Deliveroo PLC (LSE:ROO) warned that its gross transaction value (GTV) growth for full year 2022 will be at the lower half of its previously announced range, expected to be between 4% and 8% in constant currency, as it reported thrid quarter results.
Adjusted EBITDA margin, as a percentage of GTV, will be between 1.2% and 1.5% - lower than originally thought – due to continued gross profit margin expansion and control of marketing and overhead costs, the food delivery firm said.
It wasn’t all bad news, though, as Deliveroo saw continued year-on-year (YoY) growth in the third quarter, with GTV up 8% in reported currency terms to roughly £1.7bn.
"During the quarter, we delivered continued GTV growth year-on-year, strengthened our value proposition and made further progress on our path to profitability,” Will Shu, Deliveroo founder and chief executive, said in the results statement.
GTV per order rose 6% on item-level price inflation but orders declined by 1%, highlighting the difficult consumer environment. Growth in the UK and Ireland outperformed international growth, with GTV up 11% and down 2% respectively YoY.
International growth was relatively stronger in Europe and the Middle East, offset by declines in Asia Pacific, where renewed pandemic-related restrictions in Q3 last year gave a tough comparison base.
Deliveroo continued the targeted expansion of its offering, adding further ‘Hop as a Service’ sites, expanding its Boots partnership to 125 stores and the rollout of around 1,000 McDonald’s sites in the UK. It also launched its service in Qatar ahead of the FIFA World Cup.
The company said it intends to reach adjusted EBITDA breakeven at some point during H2 2023-H1 2024, the next key milestone on its path to achieving longer-term profit ambitions.
Deliveroo continued its share purchase programme of up to £75mln to acquire ordinary shares for the purpose of mitigating dilution from share-based compensation plans, with them being purchased by Deliveroo's Employee Benefit Trust.
In a separate statement, Deliveroo said that, further to the announcement made on June 20, 2022, appointing Scilla Grimble as its chief financial officer (CFO), Scilla will join the board as CFO with effect from February 20, 2023.
David Hancock who is currently serving as the company's interim chief financial officer since September 17, 2022, will step down from the position with effect from the same date.