Deliveroo, a British online food delivery company, continued its growth in challenging market conditions with H1 2022 revenue rising 12%, orders up 10% and gross transaction value (GTV) up 7% year-on-year.
Growth slowed sequentially in Q2 compared to Q1; GTV growth in constant currency was 12% in Q1 and 2% in Q2, reflecting the impact of increased consumer headwinds.
Market share gains continued in UKI and key markets in International such as Italy (based on third-party data).
Good progress on key levers of path to profitability and cash generation, drove reduction in adjusted EBITDA loss to £68 million ($83.11 million) in H1 2022 from £106 million in H2 2021.
Gross profit margin (as % of GTV) was up 130 bps vs H2 2021 and up 70 bps vs H1 2021, with improvements driven by growth in consumer fees and increased contribution from advertising revenue.
The company’s revenue was up 12% to £1,013 million, exceeding increase in GTV of 7%, due to growth in commission revenue and consumer fees, and an increased contribution from advertising as this revenue stream begins to scale.
The loss before tax was £147 million in H1 2022 compared to £95 million in H1 2021 £203 million in H2 2021. Cash and cash equivalents was £1,130 million at June 30, 2022 compared to £1,291 million at December 31, 2021.
Gross transaction value (GTV) was up 7% to £3,558 million, with UK and Ireland up 8% and International up 6%. Gross profit was up 16% to £301 million; 8.5% gross profit margin (as % of GTV)*, up from 7.8% in H1 2021 (and from 7.2% in H2 2021), helped by growth in consumer fees and increased contribution from advertising revenue.
Adjusted EBITDA loss
Adjusted EBITDA loss was £68 million, an increase compared to £26 million in H1 2021, but lower than the loss of £106 million in H2 2021 due to gross profit improvement and efficiency of marketing investments; adjusted EBITDA margin (as % of GTV) of (1.9)% in H1 2022 vs (0.8)% in H1 2021 and (3.2)% in H2 2021.
The company expects GTV growth to be in the range of 4-12% (in constant currency). Adjusted EBITDA margin (as a % of GTV) expected to be in the range of (1.5)-(1.8)%. No change to medium-term and long-term guidance issued in March 2022.
Will Shu, Founder and CEO of Deliveroo, said: “Deliveroo is committed to delivering profitable growth. We are focused on driving the business to the milestone of adjusted EBITDA profitability and then on to positive free cash flow generation. In March we set out our path to profitability and the levers to deliver this. So far in 2022, we have made good progress delivering on our profitability plan, despite increased consumer headwinds and slowing growth during the period. We are confident that in H2 2022 and beyond we will see further gains from actions already taken, as well as benefits from new initiatives.
“Underpinning our progress is a rigorous approach to capital allocation, ensuring that we invest behind the opportunities with the highest returns. Important as this financial lens is, we cannot lose our obsession with the three sides of our marketplace. We achieved our financial progress while also continued to improve our consumer value proposition, adding selection across our restaurant, grocery and non-food categories, with brands like McDonald’s, WHSmith, ASDA, Auchan, Esselunga and ParknShop.”-- TradeArabia News Service