«In JUST EAT, the way to look and the investment we are making is more in line with businesses like Amazon»


Last February, JUST EAT, announces a macro-operation of 125 million euros to acquire its main competitors in the markets of Spain (after the approval from the local competition authority, the Comisión Nacional de los Mercados y la Competencia last 1th april), Italy, Mexico and Brazil, establishing itself as the industry leader in these markets. After a successful 2015 in which company sales grew 57% (reaching 2,150 million euros GMV and EBITDA of 75 M€) JUST EAT expects to maintain that level of growth in 2016. Ecommerce News interview to David Buttress, CEO at JUST EAT.

Ecommerce News (EcN): Just Eat has gave a ‘blow on the table’ with the acquisition of part of the portfolio of Global Online Takeaway Group in Spain, Italy, Brazil and Mexico: Why this operation?

David Buttres (DB): We made four in-fill acquisitions that consolidate our existing leadership in key markets, and which reflect an important pillar of our well-established M&A strategy. Spain, Italy, Brazil and Mexico are all markets where there is a strong takeaway food culture, a fragmented restaurant market and a population with high levels of disposable income and high e-commerce adoption.

Furthermore, these markets are significant, with a combined estimated takeaway delivery market of approximately £8bn.

Our existing businesses in Spain, Italy, Brazil and Mexico have each recorded significant growth in the last year – as have the companies we acquired, with 83% order growth in 2015 in aggregate. While we were already market leaders in each territory, this transaction consolidated that position.

EcN: The cost of the operations (125 million euros)… is perhaps too much for the low margin (profits) that is handled in this sector?

DB: A very strong financial rationale underpinned this transaction. We expect the acquisition to boost earnings for the 2016 financial year, excluding one-off integration costs. Further material synergies and margin improvements are expected as the combined businesses achieve more rapid and profitable growth.

The way to look at this kind of business and the investment we are making is more in line with network businesses like, for example, Amazon. We are investing for future growth and we have demonstrated previously how this model of investment realize material revenue growth over the longer term.

Market leadership equates to more than the sum of its parts as we have seen with the growth of our UK and Danish businesses and, more recently, in Brazil.

EcN: What is the situation in each of the countries where Just Eat is: Spain-Italy-Brazil-Mexico?

DB: Spain, Italy, Brazil and Mexico are all markets with the right conditions and scale for significant future growth, and where our existing businesses were already performing well.

The businesses JUST EAT acquired back in February were the number twos in each market. Volume and scale generate significant benefits to the markets concerned, offering an enlarged customer base for takeaway restaurants and greater choice for consumers. There are also compelling economic benefits of scale that lead, in time, to material synergies and meaningfully higher sustainable margins.

EcN: Why Global Online Takeaway Group has divested these companies? Or rather focus on other areas and markets in takeaway?

DB: That would have to be answered by Rocket Internet.

EcN: March 1th, JE reports results, what about the year 2015 for Just Eat? And expectative for 2016?

DB: JUST EAT has demonstrated that it has the right business model to succeed on the global stage, with a strong performance in 2015:

  • We sent 96.2 million orders worth £1.7bn to our restaurants, up 57%.
  • Revenues grew 58% to £247.6 million. This growth is equal to our total revenues at IPO.
  • Our international business is now the same size as the whole Group was at IPO; it represents around a third of Group revenues and is growing quickly.
  • Underlying EBITDA grew 83% to £59.7 million.
  • Group EBITDA margin increased more than 300 basis points to 24.1%.

JUST EAT is the clear market leader in 12 of 13 international markets where we operate and, with the vast majority of takeaway orders in all those markets still taken by phone, there is significant runway for further growth. We will continue to invest in technology, marketing and our people to boost leadership position.

Specifically for 2016, we expect revenues of £350 million and Underlying EBITDA of between £98-100 million at current exchange rates.

EcN: Since its launch on the stock exchange, the market value of Just Eat has grown exponentially… following the road map or are above expectations?

DB: Our Full Year 2015 Results once again demonstrated the strength of JUST EAT’s business model, our ability to deliver incremental Underlying EBITDA while still investing for growth and the continued opportunities we see in the markets in which we operate.

But while we are pleased with our rate of growth – we are not complacent. We will maintain our strategy of improving the consumer experience, bringing greater choice and driving channel shift, all underpinned by a disciplined approach to M&A.

We take our responsibilities to our restaurant partners incredibly seriously, and we know that our relationship with them depends on our ability to add significant value to them and the wider sector that we – and they – operate in. To provide some context, we have operated in the UK for 10 years during which time we have grown our network of restaurant partners to almost 27,000. Over that period, the revenue generated by the UK delivery takeaway sector has grown to more than £5.5bn. We have increased the frequency of orders to our restaurant partners from once every 2 months to once every 4 weeks and our active customer base has grown to 7.1m in the UK over the past decade.

Looking ahead, we are very excited about the many initiatives we have planned for the next year that will continue providing value for our restaurant partners. We continue to invest in marketing and technology with the aim of accelerating the growth of our partner restaurants, and helping them run their businesses. We are always looking at innovative ways of delivering value for our restaurant partners and this collaborative approach has been at the heart of our success.

The global online takeaway market continues to grow as consumers become ever more demanding, wanting more choice and greater convenience. JUST EAT has been at the leading edge of developing and growing the online marketplace for takeaway food delivery as it responds to these changing trends. And we look forward to maintaining that leadership position in future.

EcN: We’ll see new acquisitions in the sector?

DB: We cannot comment on specific opportunities. However, we have a disciplined approach to M&A and will only pursue opportunities which we are confident will create value for our shareholders.


Samuel Rodríguez
Periodista a cargo de Ecommerce News desde 2012. Inquieto. En el camino, creé otros medios, como @BigDataMagazine y @CybersecurityNews. Organizador de cientos de eventos profesionales. Ahora con un pie en Portugal y otro en México... Muy del @GetafeCF

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