Just Eat Takeaway has forecast a nearly 40% jump in its 2024 core earnings, ahead of expectations, banking on strong growth in its key British and Irish markets boosted by better delivery efficiency and simplified delivery operation.
Food delivery firms have been struggling to shift to stable profitability amid rampant customer churn rates after the sector boomed during the pandemic.
Improved Demand
However, demand seems to be recovering as the frequency of orders via takeaway apps picks up, helped by the companies' broader offerings with the addition of grocery and retail categories.
Europe's biggest food delivery company by revenue sees adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of about €450 million in the current year, while analysts polled by LSEG were expecting €398 million.
Its adjusted EBITDA soared to €324 million last year, compared to €19 million a year earlier.
Just Eat said the EBITDA margin in Britain and Ireland was rapidly approaching a similarly high level as Northern Europe, which makes up a lion's share of its earnings.
The group expects its gross transaction value, a common metric for food delivery firms, to grow by 2% to 6% in 2024, excluding North America, where it continues to explore a partial or full sale of its Grubhub business.
Positive Cash Flow
Just Eat, which broke even on free cash flow in the second half of last year, expects its cash flow to stay positive in 2024 and beyond.
"Our enhanced profitability resulted in reaching the critical milestone of returning to positive free cash flow in the second half of 2023," commented Jitse Groen, chief executive. "I am particularly pleased with the strong momentum in the UK and Ireland, with adjusted EBITDA margin rapidly approaching a similarly high level as Northern Europe.
"Overall, the business is in a strong position to capture further improvement to our topline performance, adjusted EBITDA and free cash flow in 2024."
Additional reporting by ESM
