Always delivering an amazing experience is Delivery Hero’s mantra. The German food and grocery delivery group’s fourth-quarter results fell far short of that objective. Though the value of orders it processed rose 39% last year, the 17 billion euro company’s stock fell by more than a quarter on Thursday morning.
last year, the 17 billion euro company’s stock fell by more than a quarter on Thursday morning.
Chief Executive Niklas Östberg recently promised to exit less profitable markets and break even in its core food business on an adjusted EBITDA basis this year. That pledge still holds, but doesn’t include the unit delivering rapid groceries. Losses in that business are expected to leave the company with negative EBITDA equivalent to as much as 1.2% of this year’s expected gross merchandise value, or 540 million euros.
Delivery Hero shares are now back at the level they were trading at the end of 2019, before the pandemic helped lift the value of food orders more than fourfold over two years. It’s a sign of how quickly investors have soured on loss-making delivery companies. Östberg needs to show a clearer path to profitability.
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