Dutch digital services operator Prosus announced an 84% increase in its full-year adjusted core profit. This growth follows a period of substantial acquisitions, positioning the company for a strategic expansion into Europe, aiming to replicate its successful Latin American business model.

Financial Performance Highlights

Over the past year, Prosus allocated approximately $8.5 billion towards acquisitions. The company's adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) climbed 84% to $1.3 billion, with revenue increasing 57% to $9.7 billion. Prosus also achieved a record free cash flow of $1.5 billion, an increase from $1 billion in the previous year, and raised its full-year dividend by 40% to €0.28 per share.

Strategic European Expansion

A key component of Prosus's strategy involves establishing a European business foundation using Just Eat Takeaway.com, which was acquired for €4.1 billion ($4.7 billion). This initiative aims to integrate food delivery, groceries, and fintech services, mirroring the company's established approach in Latin America. Despite a 7% decline in volume, Just Eat Takeaway.com contributed $1.9 billion in revenue and $83 million in adjusted EBITDA. New leadership has been appointed at Just Eat Takeaway.com, tasked with enhancing marketing efforts and operational efficiencies to position the unit as a central element of the European strategy. The company's Latin American food delivery platform, iFood, saw its adjusted EBITDA grow by 178% to $400 million, while the European online marketplace OLX's adjusted EBITDA increased 61% to $481 million.

AI Development and Cost Efficiency

Prosus is also developing a comprehensive commerce model, which includes an AI shopping assistant. This assistant is being trained using transaction data from its various platforms to provide product recommendations and facilitate user purchases across its services. Addressing concerns about AI implementation costs, Chief Financial Officer Nico Marais indicated that Prosus is opting for open-source AI solutions. He noted that these options are more economical and offer comparable performance when compared to proprietary remote-access models.

Integration and Future Outlook

Following its recent acquisition phase, Mr. Marais stated that the company's immediate focus will shift towards integrating these new assets and enhancing profitability across its existing services. While additional smaller acquisitions may continue, their pace is expected to be reduced.