Delivery Hero CEO Niklas Östberg speaking at the Noah tech conference in Berlin on June 13, 2019.
Krisztian Bocsi | Bloomberg via Getty Images
Tradition hero Shares sank on Monday morning, extending losses from last week, as investors reacted to preliminary financial results released by the company.
Shares fell 8% at one stage during the morning session before paring losses to trade 4% lower at 11am. London time.
The financials, which were unaudited and released a week earlier, show the company grew sales in line with its guidance last year and forecasts stronger profitability in 2024.
Delivery Hero’s decision to release its numbers early was an attempt by the company to fend off an investor flight last week over the food delivery giant’s asset sales strategy.
Here’s how the company did it:
Income: 10.5 billion euros ($11.3 billion) in annual revenue in 2023, versus 10 billion euros expected by analysts, according to LSEG data
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization): Delivery Hero says adjusted EBITDA “surpassed” 250 million euros ($269.4 million). Analysts had forecast adjusted EBITDA of €254.3 million, per LSEG
Delivery Hero said group GMV (gross merchandise value), which is the combined value of total orders across its platforms, rose 6.7% year-on-year to 12.3 billion euros in the fourth quarter of 2023, and by 6.8 % to €47.6 billion for the full year 2023.
Total segment revenue rose 15.7% to 3 billion in the fourth quarter. Full-year sales totaled €11.1 billion for the full year, up 15.7% year-on-year.
That matches the company’s guidance of “about 15% annually [year-over-year]”Development in 2023.
Adjusted EBITDA, which is Delivery Hero’s measure of profitability, totaled more than 250 million euros for the full year 2023, Delivery Hero said, and the company reported an adjusted EBITDA margin of 0.6 percent.
Delivery Hero said the results came from healthy order growth in many of its geographies.
Most notably, Delivery Hero also gave some rosy guidance for 2024, with the delivery company forecasting group GMV growth of 7-9% for the year, higher than its 2023 performance.
Delivery Hero said it expects segment revenue growth of between 15% and 17% for the full year 2024 and adjusted EBITDA of 725 million to 775 million euros.
This would mean a tripling of profits from last year.
Delivery Hero argues that it can achieve this goal through incremental order growth to gradually increase its EBITDA margin. The company expects to reach an EBITDA margin of 1.6% in 2024.
Delivery Hero said it would release additional preliminary numbers for the fourth quarter in a trading update scheduled for Feb. 14, when the benchmark numbers were originally due out.
A tough week for Delivery Hero
It comes after the delivery hero’s shares lost more than 26% of their value last week, sliding to their lowest price since 2022, as investors reacted to a mix of news about portfolio asset sales.
On Tuesday, Delivery Hero said it would sell its entire 4.5 percent stake in British food delivery company Deliveroo for £76.8 million ($97 million), a value well below the price it paid for the shares in 2021.
Then on Friday, Delivery Hero shares plunged after a report said the company had ended talks to sell some assets of its Southeast Asian food delivery business Foodpanda to Singapore’s Grab.
Delivery Hero denied the report, releasing a statement saying any rumors that negotiations over the potential sale of Foodpanda’s assets had broken down were “false” and that talks were ongoing.
Delivery Hero has been particularly active when it comes to M&A over the past year – both on the acquisition side of things and on the divestment side.
The company acquired Spanish rival Glovo for an undisclosed sum in 2022. In the same year, Delivery Hero also sold its stake in German grocery company Gorillas to rival Getir, which bought the company outright for an undisclosed price.
The firm’s belief is that M&A should be used as a tool to unlock strategic value from certain assets rather than acquiring them at a significant yield and then selling them.
With Deliveroo, Delivery Hero sold its shares as their value fell significantly from the price Delivery Hero paid in mid-2021 at the height of the pandemic-driven boom in online food delivery.
Delivery Hero is one of the largest food delivery services worldwide with more than 2.2 billion users.
It competes with US giant DoorDash, UK-based Deliveroo, Anglo-Dutch Just Eat Takeaway.com, Singapore-based Grab and Indonesia-based Gojek.