Meal delivery company Just Eat Takeaway.com says it has suffered the biggest losses. The company of founder and CEO Jitse Groen announced before trading on Tuesday that in the first six months of this year it spent 486 million euros more net than it received. According to Groen, his company has thus reached the ‘peak of absolute losses’ and its profitability will increase from now on.
For the parent company of Thuisbezorgd.nl, 2021 is “a year of investing”, Groen said in an explanatory conversation with shareholders on Tuesday. Many tens of millions were invested in the countries that the meals platform now serves as a result of the merger with Just Eat at the beginning of last year. According to Groen, there is still a lot of catching up to do. For example, Just Eat Takeaway is rapidly connecting new restaurants in these countries, and a lot of advertising is done to attract customers. The company also invested money in its own delivery services.
Those expenses pay off immediately, Groen noted. In the United Kingdom, for example, the number of orders increased to 135 million in the last six months, a growth of 75 percent compared to the same period last year. Own couriers delivered more than 52 million of those orders, a sevenfold increase on an annual basis.
Just Eat Takeaway continues to grow rapidly in other markets, even now that the corona measures are being phased out in many places and consumers can return to the restaurant. As a result, the company’s turnover increased by 63 percent between January and June compared to a year earlier, to 1.7 billion euros. That amount does not include the 900 million euros turnover of Grubhub, the American delivery service that Just Eat Takeaway took over in June of this year.
Higher delivery costs
There is another reason why the second largest meal delivery company in the world after such significant growth ends up much deeper in the red. During the pandemic, several countries set a limit on delivery rates that a company could charge, according to Groen an “illegal” intervention. Due to such ceilings, Just Eat Takeaway missed out on 142 million euros last year. And although the measure has disappeared in some countries, the CEO expects it to continue to be a nuisance in other countries.
Also read last year’s interview with Takeaway CEO Jitse Groen: ‘You can’t beat us anymore’
In conversations with investors, Groen noted that this is also a button he can turn to boost profits: delivery rates. Just Eat Takeaway is significantly cheaper than the competition, he says, and that gap is only growing. The company therefore thinks it can ask for more, but will only do so as long as it does not come at the expense of the growth in the number of customers and orders.
At the presentation of the half-year figures, Groen also referred to a critical letter sent by shareholder Cat Rock last month. The British hedge fund, which has a stake of more than 4 percent, called on Just Eat Takeaway to do more to boost the share price, because otherwise the company might go from hunter to prey. According to Cat Rock, that could be done by selling or merging business units with another major global delivery company. The fund also denounced the “lack of communication” from the top of Takeaway.
Groen called the latter a justified reproach. At the same time, he rejected a merger or sale of parts. If you are the biggest somewhere and earn a lot of money, according to the CEO it makes no sense to divest those parts. However, Just Eat Takeaway is still willing to part with its third-party interest in Brazilian meal delivery company iFood. Just Eat Takeaway rejected an offer of 2.3 billion euros this year because it thought it was too low. Groen did not want to say what amount would come in the direction.