Profitability Improved While the Loss Got Bigger - Again
Delivery Hero's half-year report for the six months to June 30, 2022 shows a net loss of €1,467.3 million, 46.4% wider than the €1,002.3 million loss a year earlier (restated - see Beyond the Usual). That widening happened in the same half the company's preferred profitability metric, Adjusted EBITDA of the Segments, actually improved - from -€350.8 million to -€323.0 million, a genuine 7.9% narrowing, on the back of GMV growing 50.4% to €20,023.6 million. Both numbers are real; they're just measuring different things. The gap between them is explained by two large, largely non-operating items: a €270.6 million goodwill impairment across several cash-generating units (InstaShop, Turkey, Honest Food, and the Latin American Dmart business), and a €626.8 million fair-value loss on financial instruments - mostly the company's own convertible-bond derivatives and other investments, which move with Delivery Hero's own declining share price rather than with how the underlying delivery business performed. Layer on top of that a €212.2 million total "other financial result" loss (net interest costs also rose to €83.5 million from €51.0 million, reflecting new debt taken on this half) and the operating-metric improvement gets fully swamped well before it reaches the bottom line. And then, four days after this half closed, Delivery Hero completed its acquisition of a majority stake in Glovo - only for the European Commission to conduct an unannounced antitrust inspection at Delivery Hero's own Berlin headquarters over suspected market-sharing, disclosed as a live risk in this same report (see Beyond the Usual).
The Prescription
Delivery Hero should keep consolidating fragmented European and MENA delivery markets through majority acquisitions rather than minority stakes - the completed Glovo acquisition (25 countries across Europe, Central Asia and Africa) gives it genuine platform density in markets it was previously only a passive investor in, and full ownership means it can now actually integrate technology and operations rather than watch a portfolio company from the sidelines. That's the right structural move, even at a steep price.
What it should stop doing is closing transformational acquisitions - Glovo now, Woowa a year earlier - without first getting real clarity from regulators on competition-law exposure in the markets both companies operate in. A €270.6 million goodwill impairment landing in the same half a competition-law "dawn raid" is disclosed is not a coincidence a reader should paper over: it suggests parts of the newly-acquired or existing portfolio were already showing signs of being worth less than paid for, in the same period regulatory risk around market conduct escalated from a background item to an active EU Commission inspection. Delivery Hero needs a much higher bar for pre-clearing antitrust exposure before, not after, closing its next major deal.
Key Financial Metrics
H1 2022 vs. H1 2021, reported in EUR (H1 2022 also shown in USD); H1 2021 restated for correction of errors, see Beyond the Usual
FX: EUR 1 = USD 1.0478 (June 30, 2022 close).
| Metric | H1 2022 (EUR) | H1 2022 (USD) | H1 2021 (EUR, restated) | YoY |
|---|---|---|---|---|
| Revenue | €3,815.4M | ~$3,997.1M | €2,457.3M | ✅ +55.3% |
| Total Segment Revenue» | €4,185.7M | ~$4,386.0M | €2,682.5M | ✅ +56.0% |
| Gross profit | €935.8M | ~$980.6M | €546.3M | ✅ +71.3%, margin 24.5% vs 22.2% |
| Adjusted EBITDA» of the Segments | -€323.0M | ~-$338.5M | -€350.8M | ✅ loss narrowed 7.9% |
| Operating result | -€1,041.0M | ~-$1,091.0M | -€674.1M | ⚠️ loss widened 54.4% |
| Net result | -€1,467.3M | ~-$1,538.0M | -€1,002.3M | ⚠️ loss widened 46.4% |
| Diluted/basic EPS | -€5.64 | — | -€4.21 | ⚠️ widened |
| Cash flow from operating activities | -€401.9M | ~-$421.1M | -€354.9M | ⚠️ outflow widened 13.2% |
| Cash and cash equivalents (period-end) | €2,936.2M | ~$3,077.6M | €2,028.4M | ✅ +44.8% |
| Balance sheet | Jun 30, 2022 | Dec 31, 2021 | Change |
|---|---|---|---|
| Total assets | €12,573.6M | €12,703.7M | ⚠️ -1.0% |
| Total equity | €4,503.9M | €5,490.9M | ⚠️ -18.0% |
| Non-current liabilities | €6,247.0M | €5,458.1M | ⚠️ +14.5% |
| Current liabilities | €1,822.7M | €1,754.7M | ⚠️ +3.9% |
The only two metrics that improved this half are GMV-linked (Adjusted EBITDA and its margin) or balance-sheet cash (boosted by a new €1.0 billion syndicated term loan drawn in April 2022, not organic cash generation). Every GAAP profitability line - operating result, net result, EPS - and operating cash flow itself got worse, continuing the pattern already flagged in the FY2021 post: Adjusted EBITDA improving while the metrics that actually convert to cash and equity keep deteriorating.
Adjusted EBITDA of the Segments improved for the first time in several periods reviewed on this site - but the net loss still widened by nearly half, because a goodwill impairment and a swing in derivative fair values (both largely disconnected from delivery-business operations) overwhelmed the underlying gain.
Key Operational Metrics
Actual reported figures; Delivery Hero stopped disclosing order counts as a KPI starting this half, see below
| Metric | H1 2022 | H1 2021 | YoY |
|---|---|---|---|
| GMV» | €20,023.6M | €13,316.0M | ✅ +50.4% |
| Adjusted EBITDA/GMV margin | -1.6% | -2.6% | ✅ improved |
| Employees (period-end) | 49,417 | — | — |
Delivery Hero stopped tracking the number of orders as a management KPI starting this half - a genuine change in what the company discloses, not an omission. The report states plainly that "the focus has shifted from generating orders to profitability," and orders "are no longer considered a key performance indicator for resource allocation decisions." That's a defensible strategic pivot given everything else in this report, but it also means a metric this site has tracked in every prior post - order growth, and its relationship to GMV and headcount - is no longer available going forward without deriving it independently, which Delivery Hero's own materials no longer support.
Segment Results
H1 2022, five reportable segments: four geographic regions plus Integrated Verticals
| Segment | Revenue (H1'22) | YoY | Adj. EBITDA (H1'22) | Adj. EBITDA margin | H1'21 margin |
|---|---|---|---|---|---|
| Asia | €1,865.8M | ✅ +59.9% | -€80.5M | -0.6% | -2.9% |
| MENA | €1,006.0M | ✅ +46.9% | €40.1M | +1.0% | +2.1% |
| Europe | €311.4M | ✅ +8.9% | -€20.3M | -1.4% | +0.1% |
| Americas | €327.1M | ✅ +44.2% | -€80.0M | -6.5% | -9.1% |
| Integrated Verticals | €770.8M | ✅ >100% | -€182.3M | -21.5% | -26.3% |
Asia posted the widest margin improvement of any segment (2.3 points, to -0.6%), continuing the recovery flagged at the start of FY2021 as Woowa's subscription-heavy revenue mix keeps flattering the region's economics. Europe is the one segment that reversed direction: it was marginally profitable a year earlier (+0.1% margin) and swung to a loss (-1.4%) this half, driven by administrative costs and rising sales-related expenses tied to growing restaurant counts - a genuine deterioration worth watching given Europe is about to absorb the bulk of the incoming Glovo business (see Beyond the Usual). MENA's margin kept sliding for a fifth straight period tracked on this site (from 24.8% in H1'17 down to 1.0% now), still barely positive but continuing a multi-year erosion of what used to be Delivery Hero's clearest profit engine. Americas and Integrated Verticals both improved meaningfully in percentage terms, consistent with the scaling-efficiency story management has told since FY2021.
Beyond the Usual
The European Commission raided Delivery Hero's own headquarters, weeks after Glovo closed
On June 27, 2022 - three days before this period's close - the European Commission conducted an unannounced inspection at Delivery Hero SE's Berlin premises over suspicion of infringing European competition law, specifically an allegation of market sharing. Any resulting fine would be capped at 10% of the DH Group's total worldwide turnover in the year preceding when a fine is imposed - a potentially material exposure given FY2021 revenue alone was €5.9 billion. This lands in the same reporting period Delivery Hero closed a majority acquisition of a large European competitor (Glovo, completed July 4, 2022, days after this period ended) and in the same document that discloses a €270.6 million goodwill impairment. Delivery Hero classifies the overall antitrust risk as "high" and says a dedicated competition-law team is monitoring the investigation, but as of this report no financial provision has been recognized because the outcome can't yet be reliably estimated.
The European Commission carried out an unannounced antitrust inspection at Delivery Hero's Berlin headquarters over alleged market-sharing, just days before the company closed a majority stake in a large European competitor. No fine or provision exists yet, but a fine would be capped at 10% of worldwide turnover - a material tail risk with no number attached to it in this report.
The Glovo acquisition closed after the period, and Delivery Hero already held a convertible loan and a board seat's worth of exposure to it
Delivery Hero's stake in Glovo grew to 44.2% (non-diluted) by this period's close, and during H1 2022 the company also extended Glovo a €125.0 million convertible loan classified as a related-party transaction (Glovo was accounted for at-equity as an associate through this period). The acquisition of the remaining majority stake formally closed July 4, 2022 - after this period ended but before the report's authorization - bringing Delivery Hero's total shareholding to 94.5% for a further consideration of €509.5 million (mostly newly issued shares). Glovo also carries its own disclosed legal exposure: pending rider-classification proceedings (the same freelancer-versus-employee dispute already flagged as an industry-wide risk in the FY2021 post), most relating to the 2016-2021 period, now inherited wholesale by Delivery Hero as the new majority owner.
Delivery Hero funded Glovo with a €125 million related-party convertible loan months before formally acquiring a majority stake - and along with the acquisition, inherited Glovo's own pending rider-classification litigation, a legal-status dispute already flagged as a sector-wide risk for Delivery Hero's own operations.
A second consecutive restatement of the same Woowa-related numbers
For the second reporting period in a row, Delivery Hero restated prior-period figures due to "correction of errors" - the same disclosure language used in the FY2021 post. This time the H1 2021 comparative net result moved from -€918.1 million to -€1,002.3 million, and equity from €6,002.1 million to €5,314.0 million, again tied to the mechanics of the Woowa transaction's share-settlement accounting. Three consecutive periods (H1 2021, FY2021, and now this restated H1 2021 comparative again) touching the same underlying transaction's accounting is a genuinely unusual frequency of correction for one deal, even though each individual adjustment has been fully disclosed and audited.
A dawn raid arrives just as the interest-rate environment turns against the balance sheet
Separately from the antitrust matter, Delivery Hero drew a new $825 million plus €300 million syndicated term loan facility in April 2022 (SOFR/EURIBOR plus 5.75% margin) - its first meaningful bank-debt facility since the 2017 IPO-triggered repayment referenced in the H1 2018 post. This is disclosed as a newly "updated" interest-rate risk in this report, reflecting that rising rates now have a direct, quantifiable cost to Delivery Hero's financing in a way they didn't when the company ran on IPO proceeds and equity issuance alone. Combined with €4.5 billion of outstanding convertible bonds, Delivery Hero now carries real leverage for the first time in its public history - a genuinely new risk factor layered on top of the operating losses this post already covers.
Target Valuation Range
Implied enterprise value of ~€12 billion (~$12.6 billion), roughly 1.4x forward Total Segment Revenue (unusually uncertain, since it doesn't yet reflect the Glovo consideration or balance sheet). The market has already priced in most of the bad news - the stock is down more than 63% from its FY2021 close - but with an active EU antitrust inspection, a freshly-closed leveraged acquisition, and no order-count KPI left to track growth by, this is genuinely too early to call a forward fair value with confidence.
Delivery Hero's share price closed H1 2022 at €35.77 (June 30, 2022), down 63.5% from the €98.00 close at the end of FY2021 covered in the prior post - a collapse that tracks the broader 2022 growth-stock selloff (rising rates, the war in Ukraine) more than it tracks this half's own operating numbers, though the widening net loss and the newly-disclosed antitrust risk don't argue against the repricing either. With a weighted-average diluted share count of roughly 261.3 million shares for the half (implied by the reported -€5.64 EPS on a -€1,473.8 million shareholder net result), and against period-end cash of €2,936.2 million and total debt (convertible bonds plus the new syndicated term loan) well above €5 billion - Delivery Hero now carries meaningful net debt, a full reversal from the net-cash position through 2018 and still evident as recently as FY2021:
| Market cap → enterprise value | H1 2022 |
|---|---|
| Share price (period-end) | €35.77 |
| Shares outstanding (weighted-average diluted) | ~261.3M |
| Market capitalization | ~€9.3B (~$9.8B) |
| Total liabilities (convertible bonds + syndicated term loan) | well above €5B |
| Less: cash and equivalents | €2,936.2M |
| Enterprise value | ~€12B (~$12.6B) |
Note: this EV figure carries unusual uncertainty because it doesn't yet reflect the Glovo consideration or Glovo's own balance sheet, both of which only entered Delivery Hero's accounts after this period closed.
| Peer-multiple sanity check | FY2021 | H1 2022 | Change |
|---|---|---|---|
| Enterprise value | ~€25.5B | ~€12B | ✅ down sharply |
| EV/Total Segment Revenue | ~4.0x | ~1.4x (annualized forward) | ✅ down sharply, continuing the multiple compression tracked across every post on this site so far |
| EV/GMV | ~0.8x | ~0.3x (annualized forward) | ✅ down sharply |
No directly comparable food-delivery peer has been covered on this site with a completed post yet, so a peer-multiple sanity check against another public delivery marketplace isn't possible this period.
A real DCF still isn't attempted here, for a new and specific reason beyond the operating-loss concerns flagged in the FY2021 post: the Glovo acquisition closed four days after this period ended, meaning neither its purchase price, its balance sheet, nor its own profitability are reflected in these numbers at all - any valuation attempted now would be modeling the company Delivery Hero was on June 30, not the meaningfully larger and more leveraged one it became on July 4. Revisit once a full consolidated post-Glovo period is available.
A regulator raided Delivery Hero's own building the same week it finished buying a continent's worth of new competition-law exposure - and the stock had already priced in a rough year before either of those numbers landed on the page.
Delivery Hero SE's Half-Year Financial Report 2022 (unaudited condensed consolidated interim financial statements and interim group management report for the six months ended June 30, 2022, authorized by the Management Board August 23, 2022), via Delivery Hero's investor relations page.