Growth and profitability
Deliveroo’s mission is to be the definitive online food company – providing consumers with access to the food they love for each of the 21 weekly meal occasions.
We aim to achieve this by our focus on offering the best value proposition to all three sides of the marketplace: consumers, riders and merchants.
Our strategy
Objectives
- Deliver a seamless order experience for all and transition from transactional to emotional.
- Consumers: enable access to extensive selection and seamless transactional experience for all food occasions.
- Merchants: provide demand, insights and innovations that drive sustainable growth.
- Riders: offer attractive earnings with flexibility, security and opportunities for personal development.
- Employees: create an inclusive environment where our people have growth opportunities and can leave their mark.
Progress in 2022
- Increased number of restaurant partner sites to ~158,000 (including >1,000 McDonald’s sites in the UK as part of our new long-term global strategic partnership) and grocery partner sites to >18,000 globally.
- Evolved sustainability strategy and grew our programme of actions to support our stakeholders and the communities in which we operate.
- Launched voluntary partnership with GMB Union in the UK that recognises riders as self-employed and provides for collective bargaining on pay and consultation rights on benefits and issues including health, safety and wellbeing.
- Rider attraction and retention rates remained robust despite high levels of employment vacancies across key markets.
- Significant investment in the technology organisation to innovate and build efficiencies.
- Adopted Executive Team targets for gender equality.
Performance measures
- MACs*: 7.4 million in 2022 (+6% YoY).
- Total merchant sites: ~176,000 in December 2022 (+25% YoY).
- Rider satisfaction: 83% in Q4 2022** (Q4 2021: 85%).
- Employee engagement score: 7.8 (out of 10) in December 2022 (8.1 in December 2021).***
Objectives
- Build leading market positions (#1 or strong #2) based on hyperlocal market share.
- Expand coverage and increase penetration by growing category awareness and market share.
- Accelerate grocery offering and innovate in formats and commercial models with non-food partners.
- Support thriving incomes for merchants and riders.
Progress in 2022
- Grew market share across key markets including Italy, France and UKI.
- Broadened business in the Middle East, launching in Qatar to add to established strong positions in the UAE and Kuwait.
- Grocery offering strengthened with expanded/new partnerships in UKI with Waitrose, Sainsbury’s, Co-op, Asda and Spar, and in International with Auchan (France), Esselunga (Italy) and ParknShop (Hong Kong).
- Opened Hop sites in the UK, Italy, France, the UAE and Hong Kong and launched ‘Hop as a Service’.
- Broadened health and beauty offering by expanding UK partnerships with Boots (from 14 to 125 stores).
- Increased Plus subscribers globally, supported by initiatives with Amazon Prime (extended in UKI, and expanded to add Italy, France and the UAE).
Performance measures
- Orders: 299 million in 2022 (5% YoY).
- GTV: £6,848 million in 2022 (+7% YoY in constant currency).
- Revenue: £1,975 million in 2022 (+14% YoY).
Objectives
- Add new high-margin revenue streams, such as advertising.
- Create the most efficient logistics network built on hyperlocal network density.
- Generate tech-driven efficiencies in the marketplace and our own operations.
- Drive operating leverage with scale.
- Aim to reach 4%+ adjusted EBITDA margin (as % of GTV) by 2026.
Progress in 2022
- Launched new advertising platform, alongside the existing restaurant sponsored positioning product, allowing FMCG and other brands to advertise to Deliveroo consumers in new formats: in-app and online.
- Reduced rider experience time through new meal preparation time models that have further reduced rider wait time at restaurants, as well as better balancing supply and demand in the network.
- Optimised the use of pricing levers (delivery fees, service fees and minimum order values) through experimentation.
- Optimised restaurant ranking models with improvements to homepage layout and upselling recommended items.
- Made the difficult decision to end operations in Australia and the Netherlands in order to focus resources on market positions that support the Group’s path to profitability.
Performance measures
- Gross profit margin (as % of GTV): 9.4% in 2022 (7.9% in 2021).
- Adjusted EBITDA margin (as % of GTV): (0.7)% in 2022 ((1.6)% in 2021).
- Free cash flow: £(243) million in 2022 (£(239) million in 2021).
* Defined terms can be found in the Glossary on page 190.
** Figure based on Q4 2022 monthly survey results. During the reported period, 32,481 riders completed the survey globally, representing 22% of riders who delivered an order across the quarter.
*** Overall engagement score in December 2022, compared to the same period last year. This measures sentiment across four engagement areas: ‘belief (in product)’, ‘satisfaction (in job)’, ‘loyalty (to Deliveroo)’ and ‘employee NPS’.
