The Delivery Hero board of directors expects to be able to report a small profit in the coming year. Meanwhile, inflation and the associated slump in consumer spending are having a negative impact on ordering behavior. On the stock exchange, Delivery Hero shares temporarily rose in double digits in the morning, but could not quite maintain the gains. Most recently, however, they still gained around eight percent and were thus at the top of the MDAX.
Based on the gross goods volume (GMV), an operating margin (EBITDA margin) adjusted for special effects of minus 1.4 to minus 1.5 percent should be achieved in 2022, the group announced on Thursday in Berlin. At both ends of the range, this is 0.1 percentage points better than previously forecast. In the current year, delivery services had finally shifted their focus from aggressive growth to profitability after significant pressure from investors and a massive drop in share prices. Since then, Delivery Hero has been looking at where expenses can be reduced further.
In 2023, Delivery Hero wants to be operationally in the black. The Ebitda GMV margin is said to be more than 0.5 percent, with the second half of the year could be more than twice as good. With this, the board of directors specifies its goal. At the end of April, the managers announced their intention to break even in the coming year. In addition, management aims to reach the threshold for free cash flow in the second half of 2023. Analysts took the targets as a positive signal.
However, customers are likely to order fewer than expected in the current year. Group boss Niklas Östberg again buttoned up the forecasts for the gross value of goods and group sales. The total value of all goods that find their way into the digital shopping cart should only be around 44.7 billion euros after previously 44.7 to 46.9 billion euros. Group revenue for the full year should be at the lower end of EUR 9.8 to 10.4 billion.
Meanwhile, the gross goods volume from July to September rose by twelve percent to around 11.5 billion euros. In recent months, the group had introduced measures such as a higher minimum order value. As a result, the average size of a shopping cart has increased significantly in the area of deliveries within minutes (Quick Commerce), according to the company.
Total sales increased by 28 percent to 2.5 billion euros. The group thus performed roughly as expected by industry experts. Delivery Hero benefits from the use of new advertising techniques that restaurants can use to advertise offers in the smartphone apps. Digital advertising sales – also known as AdTech – are considered to be high-margin and high-growth. Due to the strong growth, Delivery Hero announced revenues of more than two billion euros by 2025 at the latest.
Delivery Hero also announced that it had reached adjusted breakeven in its largest segment related to the procurement and delivery of food in the past quarter. The company did not give any details. For the final quarter, the division’s adjusted operating profit is likely to settle in the lower half of the range of 40 to 120 million euros. The reason is lower growth in the gross value of goods and additional investments.
In the past, skeptics have complained that the higher profitability with falling sales is due to the fact that, among other things, fewer people are ordering and Delivery Hero therefore has to spend less advertising material.
In XETRA trading, the Delivery Hero share has since risen by 6.69 percent to EUR 37.15.
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