16 March 2023

Delivering on path to profitability

Operational Overview^[1]    

·      Excellent progress on path to profitability, delivering positive adjusted EBITDA* in H2 2022 - significantly ahead of expectations; material improvement in adjusted EBITDA margin (as a % of GTV)* to 0.2% in H2 2022 from (1.5)% in H1 2022 and (2.7)% in H2 2021.

·      Strong execution on operational initiatives underpinning the key 2022 profit levers: optimisation of consumer fees, efficiency gains in the rider network and efficient targeting of marketing spend; further actions taken in early 2023 to drive overhead savings.

·      Good year of growth in challenging market conditions with gross profit up 30%, revenue up 14% and gross transaction value* ('GTV') up 9% year-on-year (7% in constant currency*). Continued market share gains in UKI and key International markets such as France and Italy (based on third-party data).

·      Strengthened consumer value proposition, including leading on-demand grocery position (11% of GTV in H2 2022, with >18k sites at end-2022); measured roll-out of Deliveroo Hop and Hop as a Service.

·      Continued growth of advertising platform with ad revenue reaching annualised run-rate of £40 million or 0.6% of GTV in Q4 2022, reflecting that this is an effective way for merchants to drive incremental demand.

·      Further optimised portfolio of markets with launch in Qatar in October 2022 and exits from Australia and the Netherlands in November 2022, reflecting discipline in our approach to capital allocation.

·      Healthy balance sheet maintained with net cash* of £1.0 billion (2021: £1.3 billion); free cash* outflow reduced significantly to £(74) million in H2 2022 from £(169) million in H1 2022. New share purchase programme of £50 million announced today; previous £75 million programme completed in January 2023.

·      Loss for the year (including continuing and discontinued operations) improved by £36 million to £(294) million.

Summary Financial Information

* Alternative performance measure ('APM'), refer to glossary on page 50 for further details
GTV change in constant currency was 7% for continuing operations and 5% for continuing operations and Australia and the Netherlands

^∧ The comparative information has been restated to account for a charge in relation to the non-employee options granted in February and March 2021.

2023 Outlook

●     2023 GTV growth anticipated to be low- to mid- single digits (in constant currency); growth in Q1 expected to be broadly flat, with growth improving through the year as we continue to deliver on our plans and the comparison base eases.

●     2023 adjusted EBITDA expected to continue to improve and to be in the range of £20-50 million, weighted to H2.

Will Shu, Founder and CEO of Deliveroo, said:

"I'm proud of our performance in the past 12 months. Our team has delivered in difficult market conditions, with continued growth and share gains in our key markets. I'm particularly pleased that the Company reached adjusted EBITDA profitability in the second half of last year. This is a significant step on our path to sustainable cash generation, and we achieved this milestone a year earlier than our guidance by executing our strategy successfully despite headwinds from the market environment.

The macroeconomic outlook for the year ahead remains uncertain, but our record in the past 12 months makes me optimistic about our ability to adapt and continue to deliver on our plans to drive profitable growth. I want to thank the whole Deliveroo team and our consumers, riders and merchants for their ongoing commitment and I look forward to more progress together in 2023." 

Contact information

Investor Relations

David Hancock, VP Finance, Strategy & IR - investors@deliveroo.co.uk

Tim Warrington, Investor Relations Director - investors@deliveroo.co.uk

Rohan Chitale, Investor Relations Director - investors@deliveroo.co.uk

Media Relations

Joe Carberry, VP Policy & Communications - joe.carberry@deliveroo.co.uk 

Teneo, James Macey White, Jessica Reid, Mark Burgess - deliveroo@tulchangroup.com

Analyst and investor call

A conference call and webcast with Q&A for analysts and investors will be held today at 09:00 GMT / 10:00 CET. Registration details as follows:

Conference call: https://secure.emincote.com/client/deliveroo/fy-2022/vip_connect

Webcast: https://secure.emincote.com/client/deliveroo/fy-2022

The webcast will also be available to view at https://corporate.deliveroo.co.uk/. A replay will be made available later.

About Deliveroo plc ('Deliveroo' or 'the Company')

Deliveroo is an award-winning delivery service founded in 2013 by William Shu and Greg Orlowski. Deliveroo works with approximately 176,000 best-loved restaurants and grocery partners, as well as around 150,000 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/.

Additional notes

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 and Strategic Review

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 50. More detailed discussion of statutory results is contained in the Financial Review beginning on page 8.

1. Key Developments in 2022

Path to profitability

In 2022, Deliveroo had a strong year of operational and financial performance, even within a challenging environment. A major achievement was reaching adjusted EBITDA profitability in H2 2022 (with £6.6 million compared to £(84.6) million in H2 2021) - well ahead of previous guidance that we would reach this point in H2 2023 or H1 2024. This result is an important milestone in our journey to becoming sustainably free cash flow generating and to reach our ambition of a 4%+ adjusted EBITDA margin by 2026. We expect to make further progress on profitability and cash flow in 2023.

Three factors drove the majority of this profitability progression in 2022. First, we took steps to optimise consumer fees, such as ensuring delivery fees appropriately reflect delivery distance and adjusting the balance between delivery fees and service fees. Second, we continued to drive efficiency in our logistics network, through initiatives to further reduce rider wait time at restaurants, to better balance supply and demand in the network, and to capture efficiencies from order stacking without degrading the consumer experience. Third, we made adjustments during the year to optimise marketing spend, resulting in lower marketing expense in H2 than H1. Importantly, we continued to invest in our consumer proposition at the same time.

Growth

Alongside making progress on profitability, we are also focused on continuing to drive top-line growth. Coming into 2022, we had flagged that we saw growth headwinds for the year ahead, and these turned out to be even more challenging than anticipated. In that context, 7% GTV growth in constant currency was a decent outcome. Through relentless focus on the hyperlocal consumer value proposition, we gained market share in a number of our markets including the UK, France and Italy; in Italy we believe that the increased strength of our hyperlocal positions now also puts us in the number one position nationally.

As well as driving growth in existing markets, we expand when we see attractive opportunities, and in 2022 we entered Qatar. The Middle East is an attractive region for restaurant and grocery delivery, and we have a strong presence in the UAE and in Kuwait. Leveraging our experienced local team and existing relationships with merchants, our Qatar entry is an exciting opportunity. Since formally launching in October, we have partnered with over 500 restaurants including global and national chains and local independent restaurants, we have onboarded over 100 riders, and consumer feedback has been very positive, with the platform rated 4.4 out of 5 in terms of customer satisfaction.

On-demand grocery

During 2022 we made major steps forward in improving our grocery offering. We were one of the first platforms to launch on-demand grocery, prior to COVID-19, and we have taken advantage of our first-mover status. Grocery offers powerful synergies with the core platform, representing incremental demand to the restaurant offering and providing an effective customer acquisition channel. As a result of the continued strengthening of our offering, grocery reached 11% of total GTV in H2 2022 (H2 2021: 9%). We now deliver from around 8,000 partner sites in the UKI and more than 10,000 in International. During 2022, we expanded partnerships in the UKI with Waitrose, Sainsbury's and Co-op and we launched with Asda; in International, we continued to rollout with key grocery partners such as Carrefour in France, Italy, and Belgium, Casino in France, Esselunga in Italy and ParknShop in Hong Kong. With selected merchants we are experimenting with offering a much wider range of products - up to 10,000 SKUs compared to 2,000-3,000 SKUs in our regular offering.

As well as growing selection, we are making step changes in the grocery experience. For consumers, we have rolled out a new substitutions feature to address issues with availability, we are piloting more finely-grained menu categories, and we are highlighting where merchants are matching in-store prices. For merchants, we are trialling a new picking app that will help with productivity at a time when labour is a major headache for grocers.

Alongside this 'store pick' model, we have continued with the rollout of Hop, our delivery-only grocery sites. We have also experimented with new Hop formats such as Hop as a Service, where we allow grocers to use the Hop technology in their own locations with their own staff to pick and pack orders that are fulfilled by the Deliveroo rider network. The model allows grocers of all sizes to offer ultra-fast delivery, with rapid pick times and more accurate inventory monitoring. During 2022, we have witnessed the pressures on the pure-play quick commerce industry with funding drying up and players merging. For us, we have always believed Hop is a service that belongs on a platform with a wider network - given the pre-existence of lower-cost deliveries and consumers. We have made significant progress on profitability of our Hop model and are confident in its role on our marketplace.

Advertising

Deliveroo began to build its advertising offering in 2021, and this year we started to see the first significant contribution from this nascent business. Growing this revenue and profit stream will be a multi-year endeavour, but we have made an encouraging start, with advertising revenue reaching an annualised run-rate of £40 million or 0.6% of GTV in Q4 2022. Our advertising revenue stream comprises two main activities. First, we provide different ways for restaurants and grocers to advertise, such as paying to appear in high-visibility carousels or in search results. This creates incremental demand with a proven high return on advertising spend. Second, FMCG and other companies can now advertise their products via a new platform we launched in 2022. This platform allows these companies to engage consumers via post-transaction ad slots (e.g. on the order tracker page) and through virtual storefronts within our app, reaching our millions of monthly active consumers in a highly measurable way that improves the efficiency of their ad spend. Done in the right way, both of our advertising activities can improve the customer experience by helping consumers to discover content they want in an engaging way, as well as helping merchants to drive incremental demand. While still small in the overall context of the group, we expect advertising to be a more material profitability lever in 2023 and beyond.

Portfolio optimisation

In every market, our strategy is to focus on winning local market share positions, which is critical for overall profitability. The aggregation of these hyperlocal market positions drives national market share; for us national market share is primarily an output rather than an objective: our focus is on the neighbourhood. Where we have been able to build these leading hyperlocal positions, we continue to strengthen them. Italy is a great example - during 2022, we reached the national number one position, built on our strong local positions, with a particular focus on Lombardy and Northern Italy more broadly.

In some markets we have not been able to reach leading positions and in H2 2022 we took difficult decisions to exit the market in Australia and the Netherlands. We determined that we could not reach a sustainable and profitable scale in these markets without considerable financial investment, and the expected return on such investment was not commensurate with Deliveroo's risk/reward thresholds. Operations ended in Australia and the Netherlands on 16 and 30 November 2022 respectively.

Riders - engagement

Throughout 2022, our rider attraction and retention rates remained robust despite high levels of employment vacancies across key markets, providing further evidence that riders value the flexible self-employed work that Deliveroo offers. Rider satisfaction remained strong, with 83% 'satisfied' or 'very satisfied' working with Deliveroo in Q4.

In May 2022, Deliveroo and GMB Union signed a first-of-its-kind Voluntary Partnership Agreement covering the Company's ~90,000 self-employed riders in the UK. The Agreement gives GMB collective bargaining rights on pay and consultation rights on benefits and other issues, including riders' health, safety and wellbeing. GMB will also be able to represent individual riders who are GMB members in certain disputes, giving them a stronger voice. The Agreement recognises that Deliveroo riders are self-employed, following a series of UK court judgements that have confirmed this status.

Elsewhere, in France, Deliveroo began participating in the social dialogue process for platforms and unions, working to improve the working conditions of riders who are recognised by the Government-led process as being self-employed. In Italy, Deliveroo continues to operate under a Collective Bargaining Agreement that recognises riders as self-employed.

2. The three sides of the marketplace

Since 2013, Deliveroo has pioneered on-demand food delivery via a hyperlocal three-sided online marketplace, connecting local consumers, riders and merchants. For consumers, Deliveroo has unlocked broad choice and fast delivery times, working with merchants who overwhelmingly have never offered an online presence and on-demand deliveries before. For merchants, Deliveroo not only provides 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, Deliveroo offers highly flexible work which they can rely on for attractive earnings and security. In 2022, Deliveroo made further progress in developing all three sides of the marketplace.

Consumers

Deliveroo's average monthly active consumers ('MACs') grew by 6% year-on-year, averaging 7.4 million across 2022 compared to 7.0 million in 2021. The Q4 2022 average of 7.4 million represents a decline of 1% year-on-year versus Q4 2021 reflecting the challenging macroeconomic environment in 2022. Average order frequency throughout 2022 remained stable compared to 2021, at 3.4 times per month.

An important part of Deliveroo's consumer value proposition is Deliveroo Plus, the subscription programme that unlocks unlimited free delivery to consumers for a fixed monthly fee. Plus removes delivery fees as a barrier to ordering, increasing order frequency and improving retention. During 2021, Deliveroo launched a new offering with Amazon Prime, allowing all UK and Ireland Amazon Prime members to sign up for free Plus membership for a year, with unlimited free delivery on orders over £25/€25. Following good traction in this initial programme, the offering was launched in France, Italy and UAE during 2022.

Merchants

Restaurant selection is an important part of Deliveroo's consumer value proposition. Growth in restaurant selection increases availability and choice to consumers on a neighbourhood-by-neighbourhood basis. Deliveroo's global partner restaurant sites increased to approximately 158,000 at the end of 2022 compared to around 130,000 at the end of 2021. In 2022, Deliveroo continued to develop Editions, its delivery-only kitchens offering, adding almost 100 new kitchens to bring the total to over 380. As the challenging economic climate put significant pressure on restaurant partners, the pace of roll out slowed, and in 2023 we expect a further reduction in new kitchen openings. However, Editions remains a key part of the business and we strongly believe in the value of the proposition to Deliveroo and its restaurant partners, as well as consumers and riders.

Deliveroo's on-demand grocery business continued to grow as a percentage of total GTV, increasing from 9% in H2 2021, to 10% in H1 2022 and 11% in H2 2022. Globally, Deliveroo now has over 18,000 grocery sites live with major partners and smaller independent partners. Alongside this 'store pick' model, we have continued with the rollout of Hop, our delivery-only grocery stores. Deliveroo-operated Hop stores and Hop as a Service sites are now live in the UKI and International segments, with partners including Morrisons, Waitrose, Asda, Carrefour, Auchan, Esselunga, Choithrams and ParknShop. We also announced the expansion of our partnership with Boots which saw the number of stores increase to 125 (previously 14 pilot stores), with consumers now having access to an expanded range of over 1,000 health and beauty products.

Riders status - material developments

Riders are a vital part of Deliveroo's three-sided marketplace and Deliveroo works with around 150,000 riders globally. Riders value the flexible work Deliveroo offers, 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 83% of riders globally saying they are satisfied or very satisfied working with Deliveroo in Q4 2022 (Q4 2021: 85%). Deliveroo continues to see strong rider application pipelines and rider retention rates.

The independent contractor status of riders remains under scrutiny in certain markets, with the following material developments in 2022.

●     In the UK, the Deliveroo and GMB Union Voluntary Partnership Agreement that was signed in May 2022 recognises that Deliveroo riders are self-employed.

●     In France, during H1 2022, the 31st Chamber Criminal Court of Paris issued a first instance decision finding against Deliveroo France regarding the independent contractor status of riders for the period from March 2015 to December 2017. We do not agree with the decision and are appealing. Riders continue to be recognised as self-employed by the Government through the social dialogue process. Further, Deliveroo is participating in constructive dialogue with social security bodies in relation to an ongoing investigation concerning engagement with riders.

●     In the Netherlands, although Deliveroo has exited the market, it has certain ongoing litigation regarding rider status and awaits three decisions of the Supreme Court.

●     In Italy, Deliveroo and other food delivery platforms operate under a Collective Bargaining Agreement with a local trade union. A challenge against the Agreement at national level was unsuccessful in January 2023. There have been two challenges to the Agreement at local, city level, which are under appeal.   

●     The European Union published initial proposals for a reform to platform work in December 2021. Throughout 2022, these have been debated by the European Parliament and Council. Deliveroo believes the proposals could provide welcome clarity on the tests to determine the status of platform workers and continues to engage with relevant stakeholders. Original proposals provided important clarity that national law would determine final employment status decisions.

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. Deliveroo recognises 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

To supplement performance assessment, Deliveroo uses alternative performance measures ('APMs'), which are not defined under IFRS. The Board reviews gross transaction value and adjusted EBITDA, as well as other APMs shown below, alongside IFRS measures.

* Alternative performance measure ('APM'), refer to glossary on page 50 for further details.

GTV change in constant currency was 7% for continuing operations and 5% for continuing operations and Australia and the Netherlands.

* Alternative performance measure ('APM'), refer to glossary on page 50 for further details

1. Group operating performance and income statement

Gross transaction value

Gross transaction value ('GTV') grew to £6,848.1 million, an increase of 9%, or 7% in constant currency, driven by growth in orders and a higher GTV per order*. Orders increased by 5% to 299.2 million in 2022. Year-on-year order growth slowed during the year from 19% in Q1 to 4% in Q2, 2% in Q3, and (2)% in Q4. This slowdown mirrored the trend in monthly active consumers, while average order frequency was broadly stable. GTV per order rose to £22.9, up 70p versus 2021, an increase of 3%, or 2% in constant currency. In contrast to the slowing trend in order growth, year-on-year GTV per order growth accelerated through the year, driven by item level price inflation and optimisation of consumer fees. As a result we exited Q4 2022 with a GTV per order of £23.9, an increase of 11% year-on-year, or 8% in constant currency.

Revenue

Revenue grew 14% in the year to £1,974.7 million. This was ahead of the 9% growth rate in GTV, reflecting an increase in the revenue take rate* (i.e. revenue as % of GTV) to 28.8% from 27.5% in 2021. This increase was the result of optimisation of consumer fees, and an increased contribution from advertising as this revenue stream begins to scale.

Gross profit

Gross profit increased by 30% to £643.2 million. Gross profit margin (as % of GTV) was up 150 bps to 9.4%, increasing through the year from 8.7% in H1 to 10.1% in H2. The year-on-year and sequential improvements reflect increases in revenue take rate, as well as efficiencies in the rider network that have enabled cost of sales per order to remain broadly stable at ~£4.50 compared to ~£4.40 in 2021.

Administrative expenses

* Alternative performance measure ('APM'), refer to glossary on page 50 for further details

Administrative expenses were £884.0 million in 2022, up 15% compared to 2021. Marketing costs reduced year-on-year reflecting more targeted marketing investments in H2 in light of the weaker consumer environment. Staff costs and other expenses increased year-on-year, driven in particular by growth in headcount in technology during H1. As 2022 progressed and the external economic environment became more challenging, cost control became an increasing focus. This has continued into 2023 with the announcement in February of a redundancy process which could see around 9% of the Company's workforce leave after employee consultations are completed during Q2 2023. The objective of this process is to deliver a permanent shift towards increased efficiency, reduced friction in organisational structures and increased speed of decision-making.

Depreciation and amortisation increased to £61.4 million (£42.0 million in 2021), due to an increase in depreciation as a result of the expansion of the Editions kitchen portfolio and an increase in amortisation driven by additional capitalised development costs. Share-based payments charge and accrued national insurance ('NI') on share options reduced to £68.8 million (£109.5 million in 2021); this reflects the release of NI accrual as a result of the lower share price at year-end 2022 compared to year-end 2021, as well as higher awards in 2021 related to the IPO. Exceptional items increased to £70.4 million (£38.6 million in 2021) mainly due to the recognition of further provisions for legal, regulatory and contractual matters, principally in some of the Group's overseas territories.

Other operating income and other operating expenses

Other operating income was £7.8 million in 2022 compared to £3.1 million in 2021, increasing principally due to income from a new lease arrangement. Other operating expenses were £12.6 million in 2022 compared to £17.1 million in 2021, mainly due to lower rider kit costs as we onboarded fewer new riders in the year.

Adjusted EBITDA

* Alternative performance measure ('APM'), refer to glossary on page 50 for further details

Adjusted EBITDA loss more than halved to £(45.0) million from £(100.0) million in 2021. Adjusted EBITDA margin (as a % of GTV) improved to (0.7)% in 2022, compared to (1.6)% in 2021. Sequentially, adjusted EBITDA margin improved from (2.7)% in H2 2021 to (1.5)% in H1 2022 to 0.2% in H2 2022. This total movement of 290 bps was attributable to a 250 bps increase in gross profit margin (as % of GTV) and a 40 bps improvement in marketing and overheads costs (as a % of GTV).

Finance income and finance costs

Finance income increased to £17.8 million (comprising bank interest received of £11.0 million and foreign exchange gains of £6.8 million) from £9.4 million in 2021 (comprising bank interest received of £0.5 million and foreign exchange gains of £8.9 million). Finance costs increased to £2.8 million compared to £1.1 million in 2021 due to an increase in interest charged on leases, principally driven by new leases on Editions sites and headquarter premises.

Income tax charge

Whilst the Group reports a loss, certain overseas markets do generate profits for tax purposes. The income tax charge was £11.9 million in 2022 (2021: £7.4 million), with the increase largely reflecting 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 2022, loss for the year from discontinued operations was £51.6 million, compared to a loss of £41.3 million in 2021.

Loss for the year

Loss for the year (continuing and discontinued operations) was £294.1 million in 2022 compared to £330.5 million in 2021, 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 2022, UKI represented 57% of total GTV and International 43%.

UK and Ireland

* Alternative performance measure ('APM'), refer to glossary on page 50 for further details

Change in constant currency was 9% for GTV and 2% for GTV per order

In UKI, GTV grew to £3,888.2 million, an increase of 9%. Orders grew by 7% to 158.4 million, primarily driven by a 7% increase in monthly active consumers and GTV per order was up 2% in constant currency to £24.5. Revenue grew 14% to £1,119.4 million, primarily due to the increase in GTV, as well as a higher contribution from advertising revenue. Adjusted EBITDA was £157.9 million, compared to £91.1 million in 2021, due to an increase in gross profit margin, offset by a modest increase in marketing and overheads. Adjusted EBITDA was £59.9 million in H1 2022 and £98.0 million in H2 2022, with the sequential increase reflecting both gross profit expansion and lower marketing and overheads.

During the period, Deliveroo continued to add differentiated content for consumers. UKI restaurant selection was further expanded, and in 2022 we added ~10,000 new sites increasing the base of restaurants by 19%. This included the roll-out of over 1,000 McDonald's sites, which became available on the Deliveroo platform in the UK for the first time. We also continued to roll out our grocery offering: at the end of the period, Deliveroo had approaching 8,000 grocery sites live in the UKI across major partners and smaller independent partners, an increase of around 2,000 compared to the end of 2021. This included expanded partnerships with Waitrose, Sainsbury's and Co-op, and the launch of Asda on the platform. 

International^[2]

* Alternative performance measure ('APM'), refer to glossary on page 50 for further details

Change in constant currency was 5% for GTV and 1% for GTV per order

In International, GTV grew to £2,959.9 million in 2022, an increase of 5% in constant currency. Orders grew by 3% to 140.8 million, primarily driven by a 4% increase in monthly active consumers and GTV per order which was up 1% in constant currency to £21.0. Revenue grew 13% to £855.3 million, primarily due to the increase in GTV. Adjusted EBITDA was £48.2 million, compared to £(28.0) million in 2021, due to gross profit improvements and marketing and overheads remaining broadly flat. Adjusted EBITDA was £7.7 million in H1 2022 and £40.5 million in H2 2022, with the sequential movement reflecting both gross profit expansion and lower marketing and overheads.

Across the International segment, growth in 2022 was supported by strengthened relationships with restaurant partners, adding ~18,000 new sites, increasing the base of restaurants by 24%. During the period, we also expanded our grocery offering, continuing the rollout with key partners such as Carrefour in France, Italy and Belgium, Casino in France, and ParknShop in Hong Kong. At the end of the year, Deliveroo had over 10,000 grocery sites live with major partners and smaller independent grocery partners across International markets, representing a year-on-year increase of ~5,000 sites.

3. Cash flow statement

All discussion of cash flows from operating activities, cash flows used in investing activities and cash flows from financing activities are for continuing and discontinued operations, unless otherwise stated.

Cash flows from operating activities

Net cash outflow from operating activities was £(144.2) million in 2022 compared to a net cash outflow of £(171.5) million in 2021. The decrease in net cash outflow from operating activities was primarily driven by the £55.0 million reduction in adjusted EBITDA loss from continuing operations in 2022, partly offset by a working capital outflow in the year. The working capital outflow is principally caused by the timing of IPO-related employee tax and social security payments on share awards, which resulted in a £39.7 million cash inflow in H2 2021 that reversed in H1 2022.  

Cash flows used in investing activities

Net cash flows used in investing activities were £(119.9) million in 2022 compared to £(58.4) million in 2021, an increase of £61.5 million. Purchases of property, plant and equipment (also referred to as 'capital expenditure') increased to £30.1 million in 2022 from £21.4 million in 2021 mainly related to the further expansion in Editions as well as the opening of new Hop sites. Acquisition of intangible assets (also referred to as 'capitalised development costs') increased to £50.3 million from £34.6 million in 2021. Additional development work in the year included: improvements to our 'dispatcher' service (which assigns riders to live orders) to improve network efficiency; building features to improve our rider proposition such as facial recognition; building out our advertising platform to support growth in this important revenue and profit opportunity; supporting our expansion into Qatar; and optimising our promotional capability. Investments in other treasury deposits were £50.5 million (2021: £nil) and interest received increased to £11.0 million (2021: £0.5 million).

Cash flows from financing activities

Net cash outflow from financing activities was £(84.5) million in 2022 compared to a net cash inflow of £1,139.0 million in 2021. This outflow principally results from the share purchase programme commenced in 2022, which accounts for £66.0 million, with the remainder attributable to cash outflows arising from lease obligations. In 2021, the net cash inflow was primarily driven by £1,011.7 million net proceeds (after costs) from the IPO in April 2021, as well as £135.3 million net proceeds (after costs) from the Series H fundraising round in January 2021.

4. Balance sheet

Following the IPO and fundraising activities in 2021, Deliveroo has been in a strong financial position. Cash and cash equivalents were £949.1 million at 31 December 2022, compared to £1,290.9 million at 31 December 2021. As at 31 December 2022, Deliveroo had no debt outstanding. The Company has £75 million and €87.5 million of available loan finance in the form of a committed Revolving Credit Facility ('RCF'), which is available to 7 April 2026 and none of which has been drawn down.

Right-of-use assets have increased by £33.7 million from £39.8 million at 31 December 2021 to £73.5 million at 31 December 2022, as a result of additional leases for Hop and Editions sites and headquarter premises.

Provisions at 31 December 2022 were £143.2 million, an increase of £61.5 million compared to £81.7 million at 31 December 2021. This increase is primarily due to the recognition of further provisions for legal, regulatory and contractual matters, principally in some of the Group's overseas territories. In addition, a dilapidations provision has been recognised in 2022, primarily in respect of the Group's headquarter property footprint.

Total equity was £804.1 million at 31 December 2022, compared to £1,073.7 million at 31 December 2021. This movement is primarily driven by the loss for the year, share-based payments and the share purchase programme initiated in the second half of the year.

5. Share purchase plan

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. From launch of the share purchase programme on 1 September 2022 until 31 December 2022, the EBT had purchased a total of 73.8 million shares for a total gross purchase consideration of £66.0 million. Since the year-end, the EBT has completed the share purchase programme. From 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.

Deliveroo is today announcing a further share purchase programme of up to £50 million to acquire Class A Ordinary Shares. The programme is expected to commence shortly and to be completed during 2023.

6. Dividend and Dividend Policy

No dividend has been declared or paid in the current or comparative period. Given the early stage of maturity of the online food category, Deliveroo remains focused on investing to maximise long-term free cash flow, believing that this is the best way to drive long-term shareholder value. The dividend policy will be reviewed on an ongoing basis, but we do not expect to declare or pay any dividends for the foreseeable future.

Consolidated Income Statement and Statement of Comprehensive Loss

For the year ended 31 December 2022

*^ Results for the year ended 31 December 2021 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 8  and to account for a charge in relation to the non-employee options granted in February and March 2021.

This statement should be read in conjunction with the notes to the consolidated financial statements on pages 22 to 49.