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

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In today's Last Mile Brief, we cover Deliveroo's latest trading update, InPost's growth projections, and an increase in the cost of Amazon Prime in the UK.

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

Grocery and takeaway delivery company Deliveroo broke even in H2 2022 despite an overall drop in orders.

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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