Delivery Hero Persists in Expanding and Generating Revenue from Its Affiliates in the Middle East
With a surging demand, Delivery Hero has maintained its growth momentum. The food delivery giant has also declared the Initial Public Offering (IPO) of its Middle Eastern subsidiary, Talabat. As quoted by interim CFO Marie-Anne Popp, "It's kind of inherent in our nature to frequently review our portfolio's needs." She didn't disclose specifics about the transaction or the utilization of funds.
Jefferies analyst Giles Thorne recently penned down his thoughts, stating that the IPO will bring Talabat's high-potential segment into the limelight, which has been somewhat overshadowed in the larger organization. Talabat's public listing is set to kick off in the fourth quarter on the Dubai Stock Exchange. All shares offered will originate from Delivery Hero's holdings, but the company aims to maintain a significant stake in Talabat. Talabat's shares enjoyed an eight percent surge and led the MDAX index in performance. RBC analysts gauge Talabat's worth at 5 billion euros, implying an enterprise value to sales ratio of 1.3.
Delivery Hero's Middle East and North Africa region has served as the primary growth engine for quite some time now. In Q2, GMV handled through the platform escalated by nearly 37 percent to 3.1 billion euros - almost quadrupling Delivery Hero's overall growth rate.
"Perfectly placed" subsidiary
Popp divulged that the planned IPO of Talabat aims to bolster its presence in the region. "We believe it's the right time, or shortly, to welcome regional investors on board and contribute to our MENA operations' strengthening," said Popp. She underscored the importance of "perfectly placing" Talabat in the region. According to Germany's leading bank, Talabat operates in nine Middle Eastern and North African countries and is profitable at the adjusted operating result (Ebitda) level.
The group's GMV surged by 10 percent year-on-year to 11.9 billion euros in Q2, while group revenues peaked at 3 billion euros. Thanks to a determined cost-cutting strategy, the half-yearly operating result rose to approximately 241 million euros. All key performance indicators outperformed Delivery Hero's self-proclaimed forecasts.
CEO Niklas Östberg stated, "We've had a successful quarter and anticipate continued growth and substantial profitability increase during the second half of 2024." For the annual totals, he continues to predict a currency-adjusted GMV growth rate of 7 to 9 percent. Group revenue is projected to swell by 18 to 21 percent. The operating result is anticipated to land between 725 million and 775 million euros.
Delivery Hero is looking to strengthen its presence in the Middle East and North Africa region through the planned Initial Public Offering (IPO) of its subsidiary, Talabat. Popp mentioned the importance of "perfectly placing" Talabat in the region, implying that Delivery Hero's strategy involves strategically positioning Talabat within the market.
Delivery Hero's food delivery giant, Delivery Hero, has chosen to conduct the IPO of its profitable subsidiary, Talabat, which operates in nine Middle Eastern and North African countries. This move aims to bring Talabat's high-potential segment into the limelight and attract regional investors.
