Just Eat ups marketing spend again as it pursues profitability & More Live News

Just Eat increased investment in its brand over the first half, including the launch of its Katy Perry fronted campaign and UEFA sponsorships.

Just Eat Takeaway.com bumped marketing investment up by another 40% over the first six months of 2022, as the group claims to have made “significant progress” towards profitability.

The company reported a 29% improvement to its adjusted EBITDA over the period, making a loss of €134m (£112m). Marking both year on year and sequential improvement, the business says this “clearly demonstrates the path to profitability”, both on an absolute level and as a percentage of gross transaction value (GTV).

Marketing spend reached €414m (£346m), compared with €295m (£247m) in the first half of 2021. The company said this was primarily due to the business combination with US delivery service Grubhub, which it acquired in June last year.

However, Just Eat also increased investment in its brand over the period, including the launch of its Katy Perry fronted campaign ‘Did somebody say’ to drive top-of-mind awareness and engagement, as well as its sponsorship of the UEFA Champions League and Women’s Euros. This was partially offset by optimising performance marketing, the business claims.

Meanwhile, year on year headquarter costs increased over the period due to the impact of “significant investments” in its head office workforce over 2021 “to support growth”, with new hires predominantly in marketing, HR and delivery. Headcount stabilised in 2022, with a hiring freeze implemented in June.

The rise in marketing spend is somewhat of a surprise, as in March CEO Jitse Groen declared marketing spend had “reached a ceiling”. As a result, marketing spend was not expected to increase further in 2022, with the group reporting an 85% jump in investment over its full 2021 financial year to €684m (£570m). This marked the second year the business had dramatically increased its marketing investment.Just Eat on how it became part of people’s ‘way of being’

However, speaking to investors today (3 August), Groen said Just Eat would continue to focus on marketing efficiency moving forward, including leveraging last mile visibility to reduce marketing cost per order. Some efficiencies in marketing were realised from July onwards, he added.

In the UK and Ireland alone, adjusted EBITDA improved 70% to a loss of €18m (£15m) over the first half of the year. However, the segment was adjusted EBITDA positive in the second quarter, alongside Just Eat’s other two largest segments – Northern Europe and North America. The three markets represent 90% of the business’s total GTV.

Orders overall decreased 7% compared to the first half of 2021, which was a record period for order and GTV growth due to Covid-19 restrictions. The decline was offset by higher average transaction value, consumer pricing improvements and positive currency movements, resulting in a stable gross transaction value of €14.2bn (£11.9bn) and “strong” revenue growth of 7% to €2.8bn (£2.3bn).

Looking to full year expectations, the business anticipates GTV growth in the mid-single digits and an adjusted EBITDA margin in the range of -0.5% to -0.7% of GTV. The group remains convinced it will reach positive adjusted EBITDA in 2023.

“After a period of exceptional growth, Just Eat Takeaway.com is now two times larger than it was pre-pandemic. Whilst this growth required significant investment, we have continued to focus on executing our strategy to build and operate highly profitable food delivery businesses,” Groen says.

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