Prospectus dated June 1, Prospectus for the public offering

Transcription

1 Prospectus dated June 1, 2018 Prospectus for the public offering of 7,692,307 newly issued bearer shares with no par value (Stückaktien) from a capital increase against contributions in cash to be resolved by an extraordinary shareholders meeting of the Company on or about June 13, 2018 and of 1,153,846 existing bearer shares with no par value (Stückaktien) from the holdings of the Lending Shareholder in connection with a possible over-allotment, with the total number of such over-allotment shares not exceeding 15.0% of the new shares actually placed in the offering and at the same time for the admission to trading on the regulated market (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) with simultaneous admission to the sub-segment of the regulated market with additional post-admission obligations (Prime Standard) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) of up to 7,692,307 newly issued bearer shares with no par value (Stückaktien) from a capital increase against contributions in cash to be resolved by an extraordinary shareholders meeting of the Company on or about June 13, 2018 and 18,476,756 existing bearer shares with no par value (Stückaktien) (existing share capital), each such share with a notional value of 1.00 of home24 SE Price Range: International Securities Identification Number (ISIN): DE000A14KEB5 German Securities Code (Wertpapierkennnummer (WKN)): A14KEB Ticker Symbol: H24 Joint Global Coordinators and Joint Bookrunners Berenberg Citigroup Goldman Sachs International

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3 TABLE OF CONTENTS I. SUMMARY OF THE PROSPECTUS... S-1 A Introduction and Warnings... S-1 B Issuer... S-2 C Securities... S-15 D Risks... S-16 E Offer... S-19 II. ZUSAMMENFASSUNG DES PROSPEKTS... S-27 A Einleitung und Warnhinweise... S-27 B Emittent... S-28 C Wertpapiere... S-43 D Risiken... S-44 E Angebot... S RISK FACTORS Risks Related to Our Business, Operations and Financial Position Regulatory, Legal and Tax Risks Risks Related to the Company s Shareholder Structure, its Shares and the Offering GENERAL INFORMATION Responsibility Statement Purpose of this Prospectus Forward-Looking Statements Sources of Market Data Documents Available for Inspection Currency Presentation Presentation of Financial Information Non-IFRS Financial Information Enforcement of Civil Liabilities THE OFFERING Subject Matter of the Offering Price Range, Offer Period, Offer Price and Allotment Expected Timetable for the Offering Information on the Shares Transferability of the Shares; Lock-Up Information on the Company s Existing Shareholders Allotment Criteria Stabilization Measures, Over-Allotments and Greenshoe Option Lock-Up Agreements and Limitations on Disposal Admission to the Frankfurt Stock Exchange and Commencement of Trading Designated Sponsors Interests of Parties Participating in the Offering PROCEEDS AND COSTS OF THE OFFERING AND THE LISTING REASONS FOR THE OFFERING AND THE LISTING; USE OF PROCEEDS DIVIDEND POLICY; RESULTS AND DIVIDENDS PER SHARE; USE OF PROFITS General Provisions Relating to Profit Allocation and Dividend Payments Dividend Policy and Earnings per Share Page -i-

4 7. CAPITALIZATION AND INDEBTEDNESS; STATEMENT ON WORKING CAPITAL Capitalization Indebtedness Contingent and Indirect Liabilities Statement on Working Capital DILUTION SELECTED CONSOLIDATED FINANCIAL INFORMATION Consolidated Statement of Comprehensive Income Consolidated Balance Sheet Consolidated Statement of Cash Flow Additional Key Performance Indicators Consolidated Quarterly Financial Information Segment Information MANAGEMENT S DISCUSSION AND ANALYSIS OF NET ASSETS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview Key Factors Affecting our Results of Operations, Financial Condition and Cash Flows Comparability Results of Operations Assets, Equity and Liabilities Liquidity and Capital Resources Qualitative and Quantitative Disclosure on Financial Risks Critical Accounting Estimates and Judgments in Applying Accounting Policies New Accounting Standards Additional Information from the Unconsolidated Financial Statements of the Company MARKETS AND COMPETITION Markets Competition BUSINESS Our Mission and Our Unique Value Propositions Our Market Opportunity Our Strengths Our Strategy Our Operations Intellectual Property Material Agreements Insurance Coverage Employees Real Property Legal Proceedings REGULATORY AND LEGAL ENVIRONMENT Data Protection and Data Privacy Cybersecurity Consumer Protection Product Safety Trademarks Internet Domains ii-

5 14. SHAREHOLDER INFORMATION Current Shareholders Controlling Interest GENERAL INFORMATION ON THE COMPANY AND HOME Formation, Incorporation, Commercial Name and Registered Office Fiscal Year and Duration Our History Corporate Purpose Group Structure Significant Subsidiaries Auditor Announcements and Paying Agent SHARE CAPITAL OF THE COMPANY AND APPLICABLE REGULATIONS Current Share Capital; Shares Development of the Share Capital Authorized Capital Conditional Capital Authorization to Issue Convertible Bonds and Other Instruments Authorization to Purchase and Sell Treasury Shares General Provisions Governing a Liquidation of the Company General Provisions Governing a Change in the Share Capital General Provisions Governing Subscription Rights Exclusion of Minority Shareholders Shareholder Notification Requirements; Mandatory Takeover Bids; Directors Dealings Short Selling Regulation (Ban on Naked Short-Selling) GOVERNING BODIES OF THE COMPANY Overview Management Board Supervisory Board Long-Term Incentive Programs Certain Information Regarding the Members of the Management Board and the Supervisory Board Shareholders Meeting Corporate Governance CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS Relationships with Rocket Internet SE Relationships with Members of the Company s Governing Bodies UNDERWRITING Underwriting Agreement Commissions Greenshoe Option and Securities Loan Termination; Indemnification Selling Restrictions Other Interests of the Joint Bookrunners in the Offering iii-

6 20. TAXATION IN THE FEDERAL REPUBLIC OF GERMANY Taxation of the Company Taxation of Shareholders Taxation of Dividends of Shareholders with a Tax Residence in Germany Taxation of Dividends of Shareholders without a Tax Residence in Germany Taxation of Capital Gains Special Treatment of Companies in the Financial and Insurance Sectors and Pension Funds Inheritance and Gift Tax The Proposed Financial Transactions Tax Other Taxes TAXATION IN THE GRAND DUCHY OF LUXEMBOURG Withholding Taxes Taxation of Dividend Income Taxation of Capital Gains Net Wealth Tax Value Added Tax Other Taxes FINANCIAL INFORMATION... F GLOSSARY... G RECENT DEVELOPMENTS AND TREND INFORMATION... O Recent Developments... O Trend Information... O-1 -iv-

7 I. SUMMARY OF THE PROSPECTUS Summaries are made up of disclosure requirements known as elements ( Elements ). These Elements are numbered in Sections A E (A.1 E.7). This summary contains all the Elements required to be included in a summary for this type of security and issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type of security and issuer, it is possible that no relevant information can be given regarding the Element. In such cases, the summary includes a short description of the Element with the words not applicable. A Introduction and Warnings A.1 Warnings. This summary should be read as an introduction to this prospectus (the Prospectus ). The investor should base any decision to invest in the subject securities on the review of this Prospectus as a whole. If any claims are asserted before a court of law based on the information contained in this Prospectus, the investor appearing as plaintiff may have to bear the costs of translating this Prospectus prior to the commencement of the court proceedings pursuant to the national legislation of the member states of the European Economic Area. home24 SE, Berlin, Germany (the Company and, together with its consolidated subsidiaries, the Group, home24, we, us, our or ourselves ), together with Joh. Berenberg, Gossler & Co. KG, Hamburg, Germany ( Berenberg ), Citigroup Global Markets Limited, London, United Kingdom ( Citigroup ), and Goldman Sachs International, London, United Kingdom ( Goldman Sachs International and, together with Berenberg and Citigroup, the Joint Global Coordinators or the Joint Bookrunners ), assume responsibility for the contents of this summary, including any translations thereof, pursuant to Section 5 para. 2b no. 4 of the German Securities Prospectus Act (Wertpapierprospektgesetz). Those persons who have assumed responsibility for the summary, including any translations thereof, or for its issuance (von denen der Erlass ausgeht), can be held liable, but only if this summary is misleading, inaccurate or inconsistent when read together with the other parts of the Prospectus or if it does not provide, when read together with the other parts of the Prospectus, all necessary key information. A.2 Information regarding the subsequent use of the prospectus. Not applicable. Consent by the Company regarding the use of this Prospectus for a subsequent resale or placement of shares has not been granted. S-1

8 B Issuer B.1 Legal and commercial name of the issuer. B.2 Domicile, legal form and legislation under which the issuer operates and its country of incorporation. B.3 Operations and principal business activities of the issuer and principal markets in which the issuer competes. The Company s legal name is home24 SE. The Company is the parent company of the Group and primarily operates under the commercial name home24. The Group also operates under additional commercial names, in particular Fashion for Home and Mobly, as well as individual brands for specific products, in particular with respect to the Group s private label offering. The Company has its registered office at Greifswalder Straße , Berlin, Germany (telephone: +49 (0) ), and is registered in the commercial register (Handelsregister) of the local court (Amtsgericht) of Charlottenburg, Germany, under the docket number HRB B. The Company is organized under European law as a European company (Societas Europaea (SE)) and therefore subject to European legislations on such companies, especially to Council Regulation (EC) no. 2157/2001 of October 8, 2001 on the statute for a European company (SE), as amended. As a company registered in Germany, the Company is also subject to German law. We consider ourselves the pure-play market leader and go-to destination for home & living online shopping in continental Europe, where we operate in seven countries predominantly under our home24 brand, and in Brazil, where we operate under our Mobly brand. Our strong market position is evidenced by our approximately 1.1 million Active Customers (as defined under Additional Key Performance Indicators in B.7) (as of December 31, 2017), who placed approximately 1.6 million orders with an Average Order Value (as defined under Additional Key Performance Indicators in B.7) of 277 (both in 2017). To satisfy different tastes, styles and budgets, we have built one of the largest and most relevant online offerings with over 100,000 stock keeping units (i.e., code numbers for individual products included in our product offering ( SKUs )) of home & living products, including broad assortments of large furniture items (e.g., living & dining furniture, upholstery and bedroom furniture) as well as small furniture items (e.g., lighting products and accessories). We source these products from over 500 suppliers in more than 30 different countries, including directly from individual manufacturers for our private label offering. Our products are marketed on our home24 platform which comprises two distinct business models: Third-party and white label products: approximately 76% of our SKUs are comprised of a broad selection of home & living products marketed under third-party and white label brands, which we generally do not keep in stock and which accounted for 44% of our revenue in 2017; and Private label products: approximately 24% of our SKUs are comprised of our bestsellers marketed under our own private labels, which we source at highly competitive prices directly from selected manufacturers and other suppliers and often keep in stock and which accounted for 56% of our revenue in Our broad selection of products marketed under third-party and white label brands allows us to offer our customers a wide range of relevant mass market products, which is crucial to satisfy the diverse customer base in our markets where brands for individual products are of little importance and variety is key, without taking on inventory risk or tying up net working capital, while also providing us with essential data on customer preferences and behavior. By marketing our bestsellers under our own private labels, we can leverage our in-depth knowledge of customers preferences to minimize inventory risk, improve our gross profit margins and offer our bestsellers at attractive prices and with relatively short delivery times. S-2

9 To derive the maximum value from our home24 platform, we constantly try to optimize our customers shopping experience. Through our state of the art, scalable information technology ( IT ) platform, including our advanced big data analysis tools based on proprietary software, we tailor our marketing efforts and product offering to enable a maximum number of new and existing customers to find products they need and love even when using generic search terms. The superior customer experience we provide to them is based on our clear focus on customer needs and customer service, including both free deliveries and free returns in our European markets. Deliveries are handled by reliable third-party carriers and our platform is geared towards a smooth fulfillment process from sourcing, through warehousing, packaging, delivery, payment processing and customer service. In Brazil, we have supplemented these third-party carriers by successfully implementing a highly customer-centric and efficient delivery network for the last mile. As a result of our optimized logistics infrastructure, we can deliver a broad product offering with relatively short delivery times at low inventory levels, resulting in increasing recognition of, and loyalty to, our home24 platform. We launched our online offering in 2009, subsequently focusing on compiling a broad and relevant home & living product offering and rapidly expanding our business. To this end, we acquired Mobly Comercio Varejista Ltda. ( Mobly ) in 2012, which today heads our Latin America segment. In 2015, we acquired fashion4home GmbH to further solidify our competitive position in our largest market Germany while also integrating showrooms which had previously been operated by fashion4home GmbH into our operations. During these expansion efforts, our revenue grew rapidly at a compound annual growth rate of 129% between 2010 and 2015, reaching million in In 2016, we began taking the next step to support future growth, making significant investments to scale our home24 platform across the value chain, in particular by investing in end-to-end process optimization and automatic back-end fulfillment systems. In 2017, we re-accelerated our growth, which resulted in period-over-period revenue growth rates at constant currency of 1%, 7%, 17% and 23% in the three months ended March 31, June 30, September 30 and December 31, 2017, with revenue for 2017 amounting to million. In the three months ended March 31, 2018, our period-over-period revenue growth rate at constant currency of 30% was even higher and revenue amounted to 84.5 million during that period. While we remain loss making on a Group level, the successful optimization of our platform has allowed us to increase our growth from quarter to quarter, while improving our Adjusted EBITDA (as defined under Additional Key Performance Indicators in B.7) margin from minus 32.3% in 2015 to minus 6.0% in the three months ended March 31, Our strategic goal is to reach Adjusted EBITDA (as defined under Additional Key Performance Indicators in B.7) breakeven on a Group level within approximately the next 18 months. We believe that the development of our business is supported by the following strengths: A leading pure-play online destination brand for home & living in continental Europe and Brazil. Our unique business model driving superior economics and customer proposition. Our scalable, end-to-end automated and vertically integrated value chain. A scalable, first order profitable customer acquisition. Our best-in-class IT-platform empowering data-driven decision making and automation. Strong combination of accelerating growth and a clear path to profitability. S-3

10 The key elements of our strategy are: We seek to position us to best benefit from the large, untapped market opportunity in the home & living industry. We intend to roll-out our full go-to-market approach across our target markets in order to accelerate customer adoption and market penetration. We plan to develop our platform to drive further growth, increase purchase frequency and brand loyalty. We plan to expand into additional target markets and capitalize on the high degree of fragmentation in the home & living industry. B.4a Most significant recent trends affecting the issuer and the industries in which it operates. B.5 The group and the issuer s position within the group. B.6 Name of persons who, directly or indirectly, have a notifiable interest in the issuer s capital or voting rights. The home & living market is currently impacted by a number of key trends, which together influence the performance of individual home & living retailers such as home24, in particular: The increasing online engagement of consumers, leading to increasing online penetration in the home & living industry; and The ageing of millennials (i.e., people born after the early 1980s), leading to a larger share of the population engaging in online purchases. The Company is the parent company of the Group. The Group s business is conducted by the Company and its various subsidiaries. The Group comprises all companies whose financial and business policy can be controlled by the Company, either directly or indirectly, and the equity interests of the Group whose financial and business policy can be influenced by the Company to a significant extent. As of the date of this Prospectus, the Group comprises 20 companies, of which 12 are based in Germany. As of the date of this Prospectus, the following shareholders of the Company directly hold a notifiable interest in the Company s share capital and voting rights within the meaning of Sections 33 et seq. of the German Securities Trading Act (Wertpapierhandelsgesetz) (the Major Shareholders ): Rocket Internet SE (the Lending Shareholder ), registered in the commercial register of the local court of Charlottenburg Germany, under the docket number HRB B, with its registered address at Charlottenstraße 4, Berlin, Germany; Kinnevik Internet Lux S.à r.l. ( Kinnevik ), registered in the Luxembourg business registers under B190646, with its registered address at 7 Avenue Jean-Pierre Pescatore, L-2324 Luxembourg; Scottish Mortgage Investment Trust plc., registered with the companies house in the United Kingdom under company number SC007058, with its registered address at Calton Square, l Greenside Row, Edinburgh, EH1 3AN, United Kingdom; Vanguard World Fund, on behalf of its fund series Vanguard International Growth Fund, with its registered address at P.O. Box 2600, Valley Forge, Pennsylvania 19482, United States of America (the United States ); Domus Rheno B.V., registered in the companies register in the Netherlands (The Netherlands Chamber of Commerce) under no , with its registered address at Rijnkade 1, 3511 LC Utrecht, the Netherlands; Freemont Management SA, registered in the commercial register at the canton Vaud under no. CH , with its registered address at Rue des Remparts 2, 1095 Lutry, Switzerland; S-4

11 Zimmermann Investment Holding GmbH, registered in the commercial register of the local court of Iserlohn, Germany under the docket number HRB 8917, with its registered address at Eicken 1, Werdohl, Germany; and Dr. Philipp Kreibohm, a member of the management board of the Company (the Management Board ) with his business address at the Company s registered office at Greifswalder Straße , Berlin, Germany. Ultimate Shareholder Rocket Internet SE (1), (2)... Verdere S.à r.l. (3)... The following table sets for (i) the direct shareholdings of the Major Shareholders as well as other entities related to their respective ultimate controlling shareholder and (ii) the ultimate controlling shareholders of the Major Shareholders immediately prior to the Offering (as defined in C.1), as well as (iii) their expected shareholdings, together with the expected shareholdings of the public float upon completion of the Offering (as defined in C.1), assuming placement of 6,818,181 New Shares (as defined in C.1) at the mid-point of the Price Range (as defined in E.1) and final placement of 1,022,727 shares from the Greenshoe Option (as defined in E.3): Direct Shareholder Beneficial (Indirect) Ownership of the Company immediately prior to the Offering upon completion of the Offering (no exercise of (full exercise of Greenshoe Option) Greenshoe Option) (in %) Rocket Internet SE/ Bambino 53. V V UG (haftungsbeschränkt) Kinnevik Internet Lux S.à r.l. (2) Scottish Mortgage Investment Trust plc (4)... Scottish Mortgage Investment Trust plc Vanguard World Fund (5)... Vanguard World Fund Stichting Administratiekantoor Lauwerecht (6)... Domus Rheno B.V Nabuco Foundation (7)... Freemont Management SA Zimmermann Investment Reinhold Zimmermann (8)... Holding GmbH Dr. Philipp Kreibohm/ Bambino 53. V V UG (haftungsbeschränkt)/ PK Projects GmbH Dr. Philipp Kreibohm (9)... Treasury shares (10) Other shareholders (11), (12) Public float (12) Total (12) (1) The Lending Shareholder directly holds 7,526,032 shares in the Company. In addition, Bambino 53. V V UG (haftungsbeschränkt) ( Bambino ), a wholly-owned subsidiary of the Lending Shareholder, holds 90,429 shares in the Company, predominately as trustee for various persons. Due to its ownership of all shares in Bambino, these shares in the Company are attributed to the holdings of the Lending Shareholder. However, the voting rights attached to the shares in the Company held by Bambino as trustee are exercised at the direction of the relevant trustor and therefore are also attributable to such trustor. (2) The voting rights held by Kinnevik are attributable to the Lending Shareholder and vice versa due to an acting in concert within the meaning of Section 34 para. 2 of the German Securities Trading Act (Wertpapierhandelsgesetz) between these entities. (3) Kinnevik is a subsidiary of Kinnevik AB. Verdere S.à r.l. controls approximately 40.1% of the voting rights in Kinnevik AB and therefore has control over Kinnevik AB. (4) Scottish Mortgage Investment Trust plc is a publicly listed company, and no person holds a controlling stake in Scottish Mortgage Investment Trust plc. Baillie Gifford & Co is the sole investment manager of Scottish Mortgage Investment Trust plc. Baillie Gifford & Co is owned by its partners, none of which holds a controlling stake in Baillie Gifford & Co. S-5

12 (5) Vanguard World Fund is an investment company registered in the United States, and no person holds a controlling stake in Vanguard World Fund. Baillie Gifford Overseas Limited acts as investment advisor to Vanguard International Growth Fund, a fund series of Vanguard World Fund, but control over the votes remains with Vanguard International Growth Fund. (6) Domus Rheno B.V. directly holds the shares in the Company. Stichting Administratiekantoor Lauwerecht indirectly holds all shares in Domus Rheno B.V. through SHV Holdings N.V. and SHV Nederland B.V. (7) Freemont Management SA, in its capacity as a professional asset management company, holds a shareholding in the Company in its own name but for the account of its client, Regia Ltd., which also bears the risks from this investment. Nabuco Foundation is the sole shareholder of Regia Ltd. (8) Mr. Zimmermann is the sole shareholder of Zimmermann Investment Holding GmbH. (9) Dr. Kreibohm directly holds 511,700 shares in the Company. In addition, Bambino holds 90,429 shares in the Company as trustee for various persons, including 75,723 shares held as trustee for Dr. Kreibohm, with the voting rights attached to the shares held on behalf of Dr. Kreibohm to be exercised at his direction. Furthermore, PK Projects GmbH, in which Dr. Kreibohm is the sole shareholder, holds 5,547 shares in the Company. (10) As of the date of this Prospectus, the Company holds 33,282 treasury shares. (11) Refers to all shareholders with shareholdings of less than 3% in the Company s share capital immediately prior to the Offering (as defined in C.1) excluding treasury shares. (12) Does not add up to numbers shown above due to the 75,723 shares in the Company that are held by Bambino, a wholly-owned subsidiary of the Lending Shareholder, as trustee for Dr. Kreibohm and which are therefore attributable to both the Lending Shareholder and Dr. Kreibohm. Different voting rights of major shareholders of the issuer. Direct or indirect control. Not applicable. All of the Company s shares confer the same voting rights. As of the date of this Prospectus, the Lending Shareholder holds more than 30% of the voting rights in the Company and is therefore considered to hold a controlling interest in the Company within the meaning of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz ( WpÜG )). In addition, the Lending Shareholder and Kinnevik have entered into a voting agreement (the Voting Agreement ), pursuant to which they agreed to uniformly exercise their voting rights in the Company s shareholders meeting with respect to the composition of the supervisory board of the Company (the Supervisory Board ) as well as the nomination of the chairpersons of the Supervisory Board and certain committees of the Supervisory Board. The Voting Agreement expires upon the earlier of (i) 24 months after the closing of the Offering (as defined in C.1), (ii) the date on which either the Lending Shareholder or Kinnevik directly or indirectly holds less than 10% of the shares in the Company, or (iii) the date on which either the Lending Shareholder or Kinnevik has sold or otherwise transferred (other than to an affiliate of the transferring party) a number of shares corresponding to 25% of the shares in the Company held by such party as of the date of this Prospectus. As a result of the coordination of the exercise of voting rights with respect to the aforementioned matters under the Voting Agreement, the Lending Shareholder and Kinnevik will be considered persons acting in concert and their respective shareholdings will be mutually attributed pursuant to Sections 29 para. 2 and 30 para. 2 WpÜG. For the duration of the Voting Agreement, both the Lending Shareholder and Kinnevik will therefore be considered to hold a controlling interest in the Company within the meaning of the WpÜG. Following completion of the Offering (as defined in C.1), the Lending Shareholder will continue to directly and indirectly hold at least 27.9%, and Kinnevik and the Lending Shareholder together will continue to directly and indirectly hold at least 39.3%, of the Company s shares (assuming completion of the Offering (as defined in C.1) at the low end of the Price Range (as defined in E.1), issuance of 7,692,307 New Shares (as defined in C.1) and exercise of the Greenshoe Option (as defined in E.3) for 1,153,846 shares). As a result, the Lending Shareholder and Kinnevik will together continue to hold a controlling interest in the Company within the meaning of the WpÜG at least for the duration of the Voting Agreement. S-6

13 B.7 Selected historical key financial information. The financial information contained in the following tables and discussion is taken or derived from the Company s audited consolidated financial statements as of and for the fiscal years ended December 31, 2017, 2016 and 2015, the Company s unaudited condensed consolidated interim financial statements as of and for the three months ended March 31, 2018 and the Company s internal reporting system. The audited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, as adopted by the European Union ( IFRS ), and the additional requirements of German commercial law pursuant to Section 315e para. 1 of the German Commercial Code (Handelsgesetzbuch ( HGB )) and Section 315a para. 1 HGB, respectively. The unaudited condensed consolidated interim financial statements have been prepared in accordance with IFRS on interim financial reporting (IAS 34). The aforementioned audited consolidated financial statements of the Company and the respective independent auditor s report as well as audit opinions thereon and the Company s unaudited condensed consolidated interim financial statements as of and for the three months ended March 31, 2018 are included in this Prospectus. Where financial information in the following tables is labelled audited, this means that it has been taken from the audited consolidated financial statements mentioned above. The label unaudited is used in the following tables to indicate financial information that has not been taken from the audited consolidated financial statements mentioned above, but was taken either from the unaudited condensed consolidated interim financial statements mentioned above, or the Company s internal reporting system, or has been calculated based on figures from the aforementioned sources. All of the financial information presented in the tables and discussion below is shown in millions of Euro (in million), except as otherwise stated. Certain financial information, including percentages, has been rounded according to established commercial standards. Changes and percentage changes are calculated based on the rounded figures presented in this Prospectus and commercially rounded to one digit after the decimal point. As a result, the aggregate amounts (sum totals or sub totals or differences or if numbers are put in relation) may not correspond in all cases to the aggregate amounts of the underlying (unrounded) figures appearing elsewhere in this Prospectus. Furthermore, these rounded figures may not add up exactly to the totals contained in the tables in this Prospectus. Financial information presented in parentheses denotes the negative of such number presented. In respect of financial information set out in this Prospectus, a dash ( ) signifies that the relevant figure is not available, while a zero ( 0.0 ) signifies that the relevant figure is available but has been rounded to zero. Our historical results are not necessarily indicative of our future results, and our interim results as of and for the three months ended March 31, 2018 are not necessarily indicative of the results that should be expected for the full fiscal year ending December 31, 2018 or any other period. S-7

14 Selected Consolidated Financial Information of the Company Consolidated Statement of Comprehensive Income For the year ended December 31, For the three months ended March 31, (audited) (in million) (unaudited) (in million) Revenue Cost of sales... (144.2) (141.7) (152.6) (37.7) (46.6) Gross profit Selling and distribution costs... (126.3) (114.4) (123.7) (31.2) (38.5) Administrative expenses... (41.0) (44.0) (46.7) (9.9) (12.1) Other operating income Other operating expenses... (5.5) (2.2) (0.8) (0.4) (0.5) Operating result (EBIT)... (81.7) (57.6) (46.8) (11.4) (12.9) Finance income Finance costs... (4.0) (3.3) (3.7) (1.0) (1.3) Finance costs net... (2.6) (1.9) (3.2) (0.7) (1.1) Loss before taxes (EBT)... (84.2) (59.5) (50.0) (12.2) (14.0) Income taxes... (0.8) (0.3) Loss for the period... (85.1) (59.9) (49.8) (12.1) (13.8) Other comprehensive income/loss for the period, net of tax (0.4) 0.6 (0.1) 0.2 Total comprehensive loss for the period... (84.3) (60.3) (49.2) (12.2) (13.6) Consolidated Balance Sheet As of December 31, (audited) (in million) As of March 31, (unaudited) (in million) Assets Non-current assets Property and equipment Intangible assets Right of use assets Other financial assets (1) Other non-current assets Restricted funds Total non-current assets Current assets Inventories Right to repossess goods from expected returns Trade and other financial receivables Other financial assets Other non-financial assets Cash and cash equivalents Total current assets Total assets S-8

15 As of December 31, (audited) (in million) As of March 31, (unaudited) (in million) Equity Issued capital Treasury shares... (0.0) (0.0) Capital reserves Other reserves... (5.6) (5.9) (5.4) (5.2) Accumulated profit/loss... (252.0) Equity attributable to the owners of the parent company Non-controlling interests... (8.9) (10.4) (11.4) (11.5) Total equity Liabilities Non-current liabilities Financial liabilities Other financial liabilities Other liabilities Provisions Deferred tax liabilities Total non-current liabilities Current liabilities Financial liabilities Trade payables and other financial liabilities Advance payments received Income tax liabilities Other liabilities Refund obligation Provisions Total current liabilities Total liabilities Total equity and liabilities (1) Shown as financial assets in the Company s consolidated financial statements as of and for the fiscal year ended December 31, Data from the Consolidated Statement of Cash Flow As of and for the year ended December 31, As of and for the three months ended March 31, (audited) (in million) (unaudited) (in million) Cash flow from operating activities... (96.2) (37.8) (27.1) (15.8) (3.3) Cash flow from investing activities... (20.2) (13.9) (13.7) (3.3) (5.6) Cash flow from financing activities (2.1) Change in cash and cash equivalents (12.1) (14.0) (17.1) (11.0) Cash and cash equivalents at the end of the period S-9

16 Additional Key Performance Indicators We use Adjusted EBITDA as a key performance indicator in order to assess the success of our business. In addition, we believe that our Contribution Margin (together with Adjusted EBITDA, the Key Performance Indicators ) will be helpful for investors when assessing our performance and financial position. However, the Key Performance Indicators as well as certain other financial and non-financial key performance indicators included in this Prospectus do not necessarily indicate whether cash flows will be sufficient for our cash requirements, may not be suitable for an analysis of our business and operations and may not be indicative of future results. Furthermore, our Key Performance Indicators as well as the other financial and non-financial key performance indicators included in this Prospectus are not recognized as measures under IFRS, should not be considered as substitutes for an analysis of our operating results prepared in accordance with IFRS, and may not be comparable to similarly titled information published by other companies. The following table provides an overview of our Key Performance Indicators as well as certain other financial and non-financial key performance indicators for the dates and periods presented: As of and for the year ended December 31, As of and for the three months ended March 31, (audited, and in million, unless otherwise specified) (unaudited) (in million, unless otherwise specified) Revenue Adjusted EBITDA... (75.4) (1) (40.1) (21.8) (7.2) (5.1) Adjusted EBITDA margin (in %) (1), (2)... (32.3) (16.4) (7.9) (10.7) (6.0) Profit Contribution (1) Contribution Margin (in %) (1) Active Customers (in thousand) (1), (3) , ,129.0 Number of orders (in thousand) (1), (4)... 1, , , Average Order Value (in ) (1), (5) (1) Unaudited. (2) Defined as Adjusted EBITDA divided by revenue. (3) Defined as the number of customers having placed at least one uncancelled order during the twelve months prior to the respective date, irrespective of returns ( Active Customers ). (4) Defined as the number of orders placed in the relevant period, irrespective of cancelations and returns. (5) Defined as the aggregate gross order value of orders placed in the relevant period, including value added tax, divided by the number of such orders, irrespective of cancelations, returns as well as subsequent discounts and vouchers ( Average Order Value ). Adjusted EBITDA We define EBITDA as the sum of (i) operating result (EBIT) and (ii) depreciation and amortization ( EBITDA ). We calculate adjusted EBITDA by adjusting EBITDA for share-based compensation expenses ( Adjusted EBITDA ). The following table provides a calculation of our Adjusted EBITDA for the periods presented: For the year ended December 31, For the three months ended March 31, (audited, unless otherwise specified) (in million) (unaudited) (in million) Operating result (EBIT)... (81.7) (57.6) (46.8) (11.4) (12.9) Depreciation and amortization EBITDA (1)... (77.2) (46.3) (33.9) (9.0) (8.1) Share-based compensation expenses (2) Adjusted EBITDA... (75.4) (1) (40.1) (21.8) (7.2) (5.1) (1) Unaudited. (2) Comprises share-based compensation for current and former directors, officers and employees of the Group as well as share-based compensation in connection with advertising agreements. S-10

17 Contribution Margin We define profit contribution as the difference between (i) gross profit and (ii) fulfillment costs (i.e., distribution, handling and packaging expenses, warehouse employee benefit expenses, warehouse freelancer expenses, payment expenses and bad debt expense) ( Profit Contribution ). We define our contribution margin as our Profit Contribution, divided by our revenue (the Contribution Margin ). The following table provides a calculation of our Contribution Margin for the periods presented: For the year ended December 31, For the three months ended March 31, (unaudited and in million, unless otherwise specified) (unaudited) (in million, unless otherwise specified) Revenue (1) (1) (1) Cost of sales... (144.2) (1) (141.7) (1) (152.6) (1) (37.7) (46.6) Gross profit (1) (1) (1) Gross profit margin (in %) (2) Distribution, handling and packaging expenses... (37.8) (35.9) (35.2) (9.2) (10.9) Warehouse employee benefit expenses (3)... (6.6) (6.6) (7.8) (1.8) (2.7) Warehouse freelancer expenses (3)... (0.5) (0.3) (0.6) (0.2) (0.5) Payment expenses... (3.7) (3.4) (3.5) (0.8) (0.9) Bad debt expense... (3.3) (1.7) (0.1) (0.3) (0.2) Fulfillment costs... (51.9) (47.9) (47.2) (12.3) (15.2) Profit Contribution Contribution Margin (in %) (1) Audited. (2) Defined as gross profit divided by revenue. (3) Warehouse employee benefit expenses and warehouse freelancer expenses comprise employee benefit expenses for our personnel and expenses for temporary external workers (Zeitarbeiter) who are directly involved in the warehouse handling processes for the fulfillment of orders. Segment Information We manage our business based on two operating segments, which are also our reportable segments in accordance with IFRS 8. Our European segment comprises our operations in our home market Germany as well as in Austria, Belgium, France, Italy the Netherlands and Switzerland. Our Latin America segment comprises our operations in Brazil. We do not divide our business into operating segments based on the type of business activities. We measure the performance of our segments on the basis of Adjusted EBITDA. The following table shows the external revenue and Adjusted EBITDA for our European and Latin America segment for the periods presented: For the year ended December 31, For the three months ended March 31, (audited, unless otherwise specified) (in million) (unaudited) (in million) Europe External revenue (1) Adjusted EBITDA... (58.2) (1) (34.6) (19.7) (6.3) (5.8) Latin America External revenue (1) Adjusted EBITDA... (17.1) (1) (5.5) (2.1) (0.9) 0.7 (1) Unaudited. S-11

18 Significant changes to the issuer s financial condition and operating results during or subsequent to the period covered by the historical key financial information. The following significant changes in home24 s financial condition and operating results occurred in the fiscal years ended December 31, 2015, 2016 and 2017, the three months ended March 31, 2017 and 2018 as well as in the subsequent period: Fiscal Years ended December 31, 2015 and December 31, 2016 Our revenue increased from million in 2015 by 10.1 million, or 4.3%, to million in 2016, resulting from the shift in our attention from rapid growth to focusing on optimizing our operations, which also caused a decline in the number of orders by 1.9%. Revenue nevertheless benefitted from increasing online penetration in the home & living industry as well as the full consolidation of fashion4home GmbH, which we acquired towards the end of 2015 and consequently only consolidated for approximately six weeks in that year. Our period-over-period revenue at constant currency increased slightly faster at 5.5% in In 2016, external revenue for our European segment increased from million in 2015 by 12.2 million, or 6.7%, to million, thereby increasing slightly faster than our Group revenue. This was due to numerous initiatives we implemented that focused on improving the efficiency of our European operations as well as the full consolidation of fashion4home GmbH. For our Latin America segment, external revenue decreased from 50.5 million in 2015 by 2.1 million, or 4.2%, to 48.4 million in 2016, due to currency exchange rate effects as a result of the declining Brazilian Real and a greater focus on profitability. Period-over-period external revenue at constant currency in our Latin America segment increased by 1.4% in Our operating result (EBIT) improved from a loss of 81.7 million in 2015 by 24.1 million, or 29.5%, to a loss of 57.6 million in Operating result (EBIT) included depreciation and amortization as well as share-based compensation expenses, which increased in 2016 due to options granted under our long-term incentive programs. Adjusted for these items, Adjusted EBITDA improved by 35.3 million to minus 40.1 million in 2016, driven by the significant decrease in selling and distribution costs and other benefits from the streamlining across our value chain. This corresponded to an improvement of our Adjusted EBITDA margin by 15.9 percentage points to minus 16.4% in Compared to 2015, Adjusted EBITDA for our European segment improved by 23.6 million to minus 34.6 million in 2016, benefitting from our focus on improving our operations and margins. This also resulted in an improvement of our Adjusted EBITDA margin for our European segment by 14.1 percentage points to minus 17.7% in The Adjusted EBITDA for our Latin America segment also improved, rising by 11.6 million to minus 5.5 million in 2016, corresponding to an improvement of the Adjusted EBITDA margin for this segment by 22.5 percentage points to minus 11.4% in Fiscal Years ended December 31, 2016 and December 31, 2017 In 2017, revenue increased from million in 2016 by 31.9 million, or 13.1%, to million in 2017, due to our decision to re-accelerate our growth, in particular driven by our increased marketing efforts. Consequently, the number of orders also increased by 12.3% in Our period-over-period revenue at constant currency increased slightly less by 11.7% in In our European segment, external revenue increased from million in 2016 by 20.9 million, or 10.7%, to million in 2017, primarily driven by our increased marketing efforts (e.g., TV ads in Germany). External revenue in our Latin America segment increased from 48.4 million in 2016 by 11.0 million, or 22.7%, to 59.4 million in 2017, due to a higher number of Active Customers and an increase in the Average Order Value. Period-over-period external revenue at constant currency in our Latin America segment increased at a slower pace of 15.7% in S-12

19 In 2017, operating result (EBIT) improved from a loss of 57.6 million in 2016 by 10.8 million, or 18.8%, to a loss of 46.8 million. Operating result (EBIT) included depreciation and amortization as well as share-based compensation expenses, which increased significantly in 2017 as a result of the introduction of new long-term incentive programs. Adjusted for these items, Adjusted EBITDA increased by 18.3 million and amounted to minus 21.8 million in 2017, driven by our growing revenue from which we were able to derive higher profits as a result of the increased scalability of our platform, in particular due to the optimization of our fulfillment infrastructure and higher sales of our private label products. This corresponded to an improvement of our Adjusted EBITDA margin by 8.5 percentage points to minus 7.9% in Propelled by the successful optimization of our platform, Adjusted EBITDA for our European segment improved by 43.1% compared to 2016 to minus 19.7 million in 2017, with our Adjusted EBITDA margin improving by 8.6 percentage points to minus 9.1%. For our Latin America segment, Adjusted EBITDA improved by 61.8% to minus 2.1 million in 2017, while the Adjusted EBITDA margin improved by 7.9 percentage points to minus 3.5% in In the fourth quarter of 2017, our Latin America segment even achieved Adjusted EBITDA breakeven for this seasonally strong quarter, evidencing the positive development of our operations in Brazil. Three Months Ended March 31, 2017 and March 31, 2018 Our revenue increased from 67.5 million in the three months ended March 31, 2017 by 17.0 million, or 25.2%, to 84.5 million in the three months ended March 31, 2018, primarily due to an increase in the number of Active Customers, which rose by 6.6% between December 31, 2017 and March 31, 2018, as well as an increase in the number of orders by 26.4% from 0.4 million in the three months ended March 31, 2017 to 0.5 million in the three months ended March 31, Our period-over-period revenue at constant currency increased even faster at 30.1% in the three months ended March 31, In the three months ended March 31, 2018, external revenue in our European segment increased from 53.7 million in the three months ended March 31, 2017 by 13.1 million, or 24.4%, to 66.8 million, primarily driven by our increased marketing efforts (e.g., TV ads in Germany). External revenue in our Latin America segment increased from 13.8 million in the three months ended March 31, 2017 by 3.9 million, or 28.3%, to 17.7 million in the three months ended March 31, 2018, driven by an increase in the number of Active Customers as well as our ability to deliver our products through our last mile delivery capabilities faster. Period-over-period external revenue at constant currency in our Latin America segment increased significantly faster and rose by 52.5% in the three months ended March 31, In the three months ended March 31, 2018, operating result (EBIT) deteriorated from a loss of 11.4 million in the three months ended March 31, 2017 by 1.5 million, or 13.2%, to a loss of 12.9 million. Operating result (EBIT) included depreciation and amortization as well as share-based compensation expenses. Adjusted for these items, Adjusted EBITDA improved from minus 7.2 million in the three months ended March 31, 2017 by 2.1 million and amounted to minus 5.1 million in the three months ended March 31, 2018, with such increase mainly due to our re-accelerated growth as well as benefits from economies of scale and from operating our optimized platform. In addition, the early application of IFRS 16 contributed 1.7 million to the increase of our Adjusted EBITDA in the three months ended March 31, These developments led to an improvement of our Adjusted EBITDA margin from minus 10.7% in the three months ended March 31, 2017 by 4.7 percentage points to minus 6.0% in the three months ended March 31, S-13