Just Eat Takeaway, a leading online food delivery service with a market capitalization of $4.04 billion, reported its Q4 2024 earnings, revealing significant financial growth and strategic advancements. The company’s stock surged by 54.12% following the announcement, reflecting investor optimism despite a challenging market environment. According to InvestingPro analysis, the stock is currently trading near its 52-week high, with additional ProTips and insights available for subscribers. The earnings call highlighted a notable improvement in adjusted EBITDA and strategic shifts in operations, contributing to the positive market reaction.
Key Takeaways
- Just Eat Takeaway’s stock price increased by 54.12% after the earnings announcement.
- Adjusted EBITDA grew by 28% year-over-year, reaching EUR 313 million.
- The company completed the sale of Grubhub and ceased operations in New Zealand and France.
- Strategic investments of EUR 150 million are planned for growth in Europe and the UK/Ireland.
Company Performance
Just Eat Takeaway demonstrated robust financial performance in 2024, with total revenue reaching SEK 3.5 billion. The company achieved a 28% year-over-year increase in adjusted EBITDA, signaling effective cost management and operational efficiency. Despite challenging conditions in the European e-commerce market, the company maintained its competitive edge, particularly in the UK and Ireland.
Financial Highlights
- Revenue: SEK 3.5 billion
- Adjusted EBITDA: EUR 313 million, 28% growth year-over-year
- Free cash flow: EUR 101 million
- Cash and cash equivalents: EUR 1.3 billion, down from EUR 1.7 billion in 2023
Market Reaction
Following the earnings release, Just Eat Takeaway’s stock experienced a dramatic increase of 54.12%, closing at EUR 12.43. This surge reflects investor confidence in the company’s strategic direction and financial health, despite broader market challenges in the restaurant and e-commerce sectors.
Outlook & Guidance
Looking ahead to 2025, Just Eat Takeaway forecasts a 4-8% growth in gross transaction value (GTV) at constant currency rates, excluding the Rest of the World segment. The company maintains a moderate debt level with a debt-to-equity ratio of 0.36, positioning it well for future growth. Unlock detailed growth forecasts and expert analysis with InvestingPro’s comprehensive coverage of Just Eat Takeaway and the food delivery sector. The company aims for a free cash flow before working capital of approximately EUR 100 million and has set a long-term target for an adjusted EBITDA margin exceeding 5% of GTV.
Executive Commentary
CEO Jitser Hoon emphasized the company’s growth ambitions, stating, "We want to be a fast-growing business." He also highlighted regional differences in order frequency, noting, "Order frequencies in Europe are much lower than The Middle East." Hoon underscored the importance of customer engagement, saying, "A vast majority of our customers needs to be a subscriber at some point."
Risks and Challenges
- Depressed European e-commerce markets could impact future growth.
- Increased competition in the UK may pressure market share and margins.
- Economic downturns in key regions could affect consumer spending and order frequency.
The earnings call provided insights into Just Eat Takeaway’s strategic initiatives and financial health, with a strong emphasis on growth and operational efficiency. The company’s decisive actions, such as exiting underperforming markets and focusing on core regions, have positioned it for continued success amidst industry challenges.
Full transcript - Just Eat Takeaway (TKWY) Q4 2024:
Conference Operator: Hello, everyone, and welcome to JusteatTakeaway.com Fiscal Year 20 20 4 Results Call. Please note that this call is being recorded. After the speakers’ prepared remarks, there will be a question and answer session. Thank you. I’d now like to hand the call over to Yitsik Groontz, Chief Executive Officer.
You may now begin.
Jitser Hoon, Founder and CEO, JustEatTakeaway.com: Thank you, operator. Good morning, everybody, and welcome to this analyst and investor conference call. My name is Jitser Hoon. I’m the Founder and CEO of justytakeaway.com, and I’m joined here by Jorg Abig, our COO Meite Osterfeldt, our CFO and Andrew Kenny, our CCO. Today, along with our 2024 full year results, we are delighted to announce that we have reached an agreement on a recommended public offer by Process for issued and outstanding shares in the capital of JustEatTakeaway.com.
On our corporate website, you can download our press release and the slides for this analyst and investor conference call. Before we get started, I want to thank you all for the time, investment and support over the years. Since launching in February, we have significantly grown the company, both organically and through M and A, to become a leading global on demand food delivery platform. I am very proud of what we have created, and we are excited to be embarking on this next step of the journey through a combination with ProSys, a leading European technology company sharing many of our values and whose culture we respect. We will briefly walk you through several pages and then shift to answering your the transaction, justitakeaway.com and ProSys have reached agreement on a recommended per share all cash offer by ProSys for all issued and outstanding shares in the capital of Justitakeaway Dot Com.
This represents an attractive cash premium of 63% to justeedtakeaway.com’s closing share price on twenty one February twenty twenty five. The offer values 100% of the shares at approximately EUR 4,100,000,000.0. Justidakeaway dot com will be well positioned to strengthen its brands, enhance operations and drive future growth well beyond the stand alone potential with Processes’ investments, technology and fast sector expertise. JustiTakeaway.com and Process have also agreed to a robust set of non financial covenants. Our management board and supervisory board unanimously support the offer, and I and other board members holding a combined 8.1% of the shares have provided irrevocable undertakings in relation to the offer.
As I mentioned, the offer of in cash per share represent a premium of 63% to the company’s closing share price on twenty one February twenty twenty five and a 49% premium to the three month VWAP prior to announcements. Our Board believes that Process has made a compelling offer, which represents an attractive cash premium to our shareholders, favorable non financial covenants and commitments in respect of deal certainty. If a bona fide third party makes an offer, which in the reasonable opinion of the board is more beneficial than the current offer, and this exceeds the consideration by 10%, JustyTakeaway dot com can terminate the current agreement unless process matches such superior offer. If the merger agreement is terminated in the event JustyTakeaway.com agrees to a superior offer or because of an adverse board recommendation change, justtheTakeaway.com shall pay Process in the amount of EUR 41,000,000. If the merger agreement is terminated in the event regulatory clearances are not obtained, Process shall pay the company in the amount of up to EUR410 million.
On Slide six, we have summarized the strategic rationale. Since our launch in February, we have significantly grown our business, both organically and through M and A, to become a leading global on demand food delivery company. Our objective has been to build and extend large scale and sustainably profitable positions in our countries, enhancing propositions to consumers in collaboration with our partners. After having recently streamlined our portfolio by divesting our U. S.
Assets to sharpen our focus on core positions, we are now transitioning from a period of portfolio optimization and a drive for efficiency to a new phase of growth acceleration and platform investments. As a leading global food delivery investor and operator with a proven track record in successfully scaling e commerce platforms, Process is well positioned to invest in and accelerate growth at justthetakeaway.com to unlock value well beyond its stand alone potential. Transaction (JO:TCPJ) provides an opportunity to couple Processes’ investment expertise, tech and AI capabilities and innovation mindset with just see Takeaway.com’s brand strength and solid fundamentals. We will now move to the full year 2024 results. On Slide eight, our key messages are that we have met our guidance for 2024 with constant currency GTV growth excluding North America of 2%, adjusted EBITDA of EUR460 million and a free cash flow amounting to EUR104 million.
Net excluding Grubhub, our full year adjusted EBITDA was EUR313 million and we generated a free cash flow of EUR101 million. That following the sale of crop up, 85% of CTV was from our growing and profitable Europe and UK and Ireland segments and that we are increasing investment in Europe and The UK and Ireland to further accelerate growth and lastly, that we issue guidance for 2025 for GTV growth adjusted EBITDA and free cash flow. Please follow me to Slide 10, where we summarize our 2024 guidance. We’ve met our guidance for the year. And on the following slides, I will quickly take you through the three items individually.
Turning to Slide 11. Our GTV grew 2% year on year in constant currency for the group, excluding North America, in line with the 2024 guidance range. GTV for the group amounted to billion in 2024, which is down 2% compared with last year or minus 1% reported. Moving to the next slide. On the left hand side, you can see that the adjusted EBITDA for the group was million in 2024, which is a million improvement compared with 2023.
The adjusted EBITDA margin as a percentage of TTV for the group further improved to 1.7%. On the right hand side, our free cash flow before changes in working capital is provided. Maite will provide more details in her section of this presentation, but I would like to point out that mainly driven by the increase in adjusted EBITDA, we significantly improved free cash flow and generated 104,000,000 in 2024, up €156,000,000 compared with last year. Moving to Slide 13. We have completed the rollout of our single global app across all target markets.
This new app substantially improves the user experience, accelerates innovation and significantly improves speed to market of exciting new product features like the Jet plus free delivery proposition, group ordering functionality and AI assistant, and those were all launched last year. We continue to make progress in the choice we offer to consumers, adding a huge variety of new partners to offer the widest possible selection for consumers anytime and anywhere. 2024 was a strong year for new partner acquisition, increasing the overall number of partners by 10%, including further expansion in new verticals such as grocery, electronics and pharmacy with online retailers up 48% compared with a year ago. On the next slide, we show that the combination of portfolio action and structural cost reductions have put the business on a stronger footing. In January, we completed the drop up sale to Werner Group.
Following the sale of our U. S. Operations, justytakeaway.com has become a more focused business. Following comprehensive business reviews and in line with our disciplined portfolio management approach, we ceased operations in New Zealand and France in 2024. On the right hand side, we have kicked off a transformation of the cost base with several major initiatives.
We have made changes to a number of teams across multiple countries as part of our mission to fuel sustainable growth for the future. While decisions like these are never easy, it is a necessary step we have needed to make to ensure that we have the right resources and organizational structure in place to drive sustainable growth and and enhance operational efficiencies. In addition, we made meaningful progress in our delivery efficiency to reduce delivery cost per order with the simplification of our delivery operation and further improvement in order pooling through new algorithms. Moving to our revised reporting on the operating segments. Following the completion of the sale of Prop Up in January, we have reassessed the operating segmentation to better align with how we intend to run operations internally.
Effective retrospectively from 01/2025, we will report in the following three regional segments: Europe, which is comprised of Austria, Belgium, Bulgaria, Denmark, Germany, Italy, Luxembourg, Poland, Slovakia, Spain, Switzerland and The Netherlands U. K. And Ireland, which is unchanged to our previous segmentation and Rest of World, which consists of Australia, Canada and Israel. Eighty Five Percent of the GDP comes from our Europe and UK and Ireland segments. If you follow me to Slide 16, you’ll see these two segments are both growing and profitable.
In the appendix of this presentation, we have included the historical KPIs based on the new segmentation, which will help you in updating your financial models. Please turn to the next slide. After having significantly improved the profitability of the business in the past years, we are now focused on accelerating the growth pace of the business on the back of increased investments. Funded through cost efficiencies and retail media and pricing, we will invest an additional €150,000,000 in Europe and The UK and Ireland in 2025 to drive growth in the coming years. We have four key opportunity areas to accelerate this investment.
The first one is to expand logistics coverage. Our aim is to be able to deliver whatever, whenever, whenever, wherever, whenever enabled through our extensive logistics network with hundreds of thousands of couriers delivering on our behalf. We will further strengthen our logistics coverage by expanding delivery zones, entering new cities and extending opening hours. We will grow supply and new verticals by further enhancing our grocery proposition, and we will continue to expand our choice in adjacent retail categories, including pet care, pharmaceuticals, flowers and entertainment. We will also accelerate marketing, pricing and promotion, and our aim is to continue to provide the best value to our consumers and partners.
We will focus on offering great value through targeted marketing, pricing and promotional initiatives, whether that be through free delivery and stem cards or partner funded campaigns. We will develop and scale loyalty and subscription. We have successfully launched a new Just Eat Plus loyalty program in December to enhance our customer value proposition. It will deliver value to our consumers, while it will also improve performance in terms of consumer retention and order frequency. Just Eat plus is our new subscription offering, providing free delivery along with additional savings and exclusive deals, delivering more value than just free delivery.
Our unified platform will enable each of the areas through accelerated underlying tech capabilities and enhanced product experience. And with that, I hand over to Maite for the financial results.
Maite Osterfeldt, CFO, JustEatTakeaway.com: Thank you, Jitsen, and good morning to everyone. Before I share the financial results, I want to explain that you will have noticed that we published unaudited financials today because we brought our financial information up forward by two days. We expect to issue full audited financials and the full annual report this Wednesday where you will receive more detail and IFRS reconciliation. In this next section, I will focus on the company, excluding Grubhub. Please follow me to Slide 20, where I take you through our financials, excluding Grubhub.
Total revenue in 2024 was SEK 3,500,000,000.0, which was stable compared to 2023. But more importantly, we made further significant improvements in our revenue less order fulfillment cost per order, which increased by 10% in 2024 compared with last year, mainly driven by delivery model simplifications. This was a key driver of the improvements in adjusted EBITDA, which grew 28% year on year to EUR $313,000,000. As a percentage of GTV, the adjusted EBITDA margin improved to 1.7%. Moving to Slide 21.
On the next slide, we bridge adjusted EBITDA to free cash flow excluding Grubhub, with the largest drivers being our capital expenditure, leases and cash taxes. As you can see, excluding Grubhub, we had net interest income. Overall, we significantly improved our free cash flow before changes in working capital to EUR 101,000,000. On Slide 22, we bridge cash balance from year end 2023 to full year 2024. Cash and cash equivalents amounted to EUR 1,300,000,000.0 at thirty one December twenty twenty four in comparison to EUR 1,700,000,000.0 at thirty one December twenty twenty three.
As you can see, the decrease in cash position was the result of the repayments of borrowings and the share buyback programs. Before the repayment of convertible bonds of EUR $250,000,000 and cash outflow in relations to the share buyback programs of EUR203 million. Cash flow was positive EUR30 million in 2024. On Slide 23, some more information about the combined share buyback programs, which were launched in the past two years. On this slide, we summarize the combined results of these three share buyback programs that have been launched in the prior two years.
So far, we have repurchased 33,500,000.0 shares at an average share price of EUR13.34, totaling EUR447 million. As part of today’s announced offer, we will pause our current share buyback program where there was only EUR 3,000,000 left. Turning to Slide 24, where we see our cash balance and debt maturity profile. We remain well financed and this strength allows us to make balanced investments into the business as well as decisions on our capital structure. Let me then finalize on Page 25 before I get to the guidance.
On this page, we provide a table to bridge from adjusted EBITDA to free cash flow. We expect free cash flow before working capital to be broadly stable in 2025 versus 2024 at approximately EUR 100,000,000. The higher expected adjusted EBITDA is offset by higher cash taxes and an elevated level of non recurring items. We remain managing our spends and maximizing income on items which sit below adjusted EBITDA in the P and L. And then finally, moving to the slide where we issue our guidance for 2025.
We expect constant currency GTV growth, excluding Rest of World segments, to be in the range of 4% to 8% year over year. We expect to deliver an adjusted EBITDA in the range of million to million. We expect free cash flow before changes in working capital of approximately million. And we confirm our long term target of the group of adjusted EBITDA margin in excess of 5% of GTV. And with that, I hand it back to Jitsen for the conclusion of this presentation.
Jitser Hoon, Founder and CEO, JustEatTakeaway.com: Thank you, Maite. I will continue with the wrap up of this presentation on Slide 28. To summarize, our key messages were that we have met our guidance for 2024 with constant currency GTV growth excluding North America of 2% adjusted EBITDA of EUR160 million and a free cash flow amounting to EUR104 million. Excluding Grubhub, our full year adjusted EBITDA was 330,000,000 and we generated a free cash flow of million. Following the sales drop up, 85% of our GTV comes from our growing and profitable Europe and The UK and Ireland segments.
We are also investing an additional million in Europe and The UK and Ireland to further accelerate growth. Lastly, we have guided for 2025. And with that, operator, I would like to open the call for questions.
Conference Operator: We’re now opening the floor for question and answer Your first question comes from Andrew Ross from Barclays (LON:BARC). Your line is now open.
Andrew Ross, Analyst, Barclays: Open. Great. Good morning, everyone. Thank you for taking my question. So I wanted to ask about the market share both in The UK and Ireland and also in Germany.
I guess it’s the biggest country within Northern Europe during Q4. Can you just help us to understand kind of what’s happening with market share in those regions? And then how that kind of plays into your decision to invest more in 2025? Because it’s certainly a SwissBorg versus your listed competitor, you’ve lost a little bit of share in Q4. We obviously have in The UK, we also have less data in Germany and the rest of Northern Europe.
Would be curious on your take in terms of what’s happening with share.
Jitser Hoon, Founder and CEO, JustEatTakeaway.com: Thank you. Yes, it’s a very good question. Thank you. I think overall in Continental Europe, despite the economical backdrop breccia, quite satisfied with our share development and the competitive levels and the way we react to it. We have quite extensive programs specifically focused on the cities that are a bit more competitive for us in terms of investment in supply, in terms of investment in marketing and that sort of business.
And we’ve seen a significant step up in investments this year based on cost reductions that we’ve made that we also just shown to you in the presentation. The situation in The UK is that it is more competitive. We’ve seen a lot of vouchering in that market. We’re not particular fans of vouchering. We believe it drives short term market share growth and not long term.
But it’s very clear that The UK is more competitive than Continental Europe and we need to step up our investments, which we will do this year as you’ve seen.
Conference Operator: Your next question comes from Mark Hejsling from IMG. Your line is now open.
Mark Hejsling, Analyst, IMG: Yes. Thank you. Firstly, on the question combined with process, I think one of the deal strategies or rationales behind it is that you can move faster if you are together. So can you please explain that? What are the things that really will step up when you move together?
And the second thing is, I may have missed it in all the documents quite a lot to digest, but will the management stay on post the closure of the deal? Are there any commitments from that?
Jitser Hoon, Founder and CEO, JustEatTakeaway.com: Yes. Thank you. To the last question, yes, absolutely, the managements will stay on. There will not be any changes, also not in the top management of the business, including the Exco and process actually fully aligned with the strategy. Now to your first question, what can we do together that we can’t currently do?
I think we need to take a step back to what we’ve done last year. We have tremendously increased our offering. We have invested in our proposition, in our technology. We’ve invested significant amounts of marketing. We specifically stepped up marketing in the more competitive regions.
But against the backdrop of Europe and the economies in Europe stagnating, restaurant sector actually being down in most countries, we only got a couple of percent of growth out of that in most European countries, which we don’t believe is enough. We want to be a fast growing business and therefore, we’re also stepping up investments on a stand alone basis this year. That’s the EUR 150,000,000 that we have made available to ourselves to invest specifically and most of all in The UK and in Germany. I think apart from that, obviously, we can accelerate our growth further. There’s quite some opportunity in our business still.
35% of The UK orders with us, but we believe that that should be a higher chunk of the population. The order frequency in Europe is still quite low. This is also, of course, where Process sees the benefits from an acquisition. Order frequencies in Europe are much lower than The Middle East, but also Brazil, other parts of the world. And actually, by investing in more supply, by investing in a better user proposition, you can actually increase that.
Now in the public markets, that’s of course a limit to what we can do. We need to grow our EBITDA, we need to grow the business fast. And I think in a private setting, you’ll be able to make more significant investments in markets in which are already very strong. I guess that’s the appeal also to process. We’re very strong business in most of the European markets.
And therefore, if you invest more money into that, that should, of course, increase the growth pace. Base.
Conference Operator: Your next question comes from Monique Pollard from Citigroup (NYSE:C). Your line is now open.
Monique Pollard, Analyst, Citigroup: Hi. Good morning. Thank you for taking my questions. Two for me, please. Firstly, on Spain, I just wondered if you had any comments.
I know it’s very early days, but any early signs you’re seeing in Spain of changes in the competitive dynamics from a major competitor moving over to the employed model, which you’ve obviously had there the whole time? And then secondly, I’m just interested in your comments about the potential for increased order frequency in Europe and processing that as part of the rationale for the deal. I would assume that to get materially higher order frequencies in Europe, you need to be able to lower basket sizes to the point where you massively sort of expand the TAM. So is that part of the long term investment strategy there? Thank you.
Jitser Hoon, Founder and CEO, JustEatTakeaway.com: Yes, thank you. So first on Spain, there’s very little change in Spain. We think that our competitor has employed zero people thus far. So I don’t think there’s actually a change in local dynamics yet. So we’re still waiting for them to make those changes.
Then the question around the order growth in Europe. Well, it’s not no, it’s not about lower basket sizes. It’s about more supply and a better service. You could see obviously that if you invest more money into our subscription program that also that will increase growth. So certainly not about lower basket sizes, but our ambition is to deliver everything that people need and that could include lower basket sizes.
But typically, we see that the basket sizes, whether it’s grocery or food delivery, that’s roughly the same baskets. If you look at electronics, obviously it’s higher. If you look at perfume, it’s higher. So I don’t think it’s per se lower basket sizes.
Monique Pollard, Analyst, Citigroup: Understood. Thank you.
Jitser Hoon, Founder and CEO, JustEatTakeaway.com: Thank you.
Conference Operator: Your next question comes from Giles Thorne from Jefferies. Your line is now open.
Giles Thorne, Analyst, Jefferies: Thank you. I just wanted to pick up on the non financial covenants that have been signed. I’m assuming that exists because there were points of difference between yourselves and ProSys on certain aspects of the business. So specifically on strategy, it’d be interesting to hear what the point of difference with ProSys were. That was it.
Thank you.
Jitser Hoon, Founder and CEO, JustEatTakeaway.com: I don’t think there’s differences with ProSys. ProSys has agreed to run the company as is. That’s also in the non financial covenant. You can look them up. So I don’t think there’s differences there.
I think that certainly they have different insights. They operate more food delivery businesses across the globe. But that goes two ways. We have certain assets that are actually going to be quite helpful to Prozus in Brazil and the other way around. So it’s going to be an interesting dynamic.
I don’t believe there’s much light between what Prossus believes how Prossus believes the business should be run and how we believe the business should be run. And I need to point out that Fabisio obviously comes from iFood, so Fabisio understands our type of business very well. And even the composition of iFoods, which is also a very large marketplace business and a very large logistics business just like our businesses is actually quite similar. So I think actually the strategy will be very much aligned.
Giles Thorne, Analyst, Jefferies: Great. Thank you.
Jitser Hoon, Founder and CEO, JustEatTakeaway.com: Thank you.
Conference Operator: Next (LON:NXT) question comes from Chris Jonan from HSBC. Your line is now open.
Mark Hejsling, Analyst, IMG: Yes. Hi. Thanks for taking my questions. First on Spain, is
Giles Thorne, Analyst, Jefferies: it possible to get a bit
Mark Hejsling, Analyst, IMG: of color on the lawsuit you filed against Delivery Hero? Just trying to understand the angle, level of conviction. And then second question, short one, I guess, on Austria and Australia and Canada, if there is anything, are there any active talks at the moment? Thank you.
Jitser Hoon, Founder and CEO, JustEatTakeaway.com: Yes. Regarding Spain, Spain, we have indeed filed lawsuits that was before the obviously, they announced that they would change their model, which they haven’t done this far, but they have announced that actually a couple of days after we filed the court case. Our claim in Spain is that because of the unlawful competition, they have been able to invest more money into that markets than normally would have been possible and that has damaged our business in Spain. So that is the claim. We obviously filed the claim because that behavior needs to stop.
The law is the law, so everybody in the country should adhere to the law, including our competitors. Regarding Australia and Canada, there’s no change in our opinion about those markets. Now obviously, most of our investments in the past have been going into Europe. This is also, of course, a constraint of the public markets. If you don’t grow in a market, it’s difficult to invest behind it.
And we’ll see what’s possible with Prosys, but there will be no short term change there.
Conference Operator: Next question comes from William Guile from ABN Auto.
Mark Hejsling, Analyst, IMG: I have a first question, which is about the nonfinancial covenants. In the nonfinancial covenants, it also clearly states that there is an agreement on the minority shareholders in association with this particular sentence, can you confirm if the current management board of Just Eat Takeaway will own any shares, assuming that the bid will be successful in MIH Bittco Holdings PvE after the close of the deal? And the second question I have is based on what your, let’s say, lawyers are telling you, are there any regulatory hurdles or regions where there might be some scrutiny from regulators on a potential offer from Prozis?
Maite Osterfeldt, CFO, JustEatTakeaway.com: Hi. Thanks, Wim. Let me take that. I think as Jitsa already mentioned and is in the press release, there are irrevocables of all the management of our members in relation to this transaction. So we will be tendering our shares.
The nonfinancial covenant that you found on the minority shareholders, as you’ve seen, we have a backend structure and we also have some other elements in the transaction by which it could be possible that we, at least temporary, would have some minority shareholders. And then on the regulatory clearance, I think we are comfortable and confident about that process. We think this is a pro competitive transaction in the interest of the broader European technology space, and we’re confident about that process. And we’ll see where that whether the regulator agrees with us on that.
Conference Operator: Thank you very much. Next question comes from Anik Mahesh from Bernstein. Your line is now open.
Anik Mahesh, Analyst, Bernstein: My first question is on 150,000,000 investments that you plan to do in Europe and The UK. Can you just give us an idea of the split or is it fifty-fifty split for the coming year? And my second one is on the 12.5 times EBITDA margin growth. Can I confirm that this is including the Grubak cash?
Maite Osterfeldt, CFO, JustEatTakeaway.com: I think on the latter, no, I think if you’re referring to the multiple that the process has put out, that is based on EBITDA excluding Rev Health.
Conference Operator: Your next question comes from Mark DeBil from JPMorgan (NYSE:JPM).
Mark DeBil, Analyst, JPMorgan: Yitsen, congratulations on this year. Fantastic. I have one question in regards to M and A. Does it actually mean that just kind of like hopes for further disposals, is there any difference in thinking? I mean, clearly now, you have a very strong, obviously, partner in the business.
Does it change anything in terms of M and A? And the second question I have to say is we had a debate about the name of all this M and A. I think you won in the end, but I’m very happy to. So I’m really excited.
Jitser Hoon, Founder and CEO, JustEatTakeaway.com: Just the Food Hero it was, right, Markus?
Mark DeBil, Analyst, JPMorgan: Correct,
Jitser Hoon, Founder and CEO, JustEatTakeaway.com: Yeah. Well, I think we can compromise. Thank you. We can probably compromise and just call it Justy instead of justytakeaway.com. But I don’t like this justy superhero thingy here.
But no, regarding M and A, well, certainly the transaction needs to close first and it would be for Prosus (OTC:PROSF) to determine also this M and A strategy. It is Prosus is, of course, a very large player in the industry. They fully own iFoods, which I’ve always had quite some respect for. We sold the stake, not because we did not appreciate the business, but because we were a minority shareholder and we basically had no influence over that business, which was a bit unfortunate, but if that happens then you are a financial shareholder, which is why we sold that stake. But that’s an excellent business.
So I can imagine that in the future they might consider actually holding those businesses together, but that’s up to them. In terms of other M and A, I think it’s safe to say that we have no targets at this point in time. So it would be strange for me to speculate on something.
Conference Operator: Your next question comes from Robert Zink from Kepler Cheuvreux. Your line is now
Giles Thorne, Analyst, Jefferies: open. Yes, thank you. I have a question. It’s kind of like bigger picture. Are there certain things you feel like as being part of a larger company and so no longer being a publicly listed company yourself that you feel like you can yes, that you are enabled more to do?
Are there certain parts of your strategy like a long term type of strategy, decisions like investing in The U. K. That you feel like it’s easier to do when you’re a part of ProSys than what you can actually do if you’re a public company and you maybe have more things to kind of, yes, show in terms of financials in the short term? And maybe also quickly just on your guidance on, yes, what is kind of the head office component of your adjusted EBITDA guidance? There’s quite a significant investment, I think, that you’re guiding for.
But I’m just trying to understand what is the head office component of your group guidance?
Jitser Hoon, Founder and CEO, JustEatTakeaway.com: I think I’ll pass that last question to Maite, if she understood. I’m looking at that right now. Regarding being able to run the business, there’s advantages to being private and there’s advantages to being public. Now those advantages differ through time. It’s not a secret that Europe, the European markets for anything e commerce is not great at the moment.
A lot of the European e commerce businesses are actually looking at quite a depressed value compared to The U. S. Businesses that are at all time highs. That is not a good situation for Europe, but that’s a broader picture I think that’s going on. In any event, we’ve IPO ed actually three times.
We IPO ed Amsterdam, London and New York. That was very helpful to the growth of our business. I think we’ve been able to do a lot of things being listed. And at that time, that was clearly an advantage. Being private now would give us a little bit more space in terms of being able to invest in the business.
I’m quite confident of that. But again, it depends very much on what happens to the public markets if you’re listed and what happens also in an individual relationship with a private player. If everybody is aligned, there’s no issue. If you get differences of horizon, then obviously, that’s a problem whether that’s the public market or the private market.
Maite Osterfeldt, CFO, JustEatTakeaway.com: Yes. And let me take your question on the guidance. I mean, we guide for the whole company, obviously. As you’ve seen on Slide 17, we expect to generate over SEK 200,000,000 of additional sort of fuel for that investment of SEK 150 And of that SEK 200, approximately SEK 100 will come from cost efficiencies. And that will be across the organization, both on the delivery side, but also on the staff and OpEx side.
So that should give you some idea about how we go about that.
Giles Thorne, Analyst, Jefferies: Okay. Thank you very much.
Jitser Hoon, Founder and CEO, JustEatTakeaway.com: Thank you.
Conference Operator: Your next question comes from Sean Keayley from Panmure Liberum. Your line is now open.
Mark Hejsling, Analyst, IMG: Thank you and good morning everybody. In the non financial covenants, there’s a statement saying that Prosys doesn’t intend to make a breakup to implement a breakup strategy. But my question is given the recent disposals, Naveed, are you happy with the portfolio as it is? Are there further are there more markets that you’d like to dispose off go forward? And yes, it’s just interesting how your terms of runaways go forward?
Jitser Hoon, Founder and CEO, JustEatTakeaway.com: Yes, thanks for the question. Well, look, we are about creating profitable growing food delivery businesses. That is the intent of the exercise. If we can’t do that, then we would reevaluate our portfolio always. That’s what we’ve done in the past.
That’s what we’re doing now. I think that’s independent of who owns a business, whether it’s public or private. You still would look at the same situation. Now obviously, your investment appetite might differ in these environments. You might take different decisions based on that, but we’ll still look at portfolio also when we’re private.
Andrew Ross, Analyst, Barclays: Okay. Thank you.
Conference Operator: Your next question comes from Silvia Kuneya from Deutsche Bank (ETR:DBKGn). My question is on the announced investments. Part of this is to expand the logistics coverage as you mentioned. Can you give us a sense about how this could change the mix of delivery versus marketplace business during the year? And then an additional quick question still around investments.
If you could tell us about whether you have any initial ambitions in terms of how many subscribers you would like to reach this year or in the medium term, perhaps you could comment about percentage of orders coming from subscriptions?
Jitser Hoon, Founder and CEO, JustEatTakeaway.com: Charles, Silvia, Gatsby, Gauri. First of all, your question around the delivery marketplace mix. Well, we recognize that the growth from adjacencies will fully come from logistics wherever we have that on the globe. So it’s actually quite important for us to drive the cost of logistics down. And we’ve been able I think we’re looking at already one point five years of decreasing the cost per order and you see that predominantly in The UK, but we have that same dynamic in most markets.
So we’re trying to reduce the cost so that we can actually increase the delivery share even in countries in which it’s tougher, right? And we’ve spoken about this in the past that delivery in places such as Germany is very expensive because of all the regulation involved in that country versus first the UK where it’s easier for us to reduce the cost. So we assume that that mix will change. We still think that there’s quite some growth also in marketplace, but clearly if you add more logistics restaurants or logistics inventory, including grocery, that will grow quicker. Regarding the subscription, we have launched this now in Spain, Austria and Germany in combination with Amazon (NASDAQ:AMZN).
That’s doing pretty well, but we haven’t launched the paid version yet that will also come this year. We’ve launched Plus in The UK in December. That’s looking pretty good actually. We have good frequency from those customers. If you ask me conceptually where should it go?
Well, I would say a vast majority of our customers needs to be a subscriber at some point. We’ll take our time to get there. It’s obviously an investment case for us, but this is conceptually how we think about it because obviously it’s easiest for us to grow based on the consumers that we already have. It’s much easier to increase the frequency than to get new customers in, especially in these markets in which we’re already so large. So frequency is very important to us and we believe that plus increases the frequency and it increases the AOV.
So I think that’s a good combination and we’re rolling it out now. It’s a bit of a technological challenge to us. So The UK is there. I believe that Spain will be next.
Conference Operator: All right. Gratiot. We don’t have any questions as of the moment. I’d now like to hand back over to Yitsev for final remarks.
Jitser Hoon, Founder and CEO, JustEatTakeaway.com: Thanks, everybody. I would like to round off this analyst and investor call by thanking you for participating and for all your questions. Should you have any additional questions or remarks, please reach out to our Investor Relations team. Thank you and goodbye.
Conference Operator: Thank you for attending today’s conference call. You may now disconnect. Goodbye.
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