Annual Report 2015 Key Figures Financials (in EUR million) 2015 2014 Change % Rocket Internet Group (according to IFRS) Revenue 128.3 128.2 0% EBIT (Earnings before interests and taxes) −226.1 421.8 −154% Cash and cash equivalents 1,758.9 2,053.4 −14% Loss / profit for the period −197.8 428.8 −146% Earnings per share (in EUR) −1.24 3.24 −138% Rocket Internet SE (according to German GAAP) Revenue 34.2 28.8 19% EBIT (Earnings before interests and taxes) 63.8 −10.7 −696% Cash on hand and bank balances 1,720.0 1,997.7 −14% Net loss for the year −73.4 −45.9 60% Net loss for the year before extraordinary expenses 1) −70.6 −11.3 525% Revenue (in EUR million) 2015 2014 Change % Selected Portfolio Companies Food & Groceries 534.4 164.3 225% HelloFresh 305.0 69.6 338% Delivery Hero 197.9 88.0 125% foodpanda 31.5 6.7 373% Fashion Global Fashion Group 930.1 627.4 48% General Merchandise 2) 3) 450.0 262.5 71% Lazada 2) 3) 248.0 139.1 78% Jumia 134.6 61.8 118% Linio 67.4 61.6 10% Home & Living 452.9 343.4 32% Westwing 219.2 183.3 20% Home24 233.7 160.1 46% 1) Net loss for the year plus extraordinary expenses of EUR 2.9 million and extraordinary expenses of EUR 34.6 million respectively. 2) Figures shown were converted to EUR using average exchange rates. 3) Growth rate shown is calculated using constant exchange rates. Further Information Further Information on the Report on the Internet Table of Content Content 02 Letter to our Shareholders 07 About Rocket Internet 41 Our Companies 93 Consolidated Financial Statements 215 Combined Management Report 2 ANNUAL REPORT 2015 LETTER TO OUR SHAREHOLDERS ABOUT ROCKET INTERNET Oliver Samwer, Chief Executive Officer Dear Shareholders and Friends of Rocket Internet, 2015 was our first full year as a listed company. It was a year in which we took great strides in strengthening our presence in key online sectors such as Food & Groceries as well as building out our ownership in certain companies. Furthermore, we continued to focus on building out our operating and investing platform. Rocket Internet’s network of companies was able to rely on our ever more sophisticated technologies and systems, our funding support and strategic impetus and last but not least on our dedicated Rocket Internet employees and their functional expertise. We have built a company of extraordinary reach and scope and a highly differentiated business model. A company that shapes its industry sector. In the past year, we focused on five industry sectors that make up a significant portion of con- sumer online and mobile spending - Food & Groceries, Fashion, General Merchandise, Home & >36,000 Living and Travel and invested further in our Regional Internet Groups and New Businesses & employees in network of Investments. Rocket Internet’s network of companies operates a variety of business models in companies over 110 countries on six continents. Together, these companies counted more than 36,000 em- ployees at the end of 2015. OUR COMPANIES CONSOLIDATED FINANCIAL STATEMENTS COMBINED MANAGEMENT REPORT 3 Of the five industry sectors we are focusing on, Food & Groceries played a key role in 2015. I believe it offers the next big opportunity in Internet and mobile commerce as the sector is beginning to transition from offline to online and customer centric models are gaining traction all around the globe. It is an incredibly large and fast-growing online market, with an overall global sales volume of about EUR 5.8 trillion per year. In line with our conviction of the opportunities ahead in Food & Groceries, we invested in Hello Fresh and Delivery Hero, market leaders in their respective regions and sub-sectors. We increased our stake in HelloFresh, a global leader in the personalized fresh food at home market, 56.4% to 56.4% from 43.3% at the end of 2014, and acquired a 37.3% stake in Delivery Hero over the ownership in HelloFresh course of 2015. Our stake in foodpanda amounted to 49.1% at the end of 2015. These invest- ments allow us to participate in the growth ahead in this promising sector. Beyond Food & Groceries, we continued to strengthen our position in the fast growing online Fashion market by creating the Global Fashion Group, a leading online fashion group in emerging markets, through a role up of the regional entities Lamoda (Russia and CIS), Dafiti (Latin Ameri- ca), Namshi (Middle East), Zalora/The Iconic (Asia Pacific/Australia) and Jabong (India). The investments undertaken in 2015 not only protected and expanded Rocket Internet’s position in key sectors, but also provided the companies with growth capital, allowing them to further expand their operations and advance towards profitable and long-term market leadership – our ultimate goal. We are very excited about the innovation in the online and mobile sector and continue to pursue new business models. In 2015 we founded and scaled ten new companies ranging from food de- livery companies such as foodora to CarSpring, a peer-to-peer marketplace for used cars. Our aim is to make our companies highly profitable market leaders in the long-term. To achieve this, a company’s growth is more important than its profitability in the early years. Depending on the model and market, we expect a company to break-even in six to nine years. In order to continuously support the growth of our existing network of companies and to continue to pursue new online models, financial flexibility at Rocket Internet is a key prerequisite. Our stock price did not perform as we would have wished in 2015 and showed significant vola- tility. In particular, the recent uncertainties in the markets about the developments in China and emerging markets as well as in the broader Internet sector seem to have contributed to the re- cent development. In 2015 we focused on enhancing our financial flexibility, whilst having made significant invest- ments in our companies such as Delivery Hero. We ended the year 2015 with a very strong finan- EUR 1.8 billion cial position of EUR 1.8 billion gross cash. Rocket Internet accessed the capital markets through cash position a follow-on offering in February 2015 with gross proceeds of EUR 588.5 million and the issuance of a convertible bond with gross proceeds of EUR 550.0 million in July. We are very well capi- talized to launch, scale and invest in companies, supporting them in their goal to reach market leadership. These achievements have been made possible by a great Rocket Internet team and co-founders. All of us are going the extra mile, not once in a while, but always, everywhere and in every way. 4 ANNUAL REPORT 2015 LETTER TO OUR SHAREHOLDERS ABOUT ROCKET INTERNET Outlook 2016 We are entrepreneurs. Our global and well diversified network of companies is a strong base for creating long-term sustainable value for our investors. 2016 will be a year of continued growth and profitability improvement across our network of companies. Our objective for 2016 is to continue making great investments and launching new companies, to strengthen our market share and position in the countries we are present and to generate returns for our shareholders. We will work on further reducing the complexity across our network of companies and on enhancing transparency. 2016 will be another exciting year for Rocket Internet – great opportunities lay ahead. With our ever growing expertise, our sophisticated technology and our state of the art platform, we will continue to define entrepreneurship in the Internet sector in our markets. Berlin, April 2016 Oliver Samwer Chief Executive Officer Rocket Internet SE OUR COMPANIES CONSOLIDATED FINANCIAL STATEMENTS COMBINED MANAGEMENT REPORT 5 Oliver Samwer, Chief Executive Officer Peter Kimpel, Chief Financial Officer Alexander Kudlich, Group Managing Director 7 1 About Rocket Internet Content 08 Our Business Model and Strategy 12 What Sets Rocket Internet Apart? 14 Our Operational Platform 18 HelloFresh – Building the Leading Global Online Consumer Food Brand 20 Our Infrastructure 22 Our Technology 26 Our Network 28 Our Global Footprint 30 Employees 32 Rocket Internet Stock Information 35 Report of the Supervisory Board 8 ANNUAL REPORT 2015 LETTER TO OUR SHAREHOLDERS ABOUT ROCKET INTERNET Our Business Model and Strategy One of Rocket Internet's major focus industries is Food & Groceries Our Business Model and Strategy Rocket Internet builds and invests in Internet compa- nies that take proven online business models to new, fast-growing markets. Our companies are often “first movers” in their markets that quickly capture size- able market share, the foundation for strong and last- ing profitability. We further honed and deepened this approach in 2015, identifying opportunities in new regions and markets, and consistently expanding the Rocket Internet network of companies. OUR COMPANIES CONSOLIDATED FINANCIAL STATEMENTS COMBINED MANAGEMENT REPORT 9 We seek to disrupt traditional offline industries with new, innovative online business models Our strategy is influenced by five major trends that drive growth in our key markets: – Internet penetration in emerging markets is low but grow- ing quickly, which means demand for online and mobile services that meet basic needs is growing strongly. – The smartphone revolution is giving ever more people In- ternet access, a big opportunity for online retailers to ex- ploit new demand in all corners of the world. Rocket Internet has developed a platform, which is able to support our network of companies. Our operational excellence – The population in many of our markets is younger than and our access to international expertise and funding enable us that in the US, which increases the scope for online busi- to identify, build and scale proven online and mobile business ness models.