This is evidenced in the summer of 2023, when we pointed out that while the American group Uber could comfortably finance the development of this activity thanks to revenues from its ride-hailing segment, and the British firm Deliveroo, more cautious, avoided acquisitions to prioritize organic growth within a well-defined perimeter, Germany's Delivery Hero and the Netherlands' Just Eat had both bitten off more than they could chew.
The sequel, as we know, has been nothing but a series of fiascos for the parties involved. On the verge of bankruptcy, Just Eat was taken over by Prosus, already a core shareholder in Delivery Hero, but which has since thrown in the towel and signaled its intention to exit. Regarding the German group, despite notable efforts undertaken last year, it has still not demonstrated the viability of its overly fragmented business model.
Delivery Hero is also the target of an activist campaign led by Aspex Management, which is calling for a strategic review and a break-up sale of the group's mosaic of heterogeneous operations. This is yet another problem for CEO Niklas Östberg to manage, already weakened by his group's operational underperformance, as well as recurring issues with regulators in several countries.
Published yesterday, the results for the 2025 financial year, unfortunately, will not provide any solace to shareholders. Some will also warn against financial communication that is frankly too cosmetic to be taken at face value, centered around an "adjusted" EBITDA of 903 million euros, which very conveniently excludes 147 million euros in "management adjustments" and 224 million euros in stock-based compensation and equivalents.
However, both are very real operating expenses, and certainly not exceptional at Delivery Hero. Indeed, "management adjustments" cover legal fees and restructuring costs that tend to multiply. As for stock-based compensation, given the group's poor performance, it is surprising to see it increase by 31% compared to the previous year. Are we looking at a sort of European Snapchat?
Despite revenue growth, Delivery Hero's accounts and cash flows remain deeply in the red. The central issue remains Talabat, the group's Middle Eastern subsidiary, which accounts for two-thirds of its parent's EBITDA and whose performance has slowed recently. Further disappointment comes from advertising segment revenues, which are stagnating, even though they previously offered hope of becoming one of the group's few profitable pillars.
Aspex's activist campaign seems legitimate in every respect. It is indeed highly likely that the sum of the parts of Delivery Hero - which operates in 72 countries - would prove to be significantly higher than its current enterprise value. However, the group shows no sign of wanting to move in this direction. As current events frequently remind us, "regime changes" driven from the outside often face strong resistance from within...
