Despite recent challenges in the market, Delivery Hero, the Berlin-based food delivery giant known for brands like Foodpanda, remains optimistic about its performance. In an email sent to employees, CEO Niklas Östberg highlighted the company’s resilience, stating that business is “doing better than ever,” despite a downturn in its share price.
According to Östberg, the company has reached breakeven status, with zero EBITDA and negative cash flow expected for the coming months. He acknowledged uncertainties related to growth, inflation, competitive conditions in markets like Korea and the Middle East, as well as rider fines in Spain. However, Östberg emphasized that recent trends are “very encouraging.”
Delivery Hero’s achievements include a 2.5x increase in orders compared to pre-pandemic levels and an 18% growth in sales volume outside of Asia. Östberg also mentioned that profitability has improved significantly, with figures in the billions.
Competition in the food delivery sector is intense, with rivals like Coupang in Korea and Deliveroo, Noon, and Careem in the Middle East challenging Delivery Hero’s brands. Despite this, Östberg urged employees to focus on the long-term goals, reminding them that short-term share price fluctuations often lack clear reasons.
He expressed confidence in the company’s potential for substantial growth, stating that “if we can reach our long-term ambition, then share price can easily be 10x-20x higher.” Östberg concluded by emphasizing the importance of prioritizing customer satisfaction, a factor within the company’s control.
Delivery Hero’s positive outlook follows a better-than-expected performance in the first half of 2023. The company anticipates total segment revenue growth of 15% for the year, surpassing its earlier estimate of 10%. Despite recent market challenges, Delivery Hero remains committed to its long-term growth strategy.
In related news, the CEO of Baemin Vietnam, a joint venture between Delivery Hero and Woowa Brothers, recently announced his departure from the company.