Deliveroo aims to break even within two years as losses widen

Deliveroo saw losses widen in its full-year results, but said it aims to break even within the next two years.

The delivery company reported a pre-tax loss of £289m in 2021 compared to a loss of £213m in 2020.

Gross profit rose 43% to £497m but adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was a loss of £131m, down from a loss of £11m in 2020, which the company blamed on increased marketing spend and investment in technology.

In 2021 Deliveroo added 19,000 new restaurants to its platform in the UK and Ireland, an increase of 55%. It also grew its grocery offering with almost 6,000 sites on the app, an increase of two-thirds on 2020.

The company grew its number of Deliveroo Plus subscribers in the UK and Ireland fourfold during the year and added more than 100 Editions ‘dark kitchens’ globally.

Gross transaction value (GTV) in the UK and Ireland grew 71% in 2021, boosted by the pandemic, but dropped in the second half of the year as lockdown restrictions lifted.

Deliveroo said breaking even at “some point” during the second half of 2023 or the first half of 2024 was the “next key milestone” for its longer-term ambitions.

By 2026, the company is aiming to reach a 4%+ adjusted EBITDA margin, with “further upside potential” beyond 2026.

Will Shu, founder and chief executive of Deliveroo, said the the delivery firm’s performance in the UK and Ireland was “particularly encouraging”.

Shu said: “At the same time, this year it is clear that all three sides of our marketplace in Europe will face headwinds due to inflationary pressures, the removal of economic stimulus and the broader geopolitical and economic impacts of the conflict in Ukraine. We will continue to monitor developments closely. Our 2022 guidance reflects our caution on these factors, but we are confident in our ability to adapt financially to a rapidly changing macroeconomic environment.”

Image: Shutterstock / nrqemi