Talabat, the Middle East and North Africa (MENA)-based food delivery company owned by German giant Delivery Hero, has finalized the price for its initial public offering (IPO) at AED 1.60 ($0.44) per share. This allows the company to raise AED7.5 billion ($2 billion). Due to high investor demand, Talabat increased its IPO from 15% to 20%. Trading on the Dubai Financial Market (DFM) is set to begin on December 10.
Financial Performance and Growth
Talabat has demonstrated significant financial growth. In the third quarter of 2024, the company’s profits increased by 46% year-on-year, reaching $98 million. Between January 1 and September 29, 2024, Talabat’s adjusted EBITDA totaled AED 1.3 billion, a 63.4% increase year on year. The company’s adjusted free cash flow for 2023 amounted to AED 1.1 billion, representing a 79.2% year-on-year increase. For the period between January 1 and September 29, 2024, adjusted free cash flow reached AED 1.3 billion, compared to AED 752.6 million in the same period in 2023, a period-on-period increase of 68.1%.
Dividend Policy and Payouts
Talabat plans to reward its investors with dividends following the IPO. The company has committed to a minimum dividend payment of approximately $100 million in April 2025, tied to its fourth-quarter financial results. Additionally, it intends to distribute another $400 million in two installments by October 2025 and April 2026. Following these initial payments, Talabat plans to issue dividends biannually, targeting a net income distribution of 90%.
Talabat intends to pay a minimum dividend of AED 367.25 million (approximately USD 100 million) in April 2025, based on the financial results of the fourth quarter of 2024. The company plans to pay a minimum dividend of AED 1,469 million (approximately USD 400 million) in two installments in October 2025 and April 2026, based on the financial results for the year ending December 31, 2025.
The dividend policy aims to reflect the company’s expectation of strong cash flow and long-term earnings potential while also allowing Talabat to retain sufficient capital for operating requirements and continued investment for long-term growth.
Factors Influencing Dividend Decisions
The planned dividends for 2024 and 2025 and the overall dividend policy are subject to the Board of Directors’ consideration of the company’s cash management needs for operating expenses, financing expenses, and anticipated capital expenditures. The Board of Directors is also expected to consider market conditions, the current operating environment in the company’s markets, and their outlook for the company’s business.
Key Operational Metrics
As of September, Talabat serves over 6 million customers, with more than 65,000 restaurants, grocery, and retail partners, and has over 119,000 riders on its platform. In 2023, the company’s gross merchandise value (GMV) stood at $6 billion, reflecting a 24% compound annual growth rate between 2021 and 2023. The adjusted free cash flow was over $300 million in 2023.
Delivery Hero’s Perspective
Delivery Hero also announced its second-quarter and half-year financial results, indicating that its focus on profitable growth across its global operations is yielding positive results. In the first half of 2024, Delivery Hero achieved adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of €240 million ($266.28 million), an increase of €231 million from the first half of 2023. The company has reached a break-even point in free cash flow and anticipates generating additional headroom in this area in the second half of 2024.
Statements from Leadership
Niklas Ostberg, CEO and co-founder of Delivery Hero, stated that the company delivered another strong quarter of growth and improved profitability, which is a testament to its focus on customer experience, operational efficiency, and category leadership. He expects further growth and a significant increase in profitability in the second half of 2024.
Marie-Anne Popp, interim CFO of Delivery Hero, confirmed that the company has met its goal to deliver strong financial results in line with its 2024 guidance.
Tomaso Rodriguez, CEO of Talabat, noted that the company’s medium-term outlook reflects multiple growth levers and favorable socioeconomic conditions.
MENA Region Performance
The group’s platform business in the MENA region demonstrated strong top-line growth, with a 28% year-over-year increase in gross merchandise value. This strong performance was driven by continuous enhancements to the ecosystem and improvements in customer experience.
European Performance
In Europe, order volume grew by double digits, resulting in exceptional GMV growth of 19% year-over-year in the second quarter, outperforming other European peers.
