Delivery Hero (DHER GR) Germany
Consumer Discretionary
Following publication of the company’s FY24 annual report, Iron Blue’s DHER score of 30/60 remains top decile and fertile grounds for shorting. Stripped out costs remained elevated and materially exceeded FY24’s €48m PBT adj, while capitalisations expanded to 28% of total FY24 R&D expense from 20% in FY23. There were 2 changes to the group’s contingent liabilities disclosure: 1) a significant increase in the range of potential financial penalties from investigations into the legal status of riders to €440m-€770m; and 2) a new claim against Glovo Spain from Just Eat alleging unfair practices. Iron Blue also notes a reduction in Woowa’s goodwill impairment test margin assumption to 23% from 30% (albeit offset by a higher growth expectation).
Edition: 213
- 13 June, 2025
Delivery Hero (DHER GR) Germany
Communications
An Iron Blue score of 31/60 (+1 Y/Y) is top quartile (fertile ground for shorting). Red flags include: 1) High and expanding levels of stripped out restructuring, share based payment, legal and other one-off costs. 2) Increased gap between headline net debt and Iron Blue’s preferred calculation. 3) A rising interest burden with expensive debt replacing cheap debt. 4) Increased legal liabilities. 5) Sub-optimal governance, including a non-independent board and unusual executive remuneration incentives. 6) Additional risks from inflation, litigation, interest rates and Ukraine.
Edition: 161
- 26 May, 2023
Delivery Hero (DHER GR) Germany
Communications
Playing to the crowd - DHER has exited Japan and Germany and pledged to focus on reaching profits by 4Q22E. Arete believes management is looking to shore-up its equity value while eyeing its next acquisition target (Just Eat Takeaway would be Arete’s preferred choice). The stock is trading at its lowest multiple since IPO even though sales in 2H21 will be 4x higher than 1H20 and DHER is well positioned to sustain high growth (36% sales CAGR until ’25, 18% until ’30). TP €170 (+120% upside) based on blending a DCF until ’30 and a 10x ‘23E EV/Gross Profit multiple.
Edition: 127
- 21 January, 2022