Deliveroo plc

Good morning and welcome to our full year results for 23. I'm Will Shew. I'm the founder and CEO of Deliveroo. I'm joined by Cilla Grimble, our CFO. I'm going to start with a brief overview of 23 before running through some of the strategic and operational progress we made in the last year that ultimately give us confidence in our medium-term growth and profitability ambitions. Then Cilla is going to take us through the financials. She'll set out our guidance for 24. And after that, we'll open for Q&A. So let's get started with the key takeaways for 23. Overall, we had a really good year in 23, and I'm really pleased with the team's delivery. We made significant progress in profitability with adjusted EBITDA of 85 million pounds, having upgraded guidance during the year. I don't want to talk too much about macro conditions, but we did face cost-of-living headwinds in many of our markets in 23. We've remained focused on what we can control, our CVP, the efficiency of our operations, and our future growth plans. In doing so, we achieved resilient top-line growth. We delivered good relative performance across our key markets. Overall, we're very pleased with our market share and profitability trends. We strengthened our CVP further. At our CME in November, you heard me talk about prioritizing measures that build consumer trust, trying to achieve those perfect deliveries and making sure prices are fair on the platform. In my mind, these are the two most important things to drive growth in the industry. We made good progress here, and we're building really strong foundations for the long term. We also continue to drive strong growth in our grocery business. We're now at a billion-pound run rate of GTV, and we also launched a retail offering. So these are some of the things that we've done in order to lay the foundations for the future. But at the same time, we've also made strong progress on cash flow generation. I'm also really proud of that. So we've outperformed on profitability. We've made good progress on free cash flow. And this is whilst strengthening our CVP for that median term. And in terms of guidance for 24, Cilla will comment on to that later. But in short, we're going to guide to GTV growth of 5% to 9% in constant currency and adjusted EBITDA of 110 to 130 million pounds. And we expect to deliver positive free cash flow in 24. Now, on to our business updates. So at the CME, we set out our medium-term targets. Those were mid-teens GTV growth in the medium term and 4% plus adjusted EBITDA margin by 26 as a percentage of GTV. Sylla's going to talk about these later. But I guess for me, I'm as excited as I ever have been about the business. I'm excited about the team that we have in place to execute on this, and I'm really excited about the opportunity we have to deliver these targets. First, I'm going to talk – I'm going to start today by talking you through the strategic framework we use when we think about this as a team and then share some of the areas where we've made some progress. Let us start from strategy, which starts from our mission, right? And let me just repeat this again because I think it's really important. It's to transform the way you shop and eat, bringing the neighborhood to your door by connecting consumers, restaurants, shops, and riders. It's a lot to take in, but I do think it encapsulates exactly what we're trying to do. And we have three pillars that support delivery of that mission. It all centers on delivering a compelling CVP across our key verticals. And, of course, we remain focused on doing that as efficiently as possible in order to drive profitable growth. As we described at the CME, these focus areas support the building blocks of growth. And delivering across these areas will drive the outputs in terms of the targets we've communicated. And we're going to do this whilst maintaining an efficient capital structure. Now, we've made progress across a number of areas last year, but I'm going to focus on a few. These are the ones that we've highlighted in blue, those five boxes. All right, so now we're going to talk about these trust-building measures that I laid out at the CME. And specifically, we're talking about the barriers to consumer trust, which is price integrity and consumer experience. And really, we're trying to answer the question to the consumer, does the consumer feel that the prices are fair? And does the consumer feel like the delivery experience was flawless? And just being realistic, there are definitely issues that happen, and I think solving these two issues is the key to driving long-term growth in the industry. But I'll just kind of give you a personal anecdote. So I recently ordered pizza from a place I go to in my neighborhood, and I realized the prices that they were charging on the app were 25% higher than the in-store price, which for me – you know, compelled me not to order from them. I just felt annoyed by that. And I don't think I'm alone in that. I think a lot of people think that. I'll give you another example, maybe more relevant for the delivery side. So let's say you order Chinese and you order seven things, but you don't get your small side dish of fried rice, which is kind of really important to you to pair with the chicken, right? But you just didn't get it, and that's super, super annoying. I think the number one reason for churn out of the industry or the competitors is when something goes wrong, and I think that's either on the price side or on the delivery experience side. So again... We want the customers to think the prices are fair and the delivery experience is flawless. And I think we've spent a huge amount of time working on that in 23, setting the foundations for that. And I think that ultimately will be a huge point of differentiation in the sector if we can get it right, and I think a critical way to drive growth. Okay, so I'm going to go into price value in detail. We're going to talk about better value and price integrity. And over the last year, this has become even more important than ever as inflation has hurt demand across the industry and many industries. And when I talk about better value and price integrity, this isn't just we're doing it in response to inflation. I do think, however, in an inflationary environment, the sort of problems become even more acute. But this is a permanent way of thinking. So what do our consumers really want at the end of the day? So beyond access to the best merchants, they want to feel like they're getting a fair deal. whether that's promotions, savings, or overall low prices, which is ultimately what I want. Now, we directly deliver this through both our subscription program, which is Deliveroo Plus, but also through targeted promotions. So those are the direct levers you see up there. We've used more targeted promotions in 23. We thought about the structure of these promotions with offers such as seven pounds off seven orders. This reinforces value perception for the consumer, but it also drives frequency. We've created carousels which highlight good deals from our merchants, including an offers tile. And so these direct levers are critical for us to deliver value to consumers. Then, if you look on the right here, we have our indirect levers. We've developed tools to incentivize our merchants to provide fair prices in combination with great service. We've been doing that with two different programs, which are concurrent. So the first one, this is called a commercial architecture. This is our framework to work with larger partners. Our commercial architecture means merchants can unlock lower commissions that are linked to performance on these trust-building metrics, such as smaller markups and better operational performance. This creates wins for consumers because you get better prices and fewer poor order outcomes. It drives wins for riders because you have lower wait times at restaurants and therefore you can do more deliveries. You have wins for merchants themselves because you have better consumer retention and it helps enhance their brand. And ultimately for us because we build more trust in the platform. And we've had a lot of good traction here. We've seen partners make organizational changes such as adding managerial roles to oversee delivery, but also investing in technology to improve their metrics because they understand the value in this, and there's a big return on their investment from this. One of the key outputs so far has been reduced rider wait time at restaurants, which is really, again, that's a win-win-win for everyone. This works well with our largest partners, but then we thought, okay, how do we efficiently scale this approach over hundreds of thousands of merchants? Well, we do this through our second program, which we call our value program. So this is how it works. So within the value program, we rate the value for money offered by each partner across three dimensions – First one, price integrity. What's your markup versus dine-in prices? Secondly, the quality. So how do you perform on customer ratings? Thirdly, service. And these are things we can measure. We're going to focus on availability. We're going to focus on prep time speed and defect rates. So restaurants that score well on these three factors, they're featured in our Deliveroo Choice Carousel. And if you go to the app, you can see it's a teal carousel. I actually think it's a circular thing with the Deliveroo logo. Click on that, and you can see. And I personally discovered so many new restaurants in my neighborhood through this that I just otherwise wouldn't have ordered from. So we are greatly increasing their traffic and visibility. We're also allowing those partners to participate in specific offers. But for those of you with the app, I highly encourage you to click into Deliveroo's Choice and check it out. This program went live in the U.K. in November. So far, the results are great. Average markups are coming down. We've had a lot of positive feedback from merchants. Restaurant partners are getting in touch to say their recent changes have, and I'm quoting now, significantly boost sales and order volumes and, quote, resonated positively with consumers. And so when we look over the last 12 months, our MPS score has improved by 11 points year on year, and a bunch of that came from specifically on value for money. So even though this thing launched – In November, we're really seeing some benefits from that. So this is why we're pushing this really hard. Again, wins for the merchant, wins for the riders, wins for consumers, and wins for Deliveroo. We really, really believe in this. And so, you know, this is a long-term program. We run this business for the long term. And so far what we've seen suggests that our efforts on price integrity and service in tandem are having a big impact on consumer MPS. All right, now let's talk about the delivery experience here, and that's obviously a critical part of the consumer experience. So think about it this way. This is after the consumer has placed an order, okay? What's the experience? So how fast did it arrive? Was our estimates accurate? Could the rider find the consumer? Did they get what they ordered? Was the food hot? All these things sound pretty basic, but they don't always go smoothly, which is why we're fanatically obsessed with improving the operations through technology on these things. This has been a huge challenge. focus area for us in the last year. We reduced the global average order duration by one minute, which is a big, big percentage because the denominator is small, right? And we've done this by both expanding our geographic reach, expanding the radii in which consumers can order from, right? So we're driving down order durations but giving consumers more selection, So how do we do that? Well, for those of you who are in the CME breakout sessions, you might remember Camilla and the team showed us how do we reduce that wait time in restaurant through many different ways. That's one area. So you guys saw those in the breakout sessions. And this is, for me, probably the most fun part of the business, just figuring out all of these little wins through technology to drive a much better consumer experience. So what does this mean? We've reduced the defect rate overall by 10% of just bad, you know, The defect rate being just generally bad experiences, that's gone down by 10%. We've had really big reductions in the most trust-busting outcomes, such as orders marked delivered but not received. We talked about that at the CME. That went down 65%. That saved us over 20 million pounds annualized in terms of compensation expenses and other things. much more important than money, our consumers trust us more. And you can see that in the NPS score I told you about. And these are the long-term investments that we really prioritize that we think have a great return over that medium term. Because ultimately, happier customers lead to a lower net cost to the business, drives frequency, drives retention, and drives a much bigger business over time. So getting all of this right is critical to driving growth, and we are 100% behind it. All right, let's talk about grocery now. So we launched this in 2018 or so, 2018, 2019. We've grown grocery from a standing start to a business in Q4 that reached an annualized GTV run rate of 1 billion pounds. This was about 13% of our group GTV in the second half of 23. So really proud of that. you know, building this market leading business in a really short amount of time. So what did we do? We improved our in-app experience. We've made discovery more personalized. We've got features like your regulars and top picks based on your previous ordering behavior. We've made the grocery experience much more reliable. We introduced an availability API. We have a dedicated picking app for merchants. We've developed our substitution features for the consumer. So it's not just what do you see on the Deliveroo app, which I think is awesome because it's a completely separate shopping experience from the restaurant side, but all of these things you don't see that drives reliability, something we talked about earlier. We also have seen good traction from our grocery top-up feature. This is when you check out of a restaurant, you get the ability to top up your order with a grocery order. You should try it if you haven't. That's been a great way of introducing restaurant consumers to the grocery offering, and about a quarter of the consumers who use the top-up feature were actually new to grocery, which is great. I'd say this as well, you know, up until now, we've been focused on these small basket missions, call it, you know, 30-pound baskets or so, up to 30 pounds. And there's still a huge amount of growth here, as you can see. Now, even in the U.K., where this online grocery business – sorry, our online grocery business is the most developed, the majority of consumers who use the platform to order food still haven't ordered groceries. And the international business is even earlier on that maturity curve. So we've got a big opportunity just to drive these small baskets that we talked about, but we also have a real expansion opportunity – call it in that 30 to 60-pound bucket, but still delivered with that convenience of on-demand. And it doesn't require any reinvention. You know, we're really doing the same stuff. We're just really increasing the range of available products, right? So certain merchants now have 10,000 SKUs, which I think is a big deal. Those mid-sized baskets, by the way, they're growing at five times the rate of our, you know, I guess other grocery orders, and now they're about a fifth of total grocery orders. So we see a really, really big opportunity in that, both in terms of the ongoing kind of smaller basket sizes, but as well as these mid-sized baskets where, you know, we're driving that through, you know, getting to 10,000 SKUs with certain merchants. All right, let's look at retail. So we just launched this retail offering, right? This is a little over three months ago. That was in, I guess, the end of November at the CME. We really see this as a natural extension of our marketplace because even without marketing these products, at the beginning of last year, we saw that consumers were searching for thousands of non-food items such as pet, gifts, home accessories. And as we did with grocery, we're building a new vertical by leveraging two sides of our marketplace. We're leveraging that consumer base and rider network, and we're just adding in new merchants and selection. So, so far, we've launched this business in the UK and UAE, really pleased with the early progress. Our typical customers, they're, you know, as you would expect, busy professionals, young families. Now, As we've expected as well, we're finding demand is driven really by two key motivators. So one is emergency items that are needed right now. So, you know, you're sick and you need paracetamol. But also convenience, where we can save you a trip to the local high street. And so the categories that are performing really well and where we're seeing the strongest demand are pharmacy, that's beauty, that's flowers, skin care, and gifting. And beyond the categories you would expect, we're selling everything from spanner sets to ankle socks to dog beds. These are all kind of things delivered under 30 minutes that you otherwise previously couldn't get that quickly. What have we been focused on? So we've been focused on ramping up selection across these key target categories from flowers to gifting to pet care and DIY. We've expanded our screw fix partnership. We've added additional sites, and we're adding more. We're in very active discussions with a whole range of national chains and local independents. So that's a big area of focus. And within the app, we're evolving that shopping experience. We're learning better how people search and browse for retail items. We're learning how to better our cataloging abilities, getting better at search as well because it's just a different type of search than food. But we're also, like I said at the CME, we're using machine learning to provide a curated selection to consumers, as well as we have this now give a gift feature, which you should definitely try. I guess Mother's Day is gone now, but we'll get a gift for someone else. I don't know. And it's clear, you know, speaking of Mother's Day, right, that the key seasonal retail moments will be an important part of driving awareness, right, which is a bit different than food, right, because food is something you just have every single day. Driving awareness through seasonal moments is really important. Let's take the example of Valentine's Day. or Mother's Day, right? And you can see here, there's an ad here for Valentine's Day. And we saw a triple-digit percentage, an increase in GTV with florists on Valentine's Day. But more importantly, we added 60% more customers to the retail segment that week versus the week prior, right? So these are really set pieces that allow us to drive awareness in that industry. So it's still really early days. We're taking a measured expansion approach. We've got mid-teens, millions of investments in 24. But, you know, I'm going to be excited to update you in the future because we're going to be targeting GTV in the region of 700 million pounds by 28. All right, on to advertising. So this business, you can see here, it's building very, very nicely. Ad revenues were 1% of GTV in Q4 23. 70,000 merchants have placed an advert on the platform, including restaurants and grocers. We've got new display formats, so brands can showcase new products or dish launches. And then based on feedback from larger partners who want to increase brand awareness and growth, Category share, we're going to be developing new inventory like display products such as – sorry, display products like banners or videos on their menus and on order confirmation emails, which will help reinforce brand recall both on and off our platform. We've also introduced a bid boost feature for ad campaigns. So this allows merchants to target customers using adverts at a specific time of day. So if you want to do breakfast or a specific day of the week, if you're focused on that. And then we also have the opportunity of advertising from our retail partners, which we talked about before, as something we'll be looking into in the future. Finally, we signed an exciting new partnership with Rocked. They're going to bring to our platform a lot of non-endemic brands who want to advertise for our consumers, which we're excited about. So, overall, we're progressing well here. I feel confident in our ads revenue target of reaching over 2% of GTV by 26. But I just want to end by saying, you know, that 2% has to come with a great consumer experience, right? And so... We're never going to just show a bunch of ads to increase that number without understanding if we're having a detrimental impact on the consumer experience. All right, we're going to move on to riders before I hand over to Cilla. So riders, of course, are a vital part of our three-sided marketplace, and we aim to offer flexible work, attractive earnings, alongside security. And our rider proposition reflects what riders tell us they want. You can see this in the high satisfaction ratings. Eighty-three percent of riders tell us they are either very satisfied or satisfied working with us. And I've talked about the strong application pipelines and retention rates in the past. That is still the case. I'm going to now turn to regulation. I'm going to start with the EU Platform Workers Directive, given it's hot off the press. I'm sure most of you are aware that the European institutions have reached agreement this week, and we expect that the directive will soon clear the final formal hurdles for approval. This means that member states will then have two years to implement the directive. Now, what does this all mean? I think this means what we've been saying for a really long time, which is that, crucially, it will say that national law will continue to determine final employment status decisions, as is the case today. I think this is great. This is welcome clarity because we already operate according to existing national employment laws now. And so we'll be working closely with member states when this is introduced. So turning to the national level as opposed to the EU level, there's been some important developments in the last 12 months. There are still markets where there's ongoing discussions, where there's some regulatory uncertainty remaining, but we've also seen positive decisions in key markets as well. So in the UK in November 23, a rider model was upheld as self-employment by the Supreme Court. This is the highest court in the country. This means UK law has conclusively demonstrated that riders are self-employed. In France, which is also a key market, authorities have concluded that our current model is self-employment. And these developments mean that, taken together, we have regulatory clarity in markets that count for 90% of our GTV. So with that, I'll hand over to Cilla to talk about the financials.

Thanks, Will, and good morning, everyone. As Will said, we made further progress on profitability in 2023, and against a difficult market backdrop, we delivered a resilient top-line performance. GTV grew 3% year-on-year in constant currency, with growth improving in H2. Cost of living pressures impacted order volumes, although these headwinds subsided slightly as the year went on. Overall, we saw good GTV growth in the UKI, and international performance improved through the year. Revenue growth slightly lagged GTV growth, up 2% in constant currency, with some puts and takes impacting take rates that I'll describe shortly. That increase in revenue, alongside efficiencies in the delivery network and the progress we've made on service, led to strong gross profit growth of 13%. As we indicated in our Q4 trading statement, adjusted EBITDA was ahead of our upgraded guidance and we landed the year at £85 million, with strong margin improvements both on gross margin and on operating costs. Free cash flow improved by over £200 million year-on-year to an outflow of £38 million. And just as a reminder, our definition of free cash flow is after exceptionals but before interest income, so we're making good progress here. We ended the year with a strong net cash position of £679 million after returning broadly a third of our starting cash balance to shareholders. Moving into more detail then and starting with GTV, consumers continued to experience cost of living pressures in 23. This impacted order volumes, which were down 3% in the year, while GTV benefited from food price inflation. As the year progressed, we did see consumer headwinds subside slightly, as food price inflation moderated. This, alongside action we took, resulted in order growth recovering to flat in H2, with an improving trend through the year, as you can see in the chart on the left. Constant currency GTV growth improved from negative 1% in Q1 to plus 4% in Q4, supported by the enhancements we made to our CVP, particularly on service and price integrity. Looking now to the right, as you know, a year of good growth in the UKI, albeit with a slight slowdown in Q4. In international, growth improved through the year to return to positive territory. We have particularly strong momentum in Italy and good UAE performance, which strengthened through the year. And in Hong Kong, the team's done a good job in improving the CVP and defending share despite the entry of a new competitor. As you know, in France, the overall market was weaker in 23, with consumer confidence slower to recover than in other markets. While France is still pacing behind most of our other larger markets, we've seen early signs of stabilisation in recent months. And when we look at international exports, we saw good momentum with GTV growth improving through the year to 6% in Q4. Turning now to look at revenue, which grew 2% year-on-year in constant currency. the UKI grew 8% while international was down 5%, with the biggest drag being the top-line weakness I mentioned in France. Before looking at the puts and takes in the year, I want to say just a word or two on how we think about take rates more broadly. Take rates is an outcome of the decisions we take to drive absolute revenue and gross profit and to build durable competitive advantage, rather than being a target in and of itself. Looking to the right, you can see our group revenue take rate for 23 versus 22. We enjoy benefits on revenue take rate from the growth in advertising, hop, and the introduction of premium delivery, as well as fewer refunds through the service improvements Wills mentioned. On the other hand, given the cost of living pressures on consumers, we did choose to lean into targeted promotions that reinforce price perception and support ongoing demand. We also drove strong growth in grocery and in pickup, which have a negative mix effect on percentage take rate, but drive growth in absolute revenue. The net drag from these different moving parts was more pronounced in H2, meaning the take rate in H2 of 28.4% was below the full year rate of 28.7%. So do keep this in mind as you think about your models for 24. Moving on to gross profit then. Good progress here, with a year-on-year increase of 13% and margin expansion of 90 basis points to 10.3%. That uplift was driven by a combination of the increase in GTV per order and our relentless focus on operational excellence. That's included further optimisation of deliveries with smarter and more efficient stacking, progress on reducing rider wait time at merchants, and the reduction in order defects that Wills talked about earlier meant fewer refunds. And the margin rate, of course, benefited from the increased contribution from advertising. On a half-year basis, gross profit margin was slightly down in H2 compared to H1 as those efficiencies and improvements were offset by the CBP investments we've talked about. Looking at all of that in terms of unit economics then on the bottom right of the slide, you can see the impact of food price inflation in the 6% increase in GTV per order. But you can also see the impact of that operational focus I just mentioned, allowing us to keep cost of sales per order broadly stable despite an inflationary backdrop. Now on to marketing and overheads. We started to deliver some good progress in 2023 with marketing and overheads down 7% year on year and down 100 basis points as a percentage of GTV. On the marketing side, we've made improvements across several areas, helping us to drive growth more efficiently. For example, we improved our targeting by using better signalling, allowing us to reduce our digital marketing costs substantially while still generating the same amount of incremental demand. Looking in detail at overhead costs, we initiated a redundancy programme in February 23 and significantly reduced our use of contractors. That's allowed us to reduce our total costs for staff and other people costs by 6% year-on-year, despite the impact of wage inflation. The changes we made have delivered a permanent shift towards increased efficiency, reduced friction in organisational structures and increased speed of decision making. We also drove out efficiencies in our IT expenses and professional fees, which led to an 8% reduction in non-people expenses. There's more to do, but these are good steps towards driving operating leverage as top-line growth begins to accelerate. Putting all those components together then, we delivered adjusted EBITDA of £85 million ahead of expectations and a year-on-year improvement of £130 million. As you've heard us describe, the profit growth came from progress across the P&L. Top-line growth, increased contribution from advertising, progress on service, meaning lower refunds, and our delivery cost efficiencies all contributed to the gross profit growth. Then on top of that, we've made progress on both marketing and overheads. That's meant an increase of 190 basis points in adjusted EBITDA as a percentage of GTV, with approximately half of that improvement coming from gross margin and the other half from operating efficiencies. Overall, strong progress on profitability. Turning now to look at our cash position, where we closed the year with net cash of £679 million. Spend on capital items of £44 million was down substantially from the £80 million in 2022. Capitalised development costs were £36 million, down £14 million year-on-year, and capex fell to £8 million, and that was primarily reflecting the flagged lower pace of roll-out of addition sites. In 2024, I expect total spend on capital items to be a touch higher than in 2023. We had a £34 million outflow from working capital, mainly due to where year-end fell in the week, which meant an increase in receivables due to us from payment service providers. Conversely, we expect a working capital inflow in 24 as the year-end falls on a more favourable day of the week. The £20 million outflow for exceptionals included £7 million of redundancy costs, with the rest being costs related to previously exited markets and some legal costs. Putting all that together, free cash outflow for the year was £38 million, of which around £28 million was an outflow in H1. If you exclude outflows relating to exceptional items, the free cash outflow in the year was £18 million. Cash interest income was £32 million, nearly triple the prior year. Our improved cash efficiency and the rising rate environment more than offset the lower average cash balance. And finally, the $313 million of share purchases includes our share buyback programmes and the $250 million tender offer and associated fees. So to round that off, good progress on free cash flow as we move towards our goal of reaching sustainable cash generation. Turning then to guidance for 2024. As you've seen, we expect to achieve GTV growth of 5% to 9% in constant currency. This will have some shape to it and we've guided to Q1 growth being a similar level to Q4 23 with an improvement through the year as we continue to deliver on our plans. On adjusted EBITDA we expect to be in the range of £110 to £130 million and this includes the low double digit millions investment into retail that I flagged at the capital markets event. And whilst we don't guide it specifically on free cash flow, I do want to reiterate what I also said at the CME, that we do expect to deliver positive free cash flow in 2024. Moving on to look at our capital position, we made two announcements of capital return last year, the 50 million buyback announced last March and the 250 million return of structurally surplus capital I talked about in August, in which we returned through the tender offer in October, as was the shareholder preference. At Interims, I set out how we think about our capital position. The broader picture hasn't changed in the last six months or so, so unsurprisingly, the way we think about our capital position remains unchanged. Investing in future growth remains our priority. We'll make sure we have sufficient capital for our operational needs and to build durable competitive advantage. And of course, we need to have appropriate headroom to deal with unforeseen events and any potential crystallisation of liabilities. you'll see that 58 million of our provisions are classified as current, so we do expect those to be paid this year. We've announced today that we'll continue to buy back shares in the future through our Employee Benefit Trust to satisfy share-based compensation awards, as needed, effectively offsetting dilution. And at the year end, the Trust held around 57 million shares. And finally, as we've said before, we will continue to review our capital position, and consistent with our framework, we would return any structurally surplus capital in the future. Now to recap our medium-term targets. On GTV, we remain confident that we can accelerate growth to the mid-teens in the medium term. After a difficult couple of years, we've seen signs that macroeconomic headwinds have stabilised, and we have growing confidence in the large number of initiatives we're pursuing that are growth-aligned. Our CBP improvements we've touched on today, the new use cases in grocery, the move into retail, to name but a few. The number of levers we now have and the compounding effect of them coming together gives us the confidence in achieving our medium-term growth target. As you've seen today, we're already progressing towards the target of 4% plus adjusted EBITDA margin in 2026. Whereas in 22, the margin improvement was driven entirely by gross margin, in 23, we've driven improvement from both gross margin and cost efficiency. Since we talked in November, we've continued to make progress on margin levers across the P&L, including increasing ad revenue, optimising the delivery network further, and identifying further ways to improve our marketing and OPEX efficiency. As I said before, progress to the 4% plus won't be linear. It takes time to see the full effect of some of the CVP initiatives that Wills talked about earlier, as well as the cost levers that I've mentioned before. But the number of levers we have and the fact that we're already making good progress gives me confidence that we'll achieve our target. So in summary then, a good year in 23. Significant progress on profitability, resilient top-line growth and a good relative performance across our key markets. We've strengthened our CVP further for the long term, and all the while, while making further progress towards generating sustainable free cash flow. And with that, we'll open the line for Q&A.

Thank you. Ladies and gentlemen, to ask a question on today's call, please signal by pressing star 1 on your telephone keypad. And our first question today comes from Andrew Ross of Barclays. Please go ahead.