Segment information

Our operations span four segments. These segments are: Northern Europe, United Kingdom and Ireland, North America, and Southern Europe and Australia and New Zealand (ANZ). Northern Europe comprises Austria, Belgium, Denmark, Germany, Luxembourg, Poland, Slovakia, Switzerland and the Netherlands. Southern Europe and ANZ comprises Australia, Bulgaria, France, Israel, Italy, New Zealand, and Spain. North America comprises Canada and the United States.

Northern Europe

In 2023, the Northern Europe markets together made up 31% of Just Eat Takeaway.com's total orders and 29% of the total GTV, with Germany being the largest market in terms of orders and GTV.

Performance in Northern Europe gradually improved throughout 2023 to reach positive year-on-year GTV growth in the second half of the year and achieved a full year GTV increase of 4% to €7.7 billion in 2023 from €7.4 billion in 2022. Orders in Northern Europe declined by 5% in 2023 compared with 2022, primarily attributable to the impact of the pandemic on the early prior year comparatives. Growth in GTV was mainly caused by higher ATV predominantly driven by higher food prices.

Northern Europe revenue grew by 11% to €1,277 million in 2023 from €1,155 million in 2022. Revenue growth was driven by higher ATV driven by higher food pricing, optimising our partner pricing and more demand for advertising from our partners.

Northern Europe adjusted EBITDA increased to €366 million in 2023 from €313 million in 2022. The adjusted EBITDA margin improved to 4.8% in 2023 from 4.2% in 2022. The improved adjusted EBITDA was mainly driven by optimised partner pricing, higher demand for advertising offering and targeted cost reduction programmes. Northern Europe remained the segment with the highest adjusted EBITDA margin within Just Eat Takeaway.com.

UK and Ireland

Our UK and Ireland segment, operating under the Just Eat brand, processed 245 million orders which makes up 28% of Just Eat Takeaway.com's total orders and €6.6 billion GTV representing 25% total GTV in 2023.

Order growth in the UK and Ireland segment improved throughout 2023. Year-on-year orders overall still declined by 6% compared with 2022, which can be partially attributed to lapping the pandemic in the first half of 2023. There is positive momentum in our grocery business as well. Full year GTV improved significantly in the second half of 2023 and returned to growth, achieving a year-on-year increase of 1% at €6.6 billion. Growth in GTV was driven by higher ATV from higher food pricing, partly offset by unfavourable foreign exchange rate movements. On a constant currency basis, GTV grew by 3% in 2023 compared with 2022.

United Kingdom and Ireland revenue decreased by 1% to €1,311 million in 2023. The higher ATV was offset by the decrease in orders and unfavourable foreign exchange rate movements.

Adjusted EBITDA increased to €135 million in 2023 from €23 million in 2022 and the adjusted EBITDA margin improved to 2.0% in 2023 from 0.4% in 2022. The improved adjusted EBITDA was primarily driven by enhanced delivery efficiency and simplification of our delivery operation. As a result, the delivery cost per order notably reduced and additional efficiencies were achieved through streamlining our operations.

Southern Europe and ANZ

These markets together made up 10% of Just Eat Takeaway.com's total orders and 8% of the total GTV in 2023, with Australia being the largest market in this segment.

Orders for the Southern Europe and ANZ segment declined by 16% in 2023. This decline can be attributed to the impact of the pandemic, primarily in the first few months of 2022. In line with the order decline, GTV decreased by 17% to €2.2 billion in 2023 from €2.6 billion in 2022, primarily driven by lower order volume and foreign currency headwinds. The constant currency GTV decrease was 14% in 2023 compared with 2022.

Southern Europe and ANZ revenue declined by 18% to €438 million in 2023 from €532 million in 2022. This was mainly driven by a decline in ATV and orders as well as unfavourable foreign exchange rates.

Southern Europe and ANZ had an adjusted EBITDA of minus €97 million in 2023 compared with minus €161 million in 2022, and the adjusted EBITDA margin improved to minus 4.5% in 2023 from minus 6.2% in 2022. This improvement in adjusted EBITDA was mainly driven by actions taken to streamline operations, more efficient customer service as a result of better technology and improvement in marketing efficiency. In addition, we continue to focus capital and management attention towards our highest potential markets to generate scale, leadership positions and profit pools, as our industry rationalises.

North America

North America represented 32% of the total Just Eat Takeaway.com orders and 38% of the total GTV in 2023.

While constant currency GTV growth improved in the second half of 2023, the pandemic impact on the early prior year comparatives was still noticeable. North America's orders and GTV both decreased overall by 14% compared with 2022, to 281 million orders and €10.0 billion GTV. Year-on-year order growth increased in the second half of 2023 as we refocused on key operating pillars and invested behind the core business and new verticals. On a constant currency basis, GTV decreased by 11% in 2023 compared with 2022.

North America revenue decreased by 16% to €2,141 million due to a reduction in orders, investment in consumer pricing and unfavourable foreign exchange rates, partly offset by a higher ATV on constant currency basis due to higher food prices.

North America significantly improved its adjusted EBITDA to €126 million in 2023 from €65 million in 2022. Segment adjusted EBITDA as a percentage of GTV ('adjusted EBITDA margin') improved to 1.3% in 2023 from 0.6% in 2022. The improved adjusted EBITDA was largely attributed to efficient spending with lower marketing costs and continued optimisation in overheads.

Head office

Head office costs relate mostly to non-commercial expenses and include all central operating expenses such as staff costs and expenses for global support teams such as Legal and Compliance, InfoSec Risk and Control, Finance, Internal Audit, Human Resources and the Management Board.

Head office expenses were €207 million in 2023 compared with €221 million in 2022. The decrease in expense was primarily driven by continued optimisation in overheads partly offset by inflation-related cost adjustments.

CFO update and financial review

The financial information included in the CFO update and financial review is derived from the 2023 consolidated financial statements and 2022 comparative figures included therein. This section is reported on an IFRS basis.

Consolidated statement of profit or loss

Revenue

Order-driven revenue decreased by 7% to €4,933 million in 2023 due to a 9% decrease in orders, partially offset by a higher ATV and increased promoted placement revenue earned on a per order basis, as well as a reduction in consumer vouchers and refunds issued.

Ancillary revenue decreased by 5% to €234 million in 2023 compared with €246 million in 2022, due to a slight reduction in subscription revenue. This was caused mainly by the partnership with Amazon in offering Prime members a free one-year Grubhub+ membership.

Order fulfilment costs

Courier costs, which mainly include the cost of engaging couriers through agencies and third-party delivery companies as well as salary and staff expenses of our employed couriers, decreased by 12% to €2,289 million in 2023 from €2,599 million in 2022. This decrease was driven by a reduction in both delivery orders of 9% and substantial improvements in delivery efficiency through our delivery network optimisation, order pooling, algorithm optimisation, and simplification of our delivery operations. These improvements offset courier wage inflation and impact of courier pay legislation resulting in lower courier costs per order.

Order processing costs decreased by 11% to €507 million in 2023 from €571 million in 2022, primarily driven by the decrease in orders, as well as efficiency gained in the costs per order.

Revenue less Order fulfilment costs

Revenue less order fulfilment costs slightly decreased to €2,372 million in 2023 compared with €2,391 million in 2022. The negative impact of the reduction in orders is partially offset by a higher ATV and lower costs per order driven by higher delivery efficiency.

Staff costs

Staff costs decreased by 5% to €1,191 million in 2023 compared with €1,259 million in 2022. Our staff, excluding employed couriers as this group is included in order fulfilment costs, decreased by 15% to an average of approximately 13,500 FTEs in 2023 from an average of approximately 15,900 FTEs in 2022. This average FTE decrease was largely due to the Group restructuring activities and the hiring pause put in place during the second half of 2022 which had a full year effect in 2023 as well as ongoing optimisation and automation efforts pursued in 2023. Within 2023, FTEs remained broadly stable. The impact of the FTE decrease on staff costs was partially offset by staff wage inflation.

Share-based payments relate to the Long-Term Incentive Plan (LTIP) and the Short-Term Incentive Plan (STIP) for the Management Board, as well as the various long-term and short-term share (option) plans for employees (as described in Note 7 to the consolidated financial statements for the period ended 31 December 2023). Share-based payments decreased to €147 million in 2023 compared with €166 million in 2022, mainly driven by the decrease in average FTEs and the gradual completion of legacy and Grubhub rollover plans.

Other operating expenses

Marketing expenses

Marketing expenditure can primarily be distinguished as relating to (i) performance marketing (or pay-per-click/pay-per-order) which directly generates traffic and orders, such as search engine marketing, app marketing and affiliate marketing (rewarding third parties for referrals to our platforms) and (ii) brand marketing, such as television, online media, and outdoor advertising (billboards).

In 2023, we continued our partnership with UEFA and launched a new global brand campaign with Christina Aguilera and Latto. Marketing expenses decreased by 20% to €588 million in 2023 compared with €735 million in 2022, primarily due to efficiencies in brand marketing spend as well as a reduction in performance marketing spend due to lower order volumes and costs per order spend optimisation.

Other operating expenses

Other operating expenses decreased by 24% to €487 million in 2023 compared with €642 million in 2022, mainly driven by measures taken to increase efficiency and automation in the business. Consequently, we achieved savings in relation to staff-related expenses and professional fees. These measures allowed us to effectively manage costs while maintaining a focus on operational efficiency, ultimately contributing to a reduction in overall expenditure.

Depreciation, amortisation and impairments

Depreciation and amortisation expenses were €599 million in 2023, up from €567 million in 2022 due to the amortisation of intangible assets, mainly consumer lists and development costs.

Total impairments of €1,539 million were recognised in 2023 for goodwill, other intangible assets and property and equipment. Following the annual impairment test and the identification of impairment indicators, impairment losses were mainly recognised in the amount of €1,060 million related to cash-generating unit (CGU) United States and €436 million to CGU Canada. The impairment in the United States and Canada was mainly driven by lower-than-expected order levels in the short-to-medium term resulting from market competitiveness. See also Note 11 to the consolidated financial statements for more details.

Share of results of associates and joint ventures

Movements in the share of results of associates and other gains and losses are mainly explained by the sale of our investment in iFood in 2022.

Income tax expense

In 2023, the net income tax benefit was €225 million, compared with €101 million in 2022. The taxable results of profitable entities resulted in a current tax expense of €30 million compared with €53 million in 2022, which included the impact of the Danish Tax authority dispute of €32 million. In 2023, the deferred tax benefit was €254 million compared with €154 million in 2022, mainly relating to temporary differences arising from the amortisation of other intangible assets and the recognition of available tax losses carried forward.

Loss for the period

As a result of the factors described above, Just Eat Takeaway.com realised a net loss after tax of €1,846 million in 2023 (2022: €5,667 million). The loss for the period excluding the impact of total impairments amounted to €307 million compared with €1,065 million in 2022.

Consolidated statement of financial position

Non-current assets, mainly consisting of goodwill and other intangible assets decreased to €7,840 million as of 31 December 2023 from €9,742 million as of 31 December 2022. This was primarily driven by the impairment losses and amortisation of intangible assets.

Cash and cash equivalents increased to €1,724 million as of 31 December 2023, from €2,020 million as of 31 December 2022. This decrease was primarily driven by cash outflows from the share buyback programmes and capital expenditures.

Shareholders' equity decreased to €6,044 million as of 31 December 2023, from €7,903 million as of 31 December 2022, mainly due to accumulated losses over the period.

The solvency ratio, defined as total equity divided by total assets, was 59% as of 31 December 2023 compared with 64% at of 31 December 2022, the decrease was mainly caused by accumulated losses over the period.

Consolidated statement of cash flows

Net cash generated by operating activities amounted to €125 million in 2023 compared with €166 million used in 2022. The increase was driven by improved operational performance and our focus on becoming profitable.

Net cash used in investing activities amounted to €136 million in 2023 mainly driven by continued capital expenditure, compared with net cash generated of €1,214 million in 2022 which included the proceeds from the disposal of iFood.

Net cash used in financing activities amounted to €278 million in 2023 driven by cash outflows from the share buyback programmes and lease payments, compared with net cash used of €365 million in 2022 which included the repayment of a bank loan.

Events after the reporting period

On 7 February 2024, the Supervisory Board announced the nomination of Mayte Oosterveld for appointment as new CFO and member of the Management Board at the AGM 2024.

Outlook

●      The Management Board issues the following guidance for 2024:

o  Constant currency GTV growth excluding North America to be in the range of 2% to 6% year-on-year

o  Adjusted EBITDA of approximately €450 million

o  Free cash flow (before changes in working capital) to continue to be positive in 2024 and thereafter

●      Long-term target of group adjusted EBITDA margin in excess of 5% of GTV.

●      Management, together with its advisers, continues to actively explore the partial or full sale of Grubhub. There can be no certainty that any such strategic actions will be agreed or what the timing of such agreements will be. Further announcements will be made as and when appropriate.

Principal risks

In conducting our business, we face risks that may interfere with the achievement of our business objectives. It is important to understand the nature of these risks. The principal risks published in the Company's 2022 Annual Report were reviewed by senior management and the Management Board through a series of one-on-one interviews and it was determined that the principal risks continued to apply throughout 2023, with the exception of one principal risk that was no longer deemed relevant in 2023 ("Integration and Transformation") and some minor wording changes made to this list. Any of these risks and events or circumstances described therein may have a material adverse effect on our business, financial condition, results of operations and reputation. The risks outlined in the 2023 Annual Report continue to apply in 2024. These risks are not the only ones that we face. Some risks may not yet be known to us and certain risks that we do not currently believe to be material could become material in the future.

In Control Statement by the Management Board

As recommended by Governance Rules and on the basis of the foregoing and the explanations contained in the section 'Risk Management', the Management Board confirms, to its knowledge, that:

·      Just Eat Takeaway.com's financial reporting over 2023 provides sufficient insights into any failings in the effectiveness of the internal risk management and control systems;

·      Just Eat Takeaway.com's internal risk management and control systems with regard to financial reporting risks provide a reasonable assurance that Just Eat Takeaway.com's financial reporting over 2023 does not contain any material errors;

·      Based on the current state of affairs, it is justified that the financial reporting over 2023 is prepared on a going concern basis; and

·      The report states those material risks and uncertainties that are relevant to the expectation of Just Eat Takeaway.com's continuity for the period of 12 months after the preparation of the report.

The Management Board, 28 February 2024

Jitse Groen, CEO
Brent Wissink, CFO

Jörg Gerbig, COO

Andrew Kenny, CCO

Investor Relations:
Joris Wilton
E: IR@justeattakeaway.com

Media:
E: press@justeattakeaway.com

For more information, please visit our corporate website: https://www.justeattakeaway.com/