ANNUAL REPORT 2019 – HelloFresh SE – HELLOFRESH AT A GLANCE 3 months 3 months 12 months 12 months ended ended ended ended Key Figures 31-Dec 19 31-Dec 18 YoY growth 31-Dec 19 31-Dec-18 YoY growth Key Performance Indicators Group Active customers (in millions) 2.97 2.04 45.3% Number of orders (in millions) 10.54 7.42 42.0% 37.45 27.07 38.3% Orders per customer 3.6 3.6 - Meals (in millions) 79.6 54.7 45.6% 281.1 198.4 41.7% Average order value (EUR) (Exc. Retail) 48.6 48.6 0.0% Average order value constant currency (EUR) (Exc. Retail) 47.8 48.6 (1.7%) USA Active customers (in millions) 1.78 1.09 63.0% Number of orders (in millions) 5.98 3.84 55.7% 20.74 14.94 38.8% Orders per customer 3.4 3.5 (4.5%) Meals (in millions) 40.5 25.2 60.4% 138.2 99.2 39.3% Average order value (EUR) (Exc. Retail) 49.1 50.6 (3.0%) Average order value constant currency (EUR) (Exc. Retail) 47.6 50.6 (5.9%) International Active customers (in millions) 1.18 0.95 24.9% Number of orders (in millions) 4.56 3.58 27.4% 16.71 12.13 37.8% Orders per customer 3.9 3.8 2.0% Meals (in millions) 39.1 29.4 32.9% 142.9 99.2 44.0% Average order value (EUR) (Exc. Retail) 48.0 46.4 3.3% Average order value constant currency (EUR) (Exc. Retail) 48.0 46.4 3.4% 2 HelloFresh SE ANNUAL REPORT 2019 3 months 3 months 12 months 12 months ended ended ended ended Key Figures 31-Dec 19 31-Dec 18 YoY growth 31-Dec 19 31-Dec-18 YoY growth Results of operations Group Revenue (in MEUR) 511.8 361.7 41.5% 1,809.0 1,279.2 41.4% Revenue constant currency (in MEUR) 503.3 361.7 39.1% 1,757.4 1,279.2 37.4% Contribution margin (in MEUR)* 148.7 105.6 40.8% 518.5 349.9 48.2% Contribution margin (in % of Revenue)* 29.1% 29.2% (0.1 pp) 28.7% 27.4% 1.3 pp AEBITDA (in MEUR) 38.6 (2.9) nm 46.5 (54.5) nm AEBITDA (in % of Revenue) 7.5% (0.8%) 8.3 pp 2.6% (4.3%) 6.8 pp USA Revenue (in MEUR) 293.2 195.4 50.1% 1,024.8 733.8 39.7% Revenue constant currency (in MEUR) 284.4 195.4 45.5% 972.2 733.8 32.5% Contribution margin (in MEUR)* 85.6 61.2 39.9% 302.4 207.4 45.8% Contribution margin (in % of Revenue)* 29.2% 31.3% (2.1 pp) 29.5% 28.3% 1.2 pp AEBITDA (in MEUR) 18.1 (1.0) nm 8.9 (33.2) nm AEBITDA (in % of Revenue) 6.2% (0.5%) 6.7 pp 0.9% (4.5%) 5.4 pp International Revenue (in MEUR) 218.5 166.3 31.4% 784.2 545.4 43.8% Revenue constant currency (in MEUR) 218.9 166.3 31.6% 785.3 545.4 44.0% Contribution margin (in MEUR)* 63.7 45.6 39.7% 218.6 145.6 50.1% Contribution margin (in % of Revenue)* 29.2% 27.4% 1.7 pp 27.8% 26.7% 1.1 pp AEBITDA (in MEUR) 32.3 9.5 240.0% 83.2 14.9 458.4% AEBITDA (in % of Revenue) 14.8% 5.7% 9.1 pp 10.6% 2.7% 7.9 pp Group Financial Position Net working capital (in MEUR) (94.4) (85.1) (94.4) (85.1) Cash flow used in operating activities (in MEUR) 15.8 (26.2) 42.2 (50.2) Cash and cash equivalents (in MEUR) 193.6 193.9 193.6 193.9 Free Cash Flow (in MEUR) 2.0 (33.8) (11.8) (73.7) *Net of share based compensation expenses ANNUAL REPORT 2019 HelloFresh SE 3 CONTENTS A TO OUR SHAREHOLDERS .........................................................................................................5 Letter by the Management Board ......................................................................................................... 5 Report of the Supervisory Board .......................................................................................................... 7 Corporate Strategy ............................................................................................................................. 11 B COMBINED MANAGEMENT REPORT ......................................................................................13 1. Fundamentals of the Group ......................................................................................................... 15 2. Performance Measurement System ............................................................................................. 18 3. Economic Position ...................................................................................................................... 21 4. Position of the Group .................................................................................................................. 24 5. Risk and Opportunity Report ....................................................................................................... 32 6. Outlook ....................................................................................................................................... 39 7. Supplementary Management Report to the Separate Financial Statement of HelloFresh SE ........ 41 8. Corporate Governance Statement .............................................................................................. 45 9. Combined Non-Financial Report ................................................................................................. 45 10. Remuneration Report ................................................................................................................. 45 11. Takeover Law ............................................................................................................................. 49 C CONSOLIDATED FINANCIAL STATEMENTS ..........................................................................55 Consolidated Statement of Financial Position .................................................................................... 57 Consolidated Statement of Comprehensive Income ........................................................................... 59 Consolidated Statement of Changes in Equity ................................................................................... 60 Consolidated Statement of Cash Flows ............................................................................................... 61 Notes to the Consolidated Financial Statements ................................................................................ 63 D FURTHER INFORMATION .......................................................................................................115 Responsibility Statement by the Management Board ....................................................................... 115 Independent Auditor´s Report ......................................................................................................... 116 Glossary .......................................................................................................................................... 122 Financial Calendar ........................................................................................................................... 124 Imprint ............................................................................................................................................. 125 4 HelloFresh SE ANNUAL REPORT 2019 To Our Shareholders Letter by the Management Board A TO OUR SHAREHOLDERS Edward Boyes Thomas W. Griesel Dominik S. Richter Christian Gaertner LETTER BY THE MANAGEMENT BOARD Dear shareholders, 2019 has been a key milestone in the development of our company: During the year we provided more than 280m meals to our customers, who’s number rose to close to three million in the fourth quarter of the year. i.e. by now, we have reached a scale where we have a positive impact on the life of a very significant number of people, enabling them to easily prepare and enjoy more delicious and healthy dinners than they would otherwise have, and this at very competitive costs. During 2019, we have mostly focused on broadening the choice for our customers across markets by (i) increasing the number of recipes on offer, (ii) tailoring those recipes to individual customer preferences, such as quick menus, family offerings, low calorie recipes and by (iii) rolling out our portfolio of upcharge and add-on offerings. As we interact with our customers directly on a weekly basis, we know what they want and can tailor our offering accordingly. During 2019, we have also significantly invested in the ramp-up of our US value brand EveryPlate. In the second half of 2019, we have launched our service in Sweden as our 13th geography. ANNUAL REPORT 2019 HelloFresh SE 5 To Our Shareholders Letter by the Management Board Our efforts resulted in continued strong constant currency revenue growth of 37.4%, meaningfully exceeding capital markets expectations. Also, from an AEBITDA perspective, we achieved in 2019, for the first time in our history, a positive result of MEUR 46.5 or a margin of 2.6%. Both of our operating segments, the US and International, generated positive AEBITDA during the period. This is a result of both, (i) further expansion of our contribution margin by realizing efficiencies in procurement and production and (ii) a relative reduction in marketing expenses, as our existing customer base grows, and new customer acquisition costs have come down. Our operational and financial progress has been rewarded during 2019 by the capital markets with a share price increase of more than 200%, making us the 2nd best performing stock of the German SDAX. Since our inception in 2011, sustainability has been a key pillar on which our business is founded. By having successfully implemented a very direct supply chain, organized on a just-in-time basis, only delivering food that our customers have actually ordered, we achieve a vastly better CO2 footprint and significantly less food waste than traditional grocers. During 2019 we have made further progress to optimize on these two key dimensions, as well as on packaging and we are proud to report on those result in more detail in our sustainability report. For