Just Eat now expects adjusted EBITDA to reach €275 million, increasing its profit forecast by €50 million despite bad orders.
Online food delivery company Just Eat Takeaway.com is upbeat about its 2023 earnings outlook despite the worrying decline in the number of orders received. The company’s new outlook is intriguing, especially since the numbers correlate with a hopeful increase in numbers that haven’t yet materialized.
in official press releaseJust Eat increased its adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) from €225m to €275m. The company says the new figure represents inflation in wage costs, and additional investment in food and non-food items, despite an “uncertain macroeconomic environment”.
According to Just Eat, the number of orders received in the first quarter of 2023 fell by 11% in Ireland and the UK. Across the entire Just Eat Takeaway.com group, orders are down 14%. For Total Deal Value (GTV), orders were reduced by 6% in the UK and Ireland and 8% overall.
The company explained the reasoning behind the new look, while acknowledging that the requests weren’t coming in as preferred. The press release noted:
Just Eat Takeaway.com continues to recover from last year’s slowdown, with Northern Europe and Ireland segments leading the trend. While the year-over-year GTV decline in Q1 2023 is significant, the comparison is with the quarter with the second-highest GTV value of the pandemic. Our efforts to improve profitability are ahead of plan, allowing us to update our EBITDA target for 2023 to approximately €275 million.”
Just take up the profitability metrics to increase the outlook for 2023
The online delivery giant has taken several steps aimed at ensuring profitability for its new outlook for 2023. Just Eat has decided to shift to a gig economy, thus cutting the company’s staff size. The food delivery company has cut 1,700 delivery workers because it no longer intends to hire courier employees. Furthermore, Just Eat fired 170 people working in the company’s operations.
The company has also started a share buyback program as it tries to increase earnings per share. According to the press release, JustEat will buy back shares worth up to €150 million. The company will either cancel the repurchased shares to reduce the issued share capital or use the shares to cover compensation obligations.
Interestingly, Just Eat CEO Jitsi Grohn has spoken out against the gig model in 2021. Financial Times articleGroen writes that Just Eat has employed tens of thousands of couriers to show a model that works. According to Grone, the EU must “eliminate unacceptable self-employment establishments” and ensure compliance by all member states. Gron believed that this would create a level playing field for companies, and give workers the rights they deserve.
Last year, Just Eat expressed its willingness to sell part or all of Grubhub, the company’s US subsidiary. In a company memo at the time, Just Eat said its desire was based on creating and realizing value from all of the company’s assets. However, she cautioned that there is no specific timetable or confirmation for the sale.
the next
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify cryptocurrency stories down to the bare essentials so that anyone anywhere can understand without much background knowledge. When not in the depths of cryptocurrency stories, Tolo enjoys music, loves to sing, and is a movie lover.