STRONG GROWTH AND CONTINUED STRATEGIC PROGRESS IN H1 2021

STRONG GROWTH AND CONTINUED STRATEGIC PROGRESS IN H1 2021

Operational and Strategic Highlights        

  • Growth materially ahead of expectations in H1 2021; consumer engagement post-reopening has been encouraging, with orders and average order value (AOV*) proving resilient despite restrictions easing
  • Deliveroo now has the most food merchants in the UK of all delivery platforms after adding further selection; UK expansion is ahead of plan with 72% population coverage at end-June vs initial target of 67% by year-end
  • Further traction in on-demand grocery (ODG) supported by roll-out of offering with leading partners; ODG has attractive standalone unit economics and significant synergies with restaurants business
  • Strong rider satisfaction with 85% of riders globally saying they are satisfied or very satisfied working with Deliveroo; rider attraction and retention rates remain high despite rising job vacancies across economies
  • Continued investment in long-term differentiation of the consumer value proposition and in growing the monthly active consumer base, given clear evidence of a positive structural shift in consumer behaviour, and strong capital position following the IPO in March 2021
  • Proposal to end operations in Spain announced on 30 July 2021, as achieving a top-tier market position would require a disproportionate level of investment with highly uncertain long-term potential returns
  • Launch of 'Full Life' campaign, which builds on Deliveroo's support for the NHS with a new commitment to work with restaurant and grocery partners to deliver one million meals to communities in need by early next year

Financial Overview

  • Gross Transaction Value (GTV*) up 102% to  £3,385.8 million; GTV* growth was 131% in Q1 and 81% in Q2 2021, showing continued strength despite reopening effects and an increasingly tough comparison base
  • UK & Ireland GTV* up 110% in H1 2021, with broad-based geographic momentum and no material impact from UK reopening milestones during Q2 2021
  • International GTV* up 95% in H1 2021, reflecting differing patterns of reopening in H1 2021 and varying impact of lockdown restrictions in the comparison base
  • Revenues up 82% to £922.5 million, primarily due to increase in GTV*, driven by an increase in monthly active consumers compared to H1 2020
  • Gross Profit up 75% to £263.9 million; gross profit margin (as % of GTV*) of 7.8%, down from 8.8% in H1 2020 due to accelerated investments to support future growth, including consumer acquisition and retention, and differentiated restaurant and grocery selection
  • Adjusted EBITDA* was a loss of £(27.0) million compared to £(30.3) million in H1 2020, as higher gross profit was largely offset by increased investments to support future growth
  • Statutory loss before tax improved to £(104.8) million in H1 2021 compared to £(128.4) million in H1 2020
  • Cash and cash equivalents of £1,626.7 million at 30 June 2021 included £1,012.9 million net proceeds (after costs) from the IPO in March 2021 [and the Series H in January 2021]

Outlook & Full Year Guidance

Deliveroo reiterates upgraded full year guidance provided in the Q2 2021 trading update on 8 July 2021:

  • Full year GTV* growth of 50-60% (this was increased on 8 July 2021 from prior guidance of 30-40%)
  • Full year gross profit margin (as % of GTV*) in the lower half of the range of 7.5-8.0%, reflecting accelerated growth investments and the continued expectation that AOV* reverts towards pre-pandemic levels in H2 2021.

Will Shu, Founder and CEO of Deliveroo, said:

"We have reported strong performance in the first half of the year and continued to make good progress in executing our strategy. As a result, we are well positioned to take advantage of the huge opportunity ahead.

"We are seeing strong growth and engagement across our marketplace as lockdowns continue to ease. Demand has been high amongst consumers. We have widened our consumer base, seen people continuing to order frequently and we now work with thousands more restaurants. At the same time, more riders are choosing to continue to work with the company because they value the work we offer.

"As reflected in our guidance, whilst we expect that consumer behaviour may moderate later in the year, we remain excited about the opportunity ahead and our ability to capitalise on it."

The full report can be found at https://corporate.deliveroo.co.uk/

Additional Notes

1. All figures in this trading update are unaudited.

2. All growth rates reflect a comparison to the six-month period ended 30 June 2020 unless otherwise stated.

3. References to "Q1" are to the three-month period ended 31 March 2021, unless otherwise stated. References to "Q2" are to the three-month period ended 30 June 2021, unless otherwise stated. References to the "year", "financial year" or "2021 financial year" are to the financial year ending 31 December 2021 and references to the "last year", "last financial year" or "2020 financial year" are to the financial year ended 31 December 2020 unless otherwise stated.

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.

 In this section, GTV growth is year-on-year and in constant currency; all other growth rates are year-on-year and in reported currency

* To supplement performance assessment, Deliveroo uses Alternative Performance Measures ('APMs'), which are not defined under IFRS. APMs are indicated in this document with an asterisk (*);

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