(Bloomberg) — Just Eat Takeaway.com NV wrote down the value of its US-based Grubhub unit by 3 billion euros ($3.1 billion) amid plunging stock market valuations and rising interest rates, a sign of the difficulty facing the business after it was acquired for about $7.3 billion last year.
The Amsterdam-based company also reported that orders slowed in the first half of the year after customers returned to restaurants and shops following Covid-19 lockdowns, the company said in a statement on Wednesday.
Just Eat struggled in the first half of the year, announcing plans to eliminate staff in France and scale back growth plans. Delivery companies industry wide have been grappling with slowing growth. Rival Deliveroo Plc cut its estimates for order growth this year and Gopuff said in July that it was closing warehouses and cutting jobs.
Still, the cutbacks helped the company make progress toward reaching profitability goals.
“Our path to profitability is accelerating,” Chief Executive Officer Jitse Groen said in the statement. He added that the company expects to generate adjusted earnings across the entire business in 2023, with its three largest geographies reaching that threshold in the past quarter.
Key Insights
- Total orders on Just Eat’s platform decreased 6.8% from the same period a year ago to 509.4 million. That compares to 547 million orders forecast by analysts surveyed by Bloomberg.
- Sales rose to 2.78 billion euros, compared to analysts’ 2.85 billion-euro target.
- First-half losses on adjusted earnings before interest, taxes, depreciation and amortization narrowed to 134 million euros.
- Just Eat is exploring a partnership or sale for Grubhub, which it bought in an all-stock deal in 2021, and looking for a bidder for its 33% stake in iFood.
- The company maintained its guidance for the year. It had previously pared its expectations for 2022 for gross transaction value to rise by mid-single digits percentage points year-on-year.
- The company also nominated its chief operating officer Jorg Gerbig for reappointment following the results of an investigation. The company announced in May that the COO would step down while a complaint about his behavior at a company event was probed.
- Chairman Adriaan Nuhn also didn’t seek re-election this year after shareholder proxy services criticized the board’s lack of gender diversity and governance.
- On Tuesday, the company launched a pilot in Berlin offering 20-minute delivery of grocery and convenience goods from a small urban warehouse known as a “dark store.”
Market Context
- Shares rose 1.9% to 19.15 euros at 9:16 a.m. in Amsterdam trading.
- The stock has declined 61% this year.
- Amazon.com Inc. announced a partnership with Just Eat’s Grubhub business last month where it will offer a delivery subscription to Prime users. As part of the deal, Amazon has the option to take a stake of as much as 15% of Just Eat’s US-based business.
- The Amazon deal “wasn’t done at the same valuation that the merger took place at last year and, therefore, it’s a logical consequence of the market environment” that the company would have to record an impairment on Grubhub, Groen told reporters in a media briefing Wednesday.
Get More
- Statement
- Just Eat Jumps on Amazon Deal to Take Stake in Grubhub Unit
- Just Eat Moves to Eliminate 350 Delivery Jobs in France
- Just Eat COO Under Misconduct Investigation, Chairman Exits
- Just Eat’s 2Q Ebitda Gain Boosts Confidence on 2023 Goal: React
(Updates with additional context throughout)
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