Delivery Hero Q3 Trading Update

Shares of Delivery Hero (ETR:DHER) traded higher on Thursday following its Q3 trading update.

The company's Group GMV aligned with compiled consensus, while revenue surpassed expectations slightly.

Full-Year Guidance Revision

For the full year, Delivery Hero revised its guidance, narrowing its GMV growth forecast to the upper end of its original range.

It also indicated that adjusted EBITDA would likely fall at the lower end of its previously stated range.

The company now anticipates full-year Free Cash Flow (FCF) to be between €50 million and €100 million, which aligns with the upper end of market consensus.

Q3 Performance

In terms of performance during Q3, GMV growth was reported at 5% on a reported basis, which matched consensus expectations.

Excluding hyperinflation adjustments, GMV grew by 9% year-on-year, while revenue surged by 24% over the same period.

GMV growth was driven by higher order volumes, a key indicator of the company’s operational momentum.

Regional Performance

Regionally, the company saw mixed performance:
– In Asia, GMV fell by 7%, slightly worse than the expected 6% decline.
– The MENA region posted a solid 18% growth, though it fell short of the 20% growth anticipated.
– Europe, which has become a focal point of Delivery Hero’s strategy, saw a 20% GMV increase, outpacing the expected 16%.
– The European platform business reached break-even on adjusted EBITDA, highlighted as a positive development by analysts.
– In the Americas, GMV grew by 16%, exceeding consensus projections of 12%.
– Integrated Verticals performed well with a 23% GMV increase, surpassing the 18% growth expected.

Revised Forecasts

Delivery Hero revised its GMV growth forecast to the upper end of the +7-9% range (on a constant currency basis), compared to a consensus of 6% on a reported basis.

The company raised its revenue growth outlook, expecting it to fall in the upper end of the +18-21% range (on a constant currency basis).

However, adjusted EBITDA is now projected to be at the lower end of the €725-775 million range, falling short of the consensus estimate of €750 million.

The company's revised FCF guidance for FY24 now stands at €50-100 million, compared to a prior expectation of positive FCF, with consensus at €87 million. This adjustment reflects a more cautious outlook on cash flow generation in the coming months.

Analysts at RBC Capital Markets noted, “We continue to view Delivery Hero as well-positioned, owing to its leading market positions across key markets. DHER’s scale, highly predictable cohort behavior and material future cash flows make valuation look compelling at these levels."