Last week was the week of food delivery services, so of course $DHER (-3,81 %) (Delivery Hero) should of course not be missing. Here is the summary of the analyst conference:
Niklas Östberg, CEO, presented the key results. GMV increased by 8% at constant exchange rates, and adjusted for the effects of hyperinflation accounting. Growth outside Asia was particularly pleasing, accelerating from 25% in the third quarter to 27% in the fourth quarter. There are signs of a return to growth in Asia, with GMV growth already recorded in 8 out of 12 countries. The company exceeded its own sales forecast with growth of 22% for the year as a whole.
Adjusted EBITDA improved by almost EUR 500 million year-on-year to around EUR 750 million, which was also above the forecast. Free cash flow improved significantly to around 100 million euros. Thanks to the IPO of Talabat, net debt was reduced to 1.9 billion euros, which corresponds to a leverage ratio of 2.5x.
Marie-Anne Popp, CFO, provided insights into the development of the individual segments. In Europe, strong order growth led to GMV growth of 17%. The MENA segment recorded accelerated GMV and sales growth of 34%, driven by Saudi Arabia and Talabat. In the Asia segment, the expiry of the free delivery offer for non-subscribers in Korea had a short-term negative impact on sales, but improved profitability. The Americas segment recorded GMV growth of 25% and positive adjusted EBITDA for the year as a whole. The gross profit margin increased to a new record level in the fourth quarter. For the year as a whole, GMV grew by 8% to almost 49 billion euros and segment sales by 22% to almost 13 billion euros.
GMV growth of 8% to 10% and sales growth of 17% to 19% are expected for 2025. Adjusted EBITDA is expected to be between EUR 975 million and EUR 1.025 billion, including additional investments in Korea and costs related to the change of the rider model in Spain. Free cash flow is expected to exceed EUR 200 million in 2025.
Niklas Östberg presented a short case study on the business in Saudi Arabia, where the company maintains a strong leadership position despite a very competitive market. The advertising business already generates more than EUR 1 billion in revenue, with growth of 36% in 2024.
In the subsequent Q&A session various topics were addressed:
Korea: The analysts inquired about the growth outlook and product developments. Delivery Hero expects growth in Korea to improve over the course of 2025, driven by product improvements and a stronger focus on subscriptions.
Saudi Arabia: There were questions about the competitive situation and the investments made. Delivery Hero emphasized that it is focused on providing an excellent customer experience and is able to compete in a highly competitive environment.
Hong Kong: Analysts asked about the recovery of the Hong Kong business. Delivery Hero explained that it is responding to increased competitive activity and expects to return to growth in the coming quarters.
M&A: There were questions about the company's cash position and M&A ambitions. Delivery Hero emphasized that the focus is on organic growth and that it does not want to be distracted by M&A activities.
Take Rate: Analysts inquired about the factors influencing take rate improvement. Delivery Hero explained that it is a mix of different factors, including increasing subscriptions, higher delivery fees and a growing share of own deliveries.
Spain: There were questions about the changes related to the rider employment model in Spain. Delivery Hero is in a transition to an employment model and is working on a smooth implementation.
In closing, Niklas Östberg thanked all participants and emphasized that the company remains focused on profit and growth.
I hope this summary has helped you to better assess the current situation at Delivery Hero.
