DoorDash Sees Tepid Q2 For Wolt As It Completes $3.5bn Takeover
US food delivery firm DoorDash DASH.N forecast a slowdown in second-quarter orders at Wolt Enterprises from the start of the year as it completed the $3.5 billion purchase of the European business in the midst of a cost of living crisis.
The all-share deal to buy Helsinki-based Wolt had been worth more than $8 billion when it was announced in November, but DoorDash's share price has since declined amid a sector sell-off, while the US dollar has strengthened.
In filings announcing the closing of the deal, DoorDash raised forecasts for its own standalone gross marketplace order value (GOV) to at least $12.5 billion in the second quarter from at least $12.1 billion previously. It also said it expected the combined companies to make earnings before interest, taxes, depreciation and amortization (EBITDA) of $0-100 million.
But it forecast GOV of $800-850 million for Wolt in the second quarter - up 23%-30% from $652 million a year earlier, despite the stronger dollar, but down from $888 million in the first quarter of 2022.
"The macroeconomic and geopolitical situation in Europe has changed significantly in the past months," Wolt CEO Miki Kuusi said in emailed answers to questions, declining to disclose the company's investment plans for 2022.
"With inflation, increasing gas prices and general uncertainty, there is some pressure to raise prices. We continue to monitor the situation very closely," he added.
Kuusi, who will now also become the head of DoorDash International, said the company's focus on efficient operations and quick customer service were strategic advantages that had helped the company expand to 6,000 employees in 23 countries.
DoorDash's filings showed Wolt made an adjusted EBITDA loss of €54.6 million ($61.2 million) on revenues of 78.1 million for the three months ended 31 March.
That compared with negative adjusted EBITDA of €22.3 million on revenue of 43.9 million in the first quarter of 2021.
Wolt's GOV rose by 55% to €791.4 million from a year earlier, the filings showed.
Food Deliverer Delivery Hero Drops Out Of Germany's Blue Chip Index
In other food delivery firm news, the above news was followed by news that food deliverer Delivery Hero DHER.DE will drop out of Germany's blue chip stock index DAX .GDAXI replaced by consumer goods maker Beiersdorf BEIG.DE from June 20, stock market operator Deutsche Boerse DB1Gn.DE said on Friday 3 June.
Just over a year after being relegated from the DAX, the Nivea cream maker and Hansaplast wound care Beiersdorf replaces Delivery Hero <DHER.DE >nicht, Deutsche Boerse said.
"For years, Delivery Hero has been writing losses and basically doesn't operate any business or service in Germany it self," Oldenburger said.
However, there had been long discussions about the food delivery company's DAX suitability, said CMC Markets analyst Konstantin Oldenburger.