Last Mile Brief 20/01/2023: Deliveroo breaks even in H2 2022 despite orders falling

Today’s headline story: Deliveroo breaks even in H2 2022 despite orders falling

The company said in its latest update that cost-cutting measures had allowed it to balance the books, with the company’s CEO talking of continued progress on the path to profitability.

The figures highlighted in Deliveroo’s statement were as follows:

• H2 2022 adjusted EBITDA approximately breakeven for all operations (including Australia and the Netherlands); this represents a significant improvement in adjusted EBITDA margin (as % of GTV) from (3.2)% in H2 2021 to (1.9)% in H1 2022 to ~0% in H2 2022.
• Full year profitability ahead of previous guidance, driven by gross profit margin expansion and cost control. FY 2022 adjusted EBITDA margin (as a % of GTV) is now expected to be approximately (1.0)% for all operations (including Australia and the Netherlands), better than previous guidance of (1.2)-(1.5)%.
• Solid year of growth in 2022, with gross transaction value (GTV) up 7% for continuing operations (excluding Australia and the Netherlands) and 5% for all operations (both in constant currency) – within the guidance range of 4-8% growth (in constant currency). In 2022, market share increased in key markets such as the UK, France and Italy through relentless focus on the hyperlocal consumer value proposition
• Q4 2022 GTV grew by 6% year-on-year for continuing operations. GTV per order was up 8% driven by item level price inflation and consumer fee optimisation; orders were down (2)%, reflecting the continuing difficult consumer environment. In Q4 2022, GTV increased by 10% sequentially (vs seasonally weaker Q3).
• Adjusted EBITDA is expected to continue to improve in 2023; management will provide 2023 guidance at FY 2022 results on 16 March 2023

Commenting on the results, Will Shu, Founder and CEO of Deliveroo, said:

“I am proud of the team delivering significant improvements in profitability whilst also still delivering growth in a difficult macroeconomic environment. I am particularly pleased that we have done so while improving our consumer value proposition, meaningfully increasing the selection of restaurants and grocers available on the platform. As always, we continue to be focused on strengthening our offer for each side of our marketplace through a hyperlocal lens. Amidst an uncertain outlook for 2023, we remain confident in our ability to adapt financially and to make continued progress on our path to profitability.”

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Europe round up

• Polish parcel locker firm InPost is targeting growth above the expected 5-10% increase in e-commerce parcel volumes in Poland in 2023, chief executive Rafal Brzoska was quoted as saying on Wednesday.
• The Royal Mail has restarted some overseas deliveries following a recent cyber attack.
• Boohoo Group has reported a 11% drop in revenue in the four months ending 31 December 2022, with delivery disruption, elevated return numbers and freight and shipping costs impacting the fast fashion retailer.
• The UK Government was yesterday presented with a national strategy for drone technology across land, sea and air.
• Campaigners fear Royal Mail is looking to close the parcel pick-up desk at a Sheffield depot.
• A DPD distribution centre is to bring around 200 local jobs to Carlisle.
• Delivery drivers at Evri have accused the company of mistreatment, claiming they were being damaged “physically and emotionally”.
• Stuart is partnering with bodo on same day and instant deliveries across London.
• Amazon Prime members in the UK will have to spend £20 more to get free same-day delivery, as well as free click and collect order pick-ups from next month.

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North America round up

• Poor weather conditions, including freezing rain, have prompted Canada Post to suspend delivery in the Barrie area.
• Grubhub has partnered with RapidSOS, an intelligent safety platform that routes life-saving data to first responders in an emergency.
• Two DoorDash Inc. delivery workers must arbitrate their individual wage claims against the food delivery platform pursuant to a clause in the independent contractor agreement they assented to when they registered with the company.
• An auto parts distributor and an Arizona-based delivery provider have been ordered to pay $5.6 million to 1,398 drivers misclassified as independent contractors, the Department of Labor said in a Thursday news release.
• Trucking data shared by DHL with CNBC shows that while the core consumer market has pulled back, in many categories e-commerce sales remain strong.

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News from the rest of the world

• India’s Swiggy is expected to layoff 600 employees as the grocery-food delivery platform seeks to turn profitable ahead of its IPO later this year.
• DHL Express has been named the Top Employers Institute’s most certified employer in Africa for 2023.

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