Annual Report 2017 Annual Report 2017 Key Figures Rocket Internet Group (according to IFRS) Financials (in EUR million) 2017 2016 Change Revenue 36.8 50.4 (27%) EBITDA (54.8) (565.3) (90%) Cash and cash equivalents 1,716.6 1,401.0 23% Loss for the period (6.0) (741.5) (99%) Earnings per share (in EUR) 0.01 (4.22) (100%) Selected Companies Revenue (in EUR million) 2017 2016 Change FOOD & GROCERIES HelloFresh 905 597 52% Delivery Hero 544 341 60% FASHION Global Fashion Group 1,095 887 23% GENERAL MERCHANDISE Jumia 94 84 11% HOME & LIVING Westwing 266 250 6% Home24 276 244 13% Table of Content 02 Letter to our Shareholders 05 About Rocket Internet 23 Our Companies 53 Consolidated Financial Statements 172 Combined Management Report 2 ANNUAL REPORT 2017 LETTER TO OUR SHAREHOLDERS ABOUT ROCKET INTERNET Oliver Samwer, Chief Executive Officer Dear Shareholders and Friends of Rocket Internet, 2017 has been a successful year for Rocket Internet. We delivered on our promise to create sustainable value. Our investment focus on Food & Groceries paid off with the two successful IPOs of our selected companies Delivery Hero and HelloFresh. At year-end, their combined market capitalization was around EUR 8 billion, ranking them among the most successful IPOs in Europe last year. Delivery Hero, the leading global online food ordering and delivery marketplace, has been listed on the Frankfurt Stock Exchange on June 30, 2017. The offering raised Delivery Hero IPO total proceeds of EUR 989 million, making it the third largest Internet IPO ever in Largest food delivery IPO globally Germany. The company, which among others includes the Foodora, Pizza.de and Lieferheld brands, is well positioned to grow and expand its market leadership in its respective markets. HelloFresh IPO HelloFresh’s IPO in November 2017 was also a great success. The world’s leading EUR 286 million IPO primary meal kit provider raised EUR 286 million primary proceeds. HelloFresh already gen- proceeds erates half of its sales in the USA, the largest and most important growth market. HelloFresh has been a good example of succeeding with companies also in the USA. As of year-end 2017, Rocket Internet held 44 percent of the shares in HelloFresh. In addition to the two highly successful IPOs, we have closed further transactions that prove our ability to found, grow and successfully exit market-leading Internet companies. In June 2017, Rocket Internet sold its remaining 8.8 percent stake in the leading Southeast Asian General Merchandise online retailer Lazada to the leading Chinese eCommerce company Alibaba at a valuation of USD 3.15 billion. OUR COMPANIES CONSOLIDATED FINANCIAL STATEMENTS COMBINED MANAGEMENT REPORT 3 We continue to invest in lower-risk business models addressing basic customer needs, limited competition and scalable technology. We invest early and benefit from being close to a company. Therefore, we have created an investment platform with truly global reach to capture the latest technology investment opportunities. Our share price rose 10.4 percent in 2017. We have continued to reduce the com- MDAX inclusion plexity of Rocket Internet, significantly improved the profitability of our selected As of March 2018 companies and invested in exciting new companies. As of March 2018, our shares are included in the MDAX index. Rocket Internet is well capitalized with a strong gross cash position of EUR 2.7 billion EUR 2.7 billion as of end of March 2018. We are able to make larger capital commitments, support- Cash Position ing companies in their growth phase and also make larger investments in promising businesses. Our selected companies in the sectors Food & Groceries (HelloFresh and Delivery Hero), Fashion (Global Fashion Group), General Merchandise (Jumia) and Home & Living (Westwing and Home24) were able to further expand their positions in their respective markets in 2017. At the same time, they have come closer to reaching break-even in medium-term. Operationally, we continue to work on growing the top line of our selected companies, while at the same time reducing absolute EBITDA losses. Under certain circumstances, growth and a strong market position are more important to us than achieving profitability in the short-term. Since our strategy is focused on high absolute value creation, we understand that it will take several years of investment to scale companies and have them reach profitability. Consolidated revenue for Rocket Internet SE decreased by EUR 13.6 million to EPS break-even EUR 36.8 million in 2017 and the consolidated loss improved significantly from EUR 0.01 per share EUR -741.5 million in 2016 to EUR -6.0 million in 2017. Earnings per share 2017 was marginally positive at EUR 0.01. In August 2017, Rocket Internet announced a share buyback program for a total purchase price of up to EUR 100 million, ending end of April 2018. As of year-end 2017, more than 1 million shares have been bought back, which amounts to a total purchase volume of around EUR 21.1 million. I would like to thank all employees for their dedication, vision and creativity. They are the cornerstone of our success. We incubate and invest in great online companies around the globe and support our businesses with operational expertise and capital. We have offices and great teams worldwide. Combined with our strong capital base this uniquely positions us to source and support attractive investment opportunities in the Internet sector for Rocket Internet and its shareholders. Berlin, April 2018 Oliver Samwer. Chief Executive Officer, Rocket Internet SE CHAPTER 1 About Rocket Internet 06 Introduction to Rocket Internet 08 Two Successful IPOs in 2017 10 Our Global Footprint 12 Our Employees 14 Rocket Internet Stock Information 18 Report of the Supervisory Board 6 ANNUAL REPORT 2017 LETTER TO OUR SHAREHOLDERS ABOUT ROCKET INTERNET Introduction to Rocket Internet We support technology companies by providing capital and operational advice Introduction to Rocket Internet Rocket Internet empowers technology com panies to grow. We provide both capital and operational support to the entrepreneurs and companies that we partner with and help them establish market-leading positions internationally. OUR COMPANIES CONSOLIDATED FINANCIAL STATEMENTS COMBINED MANAGEMENT REPORT 7 Our functional experts assist our companies over their full lifecycle We deploy capital based on our conviction that the offline to online shift will continue to disrupt almost all sectors and fundamentally change business models and entire industries. We look for companies and business models that leverage technology to address basic needs of both consumers and companies, and that achieve over time significant scale, high levels of profit- ability and market-leading positions. What differentiates Headquartered in Berlin, Germany and listed on the us from other investors is our operational know-how, Frankfurt Stock Exchange since 2014, Rocket Internet has which enables us to both incubate new business models offices and extensive investment and operational expe- as well as invest in and support existing businesses. rience around the globe. Our global network with teams in target markets worldwide benefits from deep local We have significant capital available, enabling us to expertise (e.g. operations and logistics) and helps com- provide financing to companies over the full lifecycle of panies achieve economies of scale and synergies, thus their development. Furthermore, we support our compa- reducing marginal costs for building new companies. nies as they scale by providing deep functional expertise, proprietary technology solutions and access We have established strategic partnerships that offer to an extensive ecosystem of global partnerships. This extensive financial, operational and strategic support unique blend of operational support provides a compet- to our network of companies. In addition, framework itive advantage to our companies, increases their prob- agreements with leading global technology firms pro- ability of success and distinguishes us from competitors. vide our companies with competitively priced, leading technology and services. Our functional experts cover the full stack of technology companies, including key areas such as product, engi- Rocket Internet incubates, invests in and supports com- neering, customer acquisition and internationalization. panies in the Internet sector worldwide and provides This enables our companies to develop market-leading investors with a diversified exposure to the global positions in a shorter period of time. As they mature, Internet sector. companies continue to turn to Rocket Internet for support on special projects to cover temporary high demand or specialist know-how. 8 ANNUAL REPORT 2017 LETTER TO OUR SHAREHOLDERS ABOUT ROCKET INTERNET Two Successful IPOs in 2017 Two Successful IPOs in 2017 HelloFresh successfully went public on the Frankfurt Stock Exchange HelloFresh in 2017 The World’s Leading Meal Kit Provider On November 1, 2017, HelloFresh SE, the world’s leading meal kit provider with operations in the USA, Western Europe and Australia, set the final offer price at EUR 10.25 per share and started trading on the regulated market (Prime Standard) of the Frankfurt Stock Exchange on November 2, 2017. The all primary offering in- cluding the proceeds from the greenshoe option resulted in gross proceeds of EUR 286 million for HelloFresh. HelloFresh Share Price Development Since IPO November 2, 2017 till December 29, 2017 EUR per Share 1313.0 +16.1% HelloFresh from