Just Eat Takeaway has been hit with a €4.6 billion writedown on acquisitions that helped it become the largest food delivery company in Europe.
The food delivery service was formed out of a merger of Just Eat and its Dutch rival Takeaway.com, and the combined entity went on to acquire Grubhub after a takeover battle with Uber.
But the company’s losses have now ballooned to €5.7 billion for 2022, compared with €1 billion the year before, as it took the impairment charges on the two deals as well as a €275 million book loss on the sale of its stake in the Brazilian delivery app iFood.
The writedown was largely attributed to “macroeconomic factors such as increasing interest rates”.
Just Eat Takeaway, which is listed in Amsterdam, said it had made a loss of €792 million when the effects of the acquisitions were excluded.
Total orders fell by 9 per cent from 1.1 billion to 984 million and the average transaction value increased by 2.73 per cent to €28.66. The company reports gross transaction value (GTV) as a measure of how much consumers are spending on its platform. The GTV for last year was flat at €28.2 billion.
Just Eat Takeaway’s UK and Ireland business processed 260 million orders last year. The jurisdictions represented about 26 per cent of total orders. Revenue across both countries rose by about 6 per cent to €1.32 billion, compared with €1.25 billion in 2021.
Activist investors led by Cat Rock Capital put pressure on executives to look at selling Grubhub in April last year after the company’s total value fell below the figure it paid for the business.
Cat Rock Capital, which is run by Alex Captain, criticised the deal as the company struggled to compete with Uber Eats and DoorDash.
In a statement, Just Eat Takeaway said: “Management, together with its advisers, continues to actively explore the partial or full sale of Grubhub. There can be no certainty that any such strategic actions will be agreed, or what the timing of such agreements will be. Further announcements will be made as and when appropriate.”
Analysts at Jefferies said management had indicated that “growth will improve across the year”. But they pointed out that the company’s executives had not confirmed forecasts of the gross transaction value they expect to achieve this year.
“It won’t have helped investor confidence that management weren’t willing to comment on current trading,” they added.
Jitse Groen, 44, chief executive of Just Eat Takeaway, said the company had prioritised plans to “enhance profitability and strengthen our business”. He added that earnings would improve this year and that the company’s “ambition to create a highly profitable food delivery business is firmly on track”.
Just Eat Takeaway repaid a €300 million bank loan in December and said its free cashflow was on course to “improve substantially” this year.
The group has also secured the backing of its syndicate of ten banks to continue its €400 million revolving credit facility, which it said demonstrated its “strengthened balance sheet and improved profitability trajectory”.
The business said: “Although the company does not expect to draw the facility in the near term, it provides additional liquidity headroom and diversifies its capital structure.”
Swallowing up rivals comes at a cost for Just Eat Takeaway