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Delivery Hero: revenue grew 77% in FY 2018

Berlin / DE. (dhh) Delivery Hero Group, one of the leading global online food ordering and delivery marketplaces, accelerated growth in the fourth quarter. In the financial year 2018 revenue grew by 77 percent year-on-year on a constant currency basis excluding Germany and accounting for hyperinflation in Argentina.

Chief Executive’s Statement

Niklas Östberg, CEO of Delivery Hero, said: «2018 has been another successful year for Delivery Hero. Our focus on the customer experience, the launch of many new initiatives like the roll out of delivery and multi-vertical products, the expansion into new cities and suburbs combined with our M+A strategy to focus our resources on the largest opportunities are all delivering results. Today 80 percent of our GMV comes from countries in which we hold leadership positions. We are more confident than ever that our investments will allow us to attract millions of new customers to our platform. I am very excited about the incredible growth opportunities that lie ahead of us.»

Group Financial Performance Full Year 2018 (excluding Germany)

  • Orders grew by 49 percent to 369 million
  • Gross Merchandise Value (GMV) grew by 55 percent on constant currency and by 42 percent as reported to EUR 4,454 million
  • Group take-rate reached 15.4 percent and group take-rate excluding own delivery orders at 11.3 percent
  • Revenues grew by 77 percent on constant currency and by 65 percent as reported to EUR 687 million
  • Previously stated revenue guidance of EUR 780-785 million has been exceeded with full year revenues of EUR 792 million for 2018 (including Germany)
  • Preliminary adjusted Ebitda margin is approximately -18 percent (including Germany) in line with the previous guidance

Recap and Update on German Transaction

  • In December 2018, Delivery Hero announced the sale of its German operations to Takeaway.com N.V. («Takeaway») in exchange for cash and shares in Takeaway. The consideration will comprise of EUR 508 million in cash and 9.5 million shares in Takeaway. The transaction comprises the Lieferheld, Pizza.de and foodora businesses in Germany
  • The key aspects of the transaction include:
  • The transaction enables Delivery Hero to strengthen its global footprint, increase its focus on key growth regions and reinforce Delivery Hero’s leadership positions
  • Current enterprise value of EUR 1,060 million (up from EUR 930 million at signing as a result of the increase in Takeaway’s stock price), which equates to a GMV multiple of 1.6x 2018 Actuals (being a revenue multiple of 10.1x 2018 Actuals)
  • In January 2019, Takeaway successfully raised capital to finance the cash component of the transaction (EUR 508 million) via an equity capital increase and announced a convertible bond offering
  • After the fundraise, the initial ownership of c. 18 percent in Takeaway will be 15.5 percent prior to the dilution following a conversion of the convertible bond
  • The equity stake in Takeaway enables Delivery Hero to benefit further financially from any value creation that Takeaway may generate
  • Following completion of the Transaction, Delivery Hero will have the right to submit a binding nomination for the appointment of one independent member to Takeaway’s supervisory board
  • The transaction is only subject to approval of the general meeting of Takeaway. Takeaway’s extraordinary general meeting is expected to take place on 5 March 2019

Recap and Update on Additional investments

  • The increase in cash position from the above-described transaction allows Delivery Hero to allocate more capital towards investment opportunities across its segments at attractive returns thereby expanding leadership positions and growth
  • As a result, Delivery Hero announced an upgrade to its investment plan, with an aim to increase investments with a net adjusted Ebitda impact of negative EUR 250 million over the course of 2019. Delivery Hero expects to generate incremental revenues of EUR 45 million in 2019 and EUR 81 million of incremental recurring revenue per year starting in 2020
  • Delivery Hero had a good start to the investment program and is confident to deploy the entire EUR 250 million on top of the previously announced EUR 160 million over the course of 2019

Recap Outlook

  • As previously outlined, Delivery Hero expects to achieve the following:
    • Revenues between EUR 1,080 million and EUR 1,150 million for 2019 in line with expectations prior to the Germany transaction (notwithstanding the deconsolidation of German operations)
    • Adjusted Ebitda between negative EUR 270 and EUR 320 million after the additional investments
    • Europe segment to reach breakeven during the second half of 2019
    • MENA segment to generate EUR 70 million of adjusted Ebitda in 2019 after the additional investments
  • Delivery Hero is confident in its ability to deliver its ambitious revenue guidance on the back of a strong start to 2019
  • The annual report 2018 with the audited IFRS financial statements will be published on April 25, 2019