by Ralf Witzler, Euro on Sunday
Delivery Hero is now in the black for the second half of the year and is trying to stop the negative trend in the share. The announcement is above all a promise to the markets. The food supplier’s stock has been under pressure since November. Within a few weeks, the papers lost more than a third of their value and are thus quoted at around the level of May 2020.
The really big breakthrough would not yet have been achieved. Because the announcement is limited exclusively to the core segment of food deliveries and is only to be achieved at the operational level, ie before interest, taxes, depreciation, special items and including the recently acquired Spanish company Glovo. It remains unclear how the result will continue at group level, whether there may also be black numbers there in 2023.
The initial reactions to the announcement were nonetheless positive. On the stock exchange, the share rose by a good eight percent in early trading on Monday after the announcement was published, but then gave up part of the gains again. Experts spoke of a “profitability signal”. At least the management has made a decision and given investors a guideline again after a long time. Most recently, the company had wanted to break even in 2018, but canceled the deadline in favor of expanding into emerging markets.
More than just a food supplier
Delivery Hero is now active in around 50 countries and employs around 43,000 people worldwide. The Berlin-based company not only delivers food from restaurants to customers. It also operates a platform that connects customers to restaurants and other delivery services. The Berliners act both as a pure intermediary for the delivery services of the restaurants and as a supplier and logistician for partners in the catering industry. In the Verticals division, Delivery Hero offers express deliveries of other products.
The management pursues an active acquisitions policy, especially in Asia, but also in South America, in order to promote growth, but also sells holdings that no longer fit into the strategic concept, attacks markets and sometimes withdraws again surprisingly quickly for outsiders. After Delivery Hero returned to the German market in summer 2021, the turnaround took place in December. Only the presence in Berlin will be retained, as a kind of test laboratory for new offers.
DAX group without profit
Opinions differ on the company’s rating. On the one hand there are those who point to the high rate of growth and the opportunity to invest in a global market leader that is currently being established. On the other hand, the company, which was founded in Berlin in 2011, has not yet made a single euro profit. The ascent was still steep. When it went public in 2017, Delivery Hero had an enterprise value of a good four billion euros. In 2020, it was promoted to the DAX. Today the group is worth a good 20 billion euros on the stock exchange.
Risky: The stock is a bet that the delivery business can be consistently profitable. The proof is still pending. Keep.
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