Just Eat CEO says Grubhub will be part of US delivery consolidation

By Toby Sterling

AMSTERDAM (Reuters) - The chief executive of Just Eat Takeaway.com said on Thursday he expects newly acquired Grubhub to eventually be part of a consolidation in the U.S. delivery market, but signalled he is not currently open to selling the business.

"Over time there will inevitably be consolidation in the wider U.S. on-demand delivery market, as various players combine to optimise the last mile," Jitse Groen told investors in a livestreamed presentation.

Company management "expects Grubhub to be involved in this consolidation when it comes and intends to do so from a position of strength".

Asked whether he would consider selling or combining the whole of Grubhub's business, which Takeaway bought for $7.3 billion in June, Groen demurred.

"Grubhub is fresh," he said, but added that "anything that makes Grubhub a stronger player - we'll look at it".

Takeaway's shares are down 25% so far this year, in part due to the company losing market share in U.S. suburbs and after New York City, its biggest and strongest market, imposed a cap on the commission food-delivery companies can charge restaurants.

Investors have called on the company to address its competitive position in the United States - where Grubhub is pitted against Uber (NYSE:UBER) Eats and DoorDash among others - including by considering selling parts of its operations. They also want Takeaway to clarify its strategy on grocery delivery, where it competes strongly with Amazon-backed Deliveroo in Europe.

In a presentation, Takeaway it said it would target Gross Transaction Value growth - a common measure in e-commerce - in the "mid teens" for 2022.

The company repeated its full-year 2021 forecast for an earnings before interest, tax, depreciation and amortisation (EBITDA) margin of -1%-1.5% on a gross transaction value of 28 billion-30 billion euros ($32 billion-$35 billion). That translates to an EBITDA loss of 280 million-380 million euros.

For 2022, the company told investors to expect the negative margin to improve to -0.6% to -0.8%, and that it expects a positive margin in "long term" as GTV doubles over the next five years.

Bernstein analysts, who rate Takeaway shares "Outperform", said in a note that the 2022 guidance was lower than expected but "we remain positive about the position of Takeaway in its core markets."

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Shares recovered some of their early losses after Groen's remarks and were trading down 0.6% at 71.36 euros at 1253GMT.