Niklas Östberg, CEO of Delivery Hero, speaks at the Noah Tech conference on June 13, 2019 in Berlin.
Krisztian Bocsi | Bloomberg via Getty Images
Delivery hero Shares fell Monday morning, extending last week’s losses as investors reacted to preliminary financial results released by the company.
Shares in Delivery Hero fell 8% at one point during the morning session before paring losses to trade 4% lower at 11 a.m. London time.
The unaudited financial figures, released a week earlier, show that the Germany-based company increased its sales last year in line with its forecast and forecast higher profitability in 2024.
Delivery Hero’s decision to report its numbers early was an attempt by the company to stem investor exodus last week over the food delivery giant’s asset sale strategy.
This is how the company did it:
revenue: 10.5 billion euros ($11.3 billion) in annual sales in 2023, versus 10 billion euros analysts expected, according to data from LSEG, formerly known as Refinitiv.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization): According to Delivery Hero, adjusted EBITDA “exceeded” €250 million. Analysts had forecast adjusted EBITDA of 254.3 million euros for LSEG
Delivery Hero said the group’s GMV (gross merchandise value), which represents the total value of all orders on its platforms, increased 6.7% year-on-year to 12.3 billion euros in the fourth quarter of 2023 and increased 6.8% overall to 47, 6 billion euros in 2023.
The segment’s total sales increased by 15.7% to 3 billion euros in the fourth quarter compared to the previous year. Full-year sales amounted to 11.1 billion euros, an increase of 15.7%.
This corresponds to the company forecast of “around 15% year-on-year”. [year-over-year]“Growth in 2023.
Adjusted EBITDA, which is Delivery Hero’s measure of profitability, was more than 250 million euros for the full year 2023, Delivery Hero said, and the company reported an adjusted EBITDA margin of 0.6%.
Delivery Hero said the results were driven by healthy order growth in many of its regions.
Of particular note, Delivery Hero also provided an optimistic forecast for 2024: the delivery company forecast group GMV growth of 7-9% for the year, which is higher than its 2023 performance.
Delivery Hero expects segment sales growth of between 15 and 17 percent and adjusted EBITDA of between 725 and 775 million euros for the full year 2024.
That would mean a tripling of profits compared to the previous year.
Delivery Hero claims that it can achieve this target by increasing order growth to gradually increase its EBITDA margin. The company expects to achieve an EBITDA margin of 1.6% in 2024.
Delivery Hero said it would release further preliminary fourth-quarter figures in a trading update originally scheduled for February 14, when it was originally scheduled to release figures.
A tough week for Delivery Hero
This comes after Delivery Hero shares lost more than 26% of their value last week, falling to their lowest price since 2022 as investors reacted to a mix of news surrounding portfolio sales.
On Tuesday, Delivery Hero said it would sell its entire 4.5 percent stake in U.K. food delivery service Deliveroo for 76.8 million pounds ($97 million), a value well below the price it paid for Company paid for the shares in 2021.
Then on Friday, Delivery Hero shares fell sharply after a report said the company ended talks to sell certain assets within its Southeast Asian food delivery business Foodpanda to Singapore’s grave.
Delivery Hero denied the report and issued a statement saying any rumors that negotiations over the possible sale of Foodpanda’s assets had broken down were “false” and that discussions were still ongoing.
Delivery Hero has been particularly active over the last year when it comes to mergers and acquisitions – both on the acquisition side and on the divestiture side.
The company bought Spanish competitor Glovo in 2022 for an undisclosed price. In the same year, Delivery Hero also sold its shares in the German food company Gorillas to competitor Getir, which took over the company completely for an undisclosed price.
Delivery Hero believes that mergers and acquisitions should be used as a tool to unlock strategic value from specific assets, rather than acquiring them for a significant return and then selling them.
With Deliveroo, Delivery Hero sold its shares as their value fell significantly compared to the price Delivery Hero paid in mid-2021, at the height of the pandemic-related boom in online grocery deliveries.
Delivery Hero is one of the largest food delivery services in the world with more than 2.2 billion users.
It competes with companies such as American giant DoorDash, British company Deliveroo, Anglo-Dutch company Just Eat Takeaway.com, Grab and Indonesia-based Gojek.
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2024-02-05 15:23:39
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