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Just Eat CEO says Grubhub will be part of US delivery consolidation -Breaking


© Reuters.

Toby Sterling

AMSTERDAM (Reuters – Just Eat Takeaway.com chief executive stated on Thursday that Grubhub, which he acquired from Grubhub, will be part of a consolidation in U.S. deliveries market. But he said he wasn’t currently interested in selling the business.

Jitse Groen, a livestreamed presenter told investors that consolidation will occur in the U.S. On-Demand Delivery Market over time as different players work together to optimize the last mile.

The company management expects Grubhub’s participation in the consolidation, and plans to do it from a position that is strong.

Groen declined to answer a question about whether or not he might sell Grubhub, the business Takeaway purchased for $7.3billion in June.

He said that Grubhub was “fresh”, but also added that “anything which makes Grubhub stronger – we will look at it.”

Takeaway’s share price is down 25% in this year so far. This may be due in part to the loss of market share within the U.S. suburbs, and New York City being its strongest and largest market.

Investors called for the company’s attention to its US competitive situation. Grubhub (NYSE:) Eats, DoorDash and Uber are among the most prominent competitors. The company may also consider selling certain parts of its business. Takeaway should also clarify its strategy for grocery delivery in America, which is where it faces strong competition from Amazon’s Deliveroo.

Takeaway said in a presentation that it will target gross transaction value growth, a commonly used measure in ecommerce, in the “mid teens.” for 2022.

For a total transaction value between 28 and 30 billion euros (32 billion to $35 billion), the company reiterated its 2021 full-year forecast of an Earnings before Interest, Tax, Depreciation and Amortization (EBITDA), margin of -1%-1.5%. It means that EBITDA will be between 280-380 millions euros.

Investors were told by the company that they can expect the negative margin of -0.6%–0.8% to rise in 2022 and that they expect a positive margin “long-term” because GTV is expected to double over the next five-years.

Bernstein analysts who rate Takeaway shares as “Outperform” stated in a note, “We remain positive about Takeaway’s position in its core markets.”

After Groen’s comments, shares recovered some early losses and traded down 0.6% to 71.36 euro at 1253GMT.

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Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.