Just Eat Takeaway.com NV shares fell in Amsterdam trading as a continued drop in customer orders outweighed the upgraded full-year forecast.
(Bloomberg) — Just Eat Takeaway.com NV shares fell in Amsterdam trading as a continued drop in customer orders outweighed the upgraded full-year forecast.
The Amsterdam-based group is among the food-delivery companies that experienced surging orders during the pandemic but have since grappled with a slowdown after restaurants reopened for in-person dining. Inflation has forced many to refocus on their bottom lines.
Customer orders fell 14% to 227.8 million in the first quarter, it said in a trading update. That compared to the 231.1 million average forecast from analysts in a Bloomberg survey.
Notwithstanding the drop in orders, Just Eat raised its 2023 guidance for adjusted earnings before interest, taxes, depreciation and amortization to about €275 million ($302 million), from about €225 million previously. It also expects to turn free cash flow positive by mid-2024 and said it would begin a share buyback program of as much as €150 million.
Just Eat’s shares slid as much as 6.1% after the earnings report and were trading 1.7% lower at €15.98 apiece as of 10:55 a.m. in Amsterdam.
Mixed Set
The results were a “rather mixed set,” as orders declined in double digits year on year across regions, according to JPMorgan analyst Marcus Diebel. “While better Ebitda for 2023 is a positive, we remain cautious longer term given weakness in gross transaction value trends,” he said.
The company has been making efforts to improve profitability, which are “running ahead of plan,” CEO Jitse Groen said in a statement on Wednesday. Last month, Just Eat announced it would cut around 1,700 drivers in the UK and transition that market toward a gig-worker model that Groen had previously denounced.
The company Groen founded two decades ago in his college dorm room has been focusing on increasing the pooling rate of its orders, which means a courier can combine multiple orders into one delivery round. Just Eat has seen efficiency gains after recently introducing pooling in a couple of countries, Groen told journalists on a call.
Just Eat said it continues to actively explore the partial or full sale of Grubhub which it acquired in 2021 for about $7.3 billion. Last year, it wrote down the value of the US-based unit by €3 billion.
What Bloomberg Intelligence Says
Just Eat Takeaway.com’s improved trading in March and delivery efficiencies boost confidence it can reach its upgraded 2023 adjusted Ebitda guidance of €275 million, 15% above analysts estimates. Feasible 2H growth on an easier base and resilient northern Europe and the UK in 1Q (vs. an 8% total drop) aid its ambition to turn free cash flow positive by mid-2024, in line with peers. That underpins a €150 million share buyback as the core restaurant self-delivery business funds investment.
— Diana Gomes, BI consumer-products analyst
The total value of orders placed on Just Eat’s platform last quarter fell to €6.67 billion, compared to an average estimate of €6.91 billion. The company said it expects the total value of orders to grow in the range of -4% to +2% year-on-year in 2023, with a return to growth skewed toward the end of the year.
(Updates to add comments from company and share move. A previous version of this story corrected first-quarter orders)
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