Delivery Hero Se Unsp/Adr

Hello and welcome everyone. Thank you very much for joining our Q3 2024 earnings call. We would like to remind you that this call is being webcast and the replay will be available later today on our website. Joining me today are Niklas Oestberg, our CEO and Marianne Popp, Interim CFO of DeliverHero, who will walk us through the key highlights of our Q3 performance. Afterwards, we will be happy to answer your questions. And now, let me hand it over to you, Niklas.

Thanks, Christoph, and welcome, everyone. Thanks for listening in. Let's jump straight into the highlights. We continued on a strong momentum and accelerated our GMV from 7% in Q2 to 9% in Q3 in constant currency and excluding the effects of hyperinflation accounting. With the exception of Asia, all segments reported strong double-digit growth rates, bringing the GMV growth outside of Asia segment to 25% year-on-year. In regards to Asia, 2024 is a transition year, and we soon have all the fundamental pieces in place to grow sustainably. More on this later. Total segment revenues continue to significantly outgrow GMV with a 24% year-on-year growth. increase driven by multiple factors, including higher commission from own delivery, fast-growing DMART business, growing ad-tech revenues, as well as service and subscription fees. This also had a positive impact on our profitability and led to a further increase of our adjusted EBITDA, both in a year-on-year comparison as well as quarter-over-quarter. Europe was a big highlight in Q3. We are more than satisfied with both growth and the profitability development over there. The segment recorded positive EBITDA or adjusted EBITDA in Q3, with further earnings growth ahead. Lastly, our cash position remained at high levels of 1.65 billion euros, allowing us ongoing financial flexibility to continue to pursue our operational goals and countering potential comparative moves. For Q4, we expect to generate significant positive free cash flow. Now on to the next slide. So, as mentioned, healthy GMV growth. This was mainly driven by growing order volumes, and I think not much more to add on this slide. So let's move to the next slide. Here you can see strong revenue growth happening across the group, especially happening with MENA with 32% in constant currency, Europe with 27%, and integrated vertical segment with 26% year over year. Asia was slightly impacted by the fade-out of our pre-delivery for non-subscribers in South Korea, and America's segment generated 20% revenue growth despite the temper macroeconomic challenges in Argentina. Now, let me hand over to Mariam for more details.

Thank you, Nicholas, and a warm welcome also from my side. Let's dive straight into the Europe segment, which accelerated GMV growth from 19% in constant currency during the second quarter to now 21% driven by strong order growth. Revenue growth accelerated even faster from 22% in Q2 to 27% in 3Q. fueled by strong progress in ad tech, with NCR reaching already around 4% of GMV in the best performing countries. In line with the guidance we gave during the last trading update in August, we achieved a break-even on adjusted EBITDA level in Q3, with further earnings growth ahead. Let's now have a look at our MENA segment. GMV and revenues in MENA grew 30% and 32% year-over-year, respectively, both in constant currency and excluding the impact from hyperinflation in Turkey. We've been focused on building a strong multivertical offering over many years in MENA. We can now see how this has been paying off when it comes to customer loyalty and frequency. A particular highlight has been Saudi Arabia. We've seen a clear acceleration in growth and category share as we've been putting a lot of focus on this market in the last couple of quarters to strengthen affordability, selection, and service offering. Now onto the Asia segment. We saw a slight improvement in year-over-year developments in Asia during Q3. We have made many changes and improvements in 2024 to strengthen our ability to compete long-term. One of the recent changes was the rollout in Korea of our subscription program. The initial drop in category share since we started to charge non-subscribers delivery fee has stabilized. In a very short time period, we've grown our subscriber base very quickly and can see a clear increase in frequency. This bodes well for 2025. We will discuss Korea, in more detail later in our case studies. Lastly, I would like to highlight the merger of the Foodpanda, Foodora, and Yemeksepeti business teams into a new leadership structure. We believe by streamlining our leadership here, we can unlock further synergies and enable accelerated growth of our APAC business while optimizing our cost structures. Early results are very encouraging. Now moving to the Americas segment. America's business continued to perform really well this quarter, with GMV and revenue growth accelerating to 21% and 20% respectively, up from 14% and 13% in Q2, all in constant currency and excluding hyperinflation adjustments for Argentina. The strong growth is despite temporary macroeconomic challenges in Argentina, where inflation control measures weigh on consumers' purchasing power. Outside of Argentina, the Americas business has generated an even higher GMV growth of 26% in Q3, as you will see later in our case study. We also continue making significant progress on profitability. The segment reached adjusted EBITDA break-even in Q3, and we expect further earnings trajectory in Q4. Now on to integrated verticals. Our integrated vertical segment again accelerated its GMV and revenue growth to 32% and 26% year-over-year at constant currency, despite a 15% reduction in the number of demarts compared to the prior year. Half of the growth can be attributed to increasing number of orders, while the other half results from larger basket sizes. This is a clear indication that our DMARTs business has evolved from a more impulse-driven buying behavior and a focus on convenience store products to more planned purchases of larger shopping baskets that replace part of the weekly grocery shopping. The reduction in DMARTs was an outcome of our ongoing focus on profitability, allowing for increased store utilization, and leading to a quarter-over-quarter gross profit margin expansion of one percentage point for the DMART business to 5%. Further margin drivers were more favorable supplier conditions and growing ad-tech revenues. These efficiency measures led to an improvement in adjusted EBITDA loss of the DMART's business by more than 80% since Q1 2024. Overall, the integrated vertical segment is on track to generate a positive adjusted EBITDA by December 2024. Let's now have a closer look on the gross profit margin development of our platform business. The gross profit margin of the platform business remained largely stable at 7.3% in the quarter. The slight drop of 0.3 percentage points compared to Q2 was due to extending free delivery offers and targeted incentives connected to subscription rollout in Korea. MINA Americas and Europe continue a positive margin trajectory towards the long-term gross profit margin target of 10% to 13%, with MINA and Americas already exceeding the 10% level this quarter. As already mentioned, DMART's gross profit margin, which is not included in this illustration, expanded for the third consecutive quarter to around 5%. Let me now hand back to Niklas, who will take you through our case studies.