Just Eat now expects Adjusted EBITDA to reach €275 million, boosting its earnings outlook by €50 million despite the weak orders.
Online food delivery company Just Eat Takeaway.com is optimistic about its 2023 earnings outlook despite a worrying decline in order numbers. The company’s new outlook is interesting. Especially since the numbers relate to desired increases in numbers that have not yet been achieved.
Officially press release, Just Eat increased adjusted EBITDA (earnings before interest, tax, depreciation and amortization) from €225 million to €275 million. The company said the new figures account for inflation in wage costs, as well as additional food and non-food investments, despite an “uncertain macroeconomic environment.”
Orders received in Q1 2023 fell 11% in Ireland and the UK, according to Just Eat. Orders fell 14% across the Just Eat Takeaway.com group. Gross transaction value (GTV) saw a 6% decline in orders in the UK and Ireland, for a combined 8% decline.
The company explained the reasons behind the new outlook, while also admitting that orders were not being placed as quickly as it would have liked.
“Just Eat Takeaway.com continues to recover from last year’s slowdown, with the Nordic and Irish segments leading the trend. compares to GTV’s second-highest quarter of the pandemic Efforts to improve profitability exceed plan, allowing us to raise our 2023 Adjusted EBITDA target to around €275 million .”
Revenue measures to improve Just Eat’s 2023 outlook
The online delivery giant is taking several steps to ensure profitability for its new outlook in 2023. Just Eat decided to move to the gig economy, thereby reducing the company’s staff numbers. A food delivery company has cut 1,700 delivery workers as it does not plan to hire courier staff. Additionally, Just Eat laid off 170 of his people working for the company.
The company also launched a share buyback program to boost earnings per share. According to a press release, JustEat plans to buy back up to €150 million in shares. The company either cancels the repurchased shares to reduce its issued share capital or uses the shares to cover its indemnification obligations.
Interestingly, Just Eat CEO Jitse Groen was against the gig model in 2021. Financial Times article, Groen wrote that Just Eat hired tens of thousands of couriers to demonstrate a working model. According to Groen, the EU must “eradicate unacceptable self-employment structures” and ensure compliance by all member states. Groen believed that this would create a level playing field for companies and give workers the rights they deserved.
Last year, Just Eat announced its intention to sell some or all of its US subsidiary, Grubhub. In a company memo at the time, Just Eat said its drive was premised on creating and realizing value from all of the company’s assets. However, it cautioned that there is no timeline or clear confirmation of a sale.
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