JAB – June 2021 Table of Contents
JAB - At a glance 3
JAB Holding Company 4
Our Heritage 4
About JAB Consumer Fund (JCF) 6
Our Investment Philosophy 8
Our People 14
Our Governance 17
Risk Management 18 1 JAB at a glance $50bn+ $23bn JAB Managed Capital JAB Holding Company A global Investment Net Asset Value Company, with a solid investment Our leading Investment Platforms grade rating, focused on the consumer goods and services sector Coffee & Fast-Casual Petcare Beauty & Indulgence Beverages Restaurants Luxury
With a total Enterprise Value of $120bn+
JAB’s Managed Capital has significantly increased since its formation in 2012
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- S&P: BBB+ with stable outlook 2012 2013 2014 2015 2016 2017 2018 2019 2020
Moody’s: Baa2 with stable outlook JAB Total Managed Capital in $bn 2020 Distributions Managed Capital
A privately held partnership of ~50 professionals with global investment offices in Washington D.C., London, Amsterdam, São Paulo, Luxembourg and Mannheim
with a long-term global ambition to invest in industry-leading consumer businesses.
1 JAB in this context refers to JAB Holding Company, together with JAB Consumer Fund and other Co-investors
JAB – June 2021 | JAB Holding Company 3 JAB Holding Company
Our heritage A global leading private Investment Firm in Consumer Goods and Services, with a 1823 strong heritage The incorporation of Benckiser as chemicals producer in Germany
1980 - 1990
Peter Harf joins Benckiser Benckiser acquisition of North American and European household products and cosmetics including the spin off of the cosmetics activities 1990 - 2010
Started investing in the Beauty & Luxury Investment Platform Beauty & Luxury
IPO Benckiser and Merger to form Reckitt Benckiser M&A of several cosmetics companies 2012 - 2013
The formation of JAB Holding Company and core JAB team. 2013 - 2015 Olivier Goudet joins JAB The creation of the fast casual multi The creation of the channel restaurant Investment Coffee & Beverages Platform starting with Platform Investment Platform Investments in Caribou Coffee, via the take private of Einstein Bagels and Espresso House Peet’s Coffee and Fast-Casual Restaurants D.E Masterblenders 1753 (‘DEMB’) Coffee & Beverages
IPO of Coty Creation of the JAB Consumer Fund (“JCF”)
JAB – June 2021 | JAB Holding Company 4 2015 Creation of Jacobs Douwe Egberts (JDE) through the merger of DEMB and MDLZ Coffee
2016 Take private of Krispy Kreme, representing the first investment in the Indulgence Investment Platform Indulgence 2017 Take private of Panera Bread
Take private of Keurig Green Mountain 2018
Creation of Keurig Dr Pepper through the merger of Dr Pepper Snapple and Keurig Green Mountain
2019 Acquisition of Pret a Manger The creation of the Petcare Investment Platform Pet Care
Acquisition of Compassion-First Pet Hospitals 2020 Acquisition of NVA
IPO of JDE Peet’s
Closing of the third major fund raising of JAB Consumer Fund. Total of $17bn of committed capital raised since 2014
JAB – June 2021 | JAB Holding Company 5 About JAB Consumer Fund (JCF) Driven by investor demand to participate in the investment strategy of JAB Holding Company, JCF was established in 2014. JCF is a Luxembourg based regulated investment fund comprised of institutional investors, family offices, endowments and other professional investors. JCF is managed collectively with JAB Holding Company by the same group of partners, and JCF always invests alongside JAB Holding Company. As at 31 December 2020, JCF has capital invested of $15bn+ and has distributed $8bn+ of capital.
JAB Consumer Fund - Managed Capital in $bn JCF Managed Capital by Investment Platform JCF Managed Capital by Investment Category
15,00
- 2014 2015 2016 2017 2018 2019 2020
Managed Capital Distributions 2020 Coffee & Beverage Fast-Casual Restaurants Petcare Indulgence
JCF 2020 Highlights
Completion of over $8bn in aggregate JCF is a unique distributions, a major JCF milestone, in cash and shares of Keurig Dr Pepper, investment fund, driven by the significant value creation in the Coffee & Beverages platform investing alongside JAB Holding Company for The successful closing of the Global Consumer Brands - III Fund, the Petcare long-term value creation Co-Investment and the Co-Investment IX Funds
Deployment of $3bn investment into the Petcare Investment Platform, alongside JAB Holding Company
JAB – June 2021 | JAB Holding Company 6 As a controlling or anchor shareholder, JAB exerts significant influence over its Platform Investments
98% 98% 99% 95% 94% 91% 88%
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JAB Holding, JCF and Co-investors’ aggregate % of direct and indirect ownership. 3
JAB Holding Company and JAB Consumer Fund, together with Co-investors, established a strong capital structure to support long-term growth and sustainable value creation leading to solid compounded returns.
2 Coty and Bally are investments of JAB Holding only, without the participation of JAB Consumer Fund 3 As of Dec 31, 2020. Only includes investments with JAB Holdings, JCF and Co-Investors participation; does not include shares owned by management
JAB – June 2021 | JAB Holding Company 7 Identify investment opportunities Our Investment through an agile and flexible investment Philosophy approach, with a focus on consumer goods and services companies, leveraging the deep institutional We believe sustainable long-term value creation experience and insights of our team is built through partnerships and a clear focus on shared values and benefits. Our investment Enhance value through a unique philosophy to achieve a long-term compounding ownership and people model combined return is based on the following three pillars: with a tested and repeatable value- creation approach
Drive long-term sustainable results by doing the right things for our stakeholders
ies nit tu E r cus U n o fo niq p a r ue h p h es epe o a o it vic ata w n w er b n t h s le e c n c d v r e a n a s e o a lu h r i v m s e p p t p d c & a o r s a e l o p e t a u g e t v n r i o e e o e n p n i m l
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D o ur in o g t for st he gs y D ak right thin iet s r eho soc lt iv lders and for u e es lon r g- ble term sustaina
JAB – June 2021 | JAB Holding Company 8 ies nit tu E r cus U n o fo niq p a r ue h p h es epe o a o it vic ata w w r b n n t h se le e c n c r a d va s e e n l h o a u r s e ip v Identify investment opportunities m p t p d c & a o r s a e l o p e t a u g e t v n r i o e e o e n p n i m l
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D o ur in o g t for goods and services companies, st he gs y D ak right thin iet s r eho soc lt iv lders and for u e es lon r g- ble term sustaina leveraging the deep institutional experience and insights of our team
We invest, through our Investment Platforms, in categories with attractive long-term dynamics, including strong growth prospects, attractive margins and cash flow characteristics, and Our investment approach proven resilience. Our investment team has deep institutional experience in investing, is distinct and allows us operating and overseeing consumer businesses. the flexibility to structure This has created a robust, proprietary network which provides us with best-in-class access investment solutions for each to deal flow for premium and iconic brands that are well-recognised by consumers and particular situation strongly positioned within their respective categories and markets. We have a long track record of leveraging our Platform Investment approach and people model to attract the best management teams, with the highest quality assets, to partner with us for the long-term.
JAB – June 2021 | JAB Holding Company 9 Long-term value is created by identifying the Our Platform Investment approach is distinct. Our highest quality assets and investing behind long-term focus investment model allows us to them over a sustained period of time. Such create flexible, tailored investment structures as value-creation opportunities include platform- needed so that we can find solutions to partner consolidation, channel expansions, product and with the best people and the best businesses. Our category innovation, digitisation, and complete track record demonstrates that we act quickly business transformations of turn-around and maintain a solution-based, agile approach to businesses to allow them to fully benefit from reviewing potential Platform Investments. the underlying strength of their brands and the category. Maintaining Investment Platforms across different categories is important to our philosophy, Our leading Investment Platforms as it drives resilience of investment returns.
Our large, consumer centric and innovation driven investment portfolio, as well as the institutional experience of our team, provides us with a unique Coffee & Fast-Casual Petcare window into consumer trends and changing Beverages Restaurants behaviours. We proactively identify contemporary brands, new technologies and disruptive innovation and digitisation in order to invest behind winners, further driving long-term growth. Beauty & Indulgence Luxury
A global investment portfolio with strong asset diversity4
Our investment philosophy is focused on building businesses that are diversified by themselves a diversified Investment Platform portfolio within through their unique combination of brands, the consumer and services sectors, with low or product and service categories, and distribution negative correlation betweenAn overview the assets andof JAB with Holdings' channels. Investment Portfolio
Krispy Kreme 4%
Coty - Consumer beauty Coty - Luxury Others 4% 4% 1% KDP - Coffee Systems Compassion First 18% Pet Hospitals NVA 2% 5%
Caribou 2% Espresso House 1% Pret a Manger 2%
Panera 9% KDP - Packaged Beverages 23% JDE Peet's - Out-of-home 3%
JDE Peet's - CPG - APAC 2% KDP - Beverage Concentrates 6% JDE Peet's - CPG - JDE Peet's - CPG - KDP - Latin America Larmea Europe JDE Peet's - Peet's Beverages 3% 9% 2% 2% An overview of JAB Holding Company’s investment portfolio
4 The underlying FY19 sales data by investment has not been subject to the scope of the JAB Holding Company external audit
JAB – June 2021 | JAB Holding Company 10 Our Business Diversity
JAB is exposed to multiple business segments, either through the respective Investment Platforms in which our businesses operate or through the underlying diversification within the businesses held. Below we present a simplified overview of diversification within our Investment Platforms.
Our leading Investment Platforms
Coffee & Beverages through direct, Fast Casual Restaurants through wholesale, retail, bottlers, food service retail-owned, retail-franchised, and e-commerce digital, catering and CPG Coffee & Fast-Casual Beverages Restaurants
Covering all meals: Premium coffee brands
Mainstream coffee brands Breakfast Coffee systems Lunch Carbonated soft Drinks Dinner Juices Water Beauty & Luxury through retail, Energy drinks wholesale, online, and other Beauty & Luxury Fragrance Petcare through at-premise, home- Color cosmetics delivery and online Skin and body care Petcare Luxury Hair care
Indulgence through retail-owned, retail-franchised, digital, home delivery and CPG General care Indulgence Specialty Doughnuts Vaccine & pharmacy Cookies Pet resorts
JAB – June 2021 | JAB Holding Company 11 ies nit tu E r cus U n o fo niq p a r ue h p h es epe o a o it vic ata w w r b n n t h se le e c n c r a d va s e e n l h o a u r s e ip v Enhance value through a unique m p t p d c & a o r s a e l o p e t a u g e t v n r i o e e o e n p n i m l
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D o ur in o g t for creation approach st he gs y D ak right thin iet s r eho soc lt iv lders and for u e es lon r g- ble term sustaina Our unique ownership and people model is a core part of the JAB DNA. Our investment philosophy is centred around investment and entrepreneurship. We believe we can only attract the best people by identifying those who want to invest alongside and partner with JAB, and who have a long-term value creation mindset. With the aim of achieving solid investment returns for our stakeholders, Through our long-term we are closely involved in the selection and partnerships and value recruitment of management teams at our businesses, and ensure alignment with JAB creation approach we through shared ownership. are able to generate sustainable growth
We are an active partner for our Platform Investments. As a controlling or anchor shareholder we exert significant influence over the capital structure and the dividend policy of our Platform Investments, and we embed the JAB ownership and management culture in each of our Platform Investments. Together, we continuously re-assess the strategy of our businesses, and review opportunities to enhance operational and financial performance. We strongly believe continued challenge and refinement of strategy is necessary for sustained long-term value creation.
The incentives of our management teams are tied to the businesses for which they are responsible. This fosters a culture of accountability and focus for our respective CEOs and leadership teams, who receive strong support from JAB and who are able to fully utilise the extensive and industry-leading network of our ecosystem.
JAB – June 2021 | JAB Holding Company 12 ies nit tu E r cus U n o fo niq p a r ue h p h es epe o a o it vic ata w w r b n n t h se le e c n c r a d va s e e n l h o a u r s e ip v Drive long-term sustainable results by m p t p d c & a o r s a e l o p e t a u g e t v n r i o e e o e n p n i m l
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A 3 We are an investment firm with a clear understanding D o ur in o g t for and appreciation of the next generation of consumers, st he gs y D ak right thin iet s r eho soc lt iv lders and for u combined with a strong focus on ESG (Environmental, e es lon r g- ble term sustaina Social, Governance). We have a fundamental belief that taking a sustainable approach to business pays off for our consumers, our businesses, our Co-investors, our debt investors, and us.
With a clear We are committed to an investment philosophy of understanding and working collaboratively and serving as long-term stewards of the organisations and brands, and to build long-term appreciation of the sustainable businesses. We achieve this by incorporating ESG principles into our investment philosophy. We next generation of encourage our investments to embed sustainability consumers, we generate activities in their policies and procedures, and we regularly evaluate our investment’s sustainability performance sustainable investment based on key performance indicators. results Working with trusted debt and equity capital partners enables us, and our investments, to generate long-term growth. We maintain strong relationships with our capital partners, and we are confident that our long-term vision and sustainable investment philosophy are supported by our investors. JCF and other Co-investors are primary equity capital partners of JAB Holding Company and are important contributors to the success of our long-term investment philosophy.
JAB participates in G7 Business for Inclusive Growth coalition
As part of our ongoing commitment to ESG, within our investment strategy. JAB recognises JAB participates in the G7 Business for Inclusive that this is a long-term challenge and we Growth (B4IG) coalition powered by the OECD commit to putting our passion and energy into and sponsored by French President Emmanuel ensuring that JAB and our investments help to Macron. This initiative is designed to pool bring this to life over time, for the benefit of and strengthen efforts by public and private all. Underpinning our pledge is the view that companies to reduce inequalities linked to such engagement is not just good corporate opportunity, gender and territory, and to build responsibility but rather the future of successful greater synergies with government led efforts business. Business benefits from more inclusive in these areas. This focus is also presented growth models through a more educated and engaged workforce; a larger middle-class of consumers with greater purchasing power; more stable operating environments; and a high level of trust from employees, consumers, customers and other stakeholders.
JAB – June 2021 | JAB Holding Company 13 Our People
A high-performing team is at the heart of Working together as a powerful team our success. Our culture is entrepreneurial, high energy and high performance. We have an ambitious and Our team has deep institutional investment and motivated team which drives our long-term sector knowledge and experience. The fast-paced ambition. A core characteristic in all of us is the and dynamic environment in which we operate aligned focus on value creation for all of JAB and its requires a team with an entrepreneurial spirit stakeholders. focused on the collective success of JAB.
We operate from investment offices in Washington In an invested and full-on environment D.C., London, Amsterdam, São Paulo, Luxembourg and Mannheim. Our team is led by our managing Our team is invested towards the same goals as partners Peter Harf and Olivier Goudet, together our shareholders and Co-investors. Invested means with 9 other partners and senior partners, each that financial interests are aligned to enable our of whom has significant experience and success value-enhancing strategy. Invested also means in investing and overseeing businesses in the personal commitment and being full-on to deliver consumer goods and services industries. They are sustainable results in a fast-paced and highly supported by a global team of 40+ investment and demanding environment. industry professionals.
An environment with compounding performance opportunities
We attract, evaluate and compensate talent with the objective of successfully delivering compounding long-term value of our Platform Investments. As such, we provide our team with opportunities and stretch goals for continuous Managing development and growth. partners
(Senior) Partners
Professionals
JAB – June 2021 | JAB Holding Company 14 JAB partners
JAB is overseen by its two Managing Partners, Peter Harf as our Chairman and Olivier Goudet as our CEO, together with nine other partners and senior partners, and our CFO.
Peter Harf Olivier Goudet Managing Partner, Chairman Managing Partner, CEO
Mr. Harf joined JAB in 1981 and is the visionary and Mr Goudet joined JAB as CEO and Managing Partner in founder of the current JAB investment firm structure 2012. Mr. Goudet is the key architect of and leads JAB’s created in 2012. Over the past 40 years he has overseen Investment Platform strategy for all areas of the Firm JAB as managed capital has grown from $100 million to and has led $40bn+ increase in managed capital in the over $50 billion. Mr. Harf has been CEO and Chairman last nine years. He is currently the Chairman of Krispy of several of JAB’s portfolio companies, and is currently Kreme , JDE Peet’s, and Pret a Manger and is a member the Chairman of Coty and a member of the Board of of the Board of Directors of several other portfolio Directors of JDE Peet’s and Keurig Dr Pepper. He is also companies including Keurig Dr Pepper, Coty, NVA and the Founder of Delete Blood Cancer (“DKMS”), a global Panera. Previously, he spent 20 years at Mars, where he cancer fighting organization which has over 10m donors was EVP and CFO, and was also previously the Chairman registered. Mr. Harf has previously been Chairman of of Anheuser-Busch InBev. Anheuser-Busch InBev and a Board member of Burger King.
Joachim Creus David Bell Senior Partner, Vice Chairman Senior Partner
Mr. Creus joined JAB in 2010 and has played a critical role Mr Bell is in his 10th year at JAB, having joined in in building it into a global investment firm. He has been 2012. Over the past nine years he has led all of JAB’s at the center of JAB’s major investments and expansion major portfolio transactions. He has over 25 years of intiatives, including all of its platform acquistions and the investment, oversight and business strategy experience, creation of JAB Consumer Fund. A lawyer by training, he which includes spending four years at Mars driving has over 20 years of experience in M&A, complex cross Corporate Strategy and M&A, and eight years in the border legal & tax matters, and equity and debt financing. Consumer Investment Banking Group at Goldman Mr. Creus serves as a Director for many JAB companies, Sachs. including JDE Peet’s and Coty. Prior to joining JAB, Joachim held senior legal & tax positions at Siemens, Rodl & Partner and at Tiberghien Lawyers.
Patricia Capel Frank Engelen Partner Partner
Ms. Capel joined JAB in 2021 following 25 years at AB Mr. Engelen joined JAB in 2020. Previously, he was a InBev and Ambev, where she most recently led the partner at PwC for more than 15 years, of which five commercial operations in Chili, Bolivia and Paraguay. years were as a member of the Management Board She has extensive global experience including in the of PwC Netherlands and two years were as a member United States, Russia, Latin America, Belgium and of the Executive Board of PwC Europe. He has almost Canada, and held numerous roles including as VP of 25 years of experience in international tax, business Global People, and was a member of the ABI Global restructurings and M&A. After having obtained his PhD Diversity & Inclusion Council. Ms. Capel has also at the Erasmus University Rotterdam, he was appointed worked at PWC and Cargill Agricola S.A. Professor of International Tax Law at Leiden University in 2005.
JAB – June 2021 | JAB Holding Company 15 Luuk Hoogeveen Konrad Meyer Chief Financial Officer Partner
Mr Hoogeveen joined JAB in 2019 as a principal and Mr Meyer joined JAB in 2018 as principal and was was promoted to Chief Financial Officer in 2021. He promoted to partner in 2020. He brings 15+ years of brings 15+ years of finance expertise including in industry and investment expertise and previously held the area of finance transformations, capital market a position as Investment Director at Waterland Private transactions, internal & external financial reporting, Equity and as interim CFO at Pret a Manger. and risk management. Prior to JAB he held senior finance positions at JDE and PwC.
Ricardo Rittes Lubomira Rochet Partner Partner
Mr Rittes joined JAB in 2019. He brings 20+ years Ms Rochet joined JAB in 2021. She previously spent of financial risk management and capital markets seven years as Chief Digital Officer and member of experience and started his career as an investment the Executive Committee at L’Oréal. There, she led banker in London, NY and Latin America. Subsequently, the beauty giant’s marketing and commercial pivot to he spent 14 years as part of a small leadership team a digital-first company. She is a recognized leader in building AB InBev (NY, Brussels and Latin America). In digital business transformation, with extensive global that capacity, he has partnered with rating agencies and experience across multiple industries. Ms Rochet has financial institutions across the world as the Finance also held senior roles at Microsoft and Valtech, a digital VP responsible for cash flow integration, banking marketing agency. relationship and treasury where he, among others, executed $75+ billion financings. He also served as CFO of Ambev, a NYSE listed company, and led its successful expansion in Central America.
Jacek Szarzynski Justine Tan Partner Partner
Mr Szarzynski joined JAB in 2019. Prior to Joining Ms Tan, CFA, joined JAB in 2020 as a partner. She has JAB, Mr Szarzynski held various senior Finance, more than 20 years of international experience in Demand and Supply positions in his 20+ years at investing, banking and operations, having lived in and Mars. During his career he consistently achieved covered key markets in North America, Europe and above market growth while also delivering significant Asia across a range of transaction types and businesses margin improvement and is currently translating this including in the consumer retail, real estate, services experience to the fast-casual restaurant Investment and industrial sectors. Prior to JAB, she was a founding Platform. He has a strong passion for ESG and is an member of Temasek USA and an investment banker at inspiring leader who engages teams to only deliver the Goldman Sachs. best results.
JAB – June 2021 | JAB Holding Company 16 Our Governance
Governance Our senior advisors JAB is overseen by the two Managing Partners, JAB is partnering with two globally recognized Peter Harf and Olivier Goudet, supported senior advisors, Antonio Weiss and Bertrand by nine other partners and senior partners, Badré, who provide us with advice on and our Chief Financial Officer. The Firm’s various governance and strategy matters, governance principles are based on mutuality, which are within their respective areas of trust and consensus. Management and decision- expertise including business development, making are delegated to the managing partners mergers and acquisitions, and social and and require unanimous consent. There is full environmental matters. As JAB, we highly alignment between JAB management and value independent advice as it provides us our shareholders, since the partners are also with a fresh perspective on where we stand, invested into JAB. on our intentions and on our journey. Our businesses are managed independently by their respective CEOs and related leadership teams. The members of these leadership teams invest their own wealth into their businesses resulting in strong alignment of interests with Antonio Weiss those of JAB. Each of our companies has an Senior Advisor independent Board of Directors, an Audit Committee and a Remuneration Committee on which JAB partners are represented. Mr Weiss has advised JAB since its formation as a global investment firm in 2012. His work spans business strategy and public policy. He is a research fellow at Harvard Kennedy School’s Mossavar-Rahmani Center for Business and Government. From 2014 to 2017, he served as Counselor to the Secretary of the U.S. Treasury, where he oversaw the domestic finance department. Prior to this, he held various leadership roles at Lazard over twenty years in the US and Europe, including as Global Head of JAB signed the Investment Banking from 2009 to 2014. UN Principles for Responsible Investment Bertrand Badré
In June 2020, we signed the UN Principles for Senior Advisor Responsible Investments (PRI). Doing so, we embrace the PRI principles for incorporating Mr Badré is the founder and CEO of Blue like ESG matters into our investment practice, an Orange Sustainable Capital, an investment investment policies, disclosures, reporting Company that manages investments for and responsibilities. Important requirements social and environmental impact to foster for a signatory to meet are the Responsible inclusive and sustainable growth and reduce Investment (“RI”) policy, senior-level oversight risk. Mr Badré also serves as a guarantor to over, and our professionals implementing, the ‘One Planet Lab’ initiative. Previously, responsible investing. In order to provide the he served as Managing Director and CFO of firm and our investments with an experienced the World Bank Group, Group CFO of both sounding board on ESG-related issues and Société Générale and Crédit Agricole, Partner questions, we are proud to cooperate with Mr at Lazard and was an advisor to previous Bertrand Badré. French President Jacques Chirac’s diplomatic team.
JAB – June 2021 | JAB Holding Company 17 Risk Management
Risk management is an integral part of transformations. We believe COVID-19 accelerates the governance structure. The Firm’s risk trends, such as digitisation and channel- management approach is established to identify expansion, and we will continue to support our and analyse risks faced by JAB Holding Company, businesses to adapt to these trends and emerge to monitor risks and to implement remediation out of the crisis even stronger. initiatives to ensure adherence to limits. The risk From our investing and financing activities, we management approach is reviewed regularly are exposed to a variety of risks including market to reflect changes in market conditions and the risks, price risk, credit risk, liquidity risk, and activities of JAB. cash flow risk. It is our objective to manage and mitigate these risks to acceptable levels. Market Risk Management Policy risk refers to the Firm’s exposure to fluctuations in foreign exchange rates and interest rates. Our risk management policy contemplates a Foreign exchange risk on transactions is hedged broad range of stakeholders, including fixed through forward exchange contracts as necessary. income investors, equity investors, and the The Firm is exposed to price risk as a result of its communities where we operate. investments and subsidiaries. This exposure is On financial risk management, the policy’s not hedged as at 31 December 2020. We actively objective is to maintain a level of cash flow manage our exposure to interest rate fluctuations. uncertainty that is acceptable to our stakeholders, When the Firm is exposed to such fluctuations including equity and fixed income investors, given on floating rate long-term debt the Firm enters, a certain expected return. when thresholds have been exceeded, into In practice, we monitor closely topics related to: interest swap agreements. No hedge accounting is applied on any of the derivative transactions as • Capital structure, financing, and liquidity at 31 December 2020. Our exposure to credit risk • Transactional risks mainly relates to cash and cash equivalents and is mitigated by transacting with counterparties • Translational and balance sheet risk with high credit ratings. Exposure to liquidity risk • Counterparty credit risk (cash, marketable is limited, as sufficient liquidity is available in the securities and derivatives) form of cash, and under our credit facilities. • Environmental, Social, Governance and Within our risk management framework Reputation risks continued consideration is given to fraud risk. Our approach is to minimize fraud risks from the start, both internal and external, and to continuously Principal Risks and Uncertainties monitor and update our procedures to detect and Our financial position is impacted by the if applicable remediate from potential fraudulent performance of our Platform Investments, events. As an example, our Code of Conduct including the resulting impact on valuation. outlines the norms, and responsibility of our team By having a controlling or anchor stake in our with the aim to reduce the likelihood of unethical investments, and via representation on the actions and to protect JAB and its stakeholders. Boards, we are able to oversee and influence the As a long-term investor we are dedicated to financial and operational performance of our having our businesses acting in accordance portfolio companies, with the aim to achieve solid with the highest ethical and professional compounded investment returns. standards and together address Environmental, The loss of key talent could have a negative Social, Governance and Reputation risks. We impact on our operations. This risk is mitigated are commited to an investment management by investment and long-term equity opportunity philosophy of working with our businesses to of our leadership teams, and by promoting a address and monitor their material sustainability culture of ownership and opportunity. In this way issues. JAB incorporates sustainability issues we continue to attract talented people with the into decision-making and ownership practices mindset and skillsets to drive long-term value across its majority owned portfolio of Platform creation. Investments. In cases where we have limited ability to influence, we encourage companies The impact of the COVID-19 pandemic remains to consider relevant activities covered in the unpredictable and, if significant, may have Investment monitoring section of this policy. an adverse effect on our business, financial condition, results of operations and prospects. After taking initial measures to protect our employees, customers and businesses, COVID-19 provides an opportunity to accelerate business
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