DELHY - Delivery Hero SE (DLVHF) Q4 2023 Sales/ Trading Statement Call Transcript

2024-02-14 15:34:11 ET

Delivery Hero SE (DLVHF)

Q4 2023 Sales/ Trading Statement Call

February 14, 2024 08:00 AM ET

Company Participants

Christoph Bast - Head of Investor Relations

Niklas Ostberg - Chief Executive Officer

Emmanuel Thomassin - Chief Financial Officer

Conference Call Participants

Jo Barnet - UBS

Miriam Josiah - Morgan Stanley

Andrew Ross - Barclays

Marcus Diebel - J.P. Morgan

Chris Johnen - HSBC

Giles Thorne - Jefferies

William Woods - Bernstein

Lisa Yang - Goldman Sachs

Jurgen Kolb - Kepler Cheuvreux

Annick Maas - Societe Generale

Joseph McNamara - Citi

Kiranjot Grewal - Bank of America

Silvia Cuneo - Deutsche Bank

Andrew Gwynn - BNP Paribas

Presentation

Operator

Ladies and gentlemen, welcome to the Delivery Hero Q4 2023 Trading Update Conference Call and Live Webcast. I'm George, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by Q&A session. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Christoph Bast, Head of IR. Please go ahead, sir.

Christoph Bast

Hello, and welcome, everyone. Thank you very much for joining our Q4 2023 Earnings Call. We would like to remind you that this call is being webcast and a replay will be available later today on our website.

With me today, we have Niklas Ostberg, CEO; and Emmanuel Thomassin, CFO of Delivery Hero, who will take us through the most relevant aspects of our Q4 performance and the 2024 outlook. After that, we will look forward to answering your questions.

And now, let me hand it over to you, Niklas.

Niklas Ostberg

Thanks, Christoph, and hey, everyone. First off, Happy Valentine's and thanks for joining. We know you've seen our pre-announced results and we are excited to give you more color on our performance today.

So, let me say upfront that we understand that many shareholders are keen to understand our liquidity position and we have heard you. I would like to ask you to view our liquidity in context of our performance and the many levers that we still have available to increase our margins and cash flow. This gives us great confidence in our ability to manage our liquidity. Our conservative plans contain ample cushion and do not rely on any M&A outcomes materializing. And if conditions change, we have other plans and can pull other levers. We will share more, information on this topic in a few minutes, but let me first share more about our performance to set the stage.

So, our business continues to advance with GMV growth of 7% year-on-year in Q4 and full-year 2023, both numbers in constant currency and excluding the effect of hyperinflationary accounting. That means we have reached the upper-end of our 5% to 7% guidance range. Revenue grew faster it grew at 16% in Q4 and continued to outpace the GMV development. Due to a strong growth in combination with strict focus on profitability, the adjusted EBITDA margin rose to 1.1% in H2 2023, which correspond to an earnings uplift of EUR 390 million in the second half of the year alone.

For the full-year 2023, this means adjusted EBITDA increase of more than EUR 870 million. The strong adjusted EBITDA improvement has been seen throughout the business. The earnings trajectory in our profitable markets continue to improve. Furthermore, APAC and LatAm turned positive on adjusted EBITDA level in Q4 before Group cost.

You will also see later in the presentation that we substantially improved the performance of our unprofitable countries as well as integrated verticals. This puts the business in a very strong profit trajectory for 2024 and beyond. We are proud to have achieved this without having to sacrifice growth or market position. In most markets, we have even gained substantial category share.

Last but not least, we have finally reached cash flow breakeven during H2 2023, which implies free cash flow uplift of EUR 330 million year-on-year in H2, an improvement of more than EUR 600 million compared to full-year 2022. Again, we have achieved this while still maintaining our clear category lead in most of our markets. Our clear category leadership combined with our strong profit trajectory and positive free cash flow outlook puts us in a comfortable position to repay all debt maturities organically....

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