Deliveroo — FY2023 Earnings Presentation
32 slides from Deliveroo's earnings presentation, Mar 14, 2024
Slide 1: Deliveroo FY 2023 Results
Deliveroo FY 2023 Results 14 March 2024
Slide 2: Definitions & basis of discussion
Definitions & basis of discussion References to profitability in this presentation are to adjusted EBITDA unless otherwise stated. Adjusted EBITDA represents loss for the year before income tax charge/credit, finance costs, finance income, depreciation and amortisation, impairments, exceptional items an
Slide 3: Overview
Overview
Slide 4: FY23 highlights | A year of good progress
FY23 highlights | A year of good progress Significant progress on profitability: ahead of upgraded FY23 guidance Resilient top line growth in challenging macro conditions CVP strengthened further: trust-building measures & retail launch Further progress on FCF generation; £309m total return of capital
Slide 5: Business update
Business update
Slide 6: Medium-term targets
Medium-term targets Mid-teens GTV growth in the medium term 4%+ adjusted EBITDA margin by 2026 6
Slide 7: Our strategic framework | Strongly aligned with growth
Our strategic framework | Strongly aligned with growth Deliveroo’s mission is to transform the way you shop and eat, bringing the Building blocks neighbourhood to your door by connecting consumers, restaurants, shops and riders Compelling CVP Across key verticals Delivered efficiently New customers Se
Slide 8: Our strategic framework | Strongly aligned with growth
Our strategic framework | Strongly aligned with growth Deliveroo’s mission is to transform the way you shop and eat, bringing the Building blocks neighbourhood to your door by connecting consumers, restaurants, shops and riders Compelling CVP Across key verticals Delivered efficiently New customers Se
Slide 9: Compelling CVP | Focusing on trust-building measures
Compelling CVP | Focusing on trust-building measures Consumer trust Price integrity Consumer experience Are the prices fair? Was this flawless? 9
Slide 10: Price/value | Offering better value and price integrity
Price/value | Offering better value and price integrity Direct levers Indirect levers Loyalty Targeted Commercial Value programme promotions architecture Programme 10
Slide 11: Consumer experience | Improving delivery experience
Consumer experience | Improving delivery experience Global average order duration Global defective orders Reduction in OMDNR rate* -65% YoY -1 min YoY -10% YoY OMDNR % Jan-23 Dec-23 * Orders marked ‘delivered’ but not received. 11
Slide 12: Grocery | More customer missions to drive growth
Grocery | More customer missions to drive growth Building a large business Small baskets Mid-sized baskets £1.0 billion GTV run rate in Q4 23 Up to £30 £30-£60 On-demand On-demand ~3,000 SKUs Up to 10,000 SKUs Focus to date Expansion opportunity ● The majority of our consumers is yet to place a groc
Slide 13: Retail | Attractive medium-term opportunity
Retail | Attractive medium-term opportunity ● £700bn TAM in markets where we operate ● Launched in UK and UAE; pleased with early progress ● Ramping up selection while improving the in-app experience ● GTV target of ~£700m by 2028 13
Slide 14: Advertising | Executing on our plan to scale
Advertising | Executing on our plan to scale Advertising revenue (% of GTV) ● Consumer-first approach ● £77m revenue run rate (Q4 0.6% 1.0% >2.0% 2023 annualised) ● ~70,000 partner sites running campaigns Q4 22 Q4 23 2026 target ● New formats and inventory (e.g. partner display products) ● Retail opp
Slide 15: Riders | Update on satisfaction and regulations
Riders | Update on satisfaction and regulations Rider satisfaction Regulatory developments ● 135,000 riders globally ● EU Platform Workers Directive - close to ● 83% are ‘very satisfied’ or ‘satisfied’ agreement; existing national law remains working with Deliveroo final determinant of employment statu
Slide 16: Financials
Financials
Slide 17: Overview | Significant progress on profit and cash flow
Overview | Significant progress on profit and cash flow GTV1 Revenue1 Gross profit £7,062m £2,030m £726m +3% YoY +3% YoY +13% YoY +3% in cc +2% in cc Adj. EBITDA2 Free cash flow3 Net cash4 £85m £(38)m £679m +£130m YoY +£205m YoY vs £1.0 bn at 31 Dec 22 1 In constant currency, “cc”, GTV growth was 3% and
Slide 18: Top line | Good UKI growth; International momentum
Top line | Good UKI growth; International momentum Top line momentum in H2; stabilisation in orders GTV by segment; International returned to growth ● GTV up 3% YoY, improving from 1% (H1) to 5% (H2) ● Good growth in UKI ● Orders down 3% YoY impacted by consumer headwinds; ● International - particul
Slide 19: Revenue | Growing and investing in the CVP
Revenue | Growing and investing in the CVP Group revenue growth Revenue take rate impacted by CVP investment to support consumers +2% £m 1,975 2,030 28.8% Increase Decrease 28.7% take rate take rate -5% Consumer fees Promotions Lower refunds Mix (grocery, pick Advertising up) Hop mix Plus +8% FY 22
Slide 20: Gross profit | Strong expansion; further to go
Gross profit | Strong expansion; further to go Strong gross profit improvement in both segments Margin expansion of 90 bps YoY +13% FY 22: 9.4% FY 23: 10.3% £m 643 726 +13% +13% Margin underpinned by operational improvements Effective management of unit economics 24.2 24.5 ● Delivery efficiencies (e.g.
Slide 21: Costs | Consistent progress on costs
Costs | Consistent progress on costs Marketing & overheads Breakdown of marketing & overheads FY 23 vs Group (£m) FY 23 FY 22 FY 22 Staff and other people costs¹ 362 385 (6)% Capitalised development costs (36) (50) (28)% Total people expenses 326 334 (2)% Non-people expenses² 129 139 (8)% Total over
Slide 22: Adjusted EBITDA | Profitability ahead of expectations
Adjusted EBITDA | Profitability ahead of expectations +£130m 85 ● Delivering on all elements of the P&L: progress above and below gross profit ● Improved margin expansion: +190 bps YoY (versus +90 bps YoY in FY 22) ● Gross profit margin +90 bps YoY ● Marketing & overheads: -100 bps YoY 22
Slide 23: Cash flow | Further progress towards cash generation
Cash flow | Further progress towards cash generation £m 1,000 Free cash flow: £(38)m; +£205m improvement YoY Free cash flow before cash exceptionals: £(18)m 679 ¹ Cash exceptional items predominantly related to the redundancy programme, costs in respect of previously-exited markets and legal fees. 23
Slide 24: FY24 outlook | Balancing growth and profitability
FY24 outlook | Balancing growth and profitability GTV growth ● 5-9% (in constant currency) ● Q1 growth expected to be similar to Q4 2023 ● Improving through the year as we continue to deliver on our plans Adjusted EBITDA ● In the range of £110-130m Free cash flow ● Expected to be positive 24
Slide 25: Capital position | Capital allocation priorities unchanged
Capital position | Capital allocation priorities unchanged ● £300m of capital returns to shareholders Strategic and operational capital announced and completed in 2023, broadly a third of net cash at the start of the year ● Investing in growth and building a durable competitive advantage remain our
Slide 26: Growth target | Multiple drivers for acceleration to target
Growth target | Multiple drivers for acceleration to target GTV growth New verticals & use cases Mid- Further teens CVP levers Retail Reduced macro Leading selection Mid-sized basket headwinds grocery Price integrity End of post-Covid Delivery experience normalisation Deliveroo Plus Reducing inflatio
Slide 27: Profitability target | Multiple levers to reach our target
Profitability target | Multiple levers to reach our target Adjusted EBITDA Marketing & 4%+ overheads levers Cost of sales levers Increased marketing efficiency/targeting Revenue levers Reduce rider wait Improved tooling/ time at merchant automation Smarter stacking Drive operating Scale advertising rev
Slide 28: Summary | A year of good progress
Summary | A year of good progress Significant progress on profitability: ahead of upgraded FY23 guidance Resilient top line growth in challenging macro conditions CVP strengthened further: trust-building measures & retail launch Further progress on FCF generation; £309m total return of capital in year
Slide 29: Q&A
Q&A
Slide 30: Appendix
Appendix
Slide 31: Financial KPIs (continuing operations)
Financial KPIs (continuing operations) £m Q1 22 Q2 22 Q3 22 Q4 22 H1 22 H2 22 FY 22 Q1 23 Q2 23 Q3 23 Q4 23 H1 23 H2 23 FY 23 Group Orders (m) 79 75 70 75 154 145 299 72 73 70 75 145 145 290 % year-over-year 19% 4% 2% (2)% 11% 0% 5% (9)% (3)% (1)% 0% (6)% 0% (3)% GTV 1,710 1,703 1,640 1,795 3,413 3,
Slide 32: Disclaimer
Disclaimer This presentation 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",