Germany’s Delivery Hero hikes 2023 revenue outlook, eyes investments

By Linda Pasquini and Anna Mackenzie

(Reuters) -German online takeaway food company Delivery Hero on Wednesday raised its full-year revenue outlook and said it eyed growth investments, after it swung to a profit in the first half of the year on accelerating demand.

The Berlin-based company expects total segment revenue to grow around 15% this year, compared with its previous guidance for growth of around 10% in constant currency terms.

The company confirmed its outlook for adjusted core profit (EBITDA) margin on gross merchandise value (GMV) of over 0.5% for the year.

After a pandemic-driven boost to growth, Delivery Hero has focused on reaching long-awaited profitability while maintaining growth as investor confidence in the rapidly expanding but mostly unprofitable sector started to wane.

Chief Financial Officer Emmanuel Thomassin said in a call that if the company were on track to exceed the implied EBITDA guidance, it would rather invest in its core business.

“Asia is probably the segment where we see most opportunity to invest,” CEO Niklas Oestberg added, pointing to South Korea in particular.

However, he said “it is not going to be a voucher war,” with the company now favouring investments with a longer-term sustainable effect rather than a short-term return.

He said the overall Asian market was good with the exception of Vietnam, in which the company sees no return to profits even in the long term.

In Thailand, another non-profitable market, the business is getting back to growth but it might take longer to achieve profitability, he added.

Delivery Hero’s stock was up 7.2% at 14:06 GMT, topping the German midcap index.

The group said its adjusted EBITDA swung to profit in the first six month of the year, from a loss of 323.0 million euros ($354.59 million) in the same period a year earlier and surpassing analysts’ expectations of a loss of 5 million euros in a company-compiled consensus. It did not disclose a concrete figure.

Revenue rose 16% in constant currency to 2.58 billion euros in the second quarter, slightly above a consensus estimate of 2.50 billion euros.

Overall GMV increased 8% in constant currency to 11.08 billion euros in the quarter, exceeding analysts’ estimate of 10.96 billion euros. The group’s Asia segment, including its core market South Korea, returned to positive GMV growth of 2% in constant currency.

($1 = 0.9109 euro)

(Reporting by Linda Pasquini and Anna Mackenzie in Gdansk; Editing by Himani Sarkar, Conor Humphries and Jonathan Oatis)