Just Eat Now expects adjusted EBITDA to reach €275 million, boosting its earnings outlook by €50 million despite poor orders.
Online food delivery company Just Eat Takeaway.com is optimistic about its earnings outlook for 2023, despite a worrying drop in the number of orders received. The company’s new approach is interesting, especially since the figures add up to an expected increase in numbers not yet achieved.
in an official Press release, Just Eat increased its adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) from €225 million to €275 million. The company says the new figure accounts for wage cost inflation and additional food and non-food investments despite an “uncertain macro-economic 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 fell 14%. For gross transaction value (GTV), orders in the UK and Ireland were down by 6% and a total of 8%.
The company explained the reasoning behind the new approach, while also acknowledging that orders were not as many as would have been liked. The press release mentioned:
“Just Eat Takeaway.com continues to recover from last year’s slump, with the Northern Europe and Ireland segments leading the trend. While the year-over-year GTV decline in Q1 2023 is significant, the comparison pales in comparison with this quarter with the second highest GTV post pandemic. Our efforts to improve profitability are progressing ahead of plan, allowing us to upgrade our 2023 adjusted EBITDA target to approximately €275 million.
Just Eat Profitability Measures to Increase 2023 Outlook
The online delivery giant is taking several steps to ensure profitability for its new 2023 outlook. Just Eat decided to shift to the gig economy, which led to a reduction in the size of the company’s workforce. Food delivery firm has laid off 1700 delivery workers as it no longer intends to hire courier staff. In addition, Just Eat laid off 170 people working in the company’s operations.
The company has also launched a share buyback program as it looks to jumpstart earnings per share. According to the press release, JustEat will buy back shares for 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 Jitse Groen spoke out against the gig model in 2021. Financial Times article, Groen wrote that Just Eat employed thousands of couriers to demonstrate a working model. According to Groen, the EU should “eliminate unacceptable self-employment constructs” and ensure compliance by all member states. Groen believed this would create a level playing field for firms, and give workers the rights they deserved.
last year, just eat expressed a desire To sell part or all of the company’s US subsidiary Grubhub. In a company note at the time, Just Eat said its desire is based on creating and deriving value from all of the company’s assets. However, it cautioned that there was no timeline or definite confirmation for the sale.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to strip crypto stories down to the basics so that anyone anywhere can understand without a lot of background knowledge. When he is not delving deep into crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
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