Delivery Hero experienced a significant market setback as its shares tumbled nearly 9% to €35.32 on Monday following announcements regarding fundamental changes to its Spanish subsidiary Glovo’s employment model. The company must transition its delivery drivers from independent contractors to permanent employees in response to demands from Spanish labor authorities. This strategic shift is expected to impact the adjusted EBITDA by approximately €100 million in the coming year, while contingent liabilities in the 2024 financial report are projected to increase substantially to between €440 and €770 million, encompassing social security contributions, penalties, and various supplements.
Financial Outlook
Despite these considerable financial challenges stemming from Spain’s labor law reforms, Delivery Hero maintains its forecast of achieving positive adjusted EBITDA in the upcoming year. The company’s stock performance had been notably strong until this announcement, with year-to-date gains for 2024 still exceeding 40% even after the recent decline. The first payment or bank guarantee related to these changes is not expected to be due until the second quarter of 2025.
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Delivery Hero Stock: New Analysis – 04 December
Fresh Delivery Hero information released. What’s the impact for investors? Our latest independent report examines recent figures and market trends.
Read our updated Delivery Hero analysis…
Delivery Hero experienced a significant market setback as its shares tumbled nearly 9% to €35.32 on Monday following announcements regarding fundamental changes to its Spanish subsidiary Glovo’s employment model. The company must transition its delivery drivers from independent contractors to permanent employees in response to demands from Spanish labor authorities. This strategic shift is expected to impact the adjusted EBITDA by approximately €100 million in the coming year, while contingent liabilities in the 2024 financial report are projected to increase substantially to between €440 and €770 million, encompassing social security contributions, penalties, and various supplements.
Financial Outlook
Despite these considerable financial challenges stemming from Spain’s labor law reforms, Delivery Hero maintains its forecast of achieving positive adjusted EBITDA in the upcoming year. The company’s stock performance had been notably strong until this announcement, with year-to-date gains for 2024 still exceeding 40% even after the recent decline. The first payment or bank guarantee related to these changes is not expected to be due until the second quarter of 2025.
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Fresh Delivery Hero information released. What’s the impact for investors? Our latest independent report examines recent figures and market trends.