Delivery Hero shares climb after Glovo owner posts first full-year profit

By Louis Goss

Shares in Delivery Hero increased on Wednesday after the German food delivery company said it had hit its financial goals for 2023 in posting its first-ever full-year profit.

The Berlin headquartered company, which owns food delivery platforms including Foodpanda and Glovo, beat expectations with adjusted EBITDA worth EUR253.3 million ($271.1 million) in 2023, versus the EUR199.9 million forecast by 18 analysts.

Shares in Delivery Hero (XE:DHER) increased 7% on Wednesday, having lost 52% of their value over the previous 12 months.

Delivery Hero's first annual profit follows a series of losses since getting its start in 2011. It posted losses of EUR623.6 million in 2022 and EUR1.09 billion in 2021.

The gig economy giant, which now operates in more than 70 countries worldwide, meanwhile, hit the upper end of its guidance in posting a 6.8% uptick in its revenues, having previously said it would achieve 5%-7% revenue growth.

The company, which has received significant injections of funding from investors including South African venture capital firm Naspers and Scottish investment fund Baillie Gifford, also said it now expects to generate enough free cash flow to meet its EUR4.4 billion debt obligations.

Founded by current CEO Niklas Oestberg, Delivery Hero's revenues rose across all regions it operates in, with the sharpest upticks in its Middle East and North Africa segment, where sales increased 26% to EUR786 million.

Sales in its largest Asian segment, where it has captured a major share of the market via its 2016 acquisition of Singaporean company Foodpanda, also increased 4% to EUR1.01 billion, while sales in Europe and the Americas increased 20% and 15% respectively.

Revenues from its advertising business, which see it offer premium placements to restaurants, surged 61% year-on-year to EUR912 million, and the company said it's aiming to generate sales of more than EUR2 billion from advertising in 2024/25.

Delivery Hero also increased its profit margins, up to 8% in the fourth quarter of 2024, and said it's on course to hit its long-term target of achieving profits margins of 10%-13%.

-Louis Goss

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02-14-24 0711ET

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