Delivery Hero says it hit 2023 sales growth targets in early results after 26% stock plunge

Delivery Hero published preliminary financial results on Monday, a week earlier than planned, that showed the company grew sales in line with its guidance last year and is forecasting stronger profitability in 2024.

The results, which are unaudited and based on preliminary information, are being released by the company early in a bid to push back on investor flight last week over the food delivery giant’s asset sales strategy.

Here’s how the company did:

Revenue: 10.5 billion euros ($11.3 billion) in annual 2023 revenues, versus 10 billion euros expected by analysts, according to LSEG data

Adjusted EBITDA (earnings before interest, tax, depreciation, and amortization): Delivery Hero says adjusted EBITDA “exceeded” 250 million euros ($269.4 million). Analysts had forecast adjusted EBITDA of 254.3 million euros, per LSEG

Delivery Hero said group GMV (gross merchandise value), which is the combined value of overall orders on its platforms, grew 6.7% year-over-year to 12.3 billion euros in the fourth quarter of 2023, and by 6.8% to 47.6 billion euros in full-year 2023.

Total segment revenue increased 15.7% to 3 billion in the fourth quarter. Full-year sales came in at 11.1 billion euros for the full year, up 15.7% year-on-year.

That matches company guidance for “around 15% YoY [year-over-year]” growth in 2023.

Adjusted EBITDA, which is Delivery Hero’s measure of profitability, totaled more than 250 million euros in full-year 2023, Delivery Hero said, and the company reported adjusted EBITDA margin of 0.6%.

Delivery Hero said the results were driven by healthy order growth in many of its geographies.

Most notably, Delivery Hero also gave some rosy guidance for 2024, with the delivery company forecasting group GMV growth of 7-9% for the year, higher than its performance in 2023.

Delivery Hero said it expects segment revenue growth of between 15% and 17% in full-year 2024, and an adjusted EBITDA of 725 million to 775 million euros.

The company is also forecasting positive free cash flow for the year.

Delivery Hero said it would publish additional preliminary numbers for the fourth quarter in a trading update slated for Feb. 14, when it was originally due to report numbers.

It comes after Delivery Hero shares lost more than 26% of their value last week, slipping to their lowest price since 2022, as investors reacted to a mix of news surrounding portfolio asset sales.

On Tuesday, Delivery Hero said it would sell all of its 4.5% stake in British food delivery firm Deliveroo for £76.8 million ($97 million), a value far lower than the price it paid for the shares in 2021.

Then, on Friday, Delivery Hero shares sank sharply after a report said the company had ended discussions to sell certain assets within its Southeast Asian food delivery business Foodpanda to Singapore’s Grab.

Delivery Hero denied the report, putting out a statement saying that any rumors that negotiations for the potential sale of the Foodpanda assets had collapsed were “false,” and that talks are ongoing.

Delivery Hero is one of the largest food delivery services globally with more 2.2 billion users.

It competes with the likes of American giant DoorDash, Britain’s Deliveroo, Anglo-Dutch firm Just Eat Takeaway.com, Singaporean company Grab, and Indonesia-based Gojek.