The company benefited from the pandemic, but now the economic situation is becoming more difficult again.
(Photo: dpa)
Dusseldorf Depreciation on acquired companies pulled the Lieferando mother company Just Eat Takeaway deep into the red in the past financial year. The loss was 5.7 billion euros, of which 4.6 billion was due to goodwill amortization alone, as the company announced on Wednesday. This is mainly due to macroeconomic factors such as rising interest rates.
The delivery platform Takeaway.com, founded by the Dutchman Jitse Groen, has more than eightfold its size through the merger with Just Eat 2019 and the subsequent acquisition of the US competitor Grubhub. In the past four half-years, however, the revenue generated via the platform has stopped growing.
Without the strong inflation, however, even this would probably not have been achievable. Company boss Groen acknowledged that it was because of the higher prices at the restaurants the company delivers to that the revenue per order increased.
Just Eat Takeaway stock has lost 75 percent of its value
For now, though, Just Eat Takeaway wants to focus on making profits again. “In 2022, our priority was to improve profitability and strengthen our business,” said CEO Groen. After all, the company was able to achieve an adjusted operating profit (Ebitda) of 19 million euros again in 2022. In the previous year, this had been minus 350 million.
The aim is to further increase profitability in the current financial year. The company plans to increase the operating profit again to 225 million euros. However, it would not have reached the level of 2019 and 2020.
This optimism has not really arrived on the stock exchange. In the past two years, the share has lost almost 75 percent of its value and at times was just over 12 euros. At the end of last year, the price recovered somewhat, but has been slipping again since the beginning of the year. After the presentation of the annual results, the share started again in the red on Wednesday and was temporarily below 20 euros.
One of the bright spots is the German market, where Just Eat Takeaway is by far the market leader since it took over the business of competitor Delivery Hero. This market is highly profitable, said company boss Groen.
19
billion euro
Just Eat Takeaway was able to achieve adjusted operating profit in the past year.
The conditions for profitable growth were good. The years of the global pandemic had increased the number of orders for all delivery services. Just Eat Takeaway was also able to drive the number of orders in 2021 just over the one billion mark.
However, the company was not able to maintain this level when the restaurants were able to open normally again after the lockdowns. However, the company emphasizes that the number of 984 million orders in 2022 was still above pre-pandemic levels.
No buyer for US subsidiary Grubhub in sight
In order to gather strength again, Just Eat Takeaway started to reverse the massive takeover activities last year. Last year, for example, the stake in the Brazilian delivery service iFood was sold for 1.8 billion US dollars.
The buyer was the investor Prosus, who is also a major shareholder in the competitor Delivery Hero and has bought a large portfolio of delivery services in recent years. Prosus had also attempted to take over Just Eat but was defeated by Takeaway.com. However, this takeover battle had pushed up the purchase price.
However, the acquisition of Grubhub in the USA in June 2020 proved to be even more problematic for Just Eat Takeaway. “I’m thrilled that we can create the largest company for food delivery services outside of China,” Groen had cheered at the time. Less than two years later, he announced that the company wanted to separate from Grubhub again.
The US acquisition turned out to be an expensive mistake for Just Eat Takeaway.
(Photo: imago images/Levine-Roberts)
However, given the increasingly difficult market, a buyer is not yet in sight. In the US, competition is tough, and Grubhub was unable to assert itself against competitors Doordash and Uber Eats. In addition, several US cities have enacted limits on the commissions delivery services can take from restaurants.
According to Just Eat Takeaway, this alone cost 132 million euros in operating profit last year. “The limitation of commissions is in fact one of the biggest hurdles for a possible sale of Grubhub at the moment,” admitted company boss Groen when presenting the results.
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