REG - Deliveroo PLC - Interim Financial Report 2023
10/08/2023 07:00
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RNS Number : 8623I Deliveroo PLC 10 August 2023
10 August 2023
Interim financial report 2023
Deliveroo plc
Significant progress on profitability and cash flow;
proposed £250 million additional return of structural surplus capital
Operational overview((
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))
● Profitability ahead of expectations with adjusted EBITDA* of £39
million in H1; adjusted EBITDA margin (as a % of GTV)* increased to 1.1% in H1
from 0.2% in H2 2022 and (1.5)% in H1 2022; profit improvement levers in H1
2023 included efficiencies in marketing and overheads*, and an increasing
contribution from advertising.
● Resilient growth in challenging macroeconomic conditions with
revenue up 5% and GTV* up 3% (3% and 1%, respectively at constant currency*)
despite orders down 6%; sequentially orders and GTV up Q2 versus Q1.
● UKI growth outperformed International with GTV in UKI up 7% and in
International down 3% (down 7% at constant currency) versus H1 2022, with
year-on-year growth in both segments improving in Q2 compared to Q1.
● Consumer value proposition further strengthened with focus on
service and value for money, alongside enhanced selection, improved in-app
experience, premium delivery and top-up grocery orders.
● Loss for the period improved by £71 million to £(83) million.
● Net cash* of £948 million; further progress towards sustainable
cash-generation, with free cash outflow* reduced to £(28) million.
● Proposed £250 million additional return of structural surplus
capital, bringing total capital return to shareholders announced in 2023 to
£300 million, equivalent to 30% of net cash at the start of the year.
Summary financial information
£ million unless stated H1 2023 H1 2022 Change
Orders 145.2 154.1 (6)%
GTV per order (£)* 24.2 22.1 10%
GTV* 3,506.8 3,413.2 3%
Revenue 1,020.3 972.9 5%
Revenue take rate (as % of GTV)* 29.1% 28.5% 60 bps
Gross profit 365.1 296.7 23%
Gross profit margin (as % of GTV)* 10.4% 8.7% 170 bps
Adjusted EBITDA* 39.4 (51.6) n/a
Adjusted EBITDA margin (as % of GTV)* 1.1% (1.5)% 260 bps
Loss for the period^ (82.9) (153.8) 46%
Free cash flow*^ (27.7) (168.7) 84%
Net cash*^ 947.8 1,130.1 (16)%
* Alternative performance measure ('APM'), refer to glossary on page 45 for
further details
^ Continuing and discontinued operations
Change in constant currency was 1% for GTV, 7% for GTV per order and 3% for
revenue
2023 outlook
● 2023 GTV growth guidance narrowed to lower single digits percentage
growth in constant currency (previous guidance of low-to mid- single digits
percentage growth in constant currency).
● 2023 adjusted EBITDA guidance upgraded to a range of £60-80 million
(previous guidance range of £20-50 million) reflecting strong H1 performance
and further investments in the consumer value proposition in H2.
This announcement includes inside information as defined in Article 7 of the
Market Abuse Regulation No. 596/2014 and is being released on behalf of
Deliveroo PLC by Catherine Sukmonowski, Company Secretary.
Will Shu, Founder and CEO of Deliveroo, said:
"I am very pleased with our progress so far this year. We have delivered a
strong financial performance despite challenging macroeconomic conditions.
This has been achieved alongside continued improvements to our proposition for
consumers, riders and merchants. In particular, for consumers we have
continued to innovate, for example now offering a more personalised in-app
experience and enabling consumers to top up their restaurant orders with
grocery items.
"Over the last 18 months, Deliveroo has reached adjusted EBITDA profitability
ahead of plan, and we are progressing towards our goal of generating
consistent positive free cash flow. The industry is large and still early in
its maturity, and we are excited by the growth opportunities ahead of us -
whether this is daily incremental improvements to the consumer value
proposition, or expanding in verticals such as grocery and non-food retail.
Against this backdrop of strategic progress and growth opportunity, the Board
has considered our strong capital position and is proposing an additional
£250 million capital return to shareholders.
Looking ahead, we will continue to adapt to the evolving market conditions and
execute against our strategy. We remain excited about the number of
opportunities we have to drive further growth in the medium and longer-term,
and we have the team and resources to capture these opportunities."
Contact information
Investor Relations
David Hancock, VP Finance, Strategy & IR - investors@deliveroo.co.uk
(mailto:investors@deliveroo.co.uk)
Tim Warrington, Investor Relations Director
Rohan Chitale, Investor Relations Director
Media Relations
Joe Carberry, VP Policy & Communications - joe.carberry@deliveroo.co.uk
(mailto:joe.carberry@deliveroo.co.uk)
Teneo, James Macey White, Jessica Reid - deliveroo@teneo.com
(mailto:deliveroo@teneo.com)
Analyst and investor call
A conference call and webcast with Q&A for analysts and investors will be
held today at 09:00 BST / 10:00 CEST. Registration details as follows:
Conference call:
https://secure.emincote.com/client/deliveroo/hy-2023/vip_connect
(https://secure.emincote.com/client/deliveroo/hy-2023/vip_connect)
Webcast: https://secure.emincote.com/client/deliveroo/hy-2023
(https://secure.emincote.com/client/deliveroo/hy-2023)
The webcast will also be available to view at
https://corporate.deliveroo.co.uk/ (https://corporate.deliveroo.co.uk/) . A
replay will be made available later.
Upcoming events
Q3 2023 trading update: 19 October
Capital markets event: 29 November
About Deliveroo plc ('Deliveroo' or 'the Company' or 'we')
Deliveroo is an award-winning delivery service founded in 2013 by William Shu
and Greg Orlowski. Deliveroo works with approximately 182,000 best-loved
restaurants and grocery partners, as well as around 135,000 riders to provide
the best food delivery experience in the world. Deliveroo is headquartered in
London, with offices around the globe. Deliveroo operates across 10 markets,
including Belgium, France, Hong Kong, Italy, Ireland, Kuwait, Qatar,
Singapore, United Arab Emirates and the United Kingdom.
Further information regarding Deliveroo is available on the Company's website
at https://corporate.deliveroo.co.uk/ (https://corporate.deliveroo.co.uk/) .
Disclaimer
This announcement may include forward-looking statements, which are based on
current expectations and projections about future events. These statements may
include, without limitation, any statements preceded by, followed by or
including words such as "target", "believe", "expect", "aim", "intend", "may",
"anticipate", "estimate", "plan", "project", "will", "can have", "likely",
"should", "would", "could" and any other words and terms of similar meaning or
the negative thereof. These forward-looking statements are subject to risks,
uncertainties and assumptions about the Company and its subsidiaries and its
investments, including, among other things, the development of its business,
trends in its operating environment, and future capital expenditures and
acquisitions. The forward-looking statements in this announcement speak only
as at the date of this announcement. These statements reflect the beliefs of
the Directors, (including based on their expectations arising from pursuit of
the Group's strategy) as well as assumptions made by the Directors and
information currently available to the Company. Further, certain
forward-looking statements are based upon assumptions of future events which
may not prove to be accurate and none of the Company nor any member of the
Group, nor any of such person's affiliates or their respective directors,
officers, employees, agents and/or advisors, nor any other person(s) accepts
any responsibility for the accuracy or fairness of the opinions expressed in
this announcement or the underlying assumptions. Actual events or conditions
are unlikely to be consistent with, and may differ significantly from, those
assumed. In light of these risks, uncertainties and assumptions, the events in
the forward-looking statements may not occur. No representation or warranty is
made that any forward-looking statement will come to pass. No one undertakes
to update, supplement, amend or revise any forward-looking statements. You are
therefore cautioned not to place any undue reliance on forward-looking
statements.
Operating review((
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1. Key developments
Growth and operating environment
In H1 2023, GTV grew 3% (1% in constant currency) and revenue was up 5% (3% in
constant currency), a resilient performance in the context of the market
backdrop. Starting last year, high food price inflation in many markets has
put pressure on consumer spending power and impacted demand for food delivery,
while COVID-related restrictions in Asian markets in early 2022 created a
tougher comparison base, especially during Q1 2023.
GTV growth improved through the period, with GTV growth of (1)% in Q1 and 3%
in Q2, both in constant currency. This improvement was partly due to
comparatives easing, particularly in Hong Kong and Singapore, alongside
continued good performance in UKI. We are committed to driving further topline
growth, and with consumer headwinds expected to persist for at least the
remainder of 2023, we are focusing on the growth levers in our control.
During the period, we made further progress scaling our advertising business,
reaching an annualised revenue run-rate of £55 million or 0.8% of GTV in Q2
2023 (Q4 2022: £40 million run-rate or 0.6% of GTV). The vast majority of
this revenue currently comes from our sponsored positioning and search results
product for restaurants and grocers. We continue to take a consumer-first
approach, wanting to strike the right balance between helping merchants drive
incremental demand, while always prioritising the consumer experience. In H1
2023, over 50,000 merchants placed an advert on the platform (H2 2022: around
38,000), while we also ran campaigns with brands such as PepsiCo, Quorn, ITVX
and Sky Glass.
Consumer value proposition
While we face short-term macroeconomic headwinds, the industry is still early
in its maturity and there remains ample room for growth. An important part of
unlocking this is to get the basics right: build the best consumer value
proposition ('CVP') by continually improving factors such as consumer
experience, selection and price/value.
As an on-demand three-sided marketplace we aim to deliver a seamless consumer
delivery experience on each occasion. This is a key company priority in 2023,
and working with restaurants and riders, we have been able to substantially
reduce poor service outcomes such as missing items and late orders.
In the UKI, we have launched a 'premium' delivery option, allowing consumers
to pay a small fee to guarantee that the consumer's order is brought directly
to them, ahead of any other order; if a premium delivery arrives after the
estimated delivery time, the fee is fully refunded. We are also offering
consumers the opportunity to top up their restaurant order with a Hop grocery
order through the order tracking page, with no additional fees. Within our
grocery offering, we have transformed the in-app experience, making consumer
discovery more personalised, with features like 'Your Regulars' and 'Top
Picks' based on previous buying behaviour, as well as significantly expanding
the range of products we have available.
We have continued to enhance the selection available to consumers, adding more
merchant supply to the platform and taking the total number of restaurant and
grocery partners to around 182,000. We also expanded delivery radii in certain
zones to improve selection for consumers and to allow restaurants and grocers
to reach more consumers.
Price and value is another key component of the CVP, particularly when the
cost of living crisis is impacting consumers' spending power. While we do not
set menu prices, we are actively promoting value in the app. Examples include
highlighting where restaurant and grocers are matching prices to their dine-in
or in-store prices, as well as using targeted promotions to provide value, for
example our '£7 off 7' orders promotion and 'summer saver' campaigns,
alongside buy-one-get-one-free offers with participating restaurants.
Improving profitability
Deliveroo made further progress towards reaching our ambition of a 4%+
adjusted EBITDA margin (as % of GTV) by 2026. Despite the challenging
macroeconomic environment, adjusted EBITDA increased to £39.4 million in H1
2023, compared to £6.6 million in H2 2022 and £(51.6) million in H1 2022.
Adjusted EBITDA margin (as % of GTV) reached 1.1% in H1 2023, an improvement
of 260 basis points (bps) versus H1 2022. This was driven by 170 bps of gross
profit margin (as % of GTV)* expansion and 90 bps of reduction in marketing
and overheads as % of GTV*.
The annualisation of the measures we took in H1 2022 to optimise consumer fees
(ensuring that delivery fees appropriately reflect delivery distance and
adjusting the balance between delivery fees and service fees) and the
increasing contribution of advertising boosted the revenue take rate and
profitability. In addition, we improved gross profit margin through
efficiencies in the rider network that helped to limit the inflationary impact
on cost of sales per order (£4.51 in H1 2023 versus £4.39 in H1 2022).
Marketing and overheads* decreased further to £325.7 million, compared to
£339.9 million in H2 2022 and £348.3 million in H1 2022. The sequential
improvement was in large part due to overhead cost efficiencies, with benefits
from headcount reduction measures being realised slightly earlier than
projected.
Capital position and proposed return of capital
Deliveroo's IPO in March 2021 raised primary proceeds to meet the anticipated
investment needs of the Group at that time. Since then, the competitive
environment has evolved, in part driven by the shift in financial market
conditions. In addition, Deliveroo has reached adjusted EBITDA profitability
ahead of plan, and we have made progress towards our goal of generating
sustainable positive free cash flow*. Together, these factors have prompted
the Board to re-evaluate the cash requirements of the Group.
At the 2022 Interim results, Deliveroo announced a share purchase programme of
£75 million, via the Employee Benefit Trust, in order to mitigate dilution
related to our employee share plans. This programme was completed in January
2023. With the 2022 Preliminary results, in recognition of our strong balance
sheet, we announced a share purchase programme of up to £50 million. In
addition, we committed to provide a further update on our capital position
with the 2023 Interim results.
The Board has since undertaken a review of the Group's capital structure,
growth opportunities and required cash balances, both now and in the future.
The Board sees that its capital requirements fall into three broad
categories.
First, strategic and operational capital. This is the capital we need to
maintain and strengthen our market positions, including in case of any
intensified competitive backdrop, and to fund ongoing operational requirements
and working capital. In addition, a portion of this capital will be used to
fund additional investments for future growth. The Group intends to provide
further details on our potential future growth opportunities at a capital
markets event in November.
Second, capital is required to provide a prudent and appropriate level of
headroom for unforeseen circumstances and for the potential crystallisation of
provisions or contingent liabilities, as set out in our accounts.
The third and final category is surplus capital. Following this review, the
Board has concluded that the Group has structural surplus cash and proposes a
return to shareholders of £250 million, in addition to the £50 million
return announced in March 2023. This proposed total capital return of £300
million announced in 2023 is equivalent to 30% of net cash at the start of the
year.
Going forward, we will regularly review our capital position, as we make
further progress on our profitability and cash generation and as the
competitive, consumer and regulatory backdrop becomes clearer.
As at 30 June 2023, the Group had a net cash position of £948 million. The
proposed £250 million capital return, together with the remaining £21
million balance of the £50 million share buyback programme announced in March
2023, would leave the Group with a pro forma net cash balance of £677 million
at 30 June 2023.
We intend to consult with shareholders to determine the most appropriate
distribution mechanism for the proposed return of capital. Following this
consultation, we expect to update the market on how we will return the
proposed £250 million before the end of September.
Opportunities ahead
Our industry is at an early stage of maturity, and we see multiple
opportunities ahead of us to drive strong growth in revenue, profit and free
cash flow. We will host a capital markets event on 29 November at our London
office to share more insights into these opportunities and our strategy for
pursuing them. Further details will be provided closer to the time.
2. The three sides of the marketplace
Since 2013, we have pioneered on-demand food delivery via a hyperlocal
three-sided online marketplace, connecting local consumers, riders, and
merchants. For consumers, Deliveroo unlocks broad choice and fast delivery
times, working with merchants who overwhelmingly have never offered an online
presence and on-demand deliveries before. For merchants, we not only provide
logistics, but, more importantly, an incremental demand generation channel,
including access to millions of new consumers alongside online tools to grow
their business effectively. For riders, we offer highly flexible work which
they can rely on for attractive earnings, alongside security and benefits. In
H1 2023, we made further progress in developing all three sides of the
marketplace.
Consumers
Deliveroo's average monthly active consumers ('MACs') averaged 7.1 million
across H1 2023, compared to 7.5 million in H1 2022. Over the last year, MACs
have declined modestly, coinciding with inflationary pressures on consumers.
In H1 2023, we saw some signs that this decline is stabilising, with 7.1
million MACs in both Q1 and Q2. Average order frequency remains stable at 3.4
times per month.
Group Q1 Q2 Q3 Q4 Q1 Q2
2022
2022
2022
2022
2023 2023
UK & Ireland (m) 4.1 4.0 3.9 4.1 4.0 4.0
International (m) 3.5 3.4 3.1 3.3 3.1 3.1
Average MACs (m) 7.6 7.4 7.0 7.4 7.1 7.1
Year-on-year growth in MACs 15% 5% 4% (1)% (7)% (4)%
Average order frequency (monthly) 3.4 3.4 3.3 3.4 3.4 3.4
Monthly active consumers ('MACs') is the number of individual consumer
accounts that have placed an order on our platform in a given month; average
MACs for a quarter is the average of MACs for the three months of that
quarter.
Average order frequency (monthly) is the average number of orders placed by
active consumers in a month.
Merchants
Restaurant selection is an important part of our consumer value proposition.
Growth in restaurant selection increases availability and choice to consumers
on a neighbourhood-by-neighbourhood basis. Our global partner restaurant sites
increased to approximately 162,000 at the end of H1 2023, compared to around
158,000 at the end of 2022, including a number of strategic wins in Italy and
the Middle East.
Our on-demand grocery business continued to grow and in H1 2023 represented
11% of total GTV, an increase of 70 bps compared to H2 2022 (also rounding to
11%). Globally, we now have around 20,000 grocery sites live with major
partners and smaller independent merchants. Alongside this 'store pick' model,
we continued to roll out Hop, our delivery-only grocery stores.
Deliveroo-operated Hop stores and partner-operated Hop-as-a-Service sites are
live in the UKI and International segments, with partners including Morrisons,
Waitrose, Asda, Carrefour, Auchan, Esselunga, Choithrams and ParknShop.
Riders status - material developments
Riders are a vital part of Deliveroo's three-sided marketplace and we work
with around 135,000 riders globally. Riders value the flexible work we offer,
enabling them to set their own work patterns, to select which orders to accept
or reject and to work with multiple companies simultaneously. This is
reflected in high satisfaction ratings, with 82% of riders globally saying
they are satisfied or very satisfied working with Deliveroo in Q2 2023 (Q2
2022: 80%, Q4 2022: 83%). We continue to see strong rider application
pipelines and rider retention rates. However, we have actively managed our
rider fleet size by onboarding fewer new riders in the period to reflect the
impact of macroeconomic conditions on order volumes and maintain an efficient
rider network.
The independent contractor status of riders remains under scrutiny in certain
markets, with the following updates on material matters in H1 2023.
● The European Parliament and European Council finalised their
respective positions on the EU's Platform Work Directive. The Parliament,
Council and Commission have entered into trilogue negotiations to determine a
final Directive. Deliveroo is engaging constructively with stakeholders across
the EU institutions.
● In France, whilst uncertainties remain Deliveroo continues to
participate in constructive dialogue with social security and tax bodies in
relation to ongoing investigations concerning our engagement with riders.
Alongside this, we continue to participate in social dialogue, aiming to
improve conditions for self-employed riders. This has led to sector-wide
agreements with trade unions, including to give riders a guaranteed minimum
payment for periods working on an order.
● In Italy, Deliveroo and other food delivery platforms operate under
a Collective Bargaining Agreement with a local trade union. In January, a
challenge against this agreement at national level was unsuccessful. We
continue to engage with the national labour inspector regarding an
investigation into a historical period. There have been two challenges to the
Agreement at local, city level, which are under appeal or where appeal is
being considered.
● It is also worth noting that in the Netherlands, although Deliveroo
has exited the market, we have certain ongoing litigation regarding rider
status. On 24 March 2023, the Supreme Court found Deliveroo riders to have
been employees. However, this decision does not have any material impact on
our business.
At any given time, Deliveroo will be involved in regulatory investigations,
audits, claims, court cases and appeals, as well as individual and collective
legal claims in any market. We recognise provisions or contingent liabilities
for such proceedings as appropriate. These represent management's best
estimate of potential economic outflows based on the status of proceedings at
the time of approval of the financial statements, and are based on current
and/or anticipated claims, even where the amounts claimed are disputed.
Financial review((
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To supplement performance assessment, Deliveroo uses alternative performance
measures ('APMs'), which are not defined under IFRS. The Board reviews gross
transaction value ('GTV') and adjusted EBITDA, as well as other APMs shown
below, alongside IFRS measures.
£ million unless stated H1 2023 H1 2022 Change
Orders 145.2 154.1 (6)%
GTV per order (£)* 24.2 22.1 10%
GTV* 3,506.8 3,413.2 3%
Revenue 1,020.3 972.9 5%
Revenue take rate (as % of GTV)* 29.1% 28.5% 60 bps
Gross profit 365.1 296.7 23%
Gross profit margin (as % of GTV)* 10.4% 8.7% 170 bps
Marketing and overheads* (325.7) (348.3) (6)%
Marketing and overheads as % of GTV* (9.3)% (10.2)% 90 bps
Adjusted EBITDA* 39.4 (51.6) n/a
Adjusted EBITDA margin (as % of GTV)* 1.1% (1.5)% 260 bps
Loss for the period^ (82.9) (153.8) 46%
Free cash flow*^ (27.7) (168.7) 84%
Net cash*^ 947.8 1,130.1 (16)%
* Alternative performance measure ('APM'), refer to glossary on page 45 for
further details.
^ Continuing and discontinued operations
Change in constant currency was 1% for GTV, 7% for GTV per order and 3% for
revenue
1. Group operating performance and income statement (see page 19)
Gross transaction value
GTV grew to £3,506.8 million, a year-on-year increase of 3%, or 1% in
constant currency, driven by an increase in GTV per order* of 10%, or 7% in
constant currency, due to item-level price inflation and the annualised impact
of consumer fee optimisation in 2022. Through the period, GTV per order
increased by 8% year-on-year in Q1 and 6% in Q2, both in constant currency.
Orders decreased by 6% year-on-year to 145.2 million in H1 2023, with Q1 down
9% and Q2 down 3%, reflecting the more challenging consumer environment across
H1 as well as tough COVID comparatives in some markets in Q1. Sequentially,
orders in H1 2023 remained flat against H2 2022, while GTV was up 2%, or 3% in
constant currency, reflecting GTV per order increases.
Revenue
Revenue grew 5% year-on-year (3% in constant currency) to £1,020.3 million.
This was ahead of the growth rate in GTV, reflecting an increase in the
revenue take rate (i.e. revenue as % of GTV) to 29.1% from 28.5% in H1 2022.
The increase was driven by the impact of consumer fee optimisation, as well as
scaling the contribution from advertising, reaching a run-rate of £55 million
(0.8% of GTV) in Q2.
Gross profit
Gross profit increased by 23% to £365.1 million. Gross profit margin (as % of
GTV) was 10.4% in H1 2023, up 170 bps compared to H1 2022 and up 30 bps
compared to H2 2022. The year-on-year and sequential improvements reflect
increases in GTV per order and revenue take rate, as well as efficiencies in
the rider network that have helped to limit the inflationary impact on cost of
sales per order (£4.51 in H1 2023 versus £4.39 in H1 2022).
Administrative expenses
£ million H1 2023 H1 2022 Change
Sales and marketing costs 93.5 127.4 (27)%
Staff costs 158.5 137.5 15%
Capitalised development costs (20.0) (25.8) (22)%
Other expenses 94.2 104.1 (10)%
Depreciation, amortisation and impairments 40.0 26.1 53%
Share based payments charge and national insurance on share options 45.5 24.8 83%
Exceptional costs* 27.0 33.2 (19)%
Total administrative expenses 438.8 427.3 3%
* Alternative performance measure ('APM'), refer to glossary on page 45 for
further details
Administrative expenses increased by 3% year-on-year to £438.8 million in H1
2023. Marketing costs reduced by 27% year-on-year reflecting more measured,
targeted marketing investments given the weaker consumer environment. Staff
costs were up 15% year-on-year, driven by the annualisation of employee
headcount increases predominantly in our technology team during H1 2022 -
before we began taking cost control measures in light of the weaker consumer
environment. In H2 2022, we implemented a pause on hiring and stopped
backfilling roles, then in February 2023 we initiated a redundancy programme
removing 9% of employed positions across the business, which took effect in Q2
after employee consultations were completed. The objective of this programme
was to deliver a permanent shift towards increased efficiency, reduced
friction in organisational structures and increased speed of decision-making.
The resulting overhead efficiencies from these actions were realised slightly
earlier than projected. Other expenses of £94.2 million decreased by 10%
year-on-year, driven by a significant reduction in contractors within the
technology team.
Depreciation, amortisation and impairments increased to £40.0 million (£26.1
million in H1 2022), largely reflecting the increase in capitalised
development costs during 2022. Share-based payments charge and national
insurance ('NI') on share options was £45.5 million; this compares to £24.8
million in the prior year, which benefited from the release of accrued NI as a
result of the lower share price at the end of H1 2022 compared to year-end
2021. Exceptional items* were £27.0 million (£33.2 million in H1 2022),
comprising legal and regulatory expenses and one-off redundancy costs.
Other operating income and other operating expenses
Other operating income was £2.9 million in H1 2023 (£1.8 million in H1
2022), increasing principally due to an increase in the research and
development tax credit. Other operating expenses were £2.3 million in H1 2023
(£6.9 million in H1 2022), reducing year-on-year primarily due to lower rider
kit costs as lower order volumes meant fewer new riders were onboarded.
Adjusted EBITDA
H1 2023 H1 2022
Reconciliation to financial statements £m £m Change
Operating loss (73.1) (135.7) (46)%
Depreciation, amortisation and impairments 40.0 26.1 53%
EBITDA (33.1) (109.6) (70)%
Share based payments charge and national insurance on share options 45.5 24.8 83%
Exceptional items* 27.0 33.2 (19)%
Adjusted EBITDA* 39.4 (51.6) n/a
Marketing and overheads* 325.7 348.3 (6)%
Gross profit 365.1 296.7 23%
Figures for continuing operations
* Alternative performance measure ('APM'), refer to glossary on page 45 for
further details
Adjusted EBITDA increased to £39.4 million, compared to a loss of £(51.6)
million in H1 2022. Adjusted EBITDA margin (as a % of GTV) improved to 1.1% in
H1 2023, compared to (1.5)% in the comparative period, an increase of 260 bps.
This movement was attributable to a 170 bps increase in gross profit margin
(as % of GTV) and a 90 bps improvement in marketing and overheads costs (as a
% of GTV). Sequentially, adjusted EBITDA margin improved from 0.2% in H2 2022
to 1.1% in H1 2023.
Finance income and finance costs
Finance income increased to £16.8 million, comprising interest income of
£15.4 million and foreign exchange gains of £1.4 million (£9.5 million in
H1 2022, comprising interest income of £1.9 million and foreign exchange
gains of £7.6 million). The increase in interest income reflects an increase
in interest rates and improved efficiency in cash management. Finance costs
increased to £1.3 million (£0.9 million in H1 2022) due to an increase in
interest charged on leases, principally driven by a net increase in the number
of leases.
Income tax charge
Whilst the Group reports a loss before income tax, certain overseas markets do
generate profits for tax purposes. The income tax charge increased to £10.6
million in H1 2023 (£4.9 million in H1 2022), largely due to higher taxable
profits in certain overseas markets.
Discontinued operations
Deliveroo ended operations in Australia and the Netherlands in 2022, and in
Spain in 2021; all three have been classified as discontinued operations. In
H1 2023, the loss for the year from discontinued operations was £(14.7)
million (loss of £(21.8) million in H1 2022), with all expenses treated as
exceptional as these relate to market exit costs. The majority of these costs
are transfers from contingent liabilities to provisions, in instances where we
have reassessed the likely outcome of ongoing legal cases as we seek to
conclude matters in countries in which we no longer trade.
Loss for the period
Loss for the period (continuing and discontinued operations) was £(82.9)
million in H1 2023 (£(153.8) million in H1 2022) as a result of the movements
described above.
2. Segment operating performance
Deliveroo reviews operating performance in two geographical segments: the UK
and Ireland ('UKI') and International, which comprises eight markets across
Europe, the Middle East and Asia. In H1 2023, UKI represented 59% of total GTV
(H1 2022: 56%), while International represented 41% (H1 2022: 44%).
UK and Ireland
£ million H1 2023 H1 2022 Change
unless stated reported
Orders (m) 79.6 80.1 (1)%
GTV per order* (£) 25.8 23.9 8%
Gross transaction value* 2,057.6 1,914.3 7%
Revenue 601.9 544.4 11%
Revenue take rate (as % of GTV)* 29.3% 28.4% 90 bps
Gross profit 229.3 188.2 22%
Gross profit margin (as % of GTV)* 11.1% 9.8% 130 bps
Marketing and overheads* (105.7) (128.3) (18)%
Marketing and overheads (as % of GTV)* (5.1)% (6.7)% 160 bps
Segment adjusted EBITDA* 123.6 59.9 106%
Segment adjusted EBITDA margin (as % of GTV)* 6.0% 3.1% 290 bps
* Alternative performance measure ('APM'), refer to glossary on page 45 for
further details
Change in constant currency was 7% for GTV, 8% for GTV per order and 10% for
revenue
In UKI, GTV grew to £2,057.6 million, a year-on-year increase of 7%. Orders
declined by 1% to 79.6 million, primarily driven by a 3% decline in monthly
active consumers. GTV per order increased 8% to £25.8, reflecting the
continued impact of food price inflation as well as the annualised impact of
Deliveroo's optimisation of consumer fees in 2022. Revenue grew 11% to £601.9
million, primarily due to the increase in GTV, as well as a higher
contribution from advertising revenue. Adjusted EBITDA was £123.6 million,
compared to £59.9 million in H1 2022, due to a 22% increase in gross profit
and a reduction in marketing and overheads from cost efficiency measures.
This represents continued good performance in UKI, underpinned by enhancements
to the CVP, with significant progress made during H1 on key service metrics
(such as missing items and late orders). These service improvements have been
complemented by new features such as a more personalised discovery experience
and range expansion in grocery, the launch of 'premium' delivery and the
option to 'top-up' a restaurant order with groceries from Hop with no
additional delivery or service fees. Further, we continued to add
differentiated content for consumers, with consumers in certain zones
benefiting from the expansion of delivery radii, opening up a wealth of new
selection that was previously unavailable to them. From a grocery perspective,
we continued to add to our offering, closing the period with almost 8,000
grocery sites in the UKI across major partners and smaller independent
merchants.
International((
4 (#_ftn4)
))
£ million H1 2023 H1 2022 Change
unless stated reported
Orders (m) 65.6 74.0 (11)%
GTV per order* (£) 22.1 20.3 9%
Gross transaction value* 1,449.1 1,499.0 (3)%
Revenue 418.4 428.5 (2)%
Revenue take rate (as % of GTV)* 28.9% 28.6% 30 bps
Gross profit 135.8 108.5 25%
Gross profit margin (as % of GTV)* 9.4% 7.2% 220 bps
Marketing and overheads* (94.0) (100.8) (7)%
Marketing and overheads (as % of GTV)* (6.5)% (6.7)% 20 bps
Segment adjusted EBITDA* 41.8 7.7 443%
Segment adjusted EBITDA margin (as % of GTV)* 2.9% 0.5% 240 bps
* Alternative performance measure ('APM'), refer to glossary on page 45 for
further details
Change in constant currency was (7)% for GTV, 5% for GTV per order and (6)%
for revenue
In International, GTV was £1,449.1 million in H1, a year-on-year decline of
7% in constant currency (3% decline in reported currency). Orders fell by 11%
to 65.6 million, primarily driven by an 8% decline in monthly active
consumers. GTV per order increased 5% in constant currency to £22.1,
reflecting the continued impact of food price inflation in certain markets and
the annualised impact of Deliveroo's optimisation of consumer fees. Revenue
fell 2% to £418.4 million, primarily due to the reduction in GTV, partly
offset by a higher contribution from advertising revenue. Adjusted EBITDA was
£41.8 million, compared to £7.7 million in H1 2022, due to significant
improvement in gross profit and cost control in marketing and overheads.
Overall segment performance was held back by soft market conditions in France.
GTV in France declined year-on-year, consistent with the overall market
development, although GTV remains more than double pre-COVID levels. Excluding
France, International GTV grew year-on-year in Q2, led by Italy and UAE. Top
line performance in Hong Kong improved during H1, helped by improvements to
our consumer value proposition and the easing of tough COVID-related
comparatives.
Progress across the International segment was supported by strengthened
relationships with restaurant partners, with around 5,000 new sites added
including strategic wins in Italy and the Middle East, alongside more than
1,000 new grocery sites. At the end of the period, we had around 12,000
grocery sites live with major partners and smaller independent grocery
merchants across International markets.
Quarterly performance
YoY change (Reported) YoY change (Constant)
Q1 2022 Q2 2022 Q1 2023 Q2 2023 Q1 Q2 Q1 Q2
Group
Revenue (£m) 479 494 512 508 7% 3% 4% 2%
GTV* (£m) 1,710 1,703 1,746 1,761 2% 3% (1)% 3%
Orders (m) 78.8 75.3 72.1 73.1 (9)% (3)% (9)% (3)%
GTV per order* (£) 21.7 22.6 24.2 24.1 12% 7% 8% 6%
UK and Ireland
Revenue (£m) 268 276 299 303 12% 10% 11% 9%
GTV* (£m) 956 958 1,017 1,040 6% 9% 6% 8%
Orders (m) 40.7 39.4 39.6 40.0 (3)% 2% (3)% 2%
GTV per order* (£) 23.5 24.3 25.7 26.0 9% 7% 9% 7%
International
Revenue (£m) 211 217 213 205 1% (6)% (5)% (7)%
GTV* (£m) 754 745 729 721 (3)% (3)% (9)% (5)%
Orders (m) 38.1 35.9 32.5 33.1 (15)% (8)% (15)% (8)%
GTV per order* (£) 19.8 20.8 22.4 21.8 13% 5% 7% 3%
* Alternative performance measure ('APM'), refer to glossary on page 45 for
further details.
3. Cash flow statement (see page 25)
All discussion of cash flows are for continuing and discontinued operations,
unless otherwise stated.
Free cash flow
Net cash generated from operating activities was £6.4 million in H1 2023 (net
cash outflow of £(119.7) million in H1 2022). This improvement was primarily
driven by the £91.0 million year-on-year improvement in adjusted EBITDA from
continuing operations.
Purchases of property, plant and equipment (also referred to as 'capital
expenditure') decreased to £5.0 million (£17.0 million in H1 2022) due to a
much-reduced roll-out of new Editions sites in light of the challenging
economic climate for restaurant partners. Acquisition of intangible assets
(also referred to as 'capitalised development costs') was £20.0 million in H1
2023 (£25.8 million in H1 2022). Additional development work in the period
included development of machine learning models that support improvements to
our CVP and generate value for our partners, improvements to our multi-pickup
stacking service (which allows riders to fulfil multiple orders in one
journey) to increase operational efficiency, and further building out our
advertising offering.
Payments of lease liabilities and interest on lease liabilities increased
year-on-year to £7.8m and £1.3 million respectively, principally driven by a
net increase in the number of leases.
Free cash flow in H1 2023 was £(27.7) million (£(168.7) million in H1 2022),
which included cash exceptionals of £18.5 million (£27.1 million in H1 2022)
mainly related to the redundancy programme initiated in H1 2023 and payment of
provisions in respect of previously-exited markets.
H1 2023 H1 2022
Free cash flow £m £m
Adjusted EBITDA 39.4 (51.6)
Discontinued operations adjusted EBITDA - (16.3)
Change in net working capital (6.7) (30.6)
Cash exceptionals (18.5) (27.1)
Non-cash items and other (7.8) 5.9
Net cash generated from/(used in) operating activities 6.4 (119.7)
Purchase of property, plant and equipment (5.0) (17.0)
Acquisition of intangible assets (20.0) (25.8)
Payments of lease liabilities (7.8) (5.3)
Interest on lease liabilities (1.3) (0.9)
Free cash flow* (27.7) (168.7)
Add back: cash exceptionals* 18.5 27.1
Free cash flow before exceptionals* (9.2) (141.6)
* Alternative performance measure ('APM'), refer to glossary on page 45 for
further details
Other cash flow items
Total interest received - which is not included in our definition of free cash
flow - increased to £13.3 million (H1 2022: £1.9 million), reflecting the
increase in interest rates and improved efficiency in cash management.
Purchases of own shares were £37.6 million (H1 2022: nil) relating to two
share purchase programmes: £9.0 million in January 2023 to complete the £75
million share purchase programme announced in August 2022, and £28.6 million
since April 2023 as part of the £50 million share purchase programme
announced in March 2023.
4. Balance sheet (see page 21)
Deliveroo continues to benefit from a strong financial position. Net cash was
£947.8 million at 30 June 2023 (£999.6 million at 31 December 2022),
comprising cash and cash equivalents of £896.0 million and other treasury
deposits of £51.8 million (£949.1 million and £50.5 million, respectively
at 31 December 2022). As at 30 June 2023, Deliveroo had no debt outstanding
(31 December 2022: nil). The Company has £75.0 million and €87.5 million of
available loan finance in the form of a committed Revolving Credit Facility
('RCF') with the initial term expiring in April 2024, none of which has been
drawn down.
H1 2023 H1 2022 FY 2022
Net cash/net debt* £m £m £m
Cash 896.0 1,130.1 949.1
Other treasury deposits 51.8 - 50.5
Less: debt - - -
Net cash/net debt* 947.8 1,130.1 999.6
* Alternative performance measure ('APM'), refer to glossary on page 45 for
further details
Provisions at 30 June 2023 were £170.2 million, an increase of £27.0 million
compared to £143.2 million at 31 December 2022. This increase is primarily
due to the recognition of further provisions for legal, regulatory and
contractual matters, in some of Deliveroo's International markets. Some of
these provision increases relate to markets we have exited, where in most
instances we have seen an associated decrease in contingent liabilities, as we
seek to conclude matters in countries in which we no longer trade.
5. Capital allocation and share purchase plans
During H2 2022, Deliveroo commenced a share purchase programme of up to £75
million to acquire Class A Ordinary Shares for the purpose of mitigating
dilution from share-based compensation plans. Shares were purchased by
Deliveroo's Employee Benefit Trust ('EBT') and repurchased shares will be held
by the EBT and used to satisfy employee share-based compensation awards. As of
31 December 2022, the EBT had purchased shares for a gross purchase
consideration of £66.0 million; in January 2023, the EBT purchased further
shares for a gross purchase consideration of £9.0 million to complete this
share purchase programme. From the launch of the share purchase programme on 1
September 2022 until completion on 17 January 2023, the EBT purchased a total
of 83.3 million shares for a total gross purchase consideration of £75
million.
In H1 2023, in recognition of Deliveroo's strong capital position, we
commenced a new share purchase programme of up to £50 million to acquire
Class A Ordinary Shares in the Company. From launch of the share purchase
programme on 3 April 2023 until 30 June 2023, Deliveroo had purchased a total
of 27.2 million shares for a total gross purchase consideration of £28.6
million. Since the half year-end, Deliveroo has purchased a further 6.1
million shares for a gross purchase consideration of £7.1 million. All shares
are currently held in treasury. We expect to complete this share purchase
programme in the coming months.
The Board has recently undertaken a review of the Group's capital structure,
growth opportunities and required cash balances, both now and in the future.
The Board has concluded that the Group has structural surplus cash and is
today announcing a proposed return to shareholders of £250 million
Dividend and dividend policy
No interim dividend has been declared or paid in the current or comparative
periods. Given the early stage of maturity of the online food category,
Deliveroo remains focused on investing to drive growth, believing that this is
the best way to drive long-term shareholder value. The Company does not expect
to declare or pay any dividends for the foreseeable future.
Events after the reporting period
Deliveroo is today announcing its intention to return £250 million of surplus
capital to shareholders. We will consult with shareholders on the most
appropriate distribution mechanism for this return. Following this
consultation, we expect to update the market before the end of September.
Going concern
The interim financial statements have been prepared on a going concern basis.
In adopting the going concern basis, the directors have considered the
business activities as set out on pages 4 to 15 and the principal risks and
uncertainties as set out on page 17.
The Group continues to maintain a robust financial position and at 30 June
2023 had net cash of £947.8 million (30 June 2022: £1,130.1 million),
alongside £75.0 million (30 June 2022: £75.0 million) and €87.5 million
(30 June 2022: €87.5 million) of available loan finance in the form of a
revolving credit facility ('RCF'). The RCF remains undrawn at the date of this
report with the initial term expiring in April 2024.
The forecast cash flows for the period ended 31 December 2024, used to support
the going concern assessment incorporate assumptions in respect of order
growth and profitability, based on the estimated economic outlook over the
forecast period, and sensitivities have been applied in order to stress test
the model, focusing in particular on the challenging trading environment and
the impact of increased consumer headwinds, in particular considering
situations in which future trading is weaker than forecasted. Management has
also considered available undrawn cash facilities, which are not included in
our forecasts as we do not currently anticipate needing to draw on these over
the forecast period. We have been in compliance with all associated covenants
throughout the period, and do not anticipate any breaches over the forecast
period.
Based on the forecast cash flows and associated sensitivities, the Directors
have a reasonable expectation that the Group will be able to continue in
operation and meet its liabilities and obligations as they fall due over the
forecast period, and accordingly are satisfied that the adoption of the going
concern basis of preparation is appropriate for the interim financial
statements.
Principal risks and uncertainties
The Group faces a number of risks and uncertainties that may have an adverse
impact on the Group's operations and performance. The Directors regularly
assess the risks and uncertainties that the Group faces. Our principal risks
are those which could have the most significant impact on the achievement of
our strategic objectives, our financial performance and our long-term
sustainability.
When preparing the half year financial information, the Directors reviewed the
principal risks and uncertainties as reported in the Annual Report for the
year ended 31 December 2022 (pages 62 to 66) and considered that the
disclosures remained appropriate and adequate. These risks are expected to
apply for the remaining half of the financial year and are summarised as
follows:
● Service availability - We depend on our network infrastructure,
software, content delivery processes, and associated key third-party services
and software to operate our platform and to receive, process and fulfil
orders. Any significant disruption in service, including from a distributed
denial of service attack, could materially impact our operations, reputation
and financial performance.
● Cyber and data security - We are responsible for protecting all
personal data we receive from consumers, riders, merchants and employees. For
the sensitive data we hold and process, we could face significant reputational
and legal consequences as well as financial loss if we fail to protect this
information from security threats, including ransomware.
● Three-sided marketplace - Our business model relies on the
three-sided marketplace, and to grow revenue and achieve profitability, we
must continue to acquire and retain consumers and merchants, and maintain a
balance between supply and demand for riders, as well as growing GTV per order
and/or order frequency to develop our business, which may be difficult to
maintain.
● Rider model and rider status - Our business would be adversely
affected if our rider model or approach to rider status and our operating
practices were successfully challenged or if changes in law required us to
reclassify our riders as employees including with retrospective effect.
● Key commercial relationships - We rely on partnerships with
various national and global brands in each of the markets in which we operate,
sometimes on an exclusive basis. The loss of such relationships or the
inability to enter into new relationships (on commercially attractive terms or
at all) could adversely affect our business.
● Reputation and brand - Our reputation, brand and ability to build
and retain trust with new and existing stakeholders (including shareholders)
may be adversely affected, including by unfavourable or inaccurate publicity
or events beyond our control (including misconduct by our employees, riders,
or merchants). This could negatively impact our future performance and
prospects.
● Attracting and retaining key personnel - We rely on the skills
and experience of our key personnel, and our business may be adversely
affected if we cannot attract and retain the talent required to solve the
complex problems presented by our three-sided marketplace.
● Competition - We operate in a highly competitive industry and
must compete effectively to succeed. We may not be able to achieve or maintain
a position in each of our markets that is sufficient to support the business
sustainably for the long-term.
● Managing growth - We are a fast growth company and if we do not
manage our growth and evolution successfully, or we fail to execute on our
strategy, our business will suffer.
● Financial condition - We have in past periods incurred, and may
in future periods incur, net losses, which could affect our need and ability
to access additional capital to grow our business.
● Compliance with other laws and regulations - We are subject to
the laws and regulations of numerous national and local authorities and
changes to, or uncertainty regarding, the applicable laws, regulations or
regulatory environment may adversely affect our business.
● External environment and events - Our business could be affected
by the actions of governments, political events or instability, or changes in
public policy in the countries in which we operate. Adverse economic
conditions could impact consumers' discretionary spending and in turn our
growth and profitability.
Directors' Responsibilities Statement
We confirm that to the best of our knowledge:
(a) the condensed set of financial statements have been prepared in
accordance with UK-adopted IAS 34 'Interim Financial Reporting';
(b) the interim management report includes a fair review of the information
required by DTR 4.2.7R (indication of important events and their impact during
the first six months and description of principal risks and uncertainties for
the remaining six months of the year); and
(c) the interim management report includes a fair review of the information
required by DTR 4.2.8R (disclosure of related parties' transactions and
changes therein).
By the order of the Board of Directors,
Scilla Grimble
Chief Financial Officer
9 August 2023
Condensed Consolidated Statement of Profit or Loss
Six months ended 30 June 2023 (unaudited)
6 months ended 30 June 2023 6 months ended 30 June 2022 (restated)^ Year-ended 31 December 2022
Note £m (unaudited) £m (unaudited) £m (audited)
Revenue 4 1,020.3 972.9 1,974.7
Cost of sales (655.2) (676.2) (1,331.5)
Gross profit 365.1 296.7 643.2
Other operating income 2.9 1.8 7.8
Administrative expenses (438.8) (427.3) (884.0)
Other operating expenses (2.3) (6.9) (12.6)
Operating loss (73.1) (135.7) (245.6)
Finance income 16.8 9.5 17.8
Finance costs (1.3) (0.9) (2.8)
Loss before income tax (57.6) (127.1) (230.6)
Income tax charge 5 (10.6) (4.9) (11.9)
Loss for the period from continuing operations (68.2) (132.0) (242.5)
Discontinued operations
Loss for the period from discontinued operations 6 (14.7) (21.8) (51.6)
Loss for the period attributable to the owners of the Company (82.9) (153.8) (294.1)
6 months ended 30 June 2023 6 months ended 30 June 2022 (restated)^ Year-ended 31 December 2022
Loss per share Note £ (unaudited) £ (unaudited) £ (audited)
From continuing operations
- Basic 8 (0.04) (0.07) (0.13)
- Diluted 8 (0.04) (0.07) (0.13)
From continuing and discontinued operations
- Basic 8 (0.05) (0.08) (0.16)
- Diluted 8 (0.05) (0.08) (0.16)
^Results for the 6 months ended 30 June 2022 have been restated to reflect the
reclassification of Deliveroo Netherlands BV and Deliveroo Australia Pty Ltd
as discontinued operations, which are described in more detail in note 6.
Condensed Consolidated Statement of Comprehensive Income
Six months ended 30 June 2023 (unaudited)
6 months ended 30 June 2023 6 months ended 30 June 2022 Year-ended 31 December 2022
Other comprehensive (loss)/income £m (unaudited) £m (unaudited) £m (audited)
Loss for the period (82.9) (153.8) (294.1)
Items that may be reclassified subsequently to profit or loss:
Currency translation (6.1) 5.8 5.2
Total comprehensive loss for the period (89.0) (148.0) (288.9)
This statement should be read in conjunction with the notes to the condensed
consolidated financial statements on pages 26 to 44.
Condensed Consolidated Statement of Financial Position
Six months ended 30 June 2023 (unaudited)
30 June 2023 30 June 2022 31 December 2022
(restated)^
Note £m (unaudited) £m (unaudited) £m (audited)
Non-current assets
Property, plant and equipment 9 42.7 46.4 49.3
Right-of-use assets 10 66.2 69.9 73.5
Intangible assets 11 71.1 65.3 72.9
Deferred tax asset 5 2.2 8.5 4.1
Investments in financial assets 2.9 2.9 2.9
Trade and other receivables 12 15.7 20.1 22.6
Total non-current assets 200.8 213.1 225.3
Current assets
Inventory 17.8 17.5 19.4
Trade and other receivables 12 115.6 102.7 109.6
Other treasury deposits 51.8 - 50.5
Cash and cash equivalents 896.0 1,130.1 949.1
Total current assets 1,081.2 1,250.3 1,128.6
Total assets 1,282.0 1,463.4 1,353.9
Current liabilities
Trade and other payables 13 (329.9) (316.7) (332.8)
Lease liabilities (16.1) (16.6) (12.3)
Total current liabilities (346.0) (333.3) (345.1)
Non-current liabilities
Lease liabilities (48.9) (63.4) (61.5)
Provisions 14 (170.2) (101.2) (143.2)
Total non-current liabilities (219.1) (164.6) (204.7)
Total liabilities (565.1) (497.9) (549.8)
Net assets 716.9 965.5 804.1
Equity
Share capital 15 9.3 9.3 9.3
Share premium - 1,013.0 -
Own shares 16 (93.5) - (66.0)
Merger reserve 1,288.5 1,288.5 1,288.5
Share option reserve 183.2 183.2 183.2
Accumulated losses (658.1) (1,522.7) (604.5)
Foreign currency translation reserve (12.5) (5.8) (6.4)
Total equity 716.9 965.5 804.1
^ The comparative information has been restated to account for a charge in
relation to the non-employee options granted in February and March 2021 as
discussed in note 2.
This statement should be read in conjunction with the notes to the condensed
consolidated financial statements on pages 26 to 44.
Condensed Consolidated Statement of Changes in Equity
Six months ended 30 June 2023 (unaudited)
Share capital Share premium Own shares Merger reserve Share option reserve Accumulated losses Foreign currency translation reserve Total
£m £m £m £m £m £m £m £m
At 31 December 2022 9.3 - (66.0) 1,288.5 183.2 (604.5) (6.4) 804.1
Loss for the period - - - - - (82.9) - (82.9)
Other comprehensive loss for the period - - - - - - (6.1) (6.1)
Total comprehensive loss for the period - - - - - (82.9) (6.1) (89.0)
Own shares acquired during the period - - (37.6) - - - - (37.6)
Own shares utilised for share schemes - - 10.1 - - (10.1) - -
Share-based payment awards - - - - - 39.4 - 39.4
At 30 June 2023 9.3 - (93.5) 1,288.5 183.2 (658.1) (12.5) 716.9
This statement should be read in conjunction with the notes to the condensed
consolidated financial statements on pages 26 to 44.
Condensed Consolidated Statement of Changes in Equity
Six months ended 30 June 2022 (unaudited)
Share capital Share premium Own shares Merger reserve Share option reserve Accumulated losses Foreign currency translation reserve Total
£m £m £m £m £m £m £m £m
At 31 December 2021^ 9.3 1,013.0 - 1,288.5 183.2 (1,408.7) (11.6) 1,073.7
Loss for the period - - - - - (153.8) - (153.8)
Other comprehensive income for the period - - - - - - 5.8 5.8
Total comprehensive (loss)/income for the period - - - - - (153.8) 5.8 (148.0)
Share-based payment awards - - - - - 39.8 - 39.8
At 30 June 2022 9.3 1,013.0 - 1,288.5 183.2 (1,522.7) (5.8) 965.5
^ The comparative information has been restated to account for a charge in
relation to the non-employee options granted in February and March 2021 as
discussed in note 2.
This statement should be read in conjunction with the notes to the condensed
consolidated financial statements on pages 26 to 44.
Condensed Consolidated Statement of Cash Flows
Six months ended 30 June 2023 (unaudited)
Note 6 months ended 30 June 2023 6 months ended 30 June 2022 Year-ended 31 December 2022
£m (unaudited) £m (unaudited) £m (audited)
Cash flows from operating activities
Net cash generated from/(used in) operating activities 18 6.4 (119.7) (144.2)
Cash flows from investing activities
Purchase of property, plant and equipment 9 (5.0) (17.0) (30.1)
Acquisition of intangible assets 11 (20.0) (25.8) (50.3)
Purchase of other treasury deposits (1.3) - (50.5)
Interest received 13.3 1.9 11.0
Net cash used in investing activities (13.0) (40.9) (119.9)
Cash flows from financing activities
Payments of lease liabilities (7.8) (5.3) (15.7)
Interest on lease liabilities (1.3) (0.9) (2.8)
Purchase of own shares 16 (37.6) - (66.0)
Net cash used in financing activities (46.7) (6.2) (84.5)
Net decrease in cash and cash equivalents (53.3) (166.8) (348.6)
Cash and cash equivalents at the beginning of the period 949.1 1,290.9 1,290.9
Net foreign exchange differences on cash and cash equivalents 0.2 6.0 6.8
Cash and cash equivalents at the end of the period 896.0 1,130.1 949.1
This statement should be read in conjunction with the notes to the condensed
consolidated financial statements on pages 26 to 44.
Notes to the Condensed Consolidated set of Financial Statements
Six months ended 30 June 2023 (unaudited)
1. General information
Deliveroo plc ('the Company') (together with its subsidiaries, 'the Group') is
a public limited company incorporated and domiciled in the United Kingdom
under the Companies Act 2006 (Registration number 13227665).
This report for the six months ended 30 June 2023 is the half-yearly financial
report presented by the Group. This half-yearly financial report presents
results for the Group for the period from 1 January 2023 to 30 June 2023.
The information for the year ended 31 December 2022 does not constitute
statutory accounts as defined in section 434 of the Companies Act 2006. A copy
of the statutory accounts for that year has been delivered to the Registrar of
Companies. The auditors reported on those accounts: their report was
unqualified, did not draw attention to any matters by way of emphasis and did
not contain a statement under section 498(2) or (3) of the Companies Act 2006.
The address of its registered office is:
The River Building
Level 1 Cannon Bridge House
1 Cousin Lane
London
EC4R 3TE
United Kingdom
2. Accounting policies
Basis of preparation
The annual financial statements of Deliveroo plc will be prepared in
accordance with United Kingdom adopted International Accounting Standards. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with United Kingdom adopted
International Accounting Standard 34 'Interim Financial Reporting'.
Discontinued operations
A discontinued operation is a component of the Group for which operations and
cash flows can be clearly separated from the rest of the Group and which
represents a major line of business or geographical area of operations.
Discontinued operations are excluded from the results of continuing operations
and are presented as a single amount as profit or loss after tax from
discontinued operations in the income statement. Comparatives are re-presented
accordingly.
Going concern
The interim financial statements have been prepared on a going concern basis.
In adopting the going concern basis, the directors have considered the
business activities as set out on pages 4 to 15 and the principal risks and
uncertainties as set out on pages 17.
The Group continues to maintain a robust financial position and at 30 June
2023 had net cash of £947.8 million (30 June 2022: £1,130.1 million),
alongside £75.0 million (30 June 2022: £75.0 million) and €87.5 million
(30 June 2022: €87.5 million) of available loan finance in the form of a
revolving credit facility ('RCF'). The RCF remains undrawn at the date of this
report with the initial term expiring in April 2024.
The forecast cash flows for the period ended 31 December 2024, used to support
the going concern assessment incorporate assumptions in respect of order
growth and profitability, based on the estimated economic outlook over the
forecast period, and sensitivities have been applied in order to stress test
the model, focusing in particular on the challenging trading environment and
the impact of increased consumer headwinds, in particular considering
situations in which future trading is weaker than forecasted. Management has
also considered available undrawn cash facilities, which are not included in
our forecasts as we do not currently anticipate needing to draw on these over
the forecast period. We have been in compliance with all associated covenants
throughout the half year, and do not anticipate any breaches over the forecast
period.
Based on the forecast cash flows and associated sensitivities, the Directors
have a reasonable expectation that the Group will be able to continue in
operation and meet its liabilities and obligations as they fall due over the
forecast period, and accordingly are satisfied that the adoption of the going
concern basis of preparation is appropriate for the interim financial
statements.
Accounting policies
The accounting policies, significant accounting judgements and estimates that
have been used in the preparation of these condensed financial statements have
been noted in the basis of preparation note, or are the same as those applied
in the Deliveroo plc Annual Report and Financial Statements for the year ended
31 December 2022. New standards effective on or after 1 January 2023 have been
reviewed and do not have a material effect on the Group's financial
statements.
Prior period adjustment
The 2021 share-based payments charge was restated to account for a charge in
relation to non-employee options granted in February and March 2021. This
impacted continuing operations only in the year ended 31 December 2021. The
impact to opening reserves for the 6 month period ended 30 June 2022 is as
follows:
30 June 2022
£m (unaudited)
Consolidated statement of financial position
Increase in share option reserves 22.0
Increase in accumulated losses (22.0)
Net change in equity -
3. Segment information
Information reported to the Group's Chief Executive Officer (the Chief
Operating Decision Maker ('CODM')) for the purposes of resource allocation and
assessment of segment performance focuses on a geographical split of the Group
between 'UK and Ireland' and 'International' (being overseas jurisdictions
other than UK and Ireland). 'UK and Ireland' and 'International' are
reportable segments with the 'International' segment comprising eight
operating segments (France, Italy, Belgium, Hong Kong, Singapore, UAE, Kuwait
and Qatar).
All operating segments primarily generate revenue through the operation of an
on-demand food platform and have similar economic characteristics. As such, it
is appropriate to aggregate all 'International' operating segments as one
reportable segment under IFRS 8 paragraph 22.
The CODM primarily uses a measure of adjusted earnings before interest, tax,
depreciation and amortisation (adjusted EBITDA, see below) to assess the
performance of the operating segments.
In the presentation of segment information, the heading 'Other', which is not
a reportable operating segment, is included to facilitate the reconciliation
of segmental revenue and adjusted EBITDA with the Group's revenue and adjusted
EBITDA. 'Other' primarily represents head office and Group services.
Finance income and costs are not allocated to segments, as this type of
activity is driven by the central treasury function, which manages the cash
position of the Group.
The Netherlands and Australia operations were discontinued during 2022 (and
Spain in 2021). The segment information reported on the next pages does not
include any amounts for these discontinued operations, which are described in
more detail in note 6.
The following is an analysis of the Group's revenue and results by reportable
segment:
UK and Ireland International Segments total Other Total
6 months ended 30 June 2023 (unaudited) Note £m £m £m £m £m
Total revenue 4 601.9 418.4 1,020.3 - 1,020.3
Cost of sales (372.6) (282.6) (655.2) - (655.2)
Other operating income 2.6 0.3 2.9 - 2.9
Administrative expenses (107.6) (92.7) (200.3) (126.0) (326.3)
Other operating expenses (0.7) (1.6) (2.3) - (2.3)
Adjusted EBITDA* 123.6 41.8 165.4 (126.0) 39.4
Share based payments charge and national insurance on share options - - - (45.5) (45.5)
Exceptional costs* 7 - - - (27.0) (27.0)
Impairments (3.8)
Depreciation and amortisation (36.2)
Finance income 16.8
Finance costs (1.3)
Loss before income tax (57.6)
Income tax charge (10.6)
Loss for the period from discontinued operations (14.7)
Loss after tax and discontinued operations (82.9)
* Alternative performance measure ('APM'), refer to glossary on page 45 for
further details.
UK and Ireland International Segments total Other Total
6 months ended 30 June 2022 (restated)^ Note £m £m £m £m £m
(unaudited)
Total revenue 4 544.4 428.5 972.9 - 972.9
Cost of sales (356.2) (320.0) (676.2) - (676.2)
Other operating income 1.2 0.6 1.8 - 1.8
Administrative expenses (125.0) (99.0) (224.0) (119.2) (343.2)
Other operating expenses (4.5) (2.4) (6.9) - (6.9)
Adjusted EBITDA* 59.9 7.7 67.6 (119.2) (51.6)
Share based payments charge and national insurance on share options - - - (24.8) (24.8)
Exceptional costs* 7 (7.0) - (7.0) (26.2) (33.2)
Depreciation and amortisation (26.1)
Finance income 9.5
Finance costs (0.9)
Loss before income tax (127.1)
Income tax charge (4.9)
Loss for the period from discontinued operations (21.8)
Loss after tax and discontinued operations (153.8)
^Results for the 6 months ended 30 June 2022 have been restated to reflect the
reclassification of Deliveroo Netherlands BV and Deliveroo Australia Pty Ltd
as discontinued operations, which are described in more detail in note 6.
UK and Ireland International Segments total Other Total
Year-ended 31 December 2022 (audited) Note £m £m £m £m £m
Total revenue 4 1,119.4 855.3 1,974.7 - 1,974.7
Cost of sales (713.9) (617.6) (1,331.5) - (1,331.5)
Other operating income 6.7 1.1 7.8 - 7.8
Administrative expenses (249.0) (183.3) (432.3) (251.1) (683.4)
Other operating expenses (5.3) (7.3) (12.6) - (12.6)
Adjusted EBITDA* 157.9 48.2 206.1 (251.1) (45.0)
Share based payments charge and national insurance on share options - - - (68.8) (68.8)
Exceptional costs* 7 (6.9) (8.0) (14.9) (55.5) (70.4)
Depreciation and amortisation (61.4)
Finance income 17.8
Finance costs (2.8)
Loss before income tax (230.6)
Income tax charge (11.9)
Loss for the period from discontinued operations (51.6)
Loss after tax and discontinued operations (294.1)
No single customer contributed 10% or more to the Group's revenue in the 6
months ended 30 June 2023, the 6 months ended 30 June 2022, or the year-ended
31 December 2022.
Revenues presented by reporting segment are in respect of transactions with
external customers only.
The measurement of current assets and liabilities by reportable segment is not
included in this note disclosure as this information is not regularly reviewed
by the CODM for decision-making purposes.
Geographical information
The Group's non-current assets, excluding trade and other receivables,
financial instruments, deferred tax assets and other financial assets, split
by geographical location are detailed below:
30 June 2023 30 June 2022 31 December 2022
Non-current assets £m (unaudited) £m (unaudited) £m (audited)
UK and Ireland 139.7 134.9 147.0
Rest of the World 40.3 46.7 48.7
Total non-current assets 180.0 181.6 195.7
4. Revenue
6 months ended 30 June 2023 6 months ended 30 June 2022 Year-ended 31 December 2022
(restated)^
£m (unaudited) £m (unaudited) £m (audited)
UK and Ireland 601.9 544.4 1,119.4
Rest of the World 418.4 428.5 855.3
Total revenue 1,020.3 972.9 1,974.7
6 months ended 30 June 2023 6 months ended 30 June 2022 (restated)^ Year-ended 31 December 2022
£m (unaudited) £m (unaudited) £m (audited)
Point in time 988.8 940.9 1,909.6
Over time 31.5 32.0 65.1
Total revenue 1,020.3 972.9 1,974.7
^Results for the 6 months ended 30 June 2022 have been restated to reflect the
reclassification of Deliveroo Netherlands BV and Deliveroo Australia Pty Ltd
as discontinued operations, which are described in more detail in note 6.
Contract balances are immaterial to the Group and therefore no disclosure is
provided. There have been no significant changes to the contract balances in
the current period.
5. Taxation
Tax for the six month period is calculated at (18.4)% (six months ended 30
June 2022: (3.9)%), representing the best estimate of the annual effective tax
rate expected for the full year by geographical unit applied to the pre-tax
income of the six month period, which is then adjusted for tax on exceptional
items.
A current year deferred tax charge of £1.9 million was recognised in the six
months ended 30 June 2023 (30 June 2022: a deferred tax charge of £1.4
million) which predominantly relates to the utilisation of carried forward
losses in overseas markets. The Group has unrecognised tax losses of £1,655.6
million (six months ended 30 June 2022: £1,575.1 million; year-ended 31
December 2022: £1,549.6 million) available for offset against future taxable
profits. There are also unrecognised temporary differences of £62.0 million
relating to share based payments (six months ended 30 June 2022: £43.1
million; year-ended 31 December 2022: £62.5 million). The significant portion
of the unrecognised temporary differences arise in the UK where there is no
expiry date for utilisation.
6. Discontinued operations
During 2022, the Group ended operations in the Netherlands and Australia (and
Spain in 2021). None of the expenses within discontinued operations for the 6
months ended 30 June 2023 were trading losses.
The results of the discontinued operations, which have been included in the
consolidated income statement, were as follows:
6 months ended 30 June 2023 6 months ended 30 June 2022 Year-ended 31 December 2022
(restated)^
£m (unaudited) £m (unaudited) £m (audited)
Revenue - 40.3 66.2
Expenses (14.7) (61.1) (113.7)
Loss before tax (14.7) (20.8) (47.5)
Attributable tax expense - (1.0) (4.1)
Net loss attributable to discontinued operations (attributable to owners of (14.7) (21.8) (51.6)
the Company)
^Results for the 6 months ended 30 June 2022 have been restated to reflect the
reclassification of Deliveroo Netherlands BV and Deliveroo Australia Pty Ltd
as discontinued operations.
7. Exceptional items
The following have been recognised as exceptional items where there is
separately identifiable income and expenditure arising from activities or
events outside the normal course of business, which are qualitatively or
quantitatively material in the period that are deemed material to the
understanding of the accounts. Exceptional items for the period include market
exit costs, settlements and professional fees in relation to legal and
regulatory investigations and restructuring costs, and other project costs,
settlements and professional fees in relation to legal and regulatory
investigations, and restructuring costs.
6 months ended 30 June 2023 6 months ended 30 June 2022 Year-ended 31 December 2022
£m (unaudited) £m (unaudited) £m (audited)
Legal and regulatory costs 21.1 25.6 62.6
Restructuring costs 5.9 6.5 6.5
Coronavirus-related costs - 0.5 0.5
Initial Public Offering and deal costs - 0.6 0.8
Total exceptional items* from continuing operations 27.0 33.2 70.4
From discontinued operations 14.7 5.7 22.0
Total exceptional items* 41.7 38.9 92.4
* Alternative performance measure ('APM'), refer to glossary on page 45 for
further details.
8. Loss per share
The calculation of the basic and diluted loss per share is based on the
following data.
6 months 6 months Year-ended
ended 30 ended 30 31 December 2022
June 2023 June 2022
(restated)^
Loss £m £m £m
(unaudited) (unaudited) (audited)
Loss from continuing operations for the period ended (68.2) (132.0) (242.5)
Loss for the period ended (82.9) (153.8) (294.1)
6 months 6 months Year-ended
ended 30 ended 30 31 December 2022
June 2023 June 2022
Number of shares No. No.
No. (unaudited) (audited)
(unaudited)
Weighted average number of ordinary shares outstanding 1,770,981,024 1,855,457,799 1,836,841,624
6 months 6 months Year-ended
ended 30 ended 30 31 December 2022
June 2023 June 2022
(restated)^
Loss per share £ £
£ (unaudited) (audited)
(unaudited)
From continuing operations
- Basic (0.04) (0.07) (0.13)
- Diluted (0.04) (0.07) (0.13)
From continuing and discontinued operations
- Basic (0.05) (0.08) (0.16)
- Diluted (0.05) (0.08) (0.16)
^Results for the 6 months ended 30 June 2022 have been restated to reflect the
reclassification of Deliveroo Netherlands BV and Deliveroo Australia Pty Ltd
as discontinued operations, which are described in more detail in note 6.
There is no difference between basic and diluted loss per share for the 6
months ended 30 June 2023, 6 months ended 30 June 2022 and the year ended 31
December 2022, since the effect of all potentially dilutive shares outstanding
was anti-dilutive. Total outstanding share awards for the 6 months ended 30
June 2023, 6 months ended 30 June 2022 and as at the year ended 31 December
2022 are set out in note 17 Share-based payments.
9. Property, plant and equipment
During the six months to 30 June 2023, the Group capitalised fixed asset
expenditure of £5.0 million (six months to 30 June 2022: £17.0 million).
There were no material disposals for either period.
10. Leases
During the six months to 30 June 2023, the Group entered into a number of
leases and capitalised £3.1 million of lease payments (six months to 30 June
2022: £37.3 million). There were no material disposals for either period.
11. Intangible assets
During the six months to 30 June 2023, the Group has capitalised development
expenditure of £20.0 million (six months to 30 June 2022: £25.8 million).
There were no material disposals for either period.
12. Trade and other receivables
Non-current
Current
30 June 2023 30 June 2022 31 December 2022 30 June 2023 30 June 2022 31 December 2022
£m (unaudited) £m (unaudited) £m (audited) £m (unaudited) £m (unaudited) £m (audited)
Total receivables 67.3 59.9 80.6 - - -
Lifetime expected credit loss (4.4) (3.1) (4.0) - - -
Net trade receivables 62.9 56.8 76.6 - - -
Prepayments 28.9 31.5 15.6 - - -
Other receivables 20.2 11.7 12.4 15.7 20.1 22.6
Corporation tax receivable 3.6 2.7 5.0 - - -
Total trade and other receivables 115.6 102.7 109.6 15.7 20.1 22.6
The net carrying value of receivables is considered to be a reasonable
approximation of fair value.
13. Trade and other payables
30 June 2023 30 June 2022 31 December 2022
£m (unaudited) £m (unaudited) £m (audited)
Trade payables 21.5 33.8 25.7
Accruals and deferred income 131.8 156.4 140.7
Other tax and social security payables 72.7 55.4 62.1
Other payables 21.5 11.8 22.6
Amounts due to restaurants 71.1 55.9 77.4
Corporation tax payable 11.3 3.4 4.3
Total payables 329.9 316.7 332.8
The carrying value of trade and other payables is considered to be a
reasonable approximation of fair value.
14. Provisions
30 June 2023 30 June 2022 31 December 2022
£m (unaudited) £m (unaudited) £m (audited)
Legal provision 156.2 101.2 129.3
Dilapidations 14.0 - 13.9
Total provisions 170.2 101.2 143.2
Legal provisions Dilapidations
£m £m
At 31 December 2022 129.3 13.9
Foreign currency translation (3.7) -
Additional amounts provided for 32.4 0.1
Amounts utilised (1.8) -
Amounts released - -
At 30 June 2023 156.2 14.0
Legal provisions Dilapidations
£m £m
At 31 December 2021 81.7 -
Foreign currency translation (2.9) -
Additional amounts provided for 28.8 -
Amounts utilised (5.6) -
Amounts released (0.8) -
At 30 June 2022 101.2 -
Legal provisions Dilapidations
£m £m
At 31 December 2021 81.7 -
Foreign currency translation (0.1) -
Additional amounts provided for 54.9 13.9
Amounts utilised (6.3) -
Amounts released (0.9) -
At 31 December 2022 129.3 13.9
The Group is involved in a number of ongoing legal and arbitration proceedings
with third parties, primarily across its European territories. The amounts
provided in the legal provision represent our best estimate of associated
economic outflows based on the status of proceedings at the time of approval
of these financial statements, and are based on current claims from
regulators, even where we dispute the amounts claimed. Court proceedings and
investigations are expected to extend for at least 12 months. Depending on the
outcomes, the total economic outflow could be different to that currently
provided. The Directors will review and revise the amounts of such provisions,
as necessary, as and when new information becomes available. Provisions
assessed during the period are for various regulatory challenges, including
markets that we have exited. We are participating in ongoing discussions with
relevant authorities as part of official processes. Whilst it is difficult at
this time to quantify the probable economic outflow in the event of an adverse
outcome, the provision represents our best estimate of the amount that the
entity would rationally be willing to settle for, based on the information
available to us at this time and taking into account the range of potential
outcomes currently apparent. We will continue to refine our assessment as
further information is available.
During the period, developments in a number of cases have resulted in us
reassessing the likely outcome of these cases, and consequently increasing the
amounts we have provided. Some of this increase arises in countries we have
exited, where in most instances, we have seen an associated decrease in
contingent liabilities, as we seek to conclude matters in countries in which
we no longer trade.
Further to the amounts provided above, the challenges of the new on-demand
economy mean that, like other companies in this industry, some subsidiary
companies may eventually be subject to further inspections or litigation of
the same nature in the future. The Group would assess any such future
challenges on a case-by-case basis. We continue to defend ourselves robustly
against challenges of this nature, but we recognise that there are
jurisdictions which may seek to regulate the on-demand economy and as a result
the risk may be heightened. The Directors are confident in the operating model
and practices, and will take all reasonable steps to defend its position if so
challenged. In addition, the Company and its subsidiaries are engaged with
relevant stakeholders to seek to bring greater certainty, together with
flexibility, for individuals who work within the on-demand economy.
In addition to proceedings where the Company has assessed there to be a
probable economic outflow and for which a corresponding provision has been
made, there are other in-country proceedings where the Company has assessed
the likely outflow is possible but not probable at this time. These are
disclosed as contingent liabilities and are discussed in note 19.
The Group is required to perform dilapidation repairs to restore properties to
agreed specifications prior to the properties being vacated at the end of
their lease term. These amounts are based on estimates of repair and
restoration costs at a future date and therefore a degree of uncertainty
exists over the future outflows, given that these are subject to repair and
restoration cost price fluctuations and the extent of repairs to be completed.
15. Share capital
Shares issued, allotted and fully paid: 30 June 2023 30 June 2022 31 December 2022 30 June 2023 30 June 2022 31 December 2022
Shares (unaudited) Shares (unaudited) Shares (audited) £ (unaudited) £ (unaudited) £ (audited)
Ordinary A 1,758,813,297 1,755,425,173 1,755,425,173 8,794,066 8,777,126 8,777,126
Ordinary B 102,508,168 100,299,642 100,299,642 512,541 501,498 501,498
Total shares issued 1,861,321,465 1,855,724,815 1,855,724,815 9,306,607 9,278,624 9,278,624
16. Own shares
The own shares reserve represents the cost of shares in Deliveroo plc issued
or purchased in the market. Shares are either held in treasury or by the
Roofoods Ltd Employee Benefit Trust ('EBT') to satisfy options under the
Group's share options plans. The number of Ordinary Shares held in treasury at
30 June 2023 was 27,206,854 (30 June 2022 and 31 December 2022: nil) and held
by the EBT at 30 June 2023 was 72,490,039 (30 June 2022: 9,703,044 and 31
December 2022: 77,269,638).
17. Share-based payments
The Company operates share schemes for qualifying employees of the Group. The
following table sets out the movement in share awards during the period:
Employee share options Employee share options (France and US) Performance Share Plans Total Weighted average exercise price (£)
Outstanding at 31 December 2022 114,754,960 62,588,184 16,724,678 194,067,822 0.02
Granted 4,268,423 2,853,799 16,520,993 23,643,215 0.01
Forfeited (9,820,269) (3,011,454) (6,232,096) (19,063,819) 0.01
Exercised (8,135,088) (10,413,510) - (18,548,598) 0.02
Outstanding at 30 June 2023 101,068,026 52,017,019 27,013,575 180,098,620 0.02
Exercisable at 30 June 2023 38,528,124 - - 38,528,124 0.05
Employee share options Employee share options (France and US) Performance Share Plans Total Weighted average exercise price (£)
Outstanding at 31 December 2021 59,634,128 56,318,264 5,608,972 121,561,364 0.02
Granted 53,991,430 15,073,638 11,468,387 80,533,455 0.01
Forfeited (3,628,494) (935,230) (352,681) (4,916,405) 0.03
Exercised (1,448,190) (3,707,036) - (5,155,226) 0.02
Outstanding at 30 June 2022 108,548,874 66,749,636 16,724,678 192,023,188 0.02
Exercisable at 30 June 2022 25,681,349 - - 25,681,349 0.07
Employee share options Employee share options (France and US) Performance Share Plans Total Weighted average exercise price (£)
Outstanding at 31 December 2021 59,634,128 56,318,264 5,608,972 121,561,364 0.02
Granted 70,837,326 16,574,325 11,468,387 98,880,038 0.00
Forfeited (11,293,784) (2,644,925) (352,681) (14,291,390) 0.03
Exercised (4,422,710) (7,659,480) - (12,082,190) 0.02
Outstanding at 31 December 2022 114,754,960 62,588,184 16,724,678 194,067,822 0.02
Exercisable at 31 December 2022 31,049,260 230 - 31,049,490 0.07
In addition to the totals above, there are 2,939,400 non-employee share
options outstanding as at 30 June 2023 (30 June 2022 and 31 December 2022:
4,331,600).
18. Notes to the statement of cash flows
6 months ended 30 June 2023 6 months ended 30 June 2022 Year-ended 31 December 2022
£m (unaudited) £m (unaudited) £m (audited)
Cash flows from operating activities
Operating loss (87.8) (158.4) (295.7)
Depreciation and amortisation 36.2 26.6 61.8
Impairment loss on property, plant and equipment 3.3 0.2 2.6
Impairment of right-of-use asset 0.5 - 3.7
Gain on disposal of lease liability (0.7) - -
Share-based payments charge 39.4 39.8 85.3
Net foreign exchange differences (4.4) 8.7 7.5
Decrease/(increase) in inventories 1.6 0.7 (1.2)
Decrease/(increase) in trade and other receivables 0.4 (1.9) (11.2)
Decrease in trade and other payables (10.0) (55.0) (39.5)
Increase in legal provisions 26.9 19.5 44.5
Corporation tax refund/(paid) 1.0 0.1 (2.0)
Cash generated from/(used in) operations 6.4 (119.7) (144.2)
19. Contingent liabilities
As regulators consider the new on-demand economy, from time-to-time companies
operating in the gig economy will be subject to regulatory inspections and
investigations. Certain companies in the Group are currently subject to such
investigations regarding elements of our operating model. Whilst we defend
ourselves robustly in such cases, we recognise the inherent uncertainty
connected to regulatory inspections and investigations. Due to the stage of
completion of such discussions, it is not possible to predict - with any
reasonable certainty - the likely outcome. However, whilst we consider that
the chance of economic outflow is not probable at this stage, it is possible
that economic outflow could be needed to settle all or some of these claims at
the eventual conclusion of such matters. Such matters where we consider the
likelihood of economic outflow to be probable are discussed in note 14.
Depending on the outcomes, the total economic outflow in relation to the
quantifiable contingent liabilities is estimated to be £13.5 million (year
ended 31 December 2022: £24.6 million) with the majority of this reduction
being transferred to provisions, in instances where we have reassessed the
likely outcome of these matters.
In addition to this, there is a regulatory challenge where it is difficult at
this time to quantify the potential economic outflows. We are participating in
ongoing discussions and engaging with the relevant authorities as part of
official processes, and we will continue to refine our assessment, as we have
done during this period. At the time of signing of the financial statements,
we have assessed a range of economic outflows representing our best estimate
in the event of a potential adverse outcome which could range from £50
million to £200 million. The Directors will review the amounts of such
contingent liabilities as necessary throughout the duration of the relevant
proceedings and revise amounts accordingly as and when new information is
available.
20. Related party transactions
The Group's related party transactions are with key management personnel and
other related parties as disclosed in Deliveroo plc's Annual Report and
Financial Statements for the year ended 31 December 2022.
There have been no other material changes to the arrangements between the
Group and key management personnel in the period.
21. Events after the reporting period
Deliveroo is today announcing its intention to return £250 million of surplus
capital to shareholders. We will consult with shareholders on the most
appropriate distribution mechanism for this return. Following this
consultation, we expect to update the market before the end of September.
Alternative Performance Measures and Glossary
The Group assesses performance using alternative performance measures ('APMs')
which are not defined under IFRS. Definitions of measures and reconciliations
to amounts presented in the financial statements are set out below.
Metric Definition and purpose Reconciliation to GAAP measure
Financial measures
Adjusted EBITDA Adjusted EBITDA represents loss for the year before income tax charge/credit, See below for reconciliation
finance costs, finance income, depreciation and amortisation, impairments,
exceptional items and provisions, and share-based payments charge and national
insurance on share options. Adjusted EBITDA is considered to be a measure of
the underlying trading performance of the Group and is used, amongst other
measures, to evaluate operations from a profitability perspective, to develop
budgets and to measure performance against those budgets. EBITDA less capital
expenditure and capitalised development costs is used as a further measure of
underlying operating profitability of the business. Australia and the
Netherlands discontinued operations are excluded from adjusted EBITDA in
2021-23 but included for 2018-20. Spain discontinued operations are excluded
from adjusted EBITDA in 2020-23 but included for 2018-19.
Adjusted EBITDA margin (as % of GTV) Adjusted EBITDA margin is defined as adjusted EBITDA divided by GTV. It is See definition for calculation method
used, among other metrics, as a measure of operating profitability. Australia
and the Netherlands discontinued operations are excluded from adjusted EBITDA
(as % of GTV) in 2021-23 but included for 2018-20. Spain discontinued
operations are excluded from adjusted EBITDA (as % of GTV) in 2020-23 but
included for 2018-19.
Constant currency Constant currency adjusts for period-to-period local currency fluctuations. See definition for calculation method
The Group uses constant currency information because the Directors believe it
allows the Group to assess consumer behaviour on a like-for-like basis to
better understand the underlying trends in the business.
Exceptional items (income/ costs) Exceptional income and exceptional costs are items where there is separately See note 7 for further information
identifiable income and expenditure arising from activities or events outside
the normal course of business and are deemed material to the understanding of
the Group's accounts.
Free cash flow Free cash flow is defined as net cash used in operating activities less: See below for reconciliation
purchase of property, plant and equipment; acquisition of intangible assets;
payment of lease liabilities; and interest on lease liabilities. It is used,
among other metrics, as a measure of cash inflow or outflow from the Group's
operating and investing activities.
Free cash flow before cash exceptionals Free cash flow before cash exceptionals is defined as free cash flow with cash See below for reconciliation
exceptionals added back. It is used, among other metrics, as a measure of cash
inflow or outflow from the Group's operating and investing activities.
Gross profit margin (as % of GTV) Gross profit margin (as % of GTV) is defined as gross profit divided by GTV. See definition for calculation method
It is considered a good measure of profitability at a transactional level.
Australia and the Netherlands discontinued operations are excluded from gross
profit margin (as % of GTV) in 2021-23 but included for 2018-20. Spain
discontinued operations are excluded from gross profit margin (as % of GTV) in
2020-23 but included for 2018-19.
Gross transaction value ('GTV') GTV comprises the total value of food baskets (net of any discounts) and See definition for calculation method
consumer fees, excluding those from our Signature offering, and is represented
including VAT and other sales-related taxes but excluding any discretionary
tips. As such, GTV represents the total value paid by consumers, excluding any
discretionary tips. It is a widely used measure for understanding the total
value spent by consumers on our marketplace. Australia and the Netherlands
discontinued operations are excluded from GTV in 2021-23 but included for
2018-20. Spain discontinued operations are excluded from GTV in 2020-23 but
included for 2018-19.
Gross transaction value per order Gross transaction value per order (or GTV per order) is defined as the total See definition for calculation method
gross transaction value divided by the total number of orders. GTV per order
is used as a measure for understanding the total value spent by consumers on
our marketplace on a unit basis. Australia and the Netherlands discontinued
operations are excluded from GTV per order in 2021-23 but included for
2018-20. Spain discontinued operations are excluded from GTV per order in
2020-23 but included for 2018-19.
Marketing and overheads Marketing and overheads represent the difference between gross profit and See below for reconciliation
adjusted EBITDA. For the purposes of assessing and managing performance,
Deliveroo's fixed cost base has been split into two major categories:
marketing and overheads. Marketing costs are a combination of both
brand-building activities and activities focused on in-period acquisition.
Overheads consist of staff costs, the non-capitalised portion of costs
relating to information technology and other administrative expenses.
Australia and the Netherlands discontinued operations are excluded from
marketing and overheads in 2021-23 but included for 2018-20. Spain
discontinued operations are excluded from marketing and overheads in 2020-23
but included for 2018-19.
Marketing and overheads as % of GTV Marketing and overheads as % of GTV is defined as marketing and overheads See definition for calculation method
divided by GTV. It is considered a good measure of the Group's operating
efficiency. Australia and the Netherlands discontinued operations are excluded
from marketing and overheads as % of GTV in 2021-23 but included for 2018-20.
Spain discontinued operations are excluded from marketing and overheads as %
of GTV in 2020-23 but included for 2018-19.
Net cash/ net debt Net cash/net debt is used to total the Group's cash, cash equivalents and See below for reconciliation
treasury deposits less debt (excluding leases). Treasury deposits are not
available within 3 months, and therefore not considered 'cash and cash
equivalents' but comprise funds on deposit for a longer period.
Revenue take rate (as % of GTV) Revenue take rate is revenue divided by GTV. It is a widely used measure for See definition for calculation method
understanding the proportion of total value spent by consumers on our
marketplace that is captured by Deliveroo. Australia and the Netherlands
discontinued operations are excluded from revenue take rate in 2021-23 but
included for 2018-20. Spain discontinued operations are excluded from revenue
take rate in 2020-23 but included for 2018-19.
Segment adjusted EBITDA Information reported to the Group's Chief Executive Officer (the Chief See note 3 for further information
Operating Decision Maker ('CODM')) for the purposes of resource allocation and
assessment of segment performance focuses on a geographical split of the Group
between 'UK and Ireland' and 'International' (being overseas jurisdictions
other than UK and Ireland). The CODM primarily uses segment adjusted EBITDA to
assess the performance of the operating segments.
H1 2023 H1 2022
Reconciliation to financial statements £m £m
Operating loss (73.1) (135.7)
Depreciation, amortisation and impairments 40.0 26.1
EBITDA (33.1) (109.6)
Share based payments charge and national insurance on share options 45.5 24.8
Exceptional items 27.0 33.2
Adjusted EBITDA 39.4 (51.6)
Marketing and overheads 325.7 348.3
Gross profit 365.1 296.7
H1 2023 H1 2022
Free cash flow £m £m
Adjusted EBITDA 39.4 (51.6)
Discontinued operations adjusted EBITDA - (16.3)
Change in net working capital (6.7) (30.6)
Cash exceptionals (18.5) (27.1)
Other (including non-cash items and cash tax) (7.8) 5.9
Net cash generated from/(used in) operating activities 6.4 (119.7)
Purchase of property, plant and equipment (5.0) (17.0)
Acquisition of intangible assets (20.0) (25.8)
Payments of lease liabilities (7.8) (5.3)
Interest on lease liabilities (1.3) (0.9)
Free cash flow (27.7) (168.7)
Add back: cash exceptionals 18.5 27.1
Free cash flow before exceptionals (9.2) (141.6)
H1 2023 H1 2022 FY 2022
Net cash/net debt £m £m £m
Cash 896.0 1,130.1 949.1
Other treasury deposits 51.8 - 50.5
Less: debt - - -
Net cash/net debt 947.8 1,130.1 999.6
Metric Definition
Non-financial measures
Average order frequency The average number of orders placed by active consumers in a month.
Monthly active consumers The monthly active consumers ('MACs') is the number of individual consumer
accounts that have placed an order on our platform in a given month.
Orders The total number of orders delivered from our platform, including from our
Marketplace and Signature offering, over the period of measurement.
Independent Review Report to Deliveroo plc
Conclusion
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30th
June 2023 which comprises the Condensed Consolidated Statement of Profit or
Loss, Condensed Consolidated Statement of Comprehensive Income, Condensed
Consolidated Statement of Financial Position, Condensed Consolidated Statement
of Changes in Equity, Condensed Consolidated Statement of Cash Flows and
related notes 1 to 21.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30th June 2023 is not prepared, in
all material respects, in accordance with United Kingdom adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom's Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by the Financial Reporting
Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim
financial information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
As disclosed in note 2, the annual financial statements of the group are
prepared in accordance with United Kingdom adopted international accounting
standards. The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with United
Kingdom adopted International Accounting Standard 34, "Interim Financial
Reporting".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This Conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410; however future events or conditions may cause the entity to
cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the group's ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the
company or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly financial report, we are responsible for
expressing to the company a conclusion on the condensed set of financial
statements in the half-yearly financial report. Our Conclusion, including our
Conclusion Relating to Going Concern, are based on procedures that are less
extensive than audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our report
This report is made solely to the company in accordance with ISRE (UK) 2410.
Our work has been undertaken so that we might state to the company those
matters we are required to state to it in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company, for our review work,
for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
London, United Kingdom
9 August 2023
(( 1 (#_ftnref1) )) In this section, all growth rates are year-on-year and in
reported currency unless otherwise stated, and all figures exclude results
from Australia and the Netherlands, where operations ended on 16 November 2022
and 30 November 2022 respectively, and Spain, where operations ended on 29
November 2021 (all three markets are treated as discontinued operations).
* Alternative performance measure ('APM'), refer to glossary on page 45 for
further details
(( 2 (#_ftnref2) )) In this section, all growth rates are year-on-year and in
reported currency unless otherwise stated, and all figures exclude results
from Australia and the Netherlands, where operations ended on 16 November 2022
and 30 November 2022 respectively, and Spain, where operations ended on 29
November 2021 (all three markets are treated as discontinued operations). The
following commentary includes discussion of statutory measures such as revenue
and operating loss, as well as alternative performance measures ('APMs') such
as gross transaction value ('GTV'), gross profit margin (as % of GTV) and
adjusted EBITDA, as the business also uses these metrics to monitor and assess
performance. A full list of APMs and their definitions can be found on page
45. More detailed discussion of statutory results is contained in the
Financial Review beginning on page 8.
* Alternative performance measure ('APM'), refer to glossary on page 45 for
further details
(( 3 (#_ftnref3) )) In this section, all growth rates are year-on-year and in
reported currency unless otherwise stated, and all figures exclude results
from Australia and the Netherlands, where operations ended on 16 November 2022
and 30 November 2022, respectively, and Spain, where operations ended on 29
November 2021 (all three markets are treated as discontinued operations).
* Alternative performance measure ('APM'), refer to glossary on page 45 for
further details
(( 4 (#_ftnref4) )) On 16 and 30 November 2022, Deliveroo ceased operations
in Australia and the Netherlands respectively, and in Spain on 29 November
2021. These markets have been classified as a Discontinued Operation in
accordance with IFRS 5 and as such the results from these markets are not
included in this section.
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