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Just Eat reports 2019 Half Year Results

Executing at pace, on track to meet full year guidance

Just Eat plc (LSE: JE.), a leading global hybrid marketplace for online food delivery, today updates the market on its performance over the six months to 30 June 2019.

H1 2019 H1 2018
(restated2)
YoY %
Revenue (£m) 464.5 358.4 30%
Underlying EBITDA1,2 (excluding Mexico) (£m) 72.4 86.0 (16)%
Profit before tax (£m) 0.8 48.1 (98)%
Adjusted Basic EPS2,3 (p) 5.7 8.9 (36)%
Basic EPS (p) (0.8) 5.5 (115)%
Net cash generated by operations (£m) 65.9 77.2
(15)%

Financial Highlights

  • Orders up 21%4 to 123.8 million (H1 2018: 102.5 million), with 2 million net new customers joining Just Eat in H1
  • Revenue up 30% to £464.5 million (H1 2018: £358.4 million), ahead of orders, given the greater weighting of delivery
  • uEBITDA1,2 (excluding Mexico) down 16% to £72.4 million (H1 2018: £86.0 million), reflecting the accelerated rollout of delivery
  • Profit before tax down 98% to £0.8 million (H1 2018: £48.1 million), reflecting planned investments in delivery and iFood
  • Adjusted EPS3 down 36% to 5.7p (H1 2018 restated: 8.9p)
  • Net cash generated by operations down by 15% to £65.9 million (H1 2018: £77.2 million)
  • Full year guidance maintained

Key Highlights

  • Leading consumer brand for online food delivery, with over 27m customers now ordering an average of 8.7x a year compared to 8.1x in H1 2018
  • As expected, recovery in UK order growth to 11.2% in Q2 - May and June stronger - giving 9.3% order growth in H1
  • Accelerated delivery rollout - 5,200 UK and 5,700 Australian delivery restaurants at the end of June. Our delivery service covers in excess of 50% of the addressable population in both countries
  • Australia returned to revenue and order growth in Q2, gross profitability for delivery achieved from April
  • Canada profitable in H1 2019, with continuing positive order momentum
  • European markets showing good growth, with strong order performances in Italy and Switzerland
  • Strong performance at iFood, with triple digit year-on-year order growth. £73.2 million of cash invested in H1
  • First food platform to launch hygiene ratings in-app across the 34,000-strong UK restaurant estate
  • Updated app with personalisation and ongoing Customer Relationship Management (CRM) enhancements
  • New partnerships with Greggs and Asda in the UK, Domino’s in France and Burger King in Denmark & Ireland
  • Acquisitions of Practi in April and City Pantry in July, post period end

Outlook

The Board is confident in the current performance of the Group and is reconfirming its guidance for full year 2019 revenue in the range of £1.0 billion to £1.1 billion and uEBITDA in the range of £185 million to £205 million (both excluding Brazil and Mexico). We expect the recent acquisitions of Flyt, Practi and City Pantry to impact uEBITDA by £10-12 million in 2019 but, despite this, we are reconfirming our uEBITDA guidance range.

The Board also continues to expect Just Eat's share of its Latin American operations (being Brazil and Mexico together) to report an uEBITDA loss in the range of £80 million to £100 million for full year 2019.

Peter Duffy, Interim Chief Executive Officer, commented:

“We’ve been working at pace and made good progress in the first half of the year to become the preferred food delivery app for our customers, with a broader choice of restaurants, a better user experience and a more personalised and impactful approach to communication. Performance in our UK business strengthened in Q2, our Canadian and European businesses are performing well and Australia has returned to top line growth with our delivery operations achieving gross profitability. These are strong foundations for Just Eat to build on, as the business continues to drive forward.”

Notes to the summary financial results table

1. Our performance is monitored internally using a variety of statutory and alternative performance measures (APMs). APMs are not defined within IFRS and are used to assess underlying operational performance. As such, these APMs should be considered alongside IFRS measures. The main measure of profitability used internally to assess the performance of the business is Underlying EBITDA (uEBITDA). uEBITDA is defined as earnings before finance income and costs, taxation, depreciation and amortisation (EBITDA), and additionally excludes the results of associates,

long-term employee incentive costs, foreign exchange and other gains and losses. Further to this, we now provide uEBITDA excluding Mexico, to clearly disclose the performance of the business under our direct management, given the delegation of operational performance of the Mexican business to iFood, our Brazilian partner. For full definitions and reconciliations of APMs, please refer to the dedicated section at the end of this document.

2. As previously flagged, we have changed our policy to exclude the results of our associates from both operating profit and uEBITDA. Operating profit and uEBITDA for 2018, as previously reported, included the results of associates. The financial performance of these associates (primarily iFood Brazil) is not directly within the control of the Group and therefore does not reflect our operational performance. uEBITDA for the six months ended 30 June 2018 increased by

£0.7 million as a result of this restatement. As noted above, the results of Mexico are also excluded from uEBITDA. Adjusted Basic EPS has been impacted by excluding the results of associates and the losses of our Mexican business, increasing by 0.3 pence for the six months ended 30 June 2018.

3. Adjusted basic earnings per share is the main measure of earnings per share used by the business and is calculated using an underlying profit measure attributable to the equity shareholders. It is defined as profit attributable to the equity shareholders before the results of associates, long-term employee incentive costs, foreign exchange gains and losses, other gains and losses, amortisation of acquired intangible assets and excluding the consolidated results of Mexico. The tax impact of these adjusting items is also taken into consideration. A full reconciliation is provided in the APM section at the end of this document.

4. Order growth year-on-year including Mexico was 23%.

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