
Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically
and commercially feasible, future economic benefits are probable and the Group intends to and has sufficient resources to
complete development and use the asset. Management has made judgements and estimates regarding the future economic
benefits of capitalized internally generated software. Actual results may differ from these estimates.
Refer to note 7.3 for details about amortization methods and useful lives used by the Group for intangible assets.
17.7 Cash and cash equivalents
For the purpose of presentation in the Statement of Cash Flows, cash and cash equivalents includes cash on hand and bank
overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the Statement of Financial Position.
Cash and cash equivalents include cash in hand and at banks and short-term deposits, which are accessible within three months
or less, for which the risk of changes in value is considered to be insignificant. Fair value of cash and cash equivalents equal their
respective carrying amount due to the short-term maturities of these instruments.
17.8 Inventories
Raw materials, work-in-progress and finished goods are stated at the lower of cost and net realizable value. Costs of purchased
inventory include the purchase price, shipping and handling costs incurred to bring the inventories to their present location and
condition and are determined after deducting rebates and discounts. The cost of inventories is assigned using a first-in, first-out
(FIFO) principle.
Inventory with a short shelf life that is not utilized within the best by period is directly written off as expense (cost of goods
sold).
17.9 Provisions
Provisions for legal claims, service warranties and makegood obligations are recognized when the Group has a present legal or
constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the
obligation, and the amount can be reliably estimated. Provisions are not recognized for future operating losses. Provisions are
measured at the present value of management’s best estimate of the expenditure required to settle the probable obligation at
the end of the reporting period.
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17.10 Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Group has received consideration
(or an amount of consideration is due) from the customer. The contract liabilities primarily relate to the advance payments
received from customers.
If a customer pays consideration before the Company transfers goods to the customer, these pending performance obligations
are recognized as a contract liability. Contract liabilities are recognized as revenue when the performance obligation is satisfied.
17.11 Employee benefits
Share-based compensation
The Group operates equity-settled Share-based compensation benefits, which are provided to employees via an Employee
Share Option Program (ESOP), previously known as virtual Share program (VSP), and Share Option Program (SOP). The
accounting policies are described in note 8.
Other employee benefit obligations
The liabilities for annual leave are expected to be settled wholly within 12 months after the end of the period in which the
employees render the related service. They are then measured at the present value of expected future payments to be made in
respect of services provided by employees up to the end of the reporting period.
The Group does not operate any post-employment schemes other than mandatory defined contribution schemes.
17.12 Taxes
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the relevant
taxation authorities. The tax rates and tax laws used to calculate the amounts are those that are enacted or substantively
enacted at the reporting date in the countries where the Group has operations and generates taxable income.
Current income tax related to items recorded directly into equity are recognized in equity and not in the statement of profit and
loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and established provisions where appropriate.
Deferred taxes
Deferred tax is provided using the liability method or temporary differences between the tax bases of assets and liabilities and
their carrying amount for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognized for all temporary differences except for temporary differences between the carrying
amount and tax bases of investments in foreign operations where the company is able to control the timing of the reversal of
the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets are recognized for all deductible temporary differences, the carryforward of all unused tax credits and
unused tax losses. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that
it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized.
Unrecognized deferred tax assets are assessed at each reporting date and are recognized to the extent that it has become
probable that future taxable profits will allow the deferred tax assets to be recovered.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where
the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle
the liability simultaneously.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized
or the tax liability settled, based on tax rates that have been enacted or substantively enacted at the reporting date.
IR.MARLEYSPOON.COM 80
Sales tax
Expenses and assets are recognized net of the amount of sales tax, except when the sales tax incurred on a purchase of assets
or services is not recoverable from the taxation authority, in which case, the sales tax is recognized as part of the cost of
acquisition of the asset or as part of the expense item, as applicable.
17.13 Impairment
Non-financial assets (other than inventories)
The carrying amounts of non-financial assets are reviewed at each balance sheet date to determine whether there is any
indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. The recoverable amount of
an asset is the greater of its fair value less costs of disposal and value in use. If it is not possible to estimate the recoverable
amount of the individual asset, the recoverable amount is assessed on a cash generating unit (CGU) level and compared to net
cash flows for that CGU. When determining the value in use, estimated net cash flows are discounted to their net present value
(NPV) using a pre-tax discount rate that reflects the time value of money and the risks specific to the CGU in the current
climate.
In Management’s judgement, the lowest aggregation of assets which give rise to CGUs as defined by IAS 36 Impairment of
Assets are the individual countries being Germany, Netherlands, Portugal, Austria, United States of America and Australia. For
the applicable policy on inventories refer to note 17.8.
Non-derivative financial assets
The Group recognizes loss allowances for expected credit losses (ECLs) on:
-
-
financial assets measured at amortized cost;
financial assets measured at fair value through other comprehensive income (FVOCI)
The Group applies the general approach for security deposits which are classified as financial assets measured at amortized cost
and reported as non-current financial assets on the Statement of Financial Position.
ECLs are recognized for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that
financial instrument has increased significantly since initial recognition. If, at the reporting date, the credit risk on a financial
instrument has not increased significantly since initial recognition, ECLs are recognized for the financial instrument at an
amount equal to 12-month expected credit losses.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when
estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue
cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical
experience and informed credit assessment and including forward-looking information. The Group assumes that the credit risk
on a financial asset has increased significantly if it is more than 30 days past due.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls
(i.e., the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group
expects to receive). ECLs are discounted at the effective interest rate of the financial asset.
Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectation of recovering a
financial asset in its entirety or a portion thereof.
For trade receivables, the Group applies a simplified approach in calculating ECLs, whereby the changes in credit risk are not
tracked, but instead the Group recognizes a loss allowance based on the lifetime ECLs at each reporting date. The majority of
trade receivables are held by the Group’s payment service providers (PSPs) having collected the proceeds from customers prior
to delivery of the goods. The PSPs hold these receivables for a maximum period of one week before transferring to the Group,
effectively being a collection pass-through only. The Group has not experienced, nor does it expect material credit losses from
these parties given the reputation of the parties and the nature of the receivable and therefore have not recognized any ECLs
for these items. For receivables from corporate groups, the Group uses an allowance matrix to measure the ECLs of trade
receivables from individual customers, which are calculated using a ‘roll rate’ method based on the probability of a receivable
progressing through successive stages of delinquency to write-off.
IR.MARLEYSPOON.COM 81
For security deposits, classified under non-current financial assets, the Group considers there to be no material ECLs arising
from these transactions. Security deposits are paid to lessors or held by financial institutions on behalf of the lessor as security
over the leased premises. These deposits are held for the life of the lease. Management determines the risk of credit losses to
be immaterial given mitigation strategies exist to reduce this risk, including the issuance of letters of credit over the security
deposit as well as the ability for management to withhold future lease payments.
Revenue recognition
17.14
The Group generates revenue primarily from the sale of food ingredients along with corresponding recipes as meal kits.
Revenue is recognized in accordance with IFRS 15 Revenue from Contracts with Customers.
The Group follows the five-step model pursuant to IFRS 15 in which the amount of and period in which revenue is recognized is
determined. The process separates the following steps: identification of the contract(s) with the customer, identification of the
individual performance obligations, determination of the transaction price, allocation of the transaction price to the individual
performance obligations, and the determination of the timing of revenue recognition.
The Group has a single performance obligation to fulfill for its customers, a single promise to deliver the ordered meal kit
directly to the customer. Revenue is recognized only when the above performance obligation is satisfied, namely, upon delivery
of the meal kit. The Group does not provide a right of return for its products given that the good provided contains fresh
produce.
Revenue is measured at the fair value of the consideration received or receivable, in exchange for delivery of the ordered meal
kit, stated net of promotional discounts, rebates, and sales-related taxes. Prepayments received from customers for future
deliveries are recognized as contract liabilities under IFRS 15 and are shown as other non-financial liabilities.
Furthermore, the Group may participate in selling vouchers for future orders to marketing partners. Sales of such vouchers are
only included in revenue when a voucher has been redeemed and the corresponding box has been delivered. Prepaid and
unused vouchers sold to marketing partners are recognized as contract liabilities under IFRS 15 and are shown as other non-
financial liabilities.
Cost of goods sold
17.15
Cost of goods sold includes the purchase price of materials used in production, inbound shipping charges, costs attributable to
picking and rent of the fulfillment centers. Shipping charges paid to receive products from suppliers (inbound shipping charges)
are included in inventory and recognized as costs of goods sold upon the sale of products to customers.
17.16
Fulfillment expenses
Fulfillment expenses represent shipping expenses incurred to deliver customer orders and customer payment related expenses.
17.17 Marketing expenses
Marketing expenses represent costs incurred to support the promotion of products, including online and offline media
expenses, production and distribution costs of advertising material, costs related to customer care activities and other costs
associated with the Group’s market presence.
Royalty expenses are costs that relate to license and promotion agreements in which royalties are paid to third parties for use
of trademarks and related marketing materials. Royalty expenses are based on the greater of a pre-determined contracted
percentage of sales or the minimum guarantees in place and are expensed as the services are received.
General and administrative expenses
17.18
General and administrative expenses are costs not directly associated with the production and distribution of goods. They
include management and headquarters personnel wages and benefits, consulting expenses, travel, rent, insurance, utilities, and
other overhead costs.
IR.MARLEYSPOON.COM 82
Changes in accounting policies and disclosures
17.19
The Company has adopted all relevant new and amended Accounting Standards and Interpretations issued by the International
Accounting Standards Board (IASB) and adopted by the European Union (EU) which are effective for annual reporting periods
beginning on or after 1 January 2020. To the extent these financial statements have changed since the 2019 report due to
changes in standards and interpretations, we have disclosed the impact of those changes. The Group has not adopted early any
standard, interpretation, or amendment, that has been issued but is not yet effective.
18
Events occurred after the reporting period
EUR 2,500 thousand loan repayment to Berliner Volksbank (BVB)
On 29 January 2021, the Company retired the 2018 unsecured loan in its entirety, repaying the outstanding aggregate amount
of EUR 2,500 thousand.
New Market
In February 2021, Marley Spoon began deliveries of Dinnerly to the Netherlands. The meal kits are shipped from the Group’s
fulfilment center located in the Netherlands.
New Leased Facility
On 3 February 2021 the Company signed a 10-year lease for a new fulfilment center facility in Tracy, California, adding
additional capacity which will enable the US segment to respond to continued demand for Marley Spoon's products.
IR.MARLEYSPOON.COM 83
The consolidated financial statements were authorized by the Management Board on 24 February 2021.
Fabian Siegel
Chief Executive Officer, Chairman of the Management Board and Founder
Jennifer Bernstein
Chief Financial Officer, Member of the Management Board
Berlin, 24 February 2021
IR.MARLEYSPOON.COM 84
RESPONSIBILITY STATEMENT
To the best of our knowledge and pursuant to applicable accounting principles for consolidated financial statements, we assure
that a true and fair view of the financial position and performance is conveyed, that in the Marley Spoon management report,
the progression of business, including the business results and the position of Marley Spoon, are presented so as to convey a
true and fair view, and that the main opportunities and risks entailed in the Group's prospective development are described.
Berlin, 24 February 2021
Fabian Siegel, Chief Executive Officer, Chairman of the Management
Board and Founder
Jennifer Bernstein, Chief Financial Officer
Member of the Management Board
IR.MARLEYSPOON.COM 85
INDEPENDENT AUDITORS’ OPINION
Independent Auditors’ Report
To: Marley Spoon AG
Report on the audit of the consolidated financial statements and of the group management report
Opinions
We have audited the consolidated financial statements of Marley Spoon AG, Berlin, and its subsidiaries (the Group), which
comprise the consolidated statement of financial position as at 31 December 2020, the consolidated statement of comprehensive
income, consolidated statement of changes in equity and consolidated statement of cash flows for the fiscal year from 1 January
to 31 December 2020, and notes to the consolidated financial statements, including a summary of significant accounting policies.
In addition, we have audited the group management report of Marley Spoon AG for the fiscal year from 1 January to 31 December
2020.
In our opinion, on the basis of the knowledge obtained in the audit,
•
•
the accompanying consolidated financial statements comply, in all material respects, with the IFRSs as adopted by the EU,
and the additional requirements of German commercial law pursuant to Sec. 315e (1) HGB and, in compliance with these
requirements, give a true and fair view of the assets, liabilities, and financial position of the Group as at 31 December 2020,
and of its financial performance for the fiscal year from 1 January to 31 December 2020, and
the accompanying group management report as a whole provides an appropriate view of the Group’s position. In all material
respects, this group management report is consistent with the consolidated financial statements, complies with German legal
requirements and appropriately presents the opportunities and risks of future development.
Pursuant to Sec. 322 (3) Sentence 1 HGB, we declare that our audit has not led to any reservations relating to the legal compliance
of the consolidated financial statements and of the group management report.
Basis for the opinions
We conducted our audit of the consolidated financial statements and of the group management report in accordance with Sec.
317 HGB and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut
der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). We conducted our audit of the consolidated financial
statements in accordance with International Standards on Auditing (ISA). Our responsibilities under those requirements and
principles are further described in the "Auditor’s responsibilities for the audit of the consolidated financial statements and of the
group management report" section of our auditor’s report. We are independent of the group entities in accordance with the
requirements of German commercial and professional law, and we have fulfilled our other German professional responsibilities
in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinions on the consolidated financial statements and on the group management report.
Key audit matters in the audit of the consolidated financial statements
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated
financial statements for the fiscal year from 1 January to 31 December 2020. These matters were addressed in the context of our
audit of the consolidated financial statements as a whole, and in forming our opinion thereon; we do not provide a separate
opinion on these matters.
IR.MARLEYSPOON.COM 86
Below, we describe what we consider to be the key audit matters:
[1]
Revenue recognition
Reasons why the matter was determined to be a key audit matter
The Group generates revenue from the sale of food boxes. Revenue is recognized when the customer obtains control over the
food boxes. Revenue is presented net of various sales discounts associated with rebate campaigns.
We are of the opinion that revenue recognition is a complex matter due to the high number of boxes sold and the variety of rebate
programs which gives rise to an elevated risk of accounting errors. In light of the significance and the large number of individual
transactions recorded, we are of the opinion that revenue recognition is a key audit matter.
Auditor’s response
During our audit, we analyzed the accounting policies applied in the consolidated financial statements of Marley Spoon AG for
revenue recognition in terms of the five-step model defined in IFRS 15. Moreover, we verified the processes implemented by the
representatives of Marley Spoon AG for the recognition of revenue, particularly with regard to the appropriate treatment of rights
of return and discount allowed and tested the effectiveness of the controls implemented in these processes.
We tested the plausibility of the reported revenues by the use of data analytics. In addition, as part of our substantive audit
procedures, we reconciled the revenue recognized for a statistical sample to the cash received and verified whether the revenue
was recorded in the correct period based on the underlying terms and conditions of the supply contract.
Our procedures did not reveal any exceptions relating to revenue recognition.
Reference to related disclosures
The disclosures on the accounting policies applied for the recognition of revenue are contained in Section 17.14 “Revenue
recognition” of the notes to the consolidated financial statements.
[2]
Accounting of financing arrangements
Reasons why the matter was determined to be a key audit matter
The Company entered into several financing agreements in the previous and current fiscal year. Due to the variety of contractual
arrangements and their treatment required under IFRS accounting standards we are of the opinion that the accounting is complex.
Considering the material significance and great complexity of the issue which gives rise to an elevated risk of accounting errors,
we are of the opinion that the accounting of financing arrangements is a key audit matter.
Auditor’s response
As part of our audit, we assessed the accounting policies applied in the consolidated financial statements of Marley Spoon AG for
the accounting treatment of financing arrangements for compliance with the applicable IFRSs.
During our audit, we analyzed the accounting policies applied in the consolidated financial statements of Marley Spoon AG for the
recognition of financing arrangements to determine whether they were in line with the applicable IFRS accounting standards. We
also assessed the accounting policies applied by the legal representatives of Marley Spoon AG on the basis of the underlying
contracts and, in process discussions, understood the processes implemented by the legal representatives of Marley Spoon AG
for the accounting of financing agreements, in particular with regard to the significant estimation assumptions made.
IR.MARLEYSPOON.COM 87
The appropriateness of the key assumptions used in measurement, especially the volatility, maturity dates and the interest rates,
were examined by our internal valuation experts based on an analysis of market indicators and underlying contracts. We verified
the mathematical accuracy of the valuation method and the calculation of interest expenses in the fiscal year based on the
underlying contracts.
Our audit procedures did not reveal any exceptions relating to the accounting of financing arrangements.
Reference to related disclosures
The disclosures on the applicable accounting policies can be found in Section 6.2 “Derivative financial instruments” and Section
6.7 “Interest bearing loans and borrowings” of the notes to the consolidated financial statements”.
Other information
The supervisory board is responsible for the supervisory board report. In all other respects, the management is responsible for
the other information. The other information comprises the other components of the annual report, including:
•
•
•
•
•
•
•
•
the Marley Spoon KPIs
the letter by the management board
the report of the supervisory board
the remuneration report
the corporate governance statement
the directors report
the shareholder information and
the responsibility statement.
Our opinions on the consolidated financial statements and on the group management report do not cover the other information,
and consequently we do not express an opinion or any other form of assurance conclusion thereon.
In connection with our audit, our responsibility is to read the other information and, in so doing, to consider whether the other
information:
•
•
is materially inconsistent with the consolidated financial statements, with the group management report or our knowledge
obtained in the audit, or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the management and the supervisory board for the consolidated financial statements and the group
management report
The management is responsible for the preparation of the consolidated financial statements that comply, in all material respects,
with IFRSs as adopted by the EU and the additional requirements of German commercial law pursuant to Sec. 315e (1) HGB, and
that the consolidated financial statements, in compliance with these requirements, give a true and fair view of the assets,
liabilities, financial position, and financial performance of the Group. In addition, the management is responsible for such internal
control as they have determined necessary to enable the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
IR.MARLEYSPOON.COM 88
In preparing the consolidated financial statements, the management is responsible for assessing the Group’s ability to continue
as a going concern. They also have the responsibility for disclosing, as applicable, matters related to going concern. In addition,
they are responsible for financial reporting based on the going concern basis of accounting unless there is an intention to liquidate
the Group or to cease operations, or there is no realistic alternative but to do so.
Furthermore, the management is responsible for the preparation of the group management report that, as a whole, provides an
appropriate view of the Group’s position and is, in all material respects, consistent with the consolidated financial statements,
complies with German legal requirements, and appropriately presents the opportunities and risks of future development. In
addition, the management is responsible for such arrangements and measures (systems) as they have considered necessary to
enable the preparation of a group management report that is in accordance with the applicable German legal requirements, and
to be able to provide sufficient appropriate evidence for the assertions in the group management report.
The supervisory board is responsible for overseeing the Group’s financial reporting process for the preparation of the consolidated
financial statements and of the group management report.
Auditor’s responsibilities for the audit of the consolidated financial statements and of the group management report
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from
material misstatement, whether due to fraud or error, and whether the group management report as a whole provides an
appropriate view of the Group’s position and, in all material respects, is consistent with the consolidated financial statements and
the knowledge obtained in the audit, complies with the German legal requirements and appropriately presents the opportunities
and risks of future development, as well as to issue an auditor’s report that includes our opinions on the consolidated financial
statements and on the group management report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Sec. 317 HGB
and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der
Wirtschaftsprüfer (IDW) will always detect a material misstatement. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these consolidated financial statements and this group management report.
We exercise professional judgment and maintain professional scepticism throughout the audit. We also
•
•
•
Identify and assess the risks of material misstatement of the consolidated financial statements and of the group management
report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinions. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit of the consolidated financial statements and of
arrangements and measures (systems) relevant to the audit of the group management report in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of these systems.
Evaluate the appropriateness of accounting policies used by the management and the reasonableness of estimates made by
the management and related disclosures.
IR.MARLEYSPOON.COM 89
•
•
•
•
•
Conclude on the appropriateness of the management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in the auditor’s report to the related disclosures in the consolidated financial statements and in the group
management report or, if such disclosures are inadequate, to modify our respective opinions. Our conclusions are based on
the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the
Group to cease to be able to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures,
and whether the consolidated financial statements present the underlying transactions and events in a manner that the
consolidated financial statements give a true and fair view of the assets, liabilities, financial position and financial
performance of the Group in compliance with IFRSs as adopted by the EU and the additional requirements of German
commercial law pursuant to Sec. 315e (1) HGB.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within
the Group to express opinions on the consolidated financial statements and on the group management report. We are
responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinions.
Evaluate the consistency of the group management report with the consolidated financial statements, its conformity with
German law, and the view of the Company’s position it provides.
Perform audit procedures on the prospective information presented by the management in the group management report.
On the basis of sufficient appropriate audit evidence we evaluate, in particular, the significant assumptions used by the
management as a basis for the prospective information, and evaluate the proper derivation of the prospective information
from these assumptions. We do not express a separate opinion on the prospective information and on the assumptions used
as a basis. There is a substantial unavoidable risk that future events will differ materially from the prospective information.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.”
Berlin, 24 February 2021
Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft
Grummer
Nasirifar
Wirtschaftsprüfer
Wirtschaftsprüfer
[German Public Auditor]
[German Public Auditor]
IR.MARLEYSPOON.COM 90
IR.MARLEYSPOON.COM