Berlin-based Delivery Hero, a leading local delivery platform, has released its financial results for the first quarter of 2023. Despite a challenging comparison period compounded by the effects of COVID reopening in parts of Asia, the company reported steady progress towards its profitability goals, with total segment revenue growing by 12% YoY to EUR 2.5 billion.

However, its GMV growth for the Delivery Hero Group excluding Asia was only 2% YoY to EUR 11.2 billion, while Asia recorded a decline of 7% due to a difficult COVID comparable. The company’s other segments, however, showed an average GMV growth rate of 16% in Q1 2023. “We grew category share across numerous countries we operate in, while improving profitability by EUR 250 million YoY at the same time,” said Niklas Östberg, CEO and Co-Founder of Delivery Hero.

The Platform business, which represents Delivery Hero’s online food ordering and delivery services, performed outstandingly, expanding to a gross profit margin of over 7% of GMV. The company’s adjusted EBITDA/GMV margin also improved by almost EUR 250 million YoY, EUR 30 million above budget, to -0.1% of the GMV.

Delivery Hero has set guidance for FY 2023, with a GMV growth expectation of 5-7% and an around 10% Total Segment Revenue increase. Adjusted EBITDA/GMV margin outlook is confirmed to hit over 0.5% for the entire FY 2023 and over 1% for H2 2023, as well as Free Cash Flow break-even during H2 2023. The company expects to accelerate its growth quarter on quarter to reach its targets for the full year in constant currency.

Looking ahead, the company confirms its long-term ambitions to achieve a 5-8% adjusted EBITDA/GMV margin on Group level by 2030. CFO of Delivery Hero, Emmanuel Thomassin, said, “We’re moving closer towards our profitability targets, making significant improvements on this front, while remaining on track to achieve Free Cash Flow break-even during H2 2023.”

Delivery Hero is also focusing on improving its capital structure and liquidity position. In February 2023, the company repurchased a portion of its outstanding 2024 and 2025 convertible bonds, using the proceeds from the successful placement of convertible bonds amounting to EUR 1,000.0 million due in 2030. With this transaction, the company significantly improved its debt maturity profile.

As part of the report, Delivery Hero will publish its 2022 Annual Report, based on International Financial Reporting Standards (IFRS), instead of a pro-forma basis. Its financials may differ from this or previous Trading Updates.

Overall, despite the challenges presented by the pandemic, Delivery Hero has maintained a strong position in the market and is well-positioned to continue its growth in the years to come.