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In the full-year forecast, which was increased in sales with second quarter data at the end of July, the online grocery provider now believes that a higher lower bound of the expected range is achievable. Delivery Hero now expects a turnover of between 2.7 and 2.8 billion euros instead of 2.6-2.8 billion euros. Newcomer DAX from Berlin wants to reduce “opportunistic” investments, which foresee up to 120 million euros for 2020 instead of up to 150 million euros.
In the July-September period, Delivery Hero generated sales of € 776.4 million, almost double compared to the same quarter of the previous year. The number of orders also doubled to around 362 million from 181 million.
The gross value of goods (GMV), or the total value of orders including commissions, increased by 70 percent to 3.36 billion euros from 1.97 billion euros. For online markets, GMV is the most relevant measure.
Delivery Hero has confirmed its 2020 goal of an Adjusted EBITDA margin between minus 18 percent and minus 14 percent.
Delivery-Hero-CFO: honesty, transparency in the DAX more important than profits
The new index rules that may require a DAX company to show profits will not change Delivery Hero’s growth strategy. As Emmanuel Thomassin, CFO of the DAX newcomer, said in an interview with Dow Jones Newswires, it is more important to demand honesty and transparency from DAX companies in the future, that is, the obligation to “correct and real data that investors can do reliance “.
“We are not profitable and we announce it. The investor can evaluate whether he is investing long term or whether it is important for him to generate profits,” said Thomassin.
Delivery Hero has been in the DAX since August and may soon be banned again if the German stock exchange changes the rules for index membership in the first quarter so that included companies have to report profits.
Delivery Hero has never made a profit since its IPO in 2017 and, given the expected growth investments, it will not make it this year or next.
The food delivery service in Berlin aims for a long-term operating profit margin before interest, taxes, depreciation and amortization (EBITDA margin) of 5 to 8% of the gross value of goods. This implies an EBITDA gain.
When asked what time horizon Delivery Hero meant by “long term”, Thomassin said, “Not in 2021, but within the next 5 years” he wants to make an EBITDA profit.
Deutsche Börse wants to learn from the Wirecard scandal and be able to remove insolvent companies directly from the DAX in the future. As part of a broader DAX reform, other criteria such as profitability must also be applied, which are currently under discussion in a market consultation. According to Thomassin, Delivery Hero has taken note of the considerations and is taking part in the survey. The preceding criteria are market capitalization and stock market turnover.
A stock exchange listing outside of Germany would not be an option for Delivery Hero even after the stock exchange rules were changed, according to Thomassin. “It is important for us to be listed in Germany, we are European”. And it is also important that German technology companies, which will become more and more important in the future, are present in the high-ranking German stock indices.
Delivery Hero on top of the DAX – crisis winner in the foreground
On Wednesday, Delivery Heroes once again played their role as the winner of the crisis and in the very weak DAX on the XETRA trading platform, they eventually rose 1.67% to 97.32 EUR.
At just under € 100, the shares gradually returned to intermediate highs of around € 105 in mid-October and mid-August. The record high of 106.20 euros from the beginning of July awaits above this.
Other crisis-winning stocks also recorded moderate price increases or only slight discounts on Wednesday, making them significantly better than the general market. These are mainly shares of companies with a strong online presence or software companies benefiting from a closure of public life and an increase in home office activities. In the MDAX of midsize inventory, these included the mail order company HelloFresh, the store’s pharmacy and TeamViewer.
Conversely, the uncertainty among investors ahead of the lockdown scenarios was again felt particularly clearly by the losers in the crown of the tourism and aviation industry. MTU, Fraport, Lufthansa and Airbus all slipped significantly.
FRANKFURT (Dow Jones / dpa-AFX)
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Image sources: Delivery Hero
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