Delivery Hero has its sights set on reducing debt.
According to CFO Emmanuel Thomassin, the Berlin delivery group wants to generate “substantial cash flows” in the future that exceed the group’s maturing liabilities, said Thomassin in a company statement on the detailed figures for 2023 and the outlook for 2024.
In the current year, Delivery Hero aims to generate positive free cash flow, based on the current composition of the group, i.e. without possible sales or acquisitions. Last year, the company said it reached break-even in terms of free cash flow in the second half of the year.
“We entered 2024 in a strong position to achieve our ambitious adjusted EBITDA and free cash flow targets,” said Thomassin. “We are confident that we will generate substantial cash flows in the future that exceed our upcoming liabilities.”
Positive cash flow means that the company takes in more money than it spends during the year. Companies often point to this metric to provide a path to future profits.
According to the recently published outlook, Delivery Hero wants to almost triple its adjusted operating earnings before interest, taxes, depreciation and amortization (EBITDA) in the current year. It is expected to land in the range of 725 to 775 million euros, after 253 million euros last year.
The group will not publish the net result for 2023 until the end of April with the annual report. A year earlier, the group had expanded its loss; after taxes and third parties, the loss attributable to shareholders according to IFRS amounted to 2.99 billion euros in 2022. It was almost three times as high as the previous year of 1.1 billion euros. The loss per share in 2022 was 11.21 euros after 4.57 euros.
Analysts such as Deutsche Bank have recently pointed out the need for improved free cash flows at Delivery Hero in view of higher financing costs and competitors with good financial buffers.
Delivery hero stabilized – RBC praises gross margin
Buyers for Delivery Hero shares were found at a low price level on Wednesday morning. According to the food supplier’s final annual figures, the share price on Tradegate temporarily gained 3.5 percent to 19.30 euros compared to the XETRA closing. However, this would mean that the shares would only just make up for the setback from the previous day. The shares have been languishing below the 20 euro mark since the beginning of the month; they recently slipped to a record low of just under 15 euros.
Analysts at the Canadian bank RBC highlighted the gross margin as positive in an initial assessment. In the second half of the year, at 8.3 percent, this was above the consensus estimate of 6.6 percent and above the in-house forecast of 7.7 percent. Otherwise, the numbers largely corresponded to the provisionally published data.
FRANKFURT (Dow Jones/dpa-AFX)
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