Rocket Internet Posts Hefty Profit, Buys Back Own Shares

(Bloomberg) -- Rocket Internet SE is on track for its first profitable year since 2014. The startup incubator benefited from the IPOs of its startups Delivery Hero SE, HelloFresh SE and Home24 SE. Shares gained the most since June.

Key Insights

  • Rocket, which reported net profit of 297 million euros ($347 million) in the first half, also announced a share buyback program of up to 150 million euros that starts today. The profit and the buyback program are expected to boost shares this morning.
  • The numbers are a boon to Chief Executive Officer Oliver Samwer, who is shifting Rocket to behave more like a venture capital firm, and relying less on its earlier model of cloning successful U.S. internet companies.
  • Its remaining key startups, home design platform Westwing and Global Fashion Group, both grew sales. African startup Jumia’s general merchandise value, the total value of orders placed on the platform before discounts, grew 67 percent in the first half.
  • The company is gearing up for its next IPO, Westwing, following the listings of food delivery company Delivery Hero, meal kit service HelloFresh, and furniture retailer Home24, which all sold shares in Frankfurt starting last year.

Market Reaction

Rocket shares climbed as much as 4.55 percent, to 28.06 euros a share, in Frankfurt trading, the steepest intraday gain since June 29.

  • The shares have gained about 30 percent since the start of the year, giving Rocket a market capitalization of about 4.2 billion euros.
  • Check Rocket’s earnings statement here.

Executive Comments

  • CEO Sawmer says "we continue to look at many opportunities around the world,” to incubate companies and invest in more startups.
  • Outgoing CFO Peter Kimpel says Rocket “makes progress on all fronts.”

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