DoorDash sees tepid Q2 for Wolt as it completes $3.5 billion takeover

Toby Sterling
·2 min read
FILE PHOTO: A DoorDash sign is pictured on a restaurant in the Manhattan borough of New York City

By Toby Sterling

AMSTERDAM (Reuters) - U.S. food delivery firm DoorDash forecast a slowdown in second-quarter orders at Wolt Enterprises from the start of the year as it completed the $3.5 billion purchase of the European business in the midst of a cost-of-living crisis.

The all-share deal to buy Helsinki-based Wolt had been worth more than $8 billion when it was announced in November, but DoorDash's share price has since declined amid a sector sell-off, while the U.S. dollar has strengthened.

In filings announcing the closing of the deal, DoorDash raised forecasts for its own standalone gross marketplace order value (GOV) to at least $12.5 billion in the second quarter from at least $12.1 billion previously. It also said it expected the combined companies to make earnings before interest, taxes, depreciation and amortization (EBITDA) of $0-100 million.

But it forecast GOV of $800-850 million for Wolt in the second quarter - up 23%-30% from $652 million a year earlier, despite the stronger dollar, but down from $888 million in the first quarter of 2022.

"The macroeconomic and geopolitical situation in Europe has changed significantly in the past months," Wolt CEO Miki Kuusi said in emailed answers to questions, declining to disclose the company's investment plans for 2022.

"With inflation, increasing gas prices and general uncertainty, there is some pressure to raise prices. We continue to monitor the situation very closely," he added.

Kuusi, who will now also become the head of DoorDash International, said the company's focus on efficient operations and quick customer service were strategic advantages that had helped the company expand to 6,000 employees in 23 countries.

DoorDash's filings showed Wolt made an adjusted EBITDA loss of 54.6 million euros ($61.2 million) on revenues of 78.1 million for the three months ended March 31.

That compared with negative adjusted EBITDA of 22.3 million euros on revenue of 43.9 million in the first quarter of 2021.

Wolt's GOV rose by 55% to 791.4 million euros from a year earlier, the filings showed.

(Reporting by Toby Sterling; Editing by Mark Potter)