Just Eat Takeaway.com NV’s first-half earnings beat analysts’ estimates after cost cutting and restructuring measures boosted profitability.
The company swung to a profit, reporting adjusted earnings before interest, taxes, depreciation and amortization of €143 million ($158 million), up from a loss of €134 million in the same period a year ago, Just Eat said in a statement on Wednesday. That compared to the €128 million average estimate from analysts in a Bloomberg survey.
Just Eat has been targeting cost-cutting measures, including pooling of orders, in a bid to improve profitability. Order growth has remained weak since the Covid-19 pandemic when requests for takeout deliveries boomed during lockdowns. The delivery giant has also been expanding its order base by partnering with firms such as Lush Cosmetics Ltd.
Shares jumped 9.7% to €17.54 at 9:37 a.m. in Amsterdam, the biggest intraday gain since January. The stock has declined about 11% this year.
“There are still a lot of improvements ahead of us in the logistical network,” Just Eat Takeaway Chief Executive Officer Jitse Groen said on a media call, adding that there are changes to come with algorithms and networks. “Investment in the UK will go up and profitability will go up as well.”
Orders fell 12% to 450 million in the first half of the year, the Amsterdam-based company said. That compared to the 451.1 million average forecast from analysts in a Bloomberg survey.
The total value of orders placed on Just Eat’s platform in the first half of the year fell 7% to €13.2 billion, compared to an average estimate of €13.5 billion.
The company also reiterated its 2023 guidance for adjusted earnings before interest, taxes, depreciation and amortization of around €275 million and said growth is still expected to be skewed toward the end of the year.
What Bloomberg Intelligence Says:
Just Eat Takeaway.com’s adjusted Ebitda beat of about 12%, driven by faster margin progress in Northern Europe and the UK, may soothe the sting of 7% fewer clients and the US drag. Hiking advertising may lure new users — key to lifting growth — while a further easing of the cash burn alongside a stable monthly order rate boosts confidence that JET may reach its 2023 goals. CFO Brent Wissink’s smooth transition helps.
— Diana Gomes, BI consumer-industry analyst
Just Eat’s Ebitda, UK Growth Beat Soothe Client Loss Pain: React
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.
The company also announced that Brent Wissink will be stepping down as chief financial officer as per the annual general meeting in May 2024. The supervisory board will start the process of finding a successor.
--With assistance from Sarah Jacob.
(Updates to add share move, comments from media call and analyst comment)
