By Michal Aleksandrowicz
(Reuters) -Just Eat Takeaway on Wednesday said it expected to report 2023 core earnings ahead of its forecast, after it broke even on free cash flow in the second half of 2023.
Europe's biggest meal delivery group was the first one in the sector to achieve cash flow break-even, which CEO Jitse Groen said was aided by cost cuts that included laying off staff in the United States and bringing down costs per order delivery.
Food delivery companies are looking to shift to stable profitability after the sector boomed during the pandemic, even as they invest more in marketing to help retain customers.
Groen said Just Eat would continue to invest in Britain, its biggest market, while "competitors have to drive down the investments".
Just Eat expects to post 2023 adjusted core earnings (EBITDA) of around 320 million euros ($347.6 million) when it reports full annual results on Feb. 28, above its mid-October outlook of about 310 million.
Gross transaction value (GTV), a common metric for food delivery companies, grew 4% in Northern Europe and 5% in the United Kingdom and Ireland in the fourth quarter, Just Eat's best ever quarter in these markets.
Growth was driven by higher food prices, new partnerships with restaurants and shops, as well as expanded tie-ups with Morrison's Daily, Lego and KFC.
However, its orders fell 5% in Northern Europe and 6% in Britain and Ireland in 2023. Groen said Just Eat was close to returning to order growth in both markets.
The company's shares were down around 3% in midday trading.
The group's annual GTV fell 4%, weighed down by an 11% decline in North America, where Just Eat is still exploring a partial or full sale of its Grubhub unit.
Groen said the company was having "active conversations with a number of partners" about a possible Grubhub sale, but the process was hampered by slowing growth, high taxes and a question of fee caps in New York City, among others.
($1 = 0.9206 euros)