Delivery Hero aims to double sales. Confidence also reached the stock exchange: the Dax-listed share recently rose significantly. Nevertheless, the breakeven point is not exceeded. But CEO Niklas Östberg has other goals in mind.
Dhe food delivery service Delivery Hero expects high growth in the current year as well. The company announced on Wednesday during the presentation of the quarterly figures that sales are expected to rise to 6.6 billion euros. This would mean that the delivery service would more than double its sales compared to 2020. In order to meet these goals, the pace of investment should also increase. In the current year, for example, the Dax Group plans to invest around 550 million euros in expanding the driver fleet and in additional warehouses, as well as in expanding into Japan and Vietnam. At least on the stock exchange, the confidence arrived: The shares listed in the Dax rose at times by 12 percent. Delivery Hero’s market value is at a high of around 35 billion euros.
The company is active in more than 50 countries, but not in Germany since the end of 2018. During the crisis, customers in many restaurants can only pick up food or have it delivered. This is reflected in the result for the first quarter: sales rose by 116 percent to 1.4 billion euros. It’s the ninth quarter in a row that delivery service revenue has doubled. In addition, the takeover of the Korean delivery service Woowa (5.7 billion euros), which was completed in the spring, should also have contributed to the result.
Growth instead of profit
However, the company is still not profitable – and will probably not be in 2021 either. Reaching the breakeven point is still not the most important goal for the group, says CEO Niklas Östberg to the FAZ. The company continues to prioritize rapid growth. Last year, the group loss decreased to 1.4 billion euros after 1.63 billion euros in 2019. This year, the operating loss is expected to decrease further.
Last year, the delivery service also expanded its business with quick deliveries (“quick commerce”). Compared to the same quarter of the previous year, orders in this business area increased by 400 percent. With fast deliveries, customers can have supermarket items, especially fruit or water, delivered to their homes. According to Östberg, this can be done within ten minutes in some regions. To this end, the company has built a network of now 600 warehouses around the world, and this should continue to grow this year. Östberg is not worried that food manufacturers will also offer delivery services in the future. For many dealers, the business is still too expensive for that. “But we’re always happy about competition,” he says. Fast deliveries make up around ten percent of total sales.
But will Delivery Hero continue to grow even after the corona pandemic? At least Östberg is confident that the readiness for deliveries will continue after the pandemic. “We have always grown,” he says. “Even before the pandemic.”