Deliveroo reports resilient year of growth

Despite macroeconomic conditions, the delivery company has said that 2023 was a "resilient year of growth."

Deliveroo has reported that its gross profits are up 13% and revenue and Gross Transaction Value (GTV) are up by 3%. 

The company has said that the growth trend improved in the second half with GTV up 5% year-on-year and orders recovering through the year to be flat year-on-year in Q4. The business said it made “significant progress” on profitability in the year to 31 December 2023, with adjusted Ebitda of £85m (2022: £45m); adjusted Ebitda margin (as a % of GTV) increased to 1.2% (2022: 0.7%). Its loss for the period was reduced by £262m to £32m.

The company said that “profit improvement levers” included efficiencies in its delivery network, optimisation of marketing spend, overheads savings and a higher advertising contribution.

Furthermore, Deliveroo said it had made further progress towards sustainable cash generation, with free cash outflow reduced to £38m (2022: £243m), which included £20m cash exceptionals and excluded £32 million interest income.

Further growth

During the year the company said it made continued investment and innovation in its consumer value proposition (CVP), with better delivery experience, enhanced selection and in-app experience, premium delivery, top-up grocery orders and launch of retail proposition.

It said these CVP initiatives were driving clear benefits with higher NPS, lower average mark-ups by restaurants on the platform, improvement in key service metrics and grocery reaching an annualised GTV run-rate of £1bn in Q4, with particularly strong growth in mid-sized basket orders.

Strong levers for profitability and cash flow include reducing rider wait time and smarter order stacking, increased marketing efficiency, and greater automation to drive operating leverage as we scale. In terms of GTV growth, it said it is targeting mid-teens percentage growth per annum. 

Future growth

Looking ahead to this year, it said that GTV growth (in constant currency) is anticipated to be in the range of 5-9%, while Q1 growth is expected to be similar to Q4 2023, with an improvement in growth through the year as “we continue to deliver on our plans”.

Will Shu, founder and chief executive of Deliveroo, said: “2023 was a good year for Deliveroo and I am proud of what we have delivered financially, operationally and for our consumers. Our focus on service and value for money continues to build consumer trust, which are fundamental to unlocking future growth in this industry. Alongside this, our restaurant and grocery businesses are performing well, we launched our retail offering, Deliveroo Shopping, and we are scaling our advertising business. Building on the strong progress we made in 2023, I’m excited about the further opportunities ahead.”

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