Just Eat Takeaway.com NV raised its full-year profit guidance as the company’s focus on cost cutting boosted profitability.
The food-delivery company now sees adjusted earnings before interest, taxes, depreciation and amortization of around €310 million ($328 million) in 2023, it said in a statement on Wednesday. It had previously forecast adjusted Ebitda of about €275 million for the year.
Shares gained as much as 9.3% on the Amsterdam exchange, the biggest intraday jump since July, and were trading up 7.9% to €12.86 at 9:54 a.m.
The company said it expects to be approximately cash flow break-even in the second half of the year and positive thereafter. It also announced a new share buyback program of as much as €150 million.
Just Eat is cutting costs as it looks for ways to reignite growth. Like other delivery companies, it’s struggled to return to the surging growth it saw during the Covid-19 lockdowns, and orders fell to 217.9 million in the period. That compared to the 218.5 million average forecast from analysts in a Bloomberg survey.
Chief Executive Officer Jitse Groen said that the company’s North American business in particular is on a “slower trajectory,” in the statement. Still, “we are satisfied that this segment too is rapidly becoming cash flow neutral,” he said.
The results showed good profitability progress but “growth still sub-par,” Barclays analyst Andrew Ross said in a note to clients.
What Bloomberg Intelligence Says:
“Another €150-million share repurchase plan, at about 6% of Just Eat Takeaway.com’s market cap, boosts confidence the company is on track to reach positive cash flow in 1H24, similar to rival Deliveroo’s goal, with a near break-even position (before working capital changes) seen by year end. Though demand remains weak and the US a drag, partly on a forex dent, Just Eat’s better pricing and cost discipline strengthened its profitable UK and North European units, underpinning a raised 2023 Ebitda goal.”
—Diana Gomes, BI retail industry analyst
The company is exploring the partial or full sale of its US business Grubhub, which it acquired in 2021 for about $7.3 billion. Groen told Bloomberg in July that high price demands and a weak market for deals has made it difficult for the company to complete the sale of the Chicago-based business.
Earlier this month, Just Eat roped in artists Christina Aguilera and Latto for its latest advertising campaign. The firm has a large advertising budget which is “a little less than a billion a year,” Groen said on a call with journalists. “We need to be top of mind and that should translate into more orders in every, every single market,” he said.
(Updates with additional details throughout)
