Meituan Announces Financial Results for the Year Ended December 31, 2022

Rhea-AI Summary

Meituan (HKG: 3690) reported a 22.8% revenue increase for 2022, reaching RMB220.0 billion. The Core local commerce segment achieved an operating profit of RMB29.5 billion, up 56.8%, while the New initiatives segment saw revenues grow by 39.3% to RMB59.2 billion, with an operating loss narrowing to RMB28.4 billion. Adjusted EBITDA turned from a loss to a profit of RMB9.7 billion, and operating cash inflow reached RMB11.4 billion. The Company aims to enhance digital transformation and local consumption in 2023, while maintaining strong financial health with cash and cash equivalents of RMB20.2 billion.

Positive

• Revenue increased by 22.8% to RMB220.0 billion.
• Core local commerce segment operating profit rose by 56.8% to RMB29.5 billion.
• New initiatives segment revenue grew 39.3% to RMB59.2 billion.
• Adjusted EBITDA turned positive at RMB9.7 billion.
• Operating cash inflow of RMB11.4 billion.

Negative

• New initiatives segment operating loss was RMB28.4 billion.

HONG KONG, March 24, 2023 /PRNewswire/ -- Meituan (HKG: 3690) (the "Company"), a leading technology-driven retail company in China, today announced the audited consolidated results of the Company for the year ended December 31, 2022.

Company Financial Highlights

During the full year of 2022, our revenues increased by 22.8% to RMB220.0 billion from RMB179.1 billion in 2021. Our Core local commerce segment achieved an operating profit of RMB29.5 billion in 2022, up by 56.8% from RMB18.8 billion in 2021. Meanwhile, the operating loss for our New initiatives segment narrowed to RMB28.4 billion in 2022 from RMB35.9 billion in 2021. Our adjusted EBITDA and adjusted net profit were RMB9.7 billion and RMB2.8 billion in 2022 respectively, turning from loss into profit on a year-over-year basis. We have also achieved operating cash inflow of RMB11.4 billion for the full year of 2022. We held cash and cash equivalents of RMB20.2 billion and short-term treasury investments of RMB91.9 billion as of December 31, 2022.

"In 2022, we continued to provide consumers with a rich product and service mix as a one-stop platform of services, helped millions of merchants enhance operating efficiency and generate income through digital transformation, and thus helped boost local consumption and created opportunities for employment," said Meituan Founder and CEO Xing Wang. "We will continue to promote the digital transformation of the local services and retail industry through technology innovation, while advocating mutual benefits and long-term development of merchants, couriers and other ecosystem partners, creating more value for society, and innovating technologically to support the real economy and the high-quality growth of China's economy," added Mr. Wang.

Meituan CFO Shaohui Chen said, "Thanks to the strong resilience of China's economy, the industry know-how we have built up over the years, combined with our strong capabilities to flexibly adjust and execute our business strategies, Meituan has efficiently responded to impacts from the macro environment and continued growth momentum. We will continue to improve the strengths of our core segments and insist on high-quality growth and an ROI-driven strategy for development of our new initiatives. At the same time, we will continue to help integrate the digital economy with the real economy through technology innovation, to fulfill our mission that 'We help people eat better, live better.'"

Company Business Highlights

Core Local Commerce

In 2022, we achieved 17.6% revenue growth for the Core local commerce segment, despite negative impacts from the macro environment. Operating profit increased by 56.8% on a year-over-year basis to RMB29.5 billion, and operating margin improved to 18.4%, up from 13.8% in 2021.

For the fourth quarter of 2022, segment revenue increased by 17.4% on a year-over-year basis to RMB43.5 billion, and operating profit increased by 41.0% on a year-over-year basis to RMB7.2 billion, with operating margin improved to 16.6%, up from 13.8% in the same period of 2021.

Our food delivery business posted steady, high-quality growth in 2022, with peak daily order volume surpassing 60 million. We iterated our business model and optimised our operations to meet broader consumer demand. In December 2022, as demand for food delivery increased significantly due to the spread of COVID, we introduced measures to ensure supply and delivery capacity, which led to double-digit year-over-year growth in order volume. Thanks to our continuous efforts, food delivery has become an increasingly indispensable service for consumers, and the number of Transacting Users as well as order frequency increased year over year in the fourth quarter of 2022. We also refined our operations and enhanced marketing programs across different consumption scenarios. Our promotional campaigns around the World Cup effectively incentivised food delivery consumptions during World Cup games. As a result, user stickiness from high-quality consumers and order contribution from high-frequency users both enhanced in the past several quarters. We also continued to iterate our membership program, and ensured the rights and interests of our membership subscribers, resulting in improvement in subsidy efficiency. On the merchant side, we deepened our merchant support programs to help them overcome operating difficulties and generate more revenue during the pandemic. We offered the "Food Delivery Manager" program for free to a wider range of merchants, leading to a significant increase in their monthly income. In addition, we onboarded more new merchants and accelerated the digital transformation of high-end restaurants. Thanks to our continuous iteration, our competitive advantage in merchants, consumers and delivery network further enhanced.

For Meituan Instashopping, the consumer mindshare of delivering everything to their doorsteps has further strengthened. We effectively leveraged our experience in the on-demand delivery and the location-based operational capabilities to satisfy consumers' growing demand of broad range of e-commerce products. In 2022, both annual Transacting Users and annual Active Merchants of Meituan Instashopping increased by nearly 30% on a year-over-year basis, and the highest daily order volume exceeded 11 million in December. On the demand side, we effectively met consumer needs across different scenarios, such as delivering last-minute holiday gifts or the New Year special purchases. We also delivered essential medications to satisfy consumers' urgent needs during the pandemic, and expanded the delivery distance to city-wide. We ensured stable supply of medication and medical equipment at fair prices, and worked with local pharmacies to provide certain COVID-19 drugs and 24/7 "fever consultation" services for consumers. Subsequently, daily order volume of medicine peaked at 5.8 million in the fourth quarter. On the supply side, we continued to grow and diversify our merchant base, and helped traditional offline retailers digitise their operations. We leveraged our operational capabilities and experience from high-tier cities and replicated our success to many low-tier cities. We also onboarded a large number of chain supermarkets, and formed strategic collaborations with selected brands. As a result, categories such as electronics, beauty and personal care, mother and child supplies, and pet care, all experienced significant growth during festival promotions and marketing campaigns. We have high confidence in the future growth potential of Meituan Instashopping, and we will continue to help offline retailers with digital operations going forward.

The delivery network is at the core of our food delivery and Meituan Instashopping businesses, and it has always been our competitive advantage. While we guarantee delivery capacity and improve efficiency, we also created more job opportunities and continued to improve our couriers' benefits and advocate for their interests. When delivery capacity was tight during the peak of the pandemic, we launched various measures to stabilise delivery capacity, including expanding efforts in courier recruitment, providing cross-region order dispatches and offering additional subsidies to couriers. During the pandemic, we also provided free accommodations and service stations and increased the supplies of personal protective equipment for the couriers. We proactively responded to the government's call to provide flexible employment opportunities, and participated in the pilot program of occupational injury insurance. In addition, we continuously optimised our order dispatch system and the courier performance assessment mechanism, while strengthening the safety and protection policies for the couriers. Moreover, we provided couriers with career development opportunities, through promotions, job rotations and continuing education courses. Going forward, we will continue to invest in the safety and welfare for the couriers and ensure a better working environment for them.

Our in-store, hotel and travel business has been negatively affected by the repeated COVID outbreaks and prolonged pandemic control measures during 2022. In the fourth quarter of 2022, the year-over-year decrease of the in-store, hotel and travel revenue due to the negative impact of the pandemic, was to a similar extent as that of the second quarter. Despite the external challenges, our annual Active Merchants of the in-store, hotel and travel business maintained healthy growth on a year-over-year basis in 2022. We not only enhanced the quality of our supply, but also expanded the service scope, especially in the "silver economy" categories, and quickly penetrated into the elderly market. We also explored the evolving consumption trend among young people, with categories such as fitness, medical care, and pet care all posting solid growth. In addition, we continued to stratify our merchant base and assist merchants with digital operations. For example, we offered specially-tailored tools for "Time-honored Brands", allowing them to upload visually appealing contents to our platform, and expanded their customer acquisition channels. In addition, we refined our self-pickup services in combination with merchant traffic support and joint-marketing programs, to help merchants overcome difficulties during the pandemic. On the consumer side, we held promotions to celebrate holidays and special events, which effectively boosted local consumptions and optimised supply on our platform. Going forward, we will continue to enhance supply, address new consumption habits, and incentivise transactions. We believe that our rich product and content matrix, along with our strong consumer mindshare, will solidify our core advantages in this business.

For the most of 2022, strict travel controls remained in place, resulting in a prolonged depression of demand for hotel and travel. Despite external challenges, we leveraged our competitive advantages in local accommodation and short-distance travel scenarios, and further optimised our products, services, and marketing strategies. In addition, we diversified our Hotel+X packaged tours, launched joint marketing events with theme parks and major IP attractions, and deepened our collaborations with hotel brands. Moreover, we efficiently captured demand and stimulated hotel reservations. For high-star hotels, we continuously enhanced supply, optimised our pricing strategies, and improved service quality. On the low-star front, we solidified our market leadership, expanded supply, and optimised the online solutions that better match consumer demand. For the fourth quarter of 2022, despite the persisting negative impact from pandemic control in October and November, after the pandemic control was lifted in December, travel demand and hotel room nights rebounded immediately. We have full confidence in the future growth potential of the domestic travel industry in China.

New Initiatives

In 2022, revenues from the New initiatives segment increased by 39.3% on a year-over-year basis to RMB59.2 billion, mainly driven by growths from the goods retail businesses. Operating loss narrowed to RMB28.4 billion, while operating margin improved to negative 47.9%, primarily attributable to improvement in operating efficiency from the goods retail businesses.

For the fourth quarter of 2022, revenues from the New initiatives segment increased by 33.4% on a year-over-year basis to RMB16.7 billion. Operating loss for the segment decreased by 32.0% on a year-over-year basis to RMB6.4 billion, and operating margin improved sequentially to negative 38.2%.

For Meituan Select, after upgrading our brand positioning to "Next-day Supermarket", we enhanced our nationwide next-day logistics network to facilitate the circulation of agricultural products. We strengthened consumer perception of Meituan Select as a source of convenient, value-for-money products. We also remained focused on high-quality growth, maintained our market leadership, and improved efficiency through supply chain optimisation and fulfillment enhancement. Moreover, we actively responded to the government's call to ensure stable supply and logistics during the pandemic, and broadened our distribution channels for agricultural products. In addition, we helped farmers increase their incomes, and provided consumers with more quality SKUs and diverse selections of fresh produce. In the fourth quarter, GTV contribution from centralised procurement increased notably, and the number of pick-up stations in low-tier markets exceeded 1.1 million.

Meituan Grocery recorded robust growth, with improving operating efficiency in the fourth quarter of 2022, thanks to a surge in demand. We expanded supply and further strengthened consumer mindshare to purchase fresh produce, snacks, daily necessities, personal care, prepared meals, and more. Consequently, average ticket size and order frequency continued to grow. During the pandemic, we ensured supply for people from the affected regions, and guaranteed the delivery capacity to fulfill higher order volume. In addition, we established in-depth collaborations with local governments and farmers from the products' places of origin, and enhanced our "Locally-sourced Selected Product" program, which not only diversified our supply, but also helped farmers increase their income.

Company Outlook and Strategy for 2023

Looking ahead to 2023, we will continue to implement our "Retail + Technology" corporate strategy, to provide consumers with rich selections of products and services, facilitate the recovery of local consumption, and create employment opportunities. While we optimise the on-demand delivery network, we continue to extend our product coverage from meals to non-meal categories, including groceries, daily necessities, medicines, and more, and will further strengthen consumer mindshare of convenience and being able to deliver everything to their doorsteps. On the merchant side, we will continue to optimise our comprehensive service offerings and online marketing tools, to help merchants improve operating efficiency and generate more income in the post-pandemic era. In addition, we will create a wide range of job opportunities while placing particular emphasis on the welfare and benefits of our couriers. Moreover, as we grow the goods retail businesses and continue to optimise our nationwide next-day logistics network, we will penetrate deeper into counties and villages, provide more diverse and cost-effective products for consumers from rural areas, improve fulfillment efficiency, and support the circulation of agricultural products. Furthermore, we are committed to innovate and leverage advanced technology, such as autonomous delivery vehicles and drones, to improve operating efficiency, bring more value for all the participants in our ecosystem, and continue to fulfill our mission that "We help people eat better, live better".

For the full announcement of Meituan for the year end of 2022, please visit:
http://media-meituan.todayir.com/20230324164801813710643983_en.pdf 

About Meituan

Meituan (HKG: 3690) (the "Company") is a leading technology-driven retail company in China. With the mission of "We help people eat better, live better," the Company uses technology to connect consumers and merchants. Service offerings on its platform address people's daily needs for food and retail goods and extend further to broad lifestyle and travel services. Meituan is the world's leading on-demand food delivery service provider and China's leading e-commerce platform for in-store dining services. Meituan helps consumers discover merchant information, make informed decisions, complete online and offline transactions and enjoy on-demand delivery. The Company currently owns several household brands in China, including Meituan, China's leading online marketplace for services, Dianping, China's leading online destination for discovering local services, Meituan Waimai for on-demand delivery services, and Meituan Bikes for bike-sharing services. Meituan has 677.9 million Annual Transacting Users and 9.3 million Annual Active Merchants as of December 31, 2022. The Company operates in over 2,800 cities and counties in China.

Forward-Looking Statements

This press release contains forward-looking statements relating to the business outlook, forecast business plans and growth strategies of the Company. These forward-looking statements are based on information currently available to the Company and are stated herein on the basis of the outlook at the time of this press release. They are based on certain expectations, assumptions and premises, some of which are subjective or beyond our control. These forward-looking statements may prove to be incorrect and may not be realized in future. Underlying the forward-looking statements is a large number of risks and uncertainties. Further information regarding these risks and uncertainties is included in our other public disclosure documents on our corporate website.

For media inquiries, please contact:

Meituan
pr.global@meituan.com   
ir@meituan.com

ICR Inc.
Email: MeituanPR@icrinc.com

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SOURCE Meituan

FAQ

What were Meituan's financial results for 2022?

Meituan reported a revenue of RMB220.0 billion for 2022, a 22.8% increase.

How did Meituan's Core local commerce segment perform in 2022?

The Core local commerce segment achieved an operating profit of RMB29.5 billion, up 56.8% from 2021.

What was the operating loss for Meituan's New initiatives segment?

The New initiatives segment recorded an operating loss of RMB28.4 billion.

What is Meituan's outlook for 2023?

Meituan aims to enhance digital transformation and local consumption through its 'Retail + Technology' strategy.

How much cash did Meituan hold at the end of 2022?

Meituan held cash and cash equivalents of RMB20.2 billion as of December 31, 2022.