HelloFresh : Individual Financial Statements 2023 (2024)

HelloFresh SE, Berlin

Separate Financial Statements

2023

HelloFresh SE, Berlin

Balance sheet as of 31 December 2023

HelloFresh SE, Berlin

Income statement for the financial year 2023

HelloFresh SE, Berlin

Notes to the Financial Statements for the Financial Year 2023

General

HelloFresh SE (the "Company" or "HelloFresh") is a European company (Societas Europaea or "SE"). The Company is entered in the commercial register of the local court of Charlottenburg under HRB no. 182382 B. The Company's head office is at Prinzenstraße 89, 10969 Berlin.

The financial statements were prepared in accordance with Sec. 242 et seq. and Sec. 264 et seq. HGB ["Handels- gesetzbuch": German Commercial Code] as well as in accordance with the relevant provisions of the AktG ["Aktiengesetz": German Stock Corporation Act] in conjunction with Art. 61 of Regulation (EC) No 2157/2001. The Company is subject to the requirements for large corporations. The income statement was prepared using the cost of sales method in accordance with Sec. 275 (3) HGB.

The financial statements were prepared in Euros.

As the ultimate parent, HelloFresh SE prepares consolidated financial statements as of 31 December 2023 in accordance with IFRSs as adopted by the European Union.

The financial statements and the combined management report for the fiscal year 2023 in accordance with Sec. 315 (5) HGB are published in the Bundesanzeiger [German Federal Gazette] together with the auditor's report.

To improve legibility, all amounts are reported in thousands of Euro.

Accounting policies

The following recognition and accounting policies were used to prepare the financial statements. The policies remained unchanged in comparison to prior year.

The option under Sec. 248 (2) HGB to capitalize internally generated intangible assets is exercised provided that the conditions to do so are met. The manufaturing costs of internally generated intangible assets comprise direct costs and an appropriate share of overhead cost. The assets are depreciated on a straight- line basis over a useful economic life of 2 to 3 years.

Property, plant and equipment are recognized at acquisition or manufacturing cost and depreciated on a straight- line basis over their useful lives of 3 to 10 years. Low-value assets with an individual net value not exceeding EUR 800 are fully written off in the year of acquisition.

Investments in affiliates and participations are disclosed within financial assets and recognized at acquisition cost. A lower fair value is recognised at the balance sheet date only if the impairment is expected to be permanent. The company determines the fair value with an impairment test using the discounted cash flow method. Impairments are reversed to the extent that the reason for the impairment no longer exists.

Loans to affiliates are recognized at nominal value or, if lower, at their fair value. If an impairment on a financial investment exceeds it's acquisition cost, the exceeding amount is allocated to the respective loan.

Inventories are measured at the lower of cost and net realizable value. Cost is determined pursuant to the average method. The cost of inventory includes the purchase price, shipping and handling costs incurred to bring the inventories to their present location and condition. Net realizable value is the estimated selling price less the estimated costs necessary to make the sale.

Receivables are recognised at the lower of their nominal value or net realisable value. Specific bad debt allowances provide for all foreseeable valuation risks. The general credit risk is provided for by a general bad debt allowance.

Other assets are recognised at nominal value.

Prepaid expenses are recognized when payments are made prior to the balance sheet date that relate to expenses after the balance sheet date.

The share capital is reported at its nominal amount. Additional paid-in capital was recognized pursuant to Sec. 272 (2) No. 1 HGB.

The Company recognised the premium arising from the issuance of convertible bonds under capital reserves (Sec. 272

1. No. 2 HGB) and made use of its option under German Commercial Code (HGB) to recognise a discount in the balance sheet under prepaid expenses. The capitalized discount is amortized on a straight-line basis over the lifetime of the convertible bonds (5 years).

The accounting par value of acquired treasury shares is deducted from subscribed capital on the face of the balance sheet. The difference between the accounting par value and the acquisition cost of treasury shares is offset against the freely available capital reserves. Incidental costs of acquisition are expensed.

Other provisions represent uncertain liabilities. They are recognized at the settlement value deemed necessary according to prudent business judgment (i.e., including future cost and price increases). Provisions due in more than one year, if any, are discounted.

The Company maintains different share-based compensation plans, under which the Company grants virtual share options and restricted stock units to employees and the Management Board in return of their service. The German Commercial Code (HGB) does not explicitly stipulate how to recognize these compensation expenses over the vesting period. The Company accounts share-based compensation under German GAAP (HGB) in line with International Reporting Standard 2 (IFRS 2). The fair value calculated under IFRS 2 is distributed pro rata over the period of service and recognized under general and administrative expenses and provisions. With exercise of grants the gap value between settlement and value at initial recognition is recorded in the capital reserve.

Liabilities and the convertible bond are recognized at their settlement value at the balance sheet date.

Deferred taxes are recognized for temporary differences between the carrying amounts of assets, liabilities, prepaid expenses and deferred income in the statutory accounts and their tax carrying amounts or due to tax losses carried forward. These differences are measured using the company-specific tax rates at the time they reverse; the amounts of any resulting tax charge or benefit are not discounted.

Deferred tax asset and liability balances are offset against each other.

Foreign currency assets and liabilities were translated using the mean spot rate on the reporting date. If they had residual terms denominated of more than one year, the realization principle (Sec. 252 (1) No. 4 clause 2 HGB) and the historical cost principle (Sec. 253 (1) Sentence 1 HGB) were applied.

Global minimum top-up tax

The Group operates in the following countries, which have enacted new legislation to implement the global minimum top-up tax: Belgium, Denmark, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Norway, Sweden, Switzerland and United Kingdom.

However, since the newly enacted tax legislation in these countries is only effective from 1 January 2024, there is no current tax impact for the year ended 31 December 2023.

If the global minimum top-up tax legislation has applied in 2023, then no profits relating to the Group's operations in all relevant jurisdictions for the year ended 31 December 2023 would be subject to any top-up taxes.

Temporary mandatory relief

In case global minimum top-up tax were triggered, the Group would apply a temporary mandatory relief from deferred tax accounting for the impacts of the top-up tax and account for for it as a current tax when it is incurred.

Transitional CbCR Safe Harbour

The Group has applied the Transitional CbCR Safe Harbour regulations and calculations, and determined that all material Constituent Entities qualify for the Transitional CbCR Safe Harbour status via the de-minimis, simplified ETR or Routine Profits test.

Three non-qualifying Constituent Entities are Kommanditgesellschaft ("KG") Entities in Germany which need to be qualified as Stateless Constituent Entities due to its transparent nature. Stateless Constituent Entities do not qualify for Transitional CbCR Safe Harbour status, however all results from these KGs are taxed at the level of HelloFresh SE.

The Group operates in jurisdictions with a statutory rate above the Global minimum tax rate of 15 %, with the exception of two jurisdictions. The Group has an operating subsidiary in Ireland, where the statutory rate is 12,5 %, and a

subsidiary in the Philippines, which receives government support ("Board of Investments") through tax concessions that reduce its effective tax rate below 15 %. However, the Irish and Philippine subsidiaries both qualify for the Transitional CbCR Safe Harbour status through the Routine Profits test.

The Management Board is closely monitoring the progress of the legislative process in each country in which the Group operates. As at 31 December 2023, the Group estimates that the impact in 2024 and 2025 will be immaterial.

Notes to the balance sheet

Fixed assets

The changes of the individual fixed asset items, including amortization, depreciation, and impairment, are shown in the statement of changes in fixed assets (exhibit to the notes). In the 2023 financial year, development costs for internally generated intangible assets of EUR 41,550k (2022: EUR 33,639k) were capitalized.

These assets refer to components of the internally generated software solutions, to optimize the operating processes and systems of the business. Examples are developments on i) reliability, high-performance and scalability of the consumer core backend (EUR 12,232k; 2022: EUR 7,239k), ii) scalability and integration of the Food Supply Chain Management capabilities (EUR 9,229k; 2022: EUR 6,133k), iii) tools and systems to automate decision-making loops (EUR 1,973k; 2022: EUR 1,268k) and iv) analytics data products to deliver towards data asset modernization and data science (EUR 1,931k; 2022: 868k). There were no material research costs.

The additions in accumulated amortization of internally generated software contain a recognized impairment loss of EUR 1,694k (2022: EUR 625k) for assets, whose carrying amount exceeded the recoverable amount.

Information on shareholdings

Equity and net income according to local financial statements for the 2023 fiscal year, unless otherwise stated

1. Equity and net income are taken from the financial statements prepared for consolidated purposes for the year ended December 31, 2023.
2. Including the limited partnership interests held in trust, the Company holds 100% of the shares in HelloFresh Deutschland SE & Co. KG, Berlin, as well as HelloFresh Deutschland Produktions SE & Co. KG., Berlin.
3. The company made use of the option afforded by Sec. 286 (3) No. 1 HGB not to disclose equity investments that are not material for the presentation of HelloFresh SE's assets, liabilities, financial position and financial performance.

The loans to affiliates balance of EUR 567,700k (2022: EUR 605,930k) include EUR 74,108k (2022: EUR 340,737k) due in less than one year. Loans to affiliates, which bear interest at a rate of between 4.00 % and 9.30 % p.a., are used to finance these affiliates. The interest rates for intra-group loans are dependent on risk free market interest rates and credit risk based interest margins. The Company has issued letters of subordination for these loans to subsidiaries in Germany, UK, the Netherlands and Australia.

The changes in this year's balance of loans to affilitates contain a reduction by debt-equity swaps with Grocery Delivery E-Services UK Ltd. (EUR 50,000k) and HelloFresh Italia S.R.L. (EUR 12,005k).

Current assets

Receivables due from affiliates consist of intercompany loans due in less than one year of EUR 74,108k (2022: EUR

340,737k), intercompany receivables of EUR 58,399k (2022: EUR 33,258k) and cash pooling of EUR 5,113k (2022: EUR 0k).

Other assets comprise primarily corporate tax and trade tax receivable from the tax office of EUR 20,595k (2022: EUR 1k),

VAT receivables of EUR 5,988k (2022: EUR 3,566k), interest receivable in respect of affiliate loans of EUR 3,581k (2022:

EUR 795k) as well as security deposits and funds subject to a restriction on disposal of EUR 378k (2022: EUR 398k).