Quarterly Report • Aug 25, 2022
Quarterly Report
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JANUARY–JUNE 2022
| H1 2022 (EUR million) |
H1 20211 (EUR million) |
Change | H1 2022 (EUR million) |
H1 20211 (EUR million) |
Change | ||
|---|---|---|---|---|---|---|---|
| Group | Americas | ||||||
| GMV2 | 20,023.6 | 13,316.0 | 50.4% | GMV2 | 1,232.5 | 884.4 | 39.4% |
| Total Segment Revenue2, 3, 4 | 4,185.7 | 2,682.5 | 56.0% | Segment Revenue2 | 327.1 | 226.9 | 44.2% |
| Adjusted EBITDA2 | –323.0 | –350.8 | Adjusted EBITDA | –80.0 | –80.2 | ||
| Adj. EBITDA/GMV (%) | –1.6% | –2.6% | Adj. EBITDA/GMV (%) | –6.5% | –9.1% | ||
| Asia | Integrated Verticals | ||||||
| GMV | 13,438.6 | 7,875.4 | 70.6% | GMV5 | 848.7 | 402.2 | >100 |
| Segment Revenue | 1,865.8 | 1,166.9 | 59.9% | Segment Revenue | 770.8 | 374.0 | >100 |
| Adjusted EBITDA | –80.5 | –230.7 | Adjusted EBITDA | –182.3 | –105.8 | ||
| Adj. EBITDA/GMV (%) | –0.6% | –2.9% | Adj. EBITDA/GMV (%) | –21.5% | –26.3% | ||
| MENA | 1 Delivery Hero Korea LLC ("DHK") was part of the Asia segment but is excluded from January 2021. Woowa is included in the Asia segment since the closing of the transaction on March 4, 2021. Delivery Hero's operations in Bosnia and Herze |
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| GMV2 | 3,947.5 | 3,155.0 | 25.1% | govina, Bulgaria, Croatia, Montenegro and Serbia, are reflected in the Europe Segment until June 17, 2021. Romania is in cluded in the performance of the Europe segment for the first six months of 2021. |
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| Segment Revenue2 | 1,006.0 | 684.9 | 46.9% | 2 Revenue, adjusted EBITDA, Gross Merchandise Value (GMV) as well as the respective growth rates for MENA and Americas are impacted by hyperinflation adjustments as Argentina, Lebanon and Türkiye qualify as hyperinflationary economies ac |
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| Adjusted EBITDA | 40.1 | 65.0 | cording to IAS 29. 3 Total Segment Revenue is defined as revenue before subtraction of voucher expenses. |
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| Adj. EBITDA/GMV (%) | 1.0% | 2.1% | 4 Due to intersegment consolidation adjustments, revenue of the segments do not sum up to Total Segment Revenue. 5 GMV is accounted for in the respective platform segments and shown in the Integrated Verticals segment for illustrative |
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| Europe | purposes only. | ||||||
| GMV | 1,405.1 | 1,401.1 | 0.3% | ||||
| Segment Revenue | 311.4 | 285.9 | 8.9% | ||||
| Adjusted EBITDA | –20.3 | 1.0 | |||||
| Adj. EBITDA/GMV (%) | –1.4% | 0.1% |
C. RISK AND OPPORTUNITIES PAGE 12
D. OUTLOOK 2022 PAGE 12
The statements made in the Annual Report 2021 on the business model, the Group structure, the segments, the management and supervision as well as research and development ("R&D") are still applicable for the first six months of 2022.
Since the beginning of 2022 the number of orders is no longer used as a non-financial performance indicator to manage the Group as a whole as the focus has shifted from generating orders to profitability. As such the number of orders is no longer considered a key performance indicator for resource allocation decisions to be based on as it is deemed contradictory to the objective of profitable growth.
The number of employees decreased to 49,417 as of June 30, 2022 (December 31, 2021: 52,006) mainly due to a decrease in delivery personnel which was partially offset by an increase in product development personnel.
The Organisation for Economic Co-operation and Development (OECD) projects a downwards revision of its global GDP growth forecast for 2022. Based on its June 2022 report, global GDP growth is expected to reach 3% in 2022, which is around 1.5 percentage points lower than the previous forecast provided in December 2021. The slowdown in growth is driven, among other factors, by the ongoing war in Ukraine, COVID-19 lockdowns in China, reduced household purchasing power, tighter monetary policies as well as a sharp rise in commodity prices1. Moreover, global inflation is expected to remain elevated due to food and energy prices and supply chain shortages, with consumer price inflation reaching on average 6.6% in advanced economies and 9.5% in emerging markets and developing economies in 2022, based on the latest IMF forecast2. Due to the current economic backdrop of slower growth paired with rising inflation rates, the world economy may enter into a stagflationary period. Additionally, the OECD highlights the high amount of uncertainty around their outlook1. The World Bank also projects that global GDP growth will slow down to 2.9% in 2022, which constitutes almost a one-third downgrade to its previous forecast of 4.1% from January 2022.
Effective February 24, 2022, Russia launched a large-scale invasion of Ukraine, causing catastrophic human suffering. In addition, it is also likely to dampen the global economic outlook by slowing growth and jacking up inflation. Although Delivery Hero does not run operations in Ukraine during the reporting period, an adverse effect on global purchasing power due to a spike in commodity and energy prices, as a result of supply chain disruptions and punishing sanctions, is likely to continue.
Moreover, the economic development in 2022 is dependent on the impact from COVID-19 on a global scale as well as how effective the economic policy actions in countries will be.
Below, we examine the four regional segments, based on the World Bank's Global Economic Prospects Report from June 2022.
Please note that the regions described below (defined by the World Bank Report) differ in country constellation from Delivery Hero segments defined for financial reporting purposes but serve as an indication for the economic outlook of the segments.
Across East Asia and Pacific (EAP), growth is expected to decelerate to 4.4% in 2022, compared to 7.2% in 2021. This is driven by a slowdown of growth in China due to strict COVID-19 lockdowns and measures to limit the spread of the virus. Even though East Asia and Pacific is less affected by the effects of the war in Ukraine with regard to inflation and output, rising commodity prices and the impact on global demand could weaken the recovery in the region. Moreover, there are several regional differences with regard to the speed of economic recovery. In two-thirds of the EAP countries, the generated output is expected to remain below the levels seen before the pandemic3 .
For our largest market South Korea, the OECD projects GDP growth to moderate to 2.7% in 2022, from 4.0% in 2021. Consumption is expected to recover, given the easing of COVID-related social distancing measures, however, with a drag from rising inflation. Moreover, higher-thanprojected interest rate rises could be a risk for the development of domestic demand1 .
Growth in South Asia is expected to reach 6.8% in 2022, which is 0.8 percentage points lower than previously forecasted by World Bank experts in January 2022, mainly due to spillovers from the war in Ukraine that could impact the region negatively. Especially rising commodity and food prices are a challenge for South Asia3.
GDP in the Middle East and North Africa region is expected to grow by 5.3% in 2022. This forecast was upgraded by 0.9 percentage points vs. previous expectations from January 2022 and even up by 1.9 percentage points compared to 2021, as the region should benefit from the recent increase in oil prices as well as high vaccination rates across its population. However, there is a divergence between oil exporters, which benefit from rising oil prices, and oil importers, which are exposed to increasing energy and food prices3.
The economy in the Europe and Central Asia region is expected to shrink by 2.9% in 2022, after growing by 6.5% in 2021. The war in Ukraine has caused severe spillovers to the region and its economies, especially regarding trade, its financial markets as well as consumer and business confidence. Rising commodity prices as well as lower external demand are also challenging factors3.
In 2022, growth within the Latin American & Caribbean region is expected to slow down to 2.5%, after 6.7% in 2021. Moreover, growth is expected to remain subdued in the subsequent two years. Rising inflation and interest rates as well as tighter financial conditions are expected to have a negative impact on the region's growth rates3.
Since Q3 2018, the Americas segment revenues and growth rates have been impacted by the Argentine operation qualifying as a hyperinflationary economy under IAS 29. This assessment remained applicable for H1 2022.
Lebanon has classified as a hyperinflationary economy as per IAS 29 since Q4 2020, the same applies to Türkiye since Q2 2022. Therefore, revenues and growth rates in the MENA segment were impacted.
Delivery Hero has an extensive geographic footprint with operations across several attractive markets in Asia, MENA, Europe, and Latin America.
2021 was again an unprecedented year in many ways with impacts continuously stretching out into the first half of 2022. The COVID-19 pandemic still has dramatic effects on people's lives and societies. One of the consequences brought about by the resulting situation was an increased usage of delivery services in many markets where the underlying already strong structural growth was further emphasized. However, the impact of reopening effects was felt across the industry, as the demand for food delivery services somewhat softened after social distancing measures were eased during the first half of 2022.
In our industry change is everywhere. What started as a marketplace, connecting restaurants with customers, has evolved significantly over recent years. By establishing our own delivery capabilities, Delivery Hero was also able to provide restaurants, which otherwise would not have been able to economically deliver food on their own, with customers. We thereby not only increased the quality of our service by offering a wider selection of high-quality restaurants to more customers, but also expanded our total addressable market (TAM). By continuously investing in logistics and technology, we are looking for ways to maximize the quality of our service offering, the utilization of our rider network and the efficiency of our operations. This includes first as well as last-mile logistics, as Delivery Hero's approach is to "deliver anything, fast, easy and to your door".
In the first half of 2022, we continued with this approach. We have invested further in our Quick Commerce business. However, as we already have sufficient customer coverage in our core markets, we have reduced the speed of Dmart openings and invested more in product assortment and availability. The concept of quick last-mile delivery services for convenience and grocery items continues to be a key strategic initiative for our business, capitalizing on the extensive investments Delivery Hero has made in logistics and technology for first and last-mile delivery over the past years. However, we also acknowledge that the capital market environment changed at the beginning of the year.
Due to rising interest rates and geopolitical uncertainty, profitability and liquidity have increasingly come into the focus of investors. In some cases, this has also resulted in more rational competition. Irrespective of this, Delivery Hero will move forward with a clear focus on the path to profitability.
The first half of 2022 was driven by continuous growth and the focus on improvements to profitability. GMV4 increased by 50.4% to € 20.0 billion compared to H1 2021, mainly driven by Woowa5. Total Segment Revenue6 increased significantly by 56.0 % on a year-on-year basis to € 4,185.7 million in the first half of the year 2022, mainly driven by Woowa5 and Integrated Verticals. The negative adjusted EBITDA7 of the segments (H1 2022: € 323.0 million, H1 2021: € 350.8 million) improved slightly. While losses from Integrated Verticals increased in line with growth, Asia contributed the most to the adjusted EBITDA improvement (+€ 150.2 million adjusted EBITDA improvement). The adjusted EBITDA to GMV margin has improved from negative 2.6% in H1 2021 to negative 1.6% for the first half of the year 2022.
The Group completed two smaller acquisitions which include acquiring 100% shares in Shiver Nebula GmbH, Germany, for a consideration of € 3.6 million and 100% share capital of S.A.R.L. Room Service, Principality of Monaco, for a consideration of € 4.0 million.
During H1 2022 the Group invested in additional shares in Glovo, which resulted in cash outflows of € 21.3 million.
After the end of the reporting period on June 30, 2022, Delivery Hero executed the closing of the acquisition of Glovoapp23 S.A. (formerly Glovoapp23 S.L.; "Glovo") on July 4, 2022, which was entered into on December 31, 2021. Prior to the acquisition Delivery Hero held a 44.2% minority stake in Glovo on an undiluted basis. Delivery Hero acquired 50.3% of the voting shares in Glovo resulting in a total shareholding of 94.5%. The total consideration transferred amounts to € 509.5 million consisting of € 394.8 million transferred in newly issued shares and share-based payment replacement awards of € 114.7 million. The closing of the transaction was subject to certain conditions precedent and regulatory approvals, including
7 Performance measure not defined by International Financial Reporting Standards (IFRS). Adjusted EBITDA is defined as earnings from continuing operations before income taxes, financial result, depreciation and amortization and nonoperating earnings effects. Non-operating earnings effects comprise, in particu-
nection with corporate transactions and financing rounds, (iii) expenses for reorganization measures and (iv) other non-operating expenses and income, especially the result from disposal of tangible and intangible assets, the result from sale and abandonment of subsidiaries, allowances for other receivables and non-income taxes. Adjusted EBITDA excludes depreciation from right-of-use assets under IFRS 16.
4 Gross Merchandise Value (GMV) is the total value paid by customers (including VAT, delivery fees and service fees less other subsidies).
5 Increase driven by Woowa is based on its inclusion to the Group since the closing of the transaction on March 4, 2021 (four months in H1 2021 vs. six months in H1 2022).
6 Total Segment Revenue is defined as revenue before the reduction of vouchers.
merger control clearance in several countries. The results of operations, cash flows and the financial position for the first six months of 2022 of Delivery Hero are not affected by the acquisition. Refer to section H. of the Selected Notes to the Consolidated Half-Year Financial Statements for further details.
As of June 30, 2022, Delivery Hero's stake in Rappi Inc., Delaware/USA ("Rappi"), remains to be classified as an asset held for sale. Following several sales in the first half of 2022, DH reduced its shareholding from 10.6% in 2021 to 4.98% as of June 30, 2022. As of December 31, 2021, Rappi and the German logistic business were classified as assets held for sale.
Following the announcement in December 2021 of the scale down of the operations in Germany and wind down of Japan, the business activities in Japan ceased effective January 2022 and the German activities are reduced to an innovation hub in Berlin only. The liquidation process in Japan is expected to be finalized in November 2022.
a) Performance of the Group
Consolidated Statement of Profit or Loss and Other Comprehensive Income
| Change | ||||
|---|---|---|---|---|
| EUR million | H1 2022 | H1 20211 | EUR million | % |
| Revenue | 3,815.4 | 2,457.3 | 1,358.1 | 55.3 |
| Cost of sales | –2,879.5 | –1,911.0 | –968.5 | 50.7 |
| Gross profit | 935.8 | 546.3 | 389.5 | 71.3 |
| Gross profit margin | 24.5% | 22.2% | ||
| Marketing expenses | –702.4 | –561.7 | –140.7 | 25.0 |
| IT expenses | –231.4 | –120.1 | –111.3 | 92.6 |
| General administrative expenses | –764.1 | –613.4 | –150.7 | 24.6 |
| Other operating income | 20.9 | 103.8 | –82.9 | –79.9 |
| Other operating expenses | –284.4 | –21.0 | –263.3 | >100 |
| Impairment losses on trade receivables and other receivables | –15.6 | –7.9 | –7.7 | 97.8 |
| Operating result | –1,041.0 | –674.1 | –367.0 | 54.4 |
| Net interest cost | –83.5 | –51.0 | –32.5 | 63.7 |
| Other financial result | –212.2 | –165.8 | –46.4 | 28.0 |
| Share of the profit or loss of associates accounted for using the equity method |
–80.0 | –54.6 | –25.4 | 46.4 |
| Earnings before income taxes | –1,416.7 | –945.6 | –471.2 | 49.8 |
| Income taxes | –50.6 | –56.7 | 6.1 | –10.8 |
| Net result | –1,467.3 | –1,002.3 | –465.1 | 46.4 |
1 The comparative information is restated due to correction of errors. See section A.3. of the Notes to the Consolidated Half-Year Financial Statements for further details.
The Delivery Hero Group increased revenue in H1 2022 mainly driven by the organic growth across the segments and the acquisition of Woowa in March 20218 . The continuous expansion of the Group's own delivery services in key markets, as well as the global Dmart rollout combined with the ongoing optimization and stores maturity, affected revenue positively as well.
Revenue growth was achieved despite vouchers remaining relatively stable due to the optimization of the incentives spent across the markets.
Commission revenue net of vouchers increased from € 1,048.3 million in H1 2021 to € 1,251.3 million in H1 2022, representing 32.8% of total revenue and remained the largest component.
Revenue from Integrated Verticals accounted in H1 2022 for 18.2% (€ 692.6 million) of total revenue, which represents an increase of 108.3% from H1 2021 (€ 332.4 million, representing 13.6% of total revenue), benefiting from the expanding network density and fueled by the focus on operational efficiency of the stores.
| Change | ||||
|---|---|---|---|---|
| EUR million | H1 2022 | H1 2021 | EUR million |
% |
| Total Segment Revenue |
4,185.7 | 2,682.5 | 1,503.2 | 56.0 |
| Reconciliation effects |
0.6 | 140.6 | –140.0 –99.6 | |
| Vouchers | –370.9 | –365.8 | –5.1 | 1.4 |
| Revenue | 3,815.4 | 2,457.3 | 1,358.1 | 55.3 |
The growth of Total Segment Revenue in the first six months of 2022 by 56.0% is primarly organic in nature. Excluding transaction-related effects, i.e. the Woowa performance included for the full six months of 2021 and excluding the Balkan business from H1 2021, the total segment revenue growth would have been 45.8%.
The Total Segment Revenue includes commission revenue of € 1,622.2 million (H1 2021: € 1,369.4 million9) before voucher reduction. Commission revenue from own delivery contributes 83.3% of commission revenue before voucher reduction (H1 2021: 76.3%) for all segments and increased by 29.2% from € 1,045.1 million in H1 2021 to € 1,350.8 million in H1 2022.
The share of revenue from delivery fees charged separately to the customer slightly increased to 24.1% of Total Segment Revenue (H1 2021: 20.7%). Segment revenue from Integrated Verticals amounted to € 770.8 million (H1 2021: € 374.0 million). Revenue from prime placing and from credit card use further contributed € 428.4 million and € 248.2 million respectively in HY 2022 (€ 251.2 million and € 154.5 million respectively in HY 2021).
Vouchers decreased to 8.9% of the Total Segment Revenue (H1 2021: 13.6%). The level of vouchers in H1 2022 is impacted by optimized investments in marketing campaigns across all segments.
The overall negative adjusted EBITDA of the Segments improved in the first half of 2022 to negative € 323.0 million (H1 2021: negative € 350.8 million).
The negative adjusted EBITDA of the platform segments improved from negative € 244.9 million in H1 2021 to negative € 140.7 million in H1 2022, while the negative adjusted EBITDA of the Integrated Verticals segment increased from negative € 105.8 million in H1 2021 to negative € 182.3 million in H1 2022.
The negative adjusted EBITDA of the platforms improved mainly driven by increased revenue and relatively enhanced optimization of marketing and incentive spend across the industry. The Woowa group positively contributed to this key performance indicator. The improved result of the platforms was partially softened by higher operating costs, mainly triggered by increasing labor costs and fuel costs, effecting the costs per order (refer to Section B.3.b for details on the developments of adjusted EBITDA by segment).
The negative adjusted EBITDA of the Integrated Verticals increased, driven by the global new Dmarts roll-out, while the adjusted EBITDA compared to segment revenue improved during the period. With a strong focus on the improvement of unit economics, expansion efforts were reduced, as more stores reached maturity during H1 2022, (refer to Section B.3.b for details on different development of adjusted EBITDA by segment).
The adjusted EBITDA to GMV margin has improved from negative 2.6% in H1 2021 to negative 1.6% for the first half of the year 2022 as a result of continuous GMV growth (+50.4%) and efficiency improvements in almost all segments.
Cost of sales amounted to € 2,879.5 million in H1 2022 (H1 2021: € 1,911.0 million) significantly contributed by Woowa10. However, the total cost of sales increase (+50.7 %) was lower than the revenue growth (+55.3%) for the period. The cost of sales primarily increased as a result of the expansion of the own delivery share, pronounced by the global rollout of Integrated Verticals. Integrated Vertical-related cost of sales contributed € 641.6 million or 22.3% of the total cost of sales in H1 2022 (16.8% in H1 2021). The portion of delivery expenses decreased to 63.8% of the total cost of sales (H1 2021: 69.0%). The delivery expenses comprise own delivery personnel expenses (€ 114.8 million, H1 2021: € 114.4 million) as well as external riders and other operating delivery expenses (€ 1,722.5 million, H1 2021: € 1,204.6 million).
The gross profit margin of the Group improved in H1 2022 to 24.5% (H1 2021: 22.2%), mainly driven by the Group's growth, fueled by the higher share of the own delivery ser-
8 Woowa contribution to Group revenue is based on its inclusion since the closing of the transaction on March 4, 2021 (four months in H1 2021 vs. six months in H1 2022).
9 For comparative reasons and in addition to vouchers, the segment commission revenue includes, primarly, pick-up incentives for end-customers of € 22.4 million in H1 2021.
10 Woowa contribution to Group cost of sales is based on its inclusion since the closing of the transaction on March 4, 2021 (four months in H1 2021 vs. six months in H1 2022).
vice, supported by the optimization of the delivery processes and supplemented by other revenue streams. The growth was partially compensated by higher sales-related costs that, however, increased less than the revenue growth.
Marketing expenses increased by 25.0% to € 702.4 million (H1 2021: € 561.7 million), although registering a lower increment than revenue growth. The main reason is the optimization of the marketing and incentive spend in the first half of 2022. The marketing expenses primarily include restaurant acquisition costs of € 286.0 million (H1 2021: € 207.7 million) and customer acquisition costs of € 245.9 million (H1 2021: € 242.1 million). Restaurant acquisition costs mainly grew due to higher personnel costs, while customer acquisition costs remained relatively stable, effected by the above-stated spend optimizations. The marketing expenses to GMV ratio decreased by 0.7 percentage points from 4.2% to 3.5%.
IT expenses significantly increased to € 231.4 million (H1 2021: € 120.1 million) and predominantly derive from higher personnel costs due to an increased headcount and to the overall Group growth, resulting in higher server costs and license costs, supporting the R&D function to enhance our platforms' new initiatives and improve the customer experience. At 47.2%, personnel expenses continue to account for the largest share of IT expenses (H1 2021: 54.2%). In relation to GMV, IT expenses have increased from 0.9% to 1.2%.
General administrative ("G&A") expenses in H1 2022 increased by 24.6% to € 764.1 million (H1 2021: € 613.4 million), though below the revenue increase for the period. The administrative costs increased moderately, mainly driven by higher personnel expenses (H1 2022: € 262.1 million; H1 2021: € 187.9 million). Furthermore, higher expenses for share-based compensation (increase of € 18.1 million to € 149.8 million in H1 2022) and higher depreciation and amortization expenses (increase of € 47.0 million to € 131.3 million in H1 2022) contributed to the growth of G&A expenses. Comparing the G&A expenses to GMV, the ratio decreased from 4.5% to 3.8%.
Net interest cost increased to € 83.5 million (H1 2021: negative € 51.0 million) mainly due to the finance costs of € 69.9 million related to the convertible bonds outstanding as well as to the syndicated term loan.
Other financial result decreased from negative € 165.8 million in H1 2021 to negative € 212.2 million in H1 2022. It is primarily driven by fair value losses from the remeasurement of investments in public and non-public entities measured at fair value through profit and loss (H1 2022: loss of € 626.8 million, H1 2021: loss of € 8.7 million). The losses are offset by the remeasurement of financial instruments to their current fair value, mainly the remeasurement of the NCI put liability to acquire remaining outstanding Woowa shares (gain of € 348.5 million), mostly caused by the decrease of the DH share price (H1 2021: loss of € 71.5 million). Further valuation effects comprise the derivative financial instruments in connection with the convertible bonds issued in July 2020 (loss of € 15.6 million (H1 2021: loss of € 49.0 million)) and the derivative in connection with the joint venture between Delivery Hero and iFood in Colombia (gain of € 35.1 million (H1 2021: loss of € 27.2 million)). Net gains on foreign currency transactions of € 51.4 million (H1 2021: gain of € 37.6 million) softened the result.
The increase in current income tax expenses (H1 2022: € 67.9 million; H1 2021: € 36.6 million) is mainly attributable to the increase in taxable income of foreign subsidiaries as well as the recognition of a withholding tax liability at the level of Delivery Hero SE for selected LatAm entities. Deferred tax income of € 17.3 million originated mainly from the amortization of the deferred tax liability resulting from the Woowa transaction, netted with the recognition of deferred tax liabilities based on temporary differences, mainly on Yemeksepeti, Türkiye.
Adjusted EBITDA of the segments reconciles to earnings before income taxes as follows:
| Change | ||||
|---|---|---|---|---|
| EUR million | H1 2022 | H1 20211 | EUR million |
% |
| Adjusted EBITDA of the segments |
–323.0 | –350.8 | 27.8 | –7.9 |
| Consolidation adjustments |
–0.0 | –6.6 | 6.6 >100 | |
| Management adjustments |
–63.8 | –98.0 | 34.2 –34.9 | |
| Expenses for share-based compensation |
–149.8 | –131.7 | –18.1 | 13.7 |
| Other reconciliation items |
–274.4 | 64.7 | –339.1 >100 | |
| Amortization and depreciation2 |
–229.9 | –151.6 | –78.3 | 51.7 |
| Net interest and other financial result3 |
–375.7 | –271.5 | –104.2 | 38.4 |
| Earnings before income taxes |
–1,416.7 | –945.6 | –471.1 | 49.8 |
1 The comparative information is restated due to correction of errors. See section A.3. of the Notes to the Consolidated Half-Year Financial Statements for further details.
2 Amortization and depreciation according to internal reporting also includes provisions for financing provided to investments and joint ventures, and excludes goodwill impairment. Goodwill impairment is included in other reconciliation items.
3 Sum of net interest result, other financial result and share of profit or loss of associates accounted for using the equity method.
Management adjustments include (i) expenses for services related to corporate transactions of € 61.7 million (H1 2021: € 88.7 million), thereof € 12.4 million in H1 2022 related to earn-out liabilities in connection with acquisitions (H1 2021: € 34.7 million) and expenses for services related to corporate finance of € 2.1 million (H1 2021: € 18.2 million) and (ii) expenses for reorganization measures of € 2.1 million mainly with respect to the discontinuation of operations in Japan (H1 2021: € 9.3 million).
Other reconciliation effects include mainly non-operating income and expenses. In the first half of 2022, these items primarily include goodwill impairment losses of € 270.6 million that are allocated to the cash generating units (CGUs) of InstaShop, Yemeksepeti, Honest Food and LatAm Dmart, resulting from increased costs of capital, higher risk premiums as well as the initial application of IAS 29 for Türkiye (refer to section F.1. of the Notes to the Consolidated Half-Year Financial Statements for further details). Other reconciliation items in H1 2021 amounted € 64.7 million.
| Change | ||||
|---|---|---|---|---|
| EUR million | H1 2022 | H1 2021 | EUR million |
% |
| Asia | 13,438.6 | 7,875.4 | 5,563.1 | 70.6 |
| MENA | 3,947.5 | 3,155.0 | 792.5 | 25.1 |
| Europe | 1,405.1 | 1,401.1 | 4.0 | 0.3 |
| Americas | 1,232.5 | 884.4 | 348.0 | 39.4 |
| Total | 20,023.6 | 13,316.0 | 6,707.6 | 50.4 |
| thereof Integrated Verticals1 |
848.7 | 402.2 | 446.6 >100 | |
1 GMV is presented in both regional segments and Integrated Verticals, subsequently consolidated at Group level.
The GMV increase was mainly driven by Woowa, contributing six months in H1 2022 vs four months in H1 2021. The improvement is also attributable to the organic growth across the segments. This GMV growth was facilitated by initiatives to increase the average order value and basket size, especially in Asia and MENA, with the introduction of a subscription model aiming at increasing the order frequency and the minimum order value.
| Asia | ||||
|---|---|---|---|---|
| Change | ||||
| EUR million | H1 2022 H1 2021 | EUR million |
% | |
| GMV | 13,438.6 | 7,875.4 | 5,563.1 | 70.6 |
| Segment revenue | 1,865.8 | 1,166.9 | 698.9 | 59.9 |
| Adjusted EBITDA | –80.5 | –230.7 | 150.2 | –65.1 |
| Adj. EBITDA/GMV (%) | –0.6% | –2.9% | ||
| Own delivery share (%) | 47.4% | 57.7% | ||
The Asia GMV and revenue growth was mainly driven by Woowa contributing six months in H1 2022 versus four months in H1 202111. A further driver for the revenue increase is the continued growth of the own delivery services in the region, including the introduction of separately charged delivery fees by Woowa in H2 2021. The overall lower own delivery share in H1 2022 is attributable to Woowa, which is still predominantly a marketplace business model.
The increase in segment revenue is effected by several initiatives, such as restaurant advertisements strategies, the launch of the subscription model in several markets, and the roll-out of a fixed service fee. These initiatives further resulted in better restaurant coverage and higher customer engagement contributing to an increase in order frequency and higher basket size which fuelled GMV and revenue growth.
The adjusted EBITDA significantly improved from negative € 230.7 million in H1 2021 to negative € 80.5 million in H1 2022, mainly due to the positive adjusted EBITDA contribution from Woowa and the cease of Delivery Hero's Japanese operations in January 2022. Additionally, the adjusted EBITDA was positively affected by improvements of the own delivery business metrics. Adjusted EBITDA was positive in Q2 2022 due to the reasons described above. The improvement of the adjusted EBITDA was softened by
the higher rider and logistic-related costs at Woowa, following the continuing investments in the own delivery business in H1. The adjusted EBITDA/GMV margin improved significantly to negative 0.6% (H1 2021: negative 2.9%) based on higher revenue growth compared to the cost increase as well as structural changes of the segment.
| Change | ||||
|---|---|---|---|---|
| EUR million | H1 2022 H1 2021 | EUR million |
% | |
| GMV | 3,947.5 | 3,155.0 | 792.5 | 25.1 |
| Segment revenue | 1,006.0 | 684.9 | 321.1 | 46.9 |
| Adjusted EBITDA | 40.1 | 65.0 | –24.9 | –38.3 |
| Adj. EBITDA/GMV (%) | 1.0% | 2.1% | ||
| Own delivery share (%) | 58.5% | 43.8% |
The MENA segment revenue continues its growth path, increasing by 46.9% in the first half of 2022, driven by own delivery service revenue and fewer free delivery campaigns.
Next to the overall organic growth and further roll-out of own delivery services, the increase in non-commission revenue, such as restaurant advertising, contributed to the segment revenue growth. Various actionable levers also developed the segment revenue, such as the launch of the service fee as well as a subscription service module, which had a positive impact on GMV and order frequency. The subscription service is a new business initiative rolled-out in MENA aiming at strengthening the customer retention and the market position.
The migration process to a new platform for our Turkish brand Yemeksepeti during the second quarter of 2022 partially slowed the revenue growth. The Turkish lira was reported as hyperinflationary currency in accordance with
11 If Woowa had been excluded in H1 2021 and H1 2022, the GMV and revenue growth would have been 28.4% and 19.8% respectively.
IAS 29 from the second quarter 2022, which positively affected segment revenue.
The positive adjusted EBITDA of the MENA segment decreased by 38.3%. One of the drivers was the increased competition in Türkiye compared to H1 2021 that implied further marketing investments. Besides that, the positive adjusted EBITDA of the segment was negatively impacted by higher costs per order, relating to increased logistics and driver-related costs, mainly due to growing fuel prices and salary increases.
| Change | ||||
|---|---|---|---|---|
| EUR million | H1 2022 H1 2021 | EUR million |
% | |
| GMV | 1,405.1 | 1,401.1 | 4.0 | 0.3 |
| Segment revenue | 311.4 | 285.9 | 25.5 | 8.9 |
| Adjusted EBITDA | –20.3 | 1.0 | –21.2 | >100 |
| Adj. EBITDA/GMV (%) | –1.4% | 0.1% | ||
| Own delivery share (%) | 32.8% | 32.4% | ||
In the first half of 2022, segment revenue in the Europe segment increased compared to H1 2021, despite the divestment of operations in Bosnia and Herzegovina, Bulgaria, Croatia, Montenegro and Serbia with effect from June 17, 2021.
This increase was mainly due to the optimization of delivery processes and fewer free delivery campaigns, an improvement in non-commission revenue through restaurant advertisements and a higher average basket size, mainly due to currency effects and inflation. The revenue growth was partially offset by the divestment mentioned above.
Adjusted EBITDA of the Europe segment turned negative over the six months period, mostly due to administrative costs and also due to a further increase in sales-related costs. The increase in sales-related costs was primarily caused by an increase in the number of restaurants online. The marketplace commission revenue slightly decreased but is compensated by the increase in revenue from own delivery services and revenue from other business lines and from advertising.
GMV remained roughly constant, causing the adjusted EBITDA/GMV ratio to decline.
| Change | ||||
|---|---|---|---|---|
| EUR million | H1 2022 H1 2021 | EUR million |
% | |
| GMV | 1,232.5 | 884.4 | 348.0 | 39.4 |
| Segment revenue | 327.1 | 226.9 | 100.2 | 44.2 |
| Adjusted EBITDA | –80.0 | –80.2 | 0.2 | –0.3 |
| Adj. EBITDA/GMV (%) | –6.5% | –9.1% | ||
| Own delivery share (%) | 90.9% | 84.9% | ||
In the first half of 2022, the Americas segment grew yearon-year by 44.2% based on revenue. This was partly caused by a growing share of own delivery (+6.0%), increasing platform offering for the growing Integrated Verticals services, as well as by the improvement of our commission rates, the increase in non-commission revenue, the introduction of a new subscription model and the introduction of buy-now-pay-later options.
Adjusted EBITDA remained stable over the period, affected among others, by an increase in external delivery costs and sales-related costs. The EBITDA/GMV margin improved to negative 6.5% in 2022 as a result of scaling effects.
Following the investment agreement entered into by DH and iFood on March 26, 2021, the Colombian business is no longer included in the Americas segment but accounted for using the equity method.
| Change | ||||
|---|---|---|---|---|
| EUR million | H1 2022 H1 2021 | EUR million |
% | |
| GMV | 848.7 | 402.2 | 446.6 | >100 |
| Segment revenue | 770.8 | 374.0 | 396.8 | >100 |
| Adjusted EBITDA | –182.3 | –105.8 | –76.4 | 72.2 |
| Adj. EBITDA/GMV (%) | –21.5% | –26.3% |
The Integrated Verticals segment mostly consists of own warehouse operations ("Dmarts") from which goods are delivered within a very short time frame to the customer. Consequently, Integrated Verticals mainly represent businesses where Delivery Hero acts as principal in the sale of on-demand items. Accordingly, revenue is recognized on the basis of gross merchandise value (GMV) net of VAT.
As of June 30, 2022, Dmarts operate in all regional segments with a total of 1,125 stores in 45 countries. To a much lesser extent, kitchens operated by Delivery Hero also contribute to the revenue in this segment. In the first half of 2022, the Integrated Verticals segment revenue increased by 106.1 % as the number of Dmarts increased significantly (H1 2021: 687 stores) while adjusted EBITDA decreased by 72.2%. The adjusted EBITDA/GMV margin improved to negative 21.5% mainly due to optimization of margins. Mature Dmarts incurred significantly lower inventory write-downs to net realizable value of € 2.8 million (H1 2021: € 8.0 million) as a result of improved inventory management. In addition, marketing and general administrative expenses remained relatively consistent as a result of scaling effects which also contributed to improved unit economics.
The development of the Group's financial position in the first half of 2022 is shown in the following condensed statement of cash flows:
the payment of lease liabilities (€ 74.4 million) and interest (€ 25.0 million). In H1 2021 cash inflow from financing activities resulted mainly from the issuance of new shares (€ 1,242.7 million).
As of June 30, 2022, the Group's balance sheet is structured as follows:
| Cash and cash equivalents as of June 302 | 2,936.2 | 2,028.4 |
|---|---|---|
| Effect of exchange rate movements on cash and cash equivalents |
44.5 | 12.2 |
| Cash flow from financing activities | 958.0 | 1,184.5 |
| Cash flow from investing activities | –111.1 | –1,790.5 |
| Cash flow from operating activities | –401.9 | –354.9 |
| Cash and cash equivalents as of January 11 | 2,446.7 | 2,977.1 |
1 Cash of € 1.5 million included in a disposal group classified as held for sale as of January 1, 2022 (January 1, 2021: € 54.9 million).
2 Cash of € 27.2 million included in a disposal group classified as held for sale as of June 30, 2021.
Operating cash flow in H1 2022 (negative € 401.9 million) remained broadly stable compared to the prior period (negative € 354.9 million), characterized by an improved EBITDA which was offset by higher income taxes paid during the period and fewer positive impacts of the working capital results.
Cash outflows from investing activities mainly included investments in property, plant and equipment (€ 99.8 million), intangible assets (€ 37.0 million) and the acquisition of additional shares in Glovo (€ 21.3 million). Further cash outflows included a € 125.0 million convertible loan given to Glovo, additional investments in financial assets (€ 42.8 million) and cash considerations for the acquisition of 100% of the share capital of two entities in Europe (€ 6.9 million net of cash acquired). Cash inflows mainly refer to the disposal of several stakes in Rappi (€ 231.5 million). In H1 2021, cash flows from investing activities were characterized by the acquisition of the Woowa Group (€ 1,219.0 million) and investments in Glovo (approx. € 229.0 million).
Cash inflow from financing activities in the first six months of 2022 is attributable to the proceeds from a syndicated term loan (€ 1,059.0 million) which was slightly offset by
| EUR million | Jun. 30, 2022 | % | Dec. 31, 2021 | % | Change |
|---|---|---|---|---|---|
| Non-current assets | 8,576.6 | 68.2 | 9,108.9 | 71.7 | –532.4 |
| Current assets | 3,997.0 | 31.8 | 3,594.8 | 28.3 | 402.2 |
| Total assets | 12,573.6 | 100.0 | 12,703.7 | 100.0 | –130.1 |
| EUR million | Jun. 30, 2022 | % | Dec. 31, 2021 | % | Change |
Equity 4,503.9 35.8 5,490.9 43.2 –987.0 Non-current liabilities 6,247.0 49.7 5,458.1 43.0 788.9 Current liabilities 1,822.7 14.5 1,754.7 13.8 68.1 Total equity and liabilities 12,573.6 100.0 12,703.7 100.0 –130.1
The Group's total assets as of June 30, 2022, decreased by 1.0 % compared to December 31, 2021.
The non-current assets decreased by 5.8 % mainly due to a decrease in other non-current financial assets of € 543.9 million based on fair value adjustments on investments (refer to section F.3. of the selected notes to the half-year financial statements for further detail). Intangible assets decreased by € 7.7 million net driven by diverse effects. Goodwill impairment of € 270.6 million from InstaShop, Türkiye, Honest Food and the Latam Dmarts, and an increase in accumulated amortization of other intangible assets for Woowa, were partly compensated by a hyperinflation-induced rise in the value of brand names of € 91.3 million caused by the first time application of IAS 29 in Türkiye and positive FX effects of € 295.6 million. Property, plant and equipment increased by € 59.1 million to € 740.1 million, mainly due to an increase in leased assets. Investments accounted for using the equity method decreased due to the assumption of the pro rata share of losses from Glovo.
The net increase in current assets is mainly following the increase in cash and cash equivalents by € 489.5 million as a result of raising a syndicated term loan in H1 2022 as well as the increase in other current financial assets of € 121.2 million, mainly as a result of a convertible loan agreement with Glovoapp23, S.L. Trade and other receivables decreased by € 52.3 million, mostly as the result of a decrease in receivables from online payment. Inventory increased by € 32.8 million, primarily driven by increased stocks of rider equipment and Dmart inventory. Other current assets increased by € 34.7 million, driven by increases in tax receivables and prepayments.
In the first half of 2022, the Group's equity decreased by € 987.0 million, in connection with the negative earnings in H1 2022. This was partly compensated by an increase in other comprehensive income related to hyperinflation accounting for Türkiye and Argentina as well as by an increase of € 155.5 million in capital reserves due to further vesting of the equity-settled share-based payment awards in context of the Long-Term Incentive Plan ("LTIP").
As of the reporting date, non-current liabilities increased significantly by 14.5% compared to December 31, 2021, mainly related to new financing arrangements in form of the syndicated term loan amounting to € 1.0 billion (refer to section F.6. of the selected notes to the half-year financial statements for further detail). Non-current trade and other payables decreased by € 359.5 million, mainly due to the decrease in the fair value of the NCI put liability in connection with put option rights held by Woowa management over the remaining shares in Woowa to € 245.8 million.
Current liabilities increased by 3.9% compared to December 31, 2021, mainly driven by increased outstanding invoice accruals and an increase in liabilities related to employee benefits.
The risks and opportunities presented in the annual report 2021 remain valid. Beyond this, we have not identified any further significant risks and opportunities in the reporting period, taking into account the subsequent acquisition of a majority stake in Glovo. An update for this H1 2022 report is provided below for selected risks. Currently, we are unaware of any individual or aggregated risks that could jeopardize the continued existence of our company.
Updated risk description – Contingencies: The Group's ability to fund its operations can be affected by the materialization of identified contingencies, including arbitration and settlement scenarios. In May 2019, the Group became party to an arbitration proceeding in Dubai where a minority shareholder in a Group company claimed that the Group had wrongfully taken control over the Group company and thus requested relief of this prejudice as well as monetary damages. The arbitral tribunal decision may result in relief scenarios with cash outflows higher than anticipated, therefore adversely affecting the Group's liquidity.
Updated measures – Contingencies: The Group's legal team is continuously assessing the development of contingencies, including arbitration and settlement scenarios. As of June 30, 2022, the arbitration process is still ongoing and the risk assessment remains unchanged (refer to section G.3. of the Selected Notes to the Consolidated Half-Year Financial Statements for further details).
Updated risk description – Interest Rate Risk: The Group considers the interest rate risk aggregated as part of the liquidity risk. On April 4, 2022, DH announced the syndication of a term loan transaction comprising a USD 825 million term facility bearing interest at a rate of Term SOFR plus 5.75% p.a. and a € 300 million term facility bearing interest at a rate of EURIBOR plus 5.75% p.a. (refer to section F.6 of the Selected Notes to the Consolidated Half-Year Financial Statements for further details). Interest rate volatility, in particular interest rate increases may have a negative impact on Delivery Hero's cost of capital and financing cash flows.
Updated measures – Interest Rate Risk: DH's Group treasury is constantly monitoring interest rate movements and is assessing mitigating measures, including the investment of available bank balances on a short-term basis to partially offset the effect of increased interest payments.
Risk severity: Delivery Hero continues to classify the risk as high.
Updated risk description: Due to the uncertainty in the interpretation and application of applicable laws as to whether our business activities are conducted in compliance with applicable competition laws (usually based on self-assessments) antitrust investigations led by competition authorities remained high throughout H1 2022. On June 27, 2022, the European Commission ("Commission") carried out an unannounced inspection at the premises of Delivery Hero SE based on suspicions of infringing European competition law. Any fine imposed by the Commission will be capped at 10% of the total worldwide turnover of the group to which the parties belong (in this case the DH Group) in the financial year preceding the year when a fine is imposed.
Updated measures: A dedicated competition law team in the Group's legal department is closely monitoring the antitrust investigation worldwide and evaluates the likelihood and scenarios of potential negative outcomes in consultation with external counsels. If the Group identifies scenarios with a probable outflow of resources, provisions are recognized in accordance with IAS 37. If the risk for an outflow of resources is not remote, contingencies are disclosed, accordingly.
Risk severity: Irrespective of the individual case described above, Delivery Hero continues to classify the risk as high.
For Total Segment Revenue, we continue to expect a significant increase exceeding € 9.0 billion (previously: above € 9.5 billion). This growth should be driven by an increase in GMV compared to 2021. For GMV we anticipate a level of at least € 41.0 billion will be reached (previously at least € 44.0 billion).
For the Group's platform business (corresponding to the segments Asia, MENA, Europe and Americas, but excluding the segment Integrated Verticals), we still expect adjusted EBITDA to improve significantly in each of these four segments and in total to generate a positive adjusted EBITDA for the full year 2022. The Integrated Verticals segment is expected to contribute an adjusted EBITDA of up to negative € 475 million (previously: negative € 525 million).
The adjusted EBITDA to GMV margin of the Group is also expected to be slightly better than anticipated with negative 1.0% or better (previously: negative 1.2% or better).
12 The forecast excludes Glovo for the entire financial year 2022.
Due to the fact that we are operating in a relatively young and still rapidly evolving industry any forecast on the earnings trajectory is subject to considerable uncertainty. Adjusted EBITDA is dependent not only on factors that can be impacted by Delivery Hero, but also on those over which it has no influence. For example, if the Group was forced to defend its position against new competitors in specific markets or to react to revenue downturns, then measures that may not have been scheduled previously may have to be implemented (e.g., increasing marketing expenditure) which can result in a negative development of adjusted EBITDA which deviates significantly from the previous estimate. The assumptions on the economic development of the market and the industry are based on assessments that we consider realistic in line with currently available information. However, these estimates are subject to uncertainty and are accompanied by the unavoidable risk that the forecasts will not occur, either in terms of direction or in relation to extent. The forecast for the forecast period is based on the composition of the Group at the time the financial statements were prepared.
JANUARY–JUNE 2022
HALF-YEAR FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION PAGE 15 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME PAGE 16 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY PAGE 17 CONSOLIDATED STATEMENT OF CASH FLOWS PAGE 19
A. GENERAL INFORMATION ON THE HALF-YEAR FINANCIAL STATEMENTS PAGE 20 B. SEASONALITIES AND EXTERNAL EFFECTS PAGE 21 C. OPERATING SEGMENTS PAGE 21 D. ACQUISITIONS PAGE 22 E. NOTES ON THE CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME PAGE 22 F. NOTES ON THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION PAGE 23 G. OTHER DISCLOSURES PAGE 26 H. EVENTS AFTER THE REPORTING PERIOD PAGE 32
RESPONSIBILITY STATEMENT PAGE 34
| Assets | |||
|---|---|---|---|
| EUR million | Note | Jun. 30, 2022 | Dec. 31, 2021 |
| Non-current assets | |||
| Intangible assets | F.1. | 6,987.6 | 6,995.3 |
| Property, plant and equipment | F.2. | 740.1 | 681.0 |
| Other financial assets | F.3. | 587.7 | 1,131.6 |
| Trade and other receivables | 0.2 | 0.0 | |
| Other assets | 20.8 | 7.3 | |
| Deferred tax assets | 4.9 | 5.2 | |
| Investments accounted for using the equity method | 235.2 | 288.5 | |
| 8,576.6 | 9,108.9 | ||
| Current assets | |||
| Inventories | 112.2 | 79.5 | |
| Trade and other receivables | 384.8 | 437.1 | |
| Other financial assets | F.3. | 125.8 | 4.5 |
| Other assets | 214.5 | 179.8 | |
| Income tax receivables | 17.4 | 14.1 | |
| Cash and cash equivalents | 2,936.2 | 2,446.7 | |
| Assets of disposal group classified | |||
| as held for sale | F.4. | 206.1 | 433.0 |
| 3,997.0 | 3,594.8 | ||
| Total assets | 12,573.6 | 12,703.7 |
| EUR million | Note | Jun. 30, 2022 | Dec. 31, 2021 |
|---|---|---|---|
| Equity | |||
| Share capital/Subscribed capital | F.5. | 251.2 | 251.0 |
| Capital reserves | F.5. | 9,057.4 | 8,901.9 |
| Retained earnings and other reserves | –4,814.2 | –3,670.2 | |
| Treasury shares | –7.8 | –7.8 | |
| Equity attributable to shareholders of the parent company |
4,486.7 | 5,474.9 | |
| Non-controlling interests | 17.2 | 16.0 | |
| 4,503.9 | 5,490.9 | ||
| Non-current liabilities | |||
| Liabilities to banks | F.6. | 1,046.4 | – |
| Pension provisions | 37.3 | 32.2 | |
| Other provisions | F.7. | 73.3 | 26.9 |
| Trade and other payables | F.8. | 576.0 | 935.6 |
| Convertible bonds | F.9. | 4,195.4 | 4,159.6 |
| Other liabilities | 42.5 | 37.1 | |
| Deferred tax liabilities | 276.1 | 266.7 | |
| 6,247.0 | 5,458.1 | ||
| Current liabilities | |||
| Liabilities to banks | F.6. | 0.7 | 2.2 |
| Other provisions | F.7. | 117.0 | 118.6 |
| Trade and other payables | F.8. | 1,235.0 | 1,206.9 |
| Other liabilities | 378.9 | 335.3 | |
| Income tax liabilities | 91.2 | 86.9 | |
| Liabilities of disposal group classified as held for sale |
– | 4.7 | |
| 1,822.7 | 1,754.6 | ||
| Total equity and liabilities | 12,573.6 | 12,703.7 | |
| Change | Change | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| EUR | EUR | ||||||||||
| EUR million | Note | H1 2022 | H1 20211 | million | % | EUR million | Note | H1 2022 | H1 20211 | million | % |
| Revenue | E.1. | 3,815.4 | 2,457.3 | 1,358.1 | 55.3 | Other comprehensive income (net) | |||||
| Cost of sales | E.2. | –2,879.5 | –1,911.0 | –968.5 | 50.7 | Items not reclassified to profit or loss: | |||||
| Gross profit | 935.8 | 546.3 | 389.5 | 71.3 | Remeasurement of net liability (asset) arising on | ||||||
| Marketing expenses | E.3. | –702.4 | –561.7 | –140.7 | 25.0 | defined benefit pension plans | –0.2 | –5.2 | 5.0 | –95.5 | |
| IT expenses | –231.4 | –120.1 | –111.3 | 92.6 | Items reclassified to profit or loss in the future: |
||||||
| General administrative expenses | E.4. | –764.1 | –613.4 | –150.7 | 24.6 | Effect of movements in exchange rates | F.5. | 364.4 | 33.5 | 330.9 | >100 |
| Other operating income | 20.9 | 103.8 | –82.9 | –79.9 | Other comprehensive income | 364.1 | 28.3 | 335.8 | >100 | ||
| Other operating expenses | E.5. | –284.4 | –21.0 | –263.3 | >100 | Total comprehensive income | |||||
| Impairment losses on trade receivables and | for the period | –1,103.2 | –974.0 | –129.2 | 13.3 | ||||||
| other receivables | E.6. | –15.6 | –7.9 | –7.7 | 97.8 | Net result for the period attributable to: | |||||
| Operating result | –1,041.0 | –674.1 | –367.0 | 54.4 | Shareholders of the parent | –1,473.8 | –1,001.9 | –471.9 | 47.1 | ||
| Net interest cost | E.7. | –83.5 | –51.0 | –32.5 | 63.7 | Non-controlling interests | 6.4 | –0.4 | 6.8 | >100 | |
| Other financial result | E.8. | –212.2 | –165.8 | –46.4 | 28.0 | Total comprehensive income attributable to: | |||||
| Share of the profit or loss of associates accounted for using the equity method |
E.9. | –80.0 | –54.6 | –25.4 | 46.4 | Shareholders of the parent | –1,104.4 | –973.9 | –130.5 | 13.4 | |
| Earnings before income taxes | –1,416.7 | –945.6 | –471.2 | 49.8 | Non-controlling interests | 1.2 | –0.1 | 1.3 | >100 | ||
| Income taxes | E.10. | –50.6 | –56.7 | 6.1 | –10.8 | ||||||
| Net result | –1,467.3 | –1,002.3 | –465.1 | 46.4 | Diluted and basic earnings per share in EUR | –5.64 | –4.21 | –1.43 | 34.0 |
1 The comparative information is restated due to correction of errors. See section A.3. for further details.
| Jan. 1, 2022−Jun. 30, 2022 | Attributable to the shareholders of the parent | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Retained earnings and other reserves | |||||||||
| EUR million | Subscribed | capital Capital reserves | Retained earnings |
Currency translation reserve |
Revaluation reserve for pension commitments |
Treasury shares1 |
Total | Non-controlling interests |
Total equity |
| Balance as of Jan. 1, 2022 | 251.0 | 8,901.9 | –3,276.4 | –384.5 | –9.3 | –7.8 | 5,474.9 | 16.0 | 5,490.9 |
| Net result | – | – | –1,473.8 | – | – | – | –1,473.8 | 6.4 | –1,467.4 |
| Other comprehensive income | – | – | – | 369.6 | –0.2 | – | 369.4 | –5.3 | 364.1 |
| Total comprehensive income | – | – | –1,473.8 | 369.6 | –0.2 | – | –1,104.4 | 1.2 | –1,103.2 |
| Transactions with owners – payments received and change in non-controlling interests |
|||||||||
| Capital increases | 0.3 | – | – | – | – | – | 0.3 | – | 0.3 |
| Equity-settled share-based payments | – | 155.5 | – | – | – | – | 155.5 | – | 155.5 |
| Transactions with owners | 0.3 | 155.5 | – | – | – | – | 155.8 | – | 155.8 |
| Other changes to equity2 | – | – | –39.8 | – | – | – | –39.8 | – | –39.8 |
| Balance as of Jun. 30, 2022 | 251.2 | 9,057.4 | –4,790.0 | –14.8 | –9.5 | –7.8 | 4,486.7 | 17.2 | 4,503.9 |
1 Treasury share figures as indicated in the table above consist of (i) 51,639 treasury shares owned by Delivery Hero SE and (ii) 7,743,043 shares held in escrow by agent Prof. Dr. Hagen Hasselbrink, which are restricted for the Woowa transaction. 2 Includes results from hyperinflationary economies of € 39.8 million.
| Jan. 1, 2021−Jun. 30, 2021 | Attributable to the shareholders of the parent | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Retained earnings and other reserves | ||||||||||
| EUR million | Subscribed | capital Capital reserves | Retained earnings |
Currency translation reserve |
Revaluation reserve for pension commitments |
Treasury shares | Total | Non-controlling interests |
Total equity | |
| Balance as of Jan. 1, 2021 | 199.4 | 3,485.4 | –2,159.0 | –363.9 | –4.8 | –0.1 | 1,157.1 | 3.7 | 1,160.8 | |
| Net result1 | – | – | –1,001.9 | – | – | – | –1,001.9 | –0.4 | –1,002.3 | |
| Other comprehensive income1 | – | – | – | 33.2 | –5.2 | – | 28.0 | 0.3 | 28.3 | |
| Total comprehensive income1 | – | – | –1,001.9 | 33.2 | –5.2 | – | –973.9 | –0.1 | –974.0 | |
| Transactions with owners – payments received and change in non-controlling interests |
||||||||||
| Capital increases | 49.9 | 4,525.0 | – | – | – | – | 4,574.9 | – | 4,574.9 | |
| Equity-settled share-based payments | – | 122.8 | – | – | – | – | 122.8 | – | 122.8 | |
| Equity components of convertible bonds | – | 424.2 | – | – | – | – | 424.2 | – | 424.2 | |
| Other changes to equity | – | – | 0.4 | – | – | –7.7 | –7.3 | 12.8 | 5.5 | |
| Transactions with owners | 49.9 | 5,072.0 | – | – | – | –7.7 | 5,114.2 | 12.8 | 5,127.0 | |
| Other changes | – | – | 0.42 | – | – | – | 0.4 | – | 0.4 | |
| Balance as of Jun. 30, 20211 | 249.3 | 8,557.4 | –3,160.5 | –330.7 | –10.0 | –7.8 | 5,297.8 | 16.4 | 5,314.2 |
1 Restated due to correction of errors. See section A.3. for further details.
2 Includes results from hyperinflationary economies of € 0.4 million.
| Change | Change | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| EUR million | H1 2022 H1 20211 | EUR million | % | EUR million | H1 2022 H1 20211 | EUR million | % | ||
| 1. Cash flows from operating activities | Proceeds (+)/payments (−) for investments in financial as sets |
63.7 | –269.1 | 332.8 | >100 | ||||
| Net result | –1,467.3 | –1,002.3 | –464.9 | 46.4 | Payments for (−)/proceeds (+) from loans to third parties | –13.6 | –9.3 | –4.3 | 46.7 |
| Income taxes (+) | 50.6 | 56.7 | –6.1 | –10.8 | Net payments (−) for acquisitions | –6.9 | –1,219.0 | 1,212.1 | –99.4 |
| Income tax paid (−) | –35.5 | –7.2 | –28.3 | >100 | Net proceeds (+) from sale of subsidiaries or discontinued | ||||
| Amortization and depreciation (+) | 224.2 | 149.1 | 75.0 | 50.3 | operations | –0.0 | 60.4 | –60.5 | >100 |
| Write-downs of financial assets (+) | – | 1.6 | –1.6 | –100 | Purchase of equity investments (−) | –23.9 | –229.7 | 205.8 | –89.6 |
| Goodwill Impairment (+) | 270.6 | 0.4 | 270.2 | >100 | Interest received (+) | 6.4 | 2.1 | 4.3 | >100 |
| Increase (+)/decrease (−) in provisions | 44.1 | 23.8 | 20.3 | 85.4 | Cash flows from investing activities | –111.1 | –1,790.5 | 1,679.4 –93.8 | |
| Non-cash expenses (+) from share-based payments | 149.8 | 131.7 | 18.1 | 13.7 | 3. Cash flows from financing activities | ||||
| Other non-cash expenses (+) and income (−) | 18.2 | 5.1 | 13.1 | >100 | Proceeds (+) from capital contributions | 0.1 | 1,242.7 | –1,242.5 | –100 |
| Gain (−)/loss (+) on disposals of fixed assets | 12.2 | 1.1 | 11.2 | >100 | Proceeds (+) from loans and borrowings | 1,059.0 | – | 1,059.0 | >100 |
| Gain (−)/loss (+) on deconsolidation | –4.7 | –69.4 | 64.7 | >100 | Repayments (−) of loans and borrowings | –75.8 | –40.2 | –35.7 | 88.9 |
| Increase (−)/decrease (+) in inventories, trade receivables | Interest paid (−) | –25.1 | –18.0 | –7.1 | 39.3 | ||||
| and other assets | –20.8 | –32.3 | 11.4 | –35.5 | Cash flows from financing activities | 958.0 | 1,184.5 | –226.5 –19.1 | |
| Increase (+)/decrease (−) in trade and other payables | 27.4 | 202.9 | –175.4 | –86.5 | |||||
| Interest and similar income (−)/expense (+) and fair value gains (−)/losses (+) |
329.4 | 183.8 | 145.5 | 79.2 | 4. Cash and cash equivalents at the end of the period | ||||
| Cash flows from operating activities | –401.9 | –354.9 | –46.9 | 13.2 | Net change in cash and cash equivalents | 445.0 | –960.9 | 1,405.9 | >100 |
| Effect of exchange rate movements on cash and cash equiv alents |
44.5 | 12.2 | 32.3 | >100 | |||||
| 2. Cash flows from investing activities | Cash and cash equivalents at the beginning of the period2 | 2,446.7 | 2,977.1 | –530.4 | –17.8 | ||||
| Proceeds (+) from the disposal of property, plant and equipment |
– | 1.2 | –1.2 | –100 | Cash and cash equivalents at the end of period3 | 2,936.2 | 2,028.4 | 907.8 | 44.8 |
| Payments (−) for investments in property, plant and equip ment |
–99.8 | –95.9 | –3.9 | 4.1 | 1 The comparative information is restated due to correction of errors. See section A.3. for further details. 2 Cash of € 1.5 million included in a disposal group classified as held for sale as of January 1, 2022 (January 1, 2021: |
||||
| Proceeds (+) from disposal of intangible assets | 0.2 | 0.3 | –0.1 | –30.9 | € 54.9 million). 3 Cash of € 27.2 million included in a disposal group classified as held for sale as of June 30, 2021. |
||||
| Payments (−) to acquire intangible assets | –37.0 | –31.6 | –5.5 | 17.4 |
As of June 30, 2022, the Delivery Hero Group (also: DH, DH Group, Delivery Hero or Group) offers online food ordering, quick commerce and delivery services in more than 50 countries in four geographical areas, comprising Asia, Americas, Europe and MENA.
Delivery Hero SE is the parent company and is domiciled at Oranienburger Strasse 70, 10117 Berlin, Germany (the "Company"). It is registered with the commercial register of the Local Court, Berlin Charlottenburg under HRB 198015 B.
The Management Board prepared the half-year financial statements by August 23, 2022, and submitted these directly to the Supervisory Board for approval. The Supervisory Board approved the half-year financial statements on August 23, 2022.
The unaudited consolidated interim financial statements of the Group for the first half of 2022 were prepared in accordance with IAS 34 Interim Financial Reporting and comply with the International Financial Reporting Standards (IFRS) as adopted by the European Union for interim financial reporting applicable as of the reporting date.
The unaudited condensed consolidated interim financial statements do not contain all information and disclosures in the notes that are required for consolidated financial statements and should thus be read in conjunction with the consolidated financial statements as of December 31, 2021. In order to gain an understanding of the significant changes in the financial position and financial performance since the 2021 consolidated financial statements, selected disclosures regarding significant events and transactions are included in the notes to the condensed consolidated interim financial statements.
The condensed consolidated interim financial statements are prepared in euros. Unless otherwise stated, all figures have been rounded to the nearest million euros (€ million).
In June 2022 the economy in Türkiye has been considered to become hyperinflationary. Accordingly, the Group applied the hyperinflationary accounting requirements of IAS 29 – Financial Reporting in Hyperinflationary Economies to its Turkish operations. As the presentation currency of the consolidated financial statements is that of a nonhyperinflationary economy, comparative amounts are not adjusted for changes in the price level or exchange rates in the current year.
Disclosures on changes are based on exact values. In addition, for computational reasons, there may be rounding differences to the exact mathematical values in tables and references.
In preparing the condensed consolidated interim financial statements, the accounting policies used for the preparation of the consolidated financial statements as of December 31, 2021, remain unchanged. The preparation of consolidated financial statements in accordance with IFRS requires management estimates and judgements. The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those described in the consolidated financial statements as of December 31, 2021.
The condensed consolidated interim financial statements and the interim Group management report have not been audited or reviewed by an auditor.
During the preparation of the 2021 consolidated financial statements the Company reassessed and corrected errors with regard to selected aspects of the Woowa transaction dated March 4, 2021, as reflected in the 2021 half-year consolidated interim financial statements.
The following adjustments of the statement of comprehensive income refer to the period ending June 30, 2021. There was no impact on the consolidated financial statements as of December 31, 2021.
The NCI put liability related to the Delivery Hero shares held in escrow in connection with the acquisition of the remaining 10.2% shares in Woowa ("Remaining Woowa Shares") should have been remeasured at fair value through profit and loss as of June 30, 2021. The adjustment resulted in a loss from fair value measurement of € 71.5 million as of June 30, 2021.
A bonus arrangement to Woowa management in connection with the Woowa transaction of USD 30.0 million was no longer assessed to represent part of the consideration paid for the Woowa shares. The bonus arrangement has now been accounted for as an employee benefit in accordance with IAS 19 since further services are required.
The adjustment resulted in an increase in general administrative expenses of € 12.7 million for the first six months 2021.
Consequentially, the net result for H1 2021 changed from negative € 918.1 million to negative € 1,002.3 million. The Group's basic and diluted earnings per share changed from negative € 3.84 to negative € 4.21, while there was no impact on total operating, investing or financing cash flows.
During 2021, Delivery Hero discovered that the share of loss recognized for the Group's investment in Glovoapp23 S.A. (formerly Glovoapp23 S.L.; "Glovo") accounted under the equity method was understated.
The error has been corrected by restating each of the affected financial statement line items. The total effect of the correction of the error on retained earnings and other reserves as of January 1, 2021, amounted to a cumulative decrease of € 7.6 million. Accordingly, the investments accounted for using the equity method were reduced by € 7.6 million as of January 1, 2021.
Business operations are affected by fluctuations relating to weather and public holidays at the level of the individual entity and are subject to seasonal influences in some regions where the seasons are particularly pronounced, such as northern Europe. In these regions, but also in South Korea, order demand is typically higher in autumn and winter owing to shorter daylight hours and frequent poor weather.
At Group level, seasonal influences are not as significant due to the diversification of all entities and are eclipsed by organic and external growth.
The COVID-19 lockdowns in China negatively affected the East Asia and Pacific area. The ongoing war in Ukraine has generated severe spillovers in the European region resulting in rising commodity prices that affected the business costs in Europe.
The depreciation of the euro to several local currencies of our subsidiaries improved the revenue growth of the Group and also impacted the adjusted EBITDA through translation effects. The deterioration of the Turkish lira softened the growth.
Woowa is included in the Asia segment as of the closing of the transaction on March 4, 2021 (four months in 2021 vs. six months in 2022). DH's former Korean business ("DHK") with its major brand Yogiyo was part of the Asia segment but has been excluded from segment performance as of January 1, 2021. As such, DHK is reflected as a reconciling item between Total Segment Revenue and consolidated Group revenue and within consolidation adjustments between adjusted EBITDA of the Segments and earnings before income taxes in H1 2021.
| Change | ||||
|---|---|---|---|---|
| EUR million | H1 2022 | H1 2021 | EUR million |
% |
| Asia | 1,865.8 | 1,166.9 | 698.9 | 59.9 |
| MENA | 1,006.0 | 684.9 | 321.1 | 46.9 |
| Europe | 311.4 | 285.9 | 25.5 | 8.9 |
| Americas | 327.1 | 226.9 | 100.2 | 44.2 |
| Integrated Verticals | 770.8 | 374.0 | 396.8 | >100 |
| Intersegment consolidation adjustments |
–95.5 | –56.1 | –39.4 | 70.2 |
| Total Segment Revenue |
4,185.7 | 2,682.5 | 1,503.2 | 56.0 |
| Reconciliation effects | 0.6 | 140.6 | –140.0 | –99.6 |
| Vouchers | –370.9 | –365.8 | –5.1 | 1.4 |
| Revenue | 3,815.4 | 2,457.3 | 1,358.1 | 55.3 |
| Change | |||||
|---|---|---|---|---|---|
| EUR million | H1 2022 | H1 20211 | EUR million |
% | |
| Asia | –80.5 | –230.7 | 150.2 | –65.1 | |
| MENA | 40.1 | 65.0 | –24.9 | –38.3 | |
| Europe | –20.3 | 1.0 | –21.2 | >100 | |
| Americas | –80.0 | –80.2 | 0.2 | –0.3 | |
| Integrated Verticals | –182.3 | –105.8 | –76.5 | 72.2 | |
| Adjusted EBITDA of the Segments |
–323.0 | –350.8 | 27.8 | –7.9 | |
| Consolidation adjustments |
–0.0 | –6.6 | 6.6 | >100 | |
| Management adjustments |
–63.8 | –98.0 | 34.2 | –34.9 | |
| Expenses for share based compensation |
–149.8 | –131.7 | –18.1 | 13.7 | |
| Other reconciliation items |
–274.4 | 64.7 | –339.1 | >100 | |
| Amortization and depreciation2 |
–229.9 | –151.6 | –78.3 | 51.7 | |
| Net interest and other financial result3 |
–375.7 | –271.5 | –104.2 | 38.4 | |
| Earnings before income taxes |
–1,416.7 | –945.6 | –471.1 | 49.8 |
1 The comparative information is restated due to correction of errors. See section A.3. for further details.
2 Amortization and depreciation according to internal reporting also includes provisions for financing provided to investments and joint ventures and excludes goodwill impairment. Goodwill impairment is included in other reconciliation items.
3 Sum of net interest result, other financial result and share of profit or loss of associates accounted for using the equity method.
For an explanation on management adjustments and other reconciliation items, refer to the Interim Group Management Report section B.3.a. Results of Operations, Net Assets and Financial Position.
In February 2022, Delivery Hero acquired 100% shares in Shiver Nebula GmbH for a consideration of € 3.6 million paid in cash. Shiver Nebula GmbH is a German B2B food company providing catering to medium and large companies. Additionally, Delivery Hero acquired 100% of share capital of S.A.R.L. Room Service for a consideration of € 4.0 million paid in cash. The entity is active in online food delivery enabling Delivery Hero access to a new market – the Principality of Monaco.
The total consideration for the acquisition is allocated between the recognized assets and assumed liabilities as follows based on provisional accounting in accordance with IFRS 3.45:
| Fair values | |
|---|---|
| EUR million | at date of acquisition |
| Intangible assets | 0.1 |
| Property, plant and equipment | 0.2 |
| Trade and other receivables | 0.6 |
| Other assets | 0.2 |
| Cash and cash equivalents | 1.7 |
| Provisions and liabilities | –1.3 |
| Trade payables | –0.4 |
| Net assets | 1.1 |
| Consideration | 7.6 |
| Goodwill | 6.5 |
None of the intangible assets except goodwill have an indefinite useful life.
Goodwill, which consists primarily of non-separable components such as positive business prospects and employee know-how, is not deductible for tax purposes.
Combined trade receivables from third parties with a gross value of € 0.6 million were acquired and are assessed as being fully recoverable.
Since their date of acquisition, the acquired entities have contributed € 1.3 million towards Group revenues and a net loss of € 0.7 million. If the acquisitions had been consolidated as of January 1, 2022, the entities would have contributed € 1.9 million to Group revenue and a net loss of € 1.0 million to the Group's net result.
On July 4, 2022, Delivery Hero closed the acquisition of Glovoapp23 S.A. (formerly Glovoapp23 S.L.; "Glovo") which was signed on December 31, 2021. Refer to section H. of the Selected Notes to the Consolidated Half-Year Financial Statements for further details.
Revenue is composed as follows:
| Change | ||||||
|---|---|---|---|---|---|---|
| EUR million | H1 2022 | H1 2021 | EUR million | % | ||
| Commissions | 1,622.2 | 1,414.1 | 208.1 | 14.7 | ||
| Delivery fees1 | 1,007.3 | 563.2 | 444.1 | 78.8 | ||
| Integrated Verticals | 692.6 | 332.4 | 360.2 | >100 | ||
| Prime placings | 428.4 | 251.2 | 177.2 | 70.6 | ||
| Credit card use | 248.2 | 154.5 | 93.7 | 60.7 | ||
| Other | 187.5 | 107.7 | 79.8 | 74.1 | ||
| Less vouchers | –370.9 | –365.8 | –5.1 | 1.4 | ||
| Revenue | 3,815.4 | 2,457.3 | 1,358.1 | 55.4 |
1 Fees charged separately to the orderers of delivery services.
The increase in revenue is mainly driven by the Woowa operation, caused by its inclusion since the closing of the transaction on March 4, 2021 (four months in H1 2021 vs. six months in H1 2022).
Cost of sales is composed as follows:
| Change | ||||||
|---|---|---|---|---|---|---|
| EUR million | H1 2022 | H1 2021 | EUR million | % | ||
| Delivery expenses | –1,837.4 | –1,319.1 | –518.3 | 39.3 | ||
| Integrated Verticals | –641.6 | –320.5 | –321.1 | >100 | ||
| Fees for payment services |
–204.6 | –148.5 | –56.2 | 37.8 | ||
| Server hosting | –61.4 | –27.1 | –34.3 | >100 | ||
| Picker cost | –44.5 | –24.3 | –20.2 | 83.2 | ||
| Purchase of terminals and other POS systems |
–18.8 | –18.0 | –0.8 | 4.6 | ||
| Rider equipment | –18.7 | –15.7 | –3.0 | 19.0 | ||
| Expenses for data transfer |
–12.5 | –2.8 | –9.8 | >100 | ||
| Goods and merchandise |
–2.1 | –5.8 | 3.7 | –63.6 | ||
| Other cost of sales | –38.0 | –29.4 | –8.6 | 29.4 | ||
| Total | –2,879.5 | –1,911.0 | –968.5 | 50.7 |
Marketing expenses are composed as follows:
| Change | ||||
|---|---|---|---|---|
| EUR million | H1 2022 H1 2021 | EUR million | % | |
| Restaurant acquisition | –286.0 | –207.7 | –78.3 | 37.7 |
| Customer acquisition | –245.9 | –242.1 | –3.9 | 1.6 |
| Amortization of customer/supplier base |
–38.8 | –25.3 | –13.5 | 53.4 |
| Amortization of brands | –23.4 | –15.9 | –7.5 | 47.3 |
| Other marketing expenses |
–108.2 | –70.8 | –37.5 | 52.9 |
| Total | –702.4 | –561.7 | –140.7 | 25.0 |
General administrative expenses is composed as follows:
| Change | ||||||
|---|---|---|---|---|---|---|
| EUR million | H1 2022 | H1 20211 |
EUR million |
% | ||
| Personnel expenses | –262.1 | –200.5 | –61.6 | 30.7 | ||
| Share-based payment expenses |
–149.8 | –131.7 | –18.1 | 13.7 | ||
| Depreciation and amortization |
–131.3 | –84.3 | –47.0 | 55.8 | ||
| Consulting and audit expenses |
–30.9 | –38.2 | 7.3 | –19.0 | ||
| Other (non-income) taxes |
–23.4 | –25.1 | 1.7 | –6.6 | ||
| Other office expenses | –23.0 | –23.9 | 0.8 | –3.5 | ||
| Travel expenses | –15.8 | –7.5 | –8.4 | >100 | ||
| Other HR and recruiting costs |
–6.2 | –5.7 | –0.5 | 9.0 | ||
| Telecommunications | –6.0 | –6.9 | 1.0 | –13.9 | ||
| Rent and lease expenses | –4.9 | –7.2 | 2.3 | –31.9 | ||
| Bank charges | –3.1 | –19.4 | 16.3 | –84.1 | ||
| Miscellaneous | –107.6 | –63.2 | –44.4 | 70.2 | ||
| Total | –764.1 | –613.4 | –150.7 | 24.6 |
The bad debt expense on trade and other receivables increased from € 7.9 million in H1 2021 to € 15.6 million in H1 2022, mainly due to a write-off of a loan that was given to the joint venture between iFood and DH in 2022 (€ 5.7 million).
Net interest cost is composed as follows:
| Change | ||||
|---|---|---|---|---|
| EUR million | H1 2022 H1 2021 | EUR million | % | |
| Amortization of transaction costs of financial instruments |
–69.9 | –40.9 | –29.0 | 70.9 |
| Interest expense from discounting of lease liabilities |
–11.4 | –4.6 | –6.8 | >100 |
| Other interest expense | –8.7 | –10.7 | 2.0 | –18.6 |
| Interest and similar income |
6.6 | 5.3 | 1.3 | 24.3 |
| Total | –83.5 | –51.0 | –32.5 | 63.7 |
Other financial result is composed as follows:
| 1 The comparative information is restated due to correction of errors. See Section | |
|---|---|
| A.3. for further details. |
Miscellaneous increased mainly due to additions to provisions for ongoing and newly initiated antitrust investigations in connection with previous M&A transactions.
Other operating expenses in H1 2022 mainly include goodwill impairment losses of € 270.6 million related to the impairment of goodwill allocated to InstaShop CGU, to Yemeksepeti CGU, to Honest Food CGU and to LatAm Dmart CGU. Refer to Section F.1. for further details.
| Total | –212.2 | –165.8 | –46.4 | 28.0 | |
|---|---|---|---|---|---|
| Miscellaneous | 0.1 | 0.4 | –0.3 | –77.6 | |
| Result on net monetary position (hyperinflation) |
–10.5 | 4.0 | –14.5 | >100 | |
| Foreign currency result | 51.4 | 37.6 | 13.9 | 36.9 | |
| Result from remeasurement of financial instruments FVtPL |
–253.3 | –207.7 | –45.6 | 21.9 | |
| EUR million | H1 2022 H1 2021 | EUR million | % | ||
| Change |
The result from equity-accounted investees mostly results from the pro rata losses of the investment in Glovo.
The calculation of the interim period's income tax position for each entity for which income tax expenses and income are expected in the current financial year, the Group used the respective estimated tax rate applicable for the full year's total expected expenses and income.
In connection with the accounting for the syndicated term loan, net deferred tax liabilities in the amount of € 8.7 million were recognized as of June 30, 2022, with a corresponding impact on income taxes.
Intangible assets decreased by € 7.7 million in the first six months of 2022. Impairments of Türkiye, InstaShop (both MENA Segment), Honest Food (Segment Integrated Verticals) and Dmarts Latam (Integrated Verticals Segment) totaling € 270.6 million and amortization charges of € 82.3 million were partly offset by FX effects of € 295.6 million. The FX effects were mainly due to the firsttime application of IAS 29 in Türkiye, which led to an increase in previously acquired intangible assets from business combinations (€ 219.0 million) and other FX effects (€ 76.6 million).
Following the decline of the DH share price in H1 2022 and in line with the requirements of IAS 36, a goodwill impairment test was carried out for all cash generating units (CGUs) as of June 30, 2022. Goodwill impairment losses were identified and related to the CGUs InstaShop (€ 124.2 million, MENA), Türkiye (€ 131.1 million, MENA), Honest Food (€ 13.2 million, Integrated Verticals) and Dmarts Latam (€ 2.1 million, Integrated Verticals) due to increased costs of capital, higher risk premiums as well as the initial application of IAS 29 for Türkiye. For all other CGUs the recoverable amount exceeded their carrying amount.
The fair value less costs of disposal of the CGUs (categorized as Level 3 in the fair value hierarchy) was calculated by applying the discounted cash flow method. The key planning assumptions remained unchanged compared to the annual impairment test 2021 except for the average discount rates, which are included in the following table:
| % | Average discount rate in planning period /WACC |
Average discount rate in previous period /WACC |
|---|---|---|
| Woowa platform Group |
8.9 | 8.5 |
| Talabat Group | 10.9 | 9.3 |
| Woowa B-mart Group | 13.6 | 12.4 |
| InstaShop Group | 14.5 | 7.7 |
| LatAm Group | 10.5 | 10.6 |
| Other goodwill | 11.9 | 12.4 |
The equity component of the June 2022 WACC is based on a uniform risk-free base rate of 1.25% for the euro area (2021: 0.20%) and a CGU-specific risk premium between 8.9% and 28.5% (2021: 7.0% to 26.9%). The risk premium mainly contains adjustment components for inflation and country risk as well as market risk and CGU-specific premiums. Additionally, CGU-specific risk premiums are applied to the total cash flows, which depend on the age of the CGU and decline towards maturity. Further, an entity-specific risk factor (beta factor) of 0.95 (2021: 0.90) is used across all CGUs. Tax rates of between 0% and 35% are applied dependent on the CGU/country. In line with the application of IFRS 16, a market-based debt ratio and interest rate is included in WACC.
As part of the impairment testing, a sensitivity analysis was conducted for the Woowa platform Group CGU. The total headroom for the Woowa platform Group CGU under the impairment test is € 259.2 million. Either a reduction of the terminal value EBITDA margin by 1.45% points or an increase of WACC by 0.39% points, would remove the remaining headroom.
During the first six months, property, plant and equipment increased by € 59.1 million to € 740.1 million mainly due to additions to buildings (€ 49.7 million) in the course of the further rollout of Dmarts. Hyperinflation effects due to the first-time application of IAS 29 in Türkiye further contributed to the increase (€ 21.6 million).
Other financial assets are composed as follows:
| EUR million | June 30, 2022 Dec. 31, 2021 | |
|---|---|---|
| Investments | 527.9 | 1,100.0 |
| Loans granted | 141.8 | 6.1 |
| Non-current security deposits | 26.7 | 25.1 |
| Derivative financial instruments | 16.7 | 4.5 |
| Miscellaneous | 0.4 | 0.4 |
| Total | 713.5 | 1,136.2 |
| thereof non-current | 587.7 | 1,131.6 |
| thereof current | 125.8 | 4.5 |
During H1 2022, DH entered into a convertible loan agreement with Glovoapp23, S.L., Barcelona, Spain ("Glovo"). € 125.0 million were provided in cash and are included as a convertible loan within investments in current other financial assets as of June 30, 2022. The transaction qualifies as a related party transaction.
In connection with the term loan agreements DH entered into in May 2022, derivative financial instruments were bifurcated from the host contract and accounted for as financial assets at fair value through profit and loss. The fair value of the derivatives amounted to € 15.5 million upon initial recognition and to € 16.7 million as of June 30, 2022 and is included in the non-current other financial assets (refer to section F.3. for further details).
Investments decreased mainly as a result of fair value changes.
On January 12, 2022, the series of collar-loan transactions with respect to shares in Just Eat Takeaway.com entered into by Delivery Hero and Morgan Stanley in 2019 and 2020 respectively were terminated following an arbitration-tribunal decision. Both parties agreed to discharge in full and release one another from their respective obligations in respect of the collar-loan transactions. The termination net amount payable, equal to the sum of loan repayment, redelivery of shares and option unwind value, as determined upon termination date, was zero. The financial assets for derivatives identified within the collar-loan transactions had a value of zero as of December 31, 2021 and have been derecognized in H1 2022.
As of June 30, 2022, assets of a disposal group classified as held for sale comprise the stake in Rappi Inc., Delaware/USA, with a fair value of € 206.1 million (December 31, 2021: € 430.1 million). The decrease results from multiple sales throughout the first half of 2022 and a decrease in the fair value of the remaining stake. The management of the Group continues to be committed to further sales.
The increase in subscribed capital and capital reserve is attributable to two capital increases in connection with the issuance of the restricted stock units under the existing share-based incentive program and further vesting of the equity-settled share-based payment awards.
Other comprehensive income changes in H1 2022 include effects of € 329.5 million from hyperinflationary economies in the currency translation reserve.
On May 12, 2022, DH entered into a syndicated term loan comprising a USD 825 million term facility ("Dollar Term Facility") and a € 300 million term facility ("Euro Term Facility" and, together with the Dollar Term Facility, the "Term Facilities").
The Term Facilities' maturity date is August 12, 2027. The Dollar Term Facility bears interest at a rate of Term SOFR plus 5.75% p.a. and is repaid in consecutive quarterly installments of 0.25% of the aggregate principal amount. The Euro Term Facility bears interest at a rate of EURIBOR plus 5.75% p.a. with repayment of the aggregate principal amount at maturity date. Interests for both tranches are payable on a quarterly basis.
A floor has been agreed for the Term SOFR and the EURI-BOR rate at 0.5% and 0.0%, respectively.
In total Delivery Hero received gross proceeds of € 1,059.0 million, which considers an original issue discount of 2.5% and 4.5% of the principal amount of the Dollar Term Facility and the Euro Term Facility, respectively.
The term facilities both include several early prepayment features as embedded derivatives. An optional prepayment feature that entitles Delivery Hero to repay the Term Facilities early during their term has been evaluated as not being closely related to the host contract. Together with the floor features for Term SOFR and EURIBOR, the prepayment options for both term facilities have been bifurcated from the host contract and are accounted for at fair value through profit or loss in accordance with IFRS 9. Upon initial recognition, the fair value of the derivatives amounted to € 8.6 million for the Dollar Term Facility and € 6.7 million for the Euro Term Facility. It is included in other noncurrent financial assets.
The liability component is classified as a financial liability at amortized cost. It amounted to € 751.5 million (Dollar Term Facility) and € 290.2 million (Euro Term Facility) after deduction of issuance cost upon initial recognition. The total difference to the nominal amounts of € 41.3 million for both facilities is accrued as interest expense of the financial liability over the respective term of the loan using the effective interest method.
Concurrently with the signing of the Term Facilities, the DH Group entered into a revolving credit facility ("RCF") in the amount of € 425 million with a consortium of banks, which remained undrawn at closing. The RCF has an initial maturity of 3 years, with two 1-year extension options.
As collateral for the term facilities, bank accounts of the borrowers exceeding a threshold of € 1.0 million, the equity interests in the subsidiaries which are party to the loan agreements and certain intercompany receivables have been pledged.
Other provisions increased mainly due to ongoing and newly initiated antitrust investigations in connection with previous M&A transactions.
Trade and other payables are composed as follows:
| EUR million | Jun. 30, 2022 Dec. 31, 2021 | |
|---|---|---|
| Current financial liabilities | ||
| Liabilities to restaurants | 458.6 | 501.4 |
| Liabilities for outstanding invoices | 262.7 | 196.3 |
| Trade payables | 212.1 | 237.0 |
| Lease liabilities | 107.2 | 93.0 |
| Purchase price liabilities and earn-outs |
82.2 | 68.0 |
| Liabilities to riders | 48.8 | 42.7 |
| Accrued interest liability | 27.2 | 17.7 |
| Wallet liabilities | 18.0 | 16.2 |
| Security deposits received | 3.2 | 3.6 |
| Miscellaneous | 15.0 | 30.9 |
| Total current financial liabilities | 1,235.0 | 1,206.9 |
| Non-current financial liabilities | ||
| Lease liabilities | 280.6 | 263.2 |
| NCI put liability | 245.8 | 594.2 |
| Derivative financial instruments | 39.4 | 58.9 |
| Purchase price liabilities and earn-outs | 8.4 | 17.2 |
| Security deposits received | 1.6 | 1.3 |
| Miscellaneous | 0.3 | 0.8 |
| Total non-current financial liabilities | 576.0 | 935.6 |
The NCI put liability to acquire remaining outstanding Woowa shares is measured at fair value through profit and loss, hence the decrease is mainly attributed to the DH share price.
The financial liability in connection with the convertible bonds is composed as follows:
| EUR million | Jun. 30, 2022 Dec. 31, 2021 | |
|---|---|---|
| Convertible Bonds I | 1,673.6 | 1,661.8 |
| thereof tranche A | 855.5 | 849.4 |
| thereof tranche B | 818.2 | 812.4 |
| Convertible Bonds II | 1,357.3 | 1,341.8 |
| thereof tranche A | 692.8 | 684.0 |
| thereof tranche B | 664.6 | 657.8 |
| Convertible Bonds III | 1,164.4 | 1,156.1 |
| thereof tranche A | 702.2 | 696.4 |
| thereof tranche B | 462.2 | 459.7 |
| Financial liability in connection with convertible bonds |
4,195.4 | 4,159.6 |
On September 2, 2021, Delivery Hero placed two tranches ("Tranche A" and "Tranche B") of senior, unsecured convertible bonds maturing in April 2026 (Tranche A) and March 2029 (Tranche B) in a principal amount of € 750 million (Tranche A) and € 500 million (Tranche B), divided into 12,500 bonds in a nominal amount of € 100,000 each (the "Convertible Bonds III"). The Convertible Bonds III are initially convertible into approximately 6.8 million new or existing ordinary no-par value registered shares of Delivery Hero.
The Convertible Bonds III were issued at 100% of their nominal value and with a semiannually payable coupon of 1.00% p.a. (Tranche A) and 2.13% p.a. (Tranche B). The conversion price amounts to € 183.12 (Tranche A) and € 183.12 (Tranche B), representing a conversion premium of 40.0% (Tranche A) and 40.0% (Tranche B) above the reference price of € 130.80 (placement price of the concurrent share offering). The Convertible Bonds III have been placed solely to institutional investors in certain jurisdictions via a private placement. Shareholders' subscription rights were excluded. The Convertible Bonds III are trading on the non-regulated open market segment (Freiverkehr) of the Frankfurt Stock Exchange.
Delivery Hero is entitled to redeem the Convertible Bonds III at any time (i) on or after September 30, 2024 (Tranche A) and September 30, 2025 (Tranche B), if the stock ex-change price per Delivery Hero share amounts to at least 130% (Tranche A) or 150% (Tranche B) of the then prevail-ing conversion price over a certain period or (ii) if 15% or less of the aggregate principal amount of the relevant tranche of the Convertible Bonds III remains outstanding.
The bondholder holds a conditional put right if an investor gains indirect or direct voting rights of 30% or more ("change of control"). If such a change of control occurs, the bondholder has the right to declare those bonds that have not yet been converted or redeemed to be due. In that case, the bonds are redeemed at their principal amount plus interest accrued.
According to IAS 32, the conversion right within the Convertible Bonds III constitutes an equity instrument, which is included in equity in the amount of € 54.4 million (Tranche A) and € 40.0 million (Tranche B) after deduction of the issuance cost. The liability component is classified as a financial liability at amortized cost. It amounted to € 692.8 million (Tranche A) and € 458.2 million (Tranche B) after deduction of issuance cost upon initial recognition. The difference to the nominal amount of € 57.2 million (Tranche A) and € 41.8 million (Tranche B) is accrued as interest expense of the financial liability over the respective term of the tranches using the effective interest method. The early redemption features of Delivery Hero and the put right of the bondholders constitute embedded derivatives that are, however, not separated from the host contracts in accordance with IFRS 9, as they are evaluated as being closely related. The values of these embedded deriv-atives are interdependent.
Delivery Hero received gross proceeds amounting to € 1.25 billion from the Convertible Bonds III.
The total share-based compensation expense amounts to € 149.8 million (H1 2021: € 131.7 million), thereof € 107.0 million incurred for the Long-Term Incentive Plan ("LTIP") in the first six months of 2022 (H1 2021: € 63.1 million).
In the first half of 2022, a total of 1,852,807 RSUs and 1,041,826 stock options were granted to new and existing beneficiaries of the LTIP (new tranches).
In June 2022 Delivery Hero offered a One-Off Hero Grant to its LTIP beneficiaries. In the first half of 2022 a total of 850,426 RSUs were granted. The plan contributed € 3.5 million (H1 2021: € 1.3 million) of expenses in the first half-year period.
The recognized expenses for the Woowa share-based payment program amount to € 14.0 million (H1 2021: 8.1 million).
On the first anniversary of the Woowa closing in March 2022, all shares of the forfeitable portion of Woowa consideration qualifying as share-based payments in accordance with IFRS 2, have fully vested.
Total expense for the first half-year period was € 30.0 million (H1 2021: € 56.1 million).
To promote Delivery Hero's success and to retain talents, and to align the interests of management and key employees with those of the Company, its shareholders and other stakeholders, the participation of management and key employees in the economic opportunities and risks of the relevant business operation is an important component of an internationally competitive remuneration system.
For these purposes, Delivery Hero set up a Performance Share Unit Program ("PSUP 2022") in the first half of 2022, which comprises a restricted stocks plan under which performance-based restricted stock units ("PSU") can be granted to members of management bodies and granted to certain key employees of the Company, as well as to members of managing corporate bodies and certain key employees of subsidiaries of Delivery Hero. The number of vested PSUs will be determined retrospectively based on individual defined performance factors of the beneficiary, the respective department and/or Delivery Hero.
Total expense for the first half-year period was € 0.4 million.
Since DH offered no exercise window in the first half of 2022, the beneficiaries of the VSP 2017 and DH SOP were not able to exercise their equity-settled awards in the first half of 2022. In this context, the exercise period for the affected beneficiaries was extended by one year.
The remeasurement of the liability for the cash-settled VSP 2017 as of June 30, 2022 reduced the share-based compensation expenses by € 5.9 million.
The tables below show the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.
The following abbreviations are used for the measurement categories:
| Classification pursuant to Carrying Fair value IFRS 9 amount Fair value Carrying amount hierarchy EUR million Total NON-CURRENT FINANCIAL ASSETS Investments – Level 3 284.6 3 284.6 FVtPL Investments – Level 1 221.2 1 221.2 FVtPL Derivative financial instruments 16.7 2 16.7 FVtPL Loans granted and security deposits 65.2 65.2 n.a. 65.2 FAaAC Total non-current financial assets 65.2 522.5 587.7 CURRENT FINANCIAL ASSETS Trade and other receivables 384.8 n.a. n.a. 384.8 Other financial assets FVtPL 125.8 3 125.8 Cash and cash equivalents 2,936.2 n.a. n.a. 2,936.2 Financial assets held for sale FVtPL 206.1 3 206.1 NON-CURRENT FINANCIAL LIABILITIES Liabilities to banks FLaAC 1,046.4 n.a. n.a. 1,046.4 Derivative financial instruments 39.4 2 39.4 FVtPL NCI put liability – Level 1 216.9 1 216.9 FVtPL NCI put liability – Level 2 28.9 2 28.9 FVtPL Lease liabilities 280.6 n.a. n.a. 280.6 n.a. Other payables 1.9 1.9 n.a. 1.9 FLaAC Contingent purchase price obligations 8.4 3 8.4 FVtPL Trade and other payables 282.5 293.6 576.1 Convertible bonds FLaAC 4,195.4 3,117.2 2 4,195.4 CURRENT FINANCIAL LIABILITIES Liabilities to banks FLaAC 0.7 n.a. n.a. 0.7 Trade and other payables 1,045.6 n.a. n.a. 1,045.6 FLaAC Lease liabilities 107.2 n.a. n.a. 107.2 n.a. Contingent purchase price obligations 82.2 3 82.2 FVtPL Trade and other payables 1,152.8 82.2 1,235.0 Total financial liabilities 6,677.7 375.8 7,053.5 |
June 30, 2022 | Measured at amortized cost | Measured at fair value |
||
|---|---|---|---|---|---|
| December 31, 2021 | Measured at amortized cost | Measured at fair value |
||||
|---|---|---|---|---|---|---|
| EUR million | Classification pursuant to IFRS 9 |
Carrying amount |
Fair value | Carrying amount | Fair value hierarchy |
Total |
| NON-CURRENT FINANCIAL ASSETS | ||||||
| Investments – Level 3 | FVtPL | 515.1 | 3 | 515.1 | ||
| Investments – Level 1 | FVtPL | 570.6 | 1 | 570.6 | ||
| Loans granted and security deposits | FAaAC | 45.9 | 45.9 | n.a. | 45.9 | |
| Other financial assets | 45.9 | 1,085.7 | 1,131.6 | |||
| CURRENT FINANCIAL ASSETS | ||||||
| Trade and other receivables | FAaAC | 437.1 | n.a. | n.a. | 437.1 | |
| Other financial assets | FVtPL | 4.5 | 3 | 4.5 | ||
| Cash and cash equivalents | 2,446.7 | n.a. | n.a. | 2,446.7 | ||
| Financial assets held for sale | FVtPL | 430.1 | 3 | 430.1 | ||
| Total financial assets | 2,929.8 | 1,520.4 | 4,450.1 | |||
| NON-CURRENT FINANCIAL LIABILITIES | ||||||
| Derivative financial instruments | FVtPL | 58.9 | 2 | 58.9 | ||
| NCI put liability | FVtPL | 594.2 | 1 | 594.2 | ||
| Lease liabilities | n.a. | 263.2 | n.a. | n.a. | 263.2 | |
| Other payables | FLaAC | 2.1 | 2.1 | n.a. | 2.1 | |
| Contingent purchase price obligations | FVtPL | 17.2 | 3 | 17.2 | ||
| Trade and other payables | 265.2 | 670.3 | 935.6 | |||
| Convertible bonds | FLaAC | 4,159.6 | 4,538.2 | 2 | 4,159.6 | |
| CURRENT FINANCIAL LIABILITIES | ||||||
| Liabilities to banks | FLaAC | 2.2 | n.a. | n.a. | 2.2 | |
| Trade and other payables | FLaAC | 1,045.9 | n.a. | n.a. | 1,045.9 | |
| Lease liabilities | n.a. | 93.0 | n.a. | n.a. | 93.0 | |
| Contingent purchase price obligations | FVtPL | 68.0 | 3 | 68.0 | ||
| Trade and other payables | 1,138.9 | 68.0 | 1,206.9 | |||
| Total financial liabilities | 5,566.0 | 738.3 | 6,304.4 | |||
The fair value is not disclosed for some current financial assets and current financial liabilities because their carrying amount is a reasonable approximation of fair value due to their short-term nature. The fair values of some non-current financial assets approximate their carrying amount as there were no significant changes in the measurement inputs, since their fair value was determined upon initial recognition.
To determine the fair values of the Level 3 investments, the prior sale of company stock method, discounted cash flow techniques and multiples method are applied. The prior sale of company stock method considers any prior arm's length sales of the equity securities. The discounted cash flows technique considers the present value of expected payments, discounted using a risk-adjusted discount rate. The multiples method takes into account publicly available peer group metrics such as GMV/GVT in relation to market capitalization. A change from the prior sale of company stock method to the multiples method was made if there were indications that the last financing round no longer accurately reflected the fair value. An improvement in the peer group's key figures would increase the fair value again.
The fair values of the embedded derivatives associated with the Convertible Bonds II were determined based on a binomial option pricing model using the share price and volatility of the DH stockshare as well as credit spreads and risk-free interest rate as key input parameters.
The fair values of the derivatives associated with the joint venture with ifood in Colombia were determined according to the agreed call/put option valuation of the shareholder agreement using performance-based valuation criteria (GMV) and comparable multiples of publicly-listed companies.
The fair value of the derivative associated with the investment in Facily Ltd. was determined according to the agreed call option valuation of the shareholder agreement and by applying the valuation of the latest financing round.
The fair values of the embedded derivatives in the term loan facilities were determined based on a option pricing model using the credit risk-adjusted EUR and USD composite-curve, the risk-free interest rate and implicit volatility of EURIBOR and SOFR as key input parameters.
The fair value for the convertible loan granted to Glovo has been determined taking into account the expected number of shares to be received under the loan agreement, an assumption of a high probability of settling the loan through conversion into shares and the equity price of Glovo, derived from the prior sale of stock method as significant unobservable key input parameter.
The fair values of contingent purchase price obligations resulting from business combinations are estimated taking into account the underlying contingency as agreed with the seller in a particular business combination.
Starting in January 2020, Delivery Hero used Blue Chip Swaps to transfer USD-denominated funds to the Group's Argentine subsidiaries for ongoing operations. The transactions generate fair value gains from the disposal of financial instruments corresponding to the difference between the official USD-ARS exchange rate and the implicit rate of the trade. During the first half of the year, fair value gains of € 7.2 million (H1 2021: € 6.8 million) were recognized in the other financial result.
DH Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
Total gains and losses from the change in Level 3 instruments measured at fair value are recognized in other financial result.
The reconciliation of Level 3 instruments measured at fair value is as follows:
| Assets | Liabilities | ||||
|---|---|---|---|---|---|
| EUR million | Deal Contingent option |
Investments Level 3 |
Investments held for sale Level 3 |
Other financial assets |
Contingent pur chase price obliga tions |
| As of Jan. 1, 2021 | 23.1 | 125.3 | – | – | 102.4 |
| Additions | – | 336.5 | 430.1 | 0.0 | – |
| Assumed in a business combination | – | 28.1 | – | – | – |
| Disposals | – | – | – | – | –25.9 |
| Gains/losses recorded in profit or loss | –23.1 | 81.5 | – | 4.5 | 8.6 |
| Transfers out of Level 3 | – | –56.3 | – | – | – |
| As of Dec. 31, 2021 | – | 515.1 | 430.1 | 4.5 | 85.2 |
| Additions | – | 46.5 | – | 125.8 | 0.0 |
| Disposals | – | –0.0 | –227.2 | – | –3.1 |
| Gains/losses recorded in profit or loss | – | –277.0 | 3.1 | –4.5 | 8.5 |
| As of June 30, 2022 | – | 284.6 | 206.1 | 125.8 | 90.6 |
As of June 30, 2022, the effect on the profit or loss in response to changes in the inputs into the fair value measurements would be as follows: (+) means a positive effect on profit or loss and (–) means a negative effect on profit or loss:
| EUR million | Contingencies +/– 10% |
Interest rates +/– 100 BP |
Equity price +/– 10% |
|---|---|---|---|
| Other financial assets |
n.a. | n.a. +137.5/–112.5 | |
| Investments | n.a. | +0.5/–0.5 | +63.4/–63.4 |
| Contingent purchase price obligation |
+1.2/–1.2 | +0.8/–0.8 | n.a. |
As of the reporting date, contingent liabilities in connection with IAS 37 amount to € 13.9 million and to € 4.4 million in connection with IAS 12.
In May 2019, the Group became party to an arbitration proceeding in Dubai where a minority shareholder in a Group company had requested monetary damages for unfair prejudice, including significant lawyer, appraiser and expert fees, following the Group's attempt to exercise the contractual call option for approximately half of the minority shareholding. Delivery Hero assesses the prospect of success for the minority shareholder as not probable and has raised counterclaims for damages. The arbitration process is still ongoing and the risk assessment remains unchanged.
Since 2021, the Hong Kong Competition Authority ("HKCC") has been investigating Foodpanda for alleged anti-competitive practices in the food delivery sector, such as the use of most favored nation and exclusivity clauses. The investigation is at very early stages and therefore we were not able to provide a reliable estimate of the amount of a respective contingent liability. The risk assessment is unchanged since the last reporting date.
Since 2019, two subsidiaries of the Group have been investigated in parallel by a Competition Authority in relation to use of exclusivity clauses and loyalty rebates. The Competition Authority recommended fines and both subsidiaries entered into administrative proceedings to seek a nullification of the competition authority's decision. The court proceedings are still pending, but Delivery Hero believes that it has good chances of being able to succeed.
DH Group entities are taxable in a number of countries worldwide and maintain various supply and service relationships with each other. Uncertainty in the assessment of income tax positions from these relationships arises to the extent that the individual tax authorities may have different views of these relationships.
Tax authorities in many countries scrutinize intercompany transactions during transfer pricing audits for every company that operates on an international level, i.e., crossborder. Disputes between tax authorities and taxpayers often arise regarding the functional profiles of the involved parties and their value contributions, especially since transfer pricing is not an exact science but does require the exercise of judgment on the part of both the tax administration and taxpayer as well as must reflect all economic and business challenges and be adapted in a manner consistent with the independent arm's length principle. This often leads to contrary opinions regarding the appropriate transfer pricing method and regularly results in significant unilateral transfer pricing adjustments and, thus, double taxation. This risk is particularly relevant in the digital economy, where transactions are often complex.
For the Group specifically, the main aspects that are inherent to and unavoidable in the Group's business model and could lead to transfer pricing disputes between the Group and tax authorities based on the Group's intercompany transfer pricing model comprise:
– Value contributions of intangible assets and involved entities are often difficult to quantify from a transfer pricing perspective,
– Complex organizational structure (central, regional and local level),
The Group's current transfer pricing model aims to address these aspects. The Group regularly reviews its transfer pricing model and implements amendments, where necessary, to proactively manage the transfer pricing risks.
A key aspect of the food delivery and Q-commerce industry is the treatment of the riders, i.e., people who pick up deliveries and take them to the customer. Such riders can either be directly employed by our local entity or freelancers, all depending on the applicable laws for their respective country. For most markets, a local industry standard emerges that is collectively applied for riders at DH and all its local competitors. Such standard is always chosen to fully comply with tax and legal purposes, while simultaneously providing both the business and its delivery personnel with necessary and appropriate flexibility.
While DH strives for full compliance in each market by following the locally established industry standard, there is always an imminent risk for certain requalifications by the local authorities, for example identifying individuals in a freelance rider fleet who may be too dependent on DH as their employer and thus should be regarded as employees.
Such requalification risk may result in a retrograde assessment of wage tax, social security contributions, or other comparable payments that the employer should have withheld for such identified individuals.
All local subsidiaries, supported by the Group's central legal and tax functions, regularly review their local rider model in a constantly evolving legal landscape to comply with the applicable industry and market standard in order to achieve full compliance. This approach ensures that the imminent requalification risk is reduced to a minimum, however a low risk has to be regarded as imminent to the industry DH operates in. Due to an increased uncertainty no reliable estimation of the contingent liability was available as of the reporting date.
Receivables from joint ventures include a credit facility with Inversiones CMR S.A.S. (Colombia) with an interest rate of Libor + 4.17% p.a. expiring in July 2024.
The requirements of IAS 24 apply to the key management personnel of the company, their immediate family members as well as the companies they control. Within the Delivery Hero Group, this concerns members of the Management Board as well as members of the Supervisory Board.
The members of the Management Board and the Supervisory Board remained the same compared to December 31, 2021.
The statements made in the Annual Report 2021 on the structure of the remuneration of the key management personnel are still applicable for the first six months of 2022.
Other related-party transactions comprise exchanges of DH Group with related entities, primarily associated companies, joint ventures and entities controlled by key management personnel.
In the first half of 2022, the Delivery Hero provided a convertible loan to Glovoapp23, S.A., Barcelona, Spain, to provide Glovo with funds in the total amount of approximately € 125.0 million in cash.
Furthermore, for the first half of 2022 income from transactions with related parties amounts to € 0.8 million, expenses amount to € 0.6 million. As of June 30, 2022, receivables from associates amount to € 128.1 million, including the convertible loan provided to Glovo, receivables from joint ventures amount to € 23.8 million and outstanding payables to related parties amount to € 0.3 million.
On July 4, 2022 Delivery Hero executed the closing of the acquisition of Glovoapp23 S.A. (formerly Glovoapp23 S.L., "Glovo") that was entered into on December 31, 2021. Glovo is a multi-category delivery app operating in 25 countries across Europe, Central Asia and Africa. The acquisition of Glovo complements Delivery Hero's geographical footprint with leading positions in various markets. Additionally, this acquisition will leverage shared technology to further improve efficiencies and accelerate product development. The closing of the transaction was subject to certain conditions precedent and regulatory approvals, including merger control clearance in several countries.
Delivery Hero acquired 50.3% of the voting shares in Glovo resulting in a total shareholding of 94.5%. The total consideration transferred amounts to € 509.5 million consisting of € 394.8 million in newly issued shares and sharebased payment replacement awards of € 114.7 million.
Goodwill, which consists primarily of not separable components such as positive business prospects and employee know-how, is not deductible for tax purposes. The gross contractual value of acquired trade receivables from third parties equals its fair value and is assessed being fully recoverable.
At the acquisition date, Delivery Hero recognized noncontrolling interest in an amount of € 43.3 million measured at fair value. The transaction price was considered as an appropriate measure for the fair value of the Glovo shares and does not include any discount or control premium. Hence, it was also used to determine the fair value of the non-controlling interest.
Glovo has pending rider-related proceedings where the underlying legal matter is consistently related to the riders' legal status as freelancers or employees. The likelihood of an outflow of resources embodying economic benefits is assessed on a case-by-case basis and considered in the determination of the fair value of the liability in line with IFRS 3.23. The majority of the proceedings were started for the period between 2016 and 2021. A less material portion of the contingent liabilities are related to VAT treatment issues and proceedings with regard to the General Data Protection Regulation ("GDPR") infringements.
As part of the business combination, Delivery Hero replaced Glovo's share-based payment awards of which the non-vested portion is attributable to post-combination services thus considered as a separate transaction. This portion will be recognized as remuneration cost in the post-combination financial statements.
Furthermore, Delivery Hero grants incentives to Glovo employees dependent on certain vesting and non-vesting conditions.
Prior to the effective date of the business combination, Delivery Hero held 44.2% of the total shares of Glovo on a non-diluted basis at a fair value of € 347.7 million. Remeasuring the equity interest at its fair value results in a gain of € 121.2 million in H2 2022 to be recognized in the "other financial result". If the acquisition had been consolidated as of January 1, 2022, the Glovo entities would have contributed € 371.4 million to Group revenue and a net loss of € 172.4 million to the Group's net result.
The total consideration for the transaction was allocated between the recognized assets and the assumed liabilities as follows based on provisional accounting in accordance with IFRS 3.45:
| Fair values at | |
|---|---|
| EUR million | date of acquisition |
| Intangible assets | 6.8 |
| Property, plant and equipment | 34.5 |
| Trade and other receivables | 81.5 |
| Other assets | 107.4 |
| Cash and cash equivalents | 140.0 |
| Provisions and liabilities | –497.1 |
| Trade payables | –93.6 |
| Deferred tax liabilities | –0.5 |
| Net assets | –221.0 |
| NCI, based on the proportionate interest in the recognized amounts of the assets |
|
| and liabilities of Glovo | 43.3 |
| Consideration transferred | 509.5 |
| Shareholding pre-closing fair value | 347.7 |
| Goodwill | 1,121.6 |
The Glovo Transaction qualifies as a business combination in accordance with IFRS 3, thus, the identifiable assets acquired, and the liabilities assumed of the Glovo Group are measured at their acquisition date fair values. The determination of the fair values depends on certain factors, such as the development of an integrated business plan, the alignment of management judgements and estimates and a detailed analysis of internally generated assets, which are currently not recognized at Glovo Group. Furthermore, the valuation of certain components of the consideration is dependent on variable factors. As of August 23, 2022, certain information is either not yet available or the identification and valuation process is still ongoing. For this reason, some valuation parameters were provisionally determined on the basis of estimates or the information currently available. Hence, the consideration transferred, the corresponding purchase price allocation and the measurement of NCI as well as the revaluation gain on the pre-acquisition shareholding at the acquisition date of the Glovo Transaction will differ and might differ significantly from the amounts presented. The accounting for the acquisition in accordance with IFRS 3 for the Glovo Transaction and the rider litigation liability are to be considered as provisional.
After the reporting period, Delivery Hero sold its shareholding in Zomato for net proceeds of approximately € 60 million.
Delivery Hero started a partial buyback of the Company's outstanding 2024 convertible bonds, for a nominal value of up to € 85 million (approximately 10%). The transaction relates to the outstanding principal of the convertible bonds due in January 2024, which may be carried out in over-the-counter transactions, and is expected to end by September 30, 2022. Delivery Hero intends to cancel the repurchased bonds. Delivery Hero has appointed a bank to execute the repurchase independently within parameters that will be predefined. To the extent legally permissible, the repurchase can be terminated, extended, suspended, and also resumed at any time. At this time, no further repurchases are planned.
Berlin, August 23, 2022
The Management Board
Niklas Östberg Emmanuel Thomassin Pieter-Jan Vandepitte
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the consolidated interim financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the Interim Group Management Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the material opportunities and risks associated with the expected development of the Group in the remaining financial year.
Berlin, August 23, 2022
Delivery Hero SE
The Management Board
Niklas Östberg Emmanuel Thomassin Pieter-Jan Vandepitte
FINANCIAL CALENDAR PAGE 36 IMPRINT PAGE 36 DISCLAIMER PAGE 37
Q3 2022 Trading Update / Quarterly Statement Nov. 10, 2022
Delivery Hero SE Oranienburger Straße 70 10117 Berlin, Germany Phone: +49 (0)30 5444 59 000 www.deliveryhero.com HRB 198015 B
E-mail: [email protected]
This report also contains forward-looking statements. These statements are based on the current view, expectations and assumptions of the management of Delivery Hero SE ("Delivery Hero"). Such statements are subject to known and unknown risks and uncertainties that are beyond Delivery Hero's control or accurate estimates, such as the future market environment and the economic, legal and regulatory framework, the behavior of other market participants, the successful integration of newly acquired entities and the realization of expected synergy effects, as well as measures by public authorities. If any of these or other uncertainties and imponderables materialize, or if the assumptions on which these statements are based prove to be incorrect, actual results could differ materially from those expressed or implied by such statements. Delivery Hero does not warrant or assume any liability that the future development and future actual results will be consistent with the assumptions and estimates expressed in this report. Delivery Hero does not intend or assume any obligation to update forward-looking statements to reflect events or developments after the date of this report, except as required by law.
Due to the effects of rounding, some figures in this and other reports or statements may not add up precisely to the sums indicated, and percentages presented may not precisely reflect the exact figures to which they relate.
We also publish this report in German. In the event of any discrepancies, the German version of the report shall prevail over the English translation.
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