HelloFresh SE is preparing for its Initial Public Offering

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HelloFresh SE is preparing for its Initial Public Offering

- The leading global meal kit service prepares for a listing on the regulated market (Prime Standard) of the Frankfurt Stock Exchange

- With about 1.3 million active customers, HelloFresh is the largest player worldwide with #1 positions in all of its major markets outside the US

- The company is one of the fastest growing players in the global EUR 7.5 trillion food market - the single largest area of consumer spending

- Following continuous margin improvements, HelloFresh's strategic goal is to reach breakeven within the next 15 months

- Targeted IPO proceeds of c. 250 - 300 million euros from a capital increase to fund continued investment in long-term growth

Berlin, October 10, 2017 - HelloFresh SE, the leading global meal kit delivery brand, is preparing a listing on the regulated market (Prime Standard) of the Frankfurt Stock Exchange. The planned public offering will consist of a capital increase of c. 250 - 300 million euros, which are primarily earmarked to fund continued investment in the growth of the business including strategic flexibility for new business lines.

"The public listing marks the next logical step to further expand our business, to secure our position as the leading global player and to pursue our long-term growth strategy," says Dominik Richter, co-founder and CEO of HelloFresh. "In 2011, we started with the mission to change the way people eat. Since then, we have built a dynamic, data-driven organization with scalable production processes across ten international markets. We have established a brand loved by millions of loyal customers. We have experienced fast growth and have the strategic goal to reach breakeven across our group within 15 months. Now, the time has come to propel HelloFresh to the next level."

HelloFresh - the largest and only global player of scale

Founded in 2011 by Dominik Richter and Thomas Griesel, HelloFresh is the only meal kit service of scale with an intercontinental footprint. It operates in ten countries - the USA, the United Kingdom, Germany, the Netherlands, Belgium, Luxembourg, Australia, Austria, Switzerland and Canada. HelloFresh offers millions of households the opportunity to enjoy well-balanced home-cooked meals without the associated hassle. With more than 2,000 employees, HelloFresh delivered a total of 33.7 million meals to its about 1.3 million active customers^[1] in the second quarter of 2017.

Established business model tailored for growth

HelloFresh has established itself as a disruptive direct-to-consumer food company, based on a data-driven business model, a strong brand and an innovative supply chain set-up. With a market size of 7.5 trillion euros^[2], food is the largest area of consumer spending, yet one with low online penetration.

"We have pioneered an entirely new category," says Thomas Griesel, co-founder and COO of HelloFresh. "Today, we are in an ideal position to seize the growing potential of our global market by capitalizing on our customer-centric product innovation expertise, our technology platform, our vertically integrated supply chain and our scalable state-of-the-art fulfilment capabilities."

HelloFresh's unique procurement set-up creates further competitive moat. More than 50% of the food is directly sourced from local producers^[3], which means fewer intermediaries, fresher food due to less time in storage and transit compared to traditional supermarkets, and lower costs for sourcing and storing the ingredients.

As an integrated food manufacturer, HelloFresh has built up a sizeable infrastructure, optimized to produce meal kits at scale, while accommodating increased choice and flexibility for its customers. Seven fulfilment centers around the globe can accommodate continued strong future growth in all key markets.

One of the fastest growing European companies^[4]

With revenues of more than 230 million euros in Q2 2017 (H1 2017: 435.4 million euros) the quarterly revenue has grown by 26 times since Q1 2014 - making HelloFresh the largest global meal kit service.

Apart from strong customer growth, HelloFresh's development is driven by a favorable plan-based model, which combines very stable order rates at about 3.7 orders per active customer and quarter^[5] with increasing order value of currently about 49 euros per the second quarter of 2017.

Strategic goal to reach adjusted EBITDA breakeven within 15 months

HelloFresh shows a strong track record of margin expansion. Following ~14% points of contribution margin expansion over the last seven quarters, the contribution margin reached 22.1% in Q2 2017. The adjusted EBITDA margin has significantly improved over the same period by 25% points to minus 7.4%. HelloFresh's strategic goal is to reach adjusted EBITDA breakeven across its group within the next 15 months and a mid-term adjusted EBITDA margin of 12-15%.

Primary capital raise to fund continued investment in growth

"We have a very dynamic market development in our category, which we want to fully capitalize on by raising about 250 to 300 million euros of primary capital through an IPO," says Christian Gärtner, HelloFresh's CFO.

The Offering, if pursued, will consist of newly issued ordinary bearer shares with no-par value (Stückaktien) from a capital increase.

The Offering, if pursued, will include a primary greenshoe option.

The free float will depend on the number of new shares issued by the Company.

HelloFresh intends to list its shares on the regulated market segment of the Frankfurt Stock Exchange with simultaneous admission to the Prime Standard.

The proposed Offering would consist of initial public offerings in Germany and Luxembourg, as well as private placements in certain other jurisdictions outside Germany and Luxembourg.

Berenberg, BNP Paribas, Deutsche Bank, J.P. Morgan and Morgan Stanley are acting as Joint Global Coordinators and Joint Bookrunners. Rabobank has been mandated as Co-Lead Manager.

About HelloFresh

HelloFresh is the world's leading meal kit company, operating in the U.S., the United Kingdom, Germany, the Netherlands, Belgium, Luxembourg, Australia, Austria, Switzerland and Canada. HelloFresh delivered 33.7 million meals in the 3-month period from 1 April 2017 to 30 June 2017 to 1.3 million active customers. HelloFresh was founded in November 2011 in Germany and pioneered the global phenomenon of meal kits. The company has offices in New York, Berlin, London, Amsterdam, Zurich, Sydney and Toronto.

Legal Disclaimer

This document contains forward-looking statements relating to the business, financial performance and results of HelloFresh SE (the "Company"), the HelloFresh group or the industry in which the HelloFresh group operates. These statements may be identified by words such as "expect", "belief", "estimate", "plan", "target" or "forecast" and similar expressions, or by their context. Forward-looking statements include statements regarding: strategies, outlook and growth prospects; future plans and potential for future growth; growth for products and services in new markets; industry trends; and the impact of regulatory initiatives. These statements are made on the basis of current knowledge and assumptions and involve risks and uncertainties. Various factors could cause actual future results, performance or events to differ materially from those described in these statements, and neither the Company nor any other person accepts any responsibility for the accuracy of the opinions expressed in this document or the underlying assumptions. No obligation is assumed to update any forward-looking statements.

This publication constitutes neither an offer to sell nor a solicitation to buy securities. The offer will be made solely by means of, and on the basis of, a securities prospectus which is to be published. An investment decision regarding the publicly offered securities of the Company should only be made on the basis of the securities prospectus. The securities prospectus will be published promptly upon approval by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) and will be available free of charge from HelloFresh SE, Saarbrücker Strasse 37A, 10405 Berlin, Germany, or on the HelloFresh SE website.

These materials may not be published, distributed or transmitted in the United States, Canada, Australia or Japan. These materials do not constitute an offer of securities for sale or a solicitation of an offer to purchase securities (the "Securities") of the Company in the United States, Germany or any other jurisdiction. The Securities of the Company may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the "Securities Act"). The Securities of the Company have not been, and will not be, registered under the Securities Act. Any sale in the United States of the securities mentioned in this communication will be made solely to "qualified institutional buyers" as defined in, and in reliance on, Rule 144A under the Securities Act.

In the United Kingdom, this document is only being distributed to and is only directed at persons who (i) are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order") or (ii) are persons falling within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations, etc.) (all such persons together being referred to as "Relevant Persons"). This document is directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this document relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.

In connection with the placement of the offer shares, one or more of the underwriters, acting for the account of all of the underwriters, will act as the stabilization manager (the "Stabilization Manager") and may, as Stabilization Manager, and acting in accordance with legal requirements (Article 5 para. 4 and 5 of the Market Abuse Regulation (EU) No 596/2014 in conjunction with Articles 5 through 8 of the Commission Delegated Regulation (EU) 2016/1052), make over-allotments and take stabilization measures to support the market price of the Company's shares and thereby counteract any selling pressure.

The Stabilization Manager is under no obligation to take any stabilization measures. Therefore, stabilization may not necessarily occur and may cease at any time. Such measures may be taken on the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) from the date when trading in the shares of the Company is commenced on the regulated market segment (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) and must be terminated no later than 30 calendar days after this date (the "Stabilization Period"). Stabilization transactions aim at supporting the market price of the Company's shares during the Stabilization Period. These measures may result in the market price of the Company's shares being higher than would otherwise have been the case. Moreover, the market price may temporarily be at an unsustainable level.^[1] Active customers refers to the number of uniquely identified customers who received at least one box within the last 13 weeks, as of June 2017 (including first-time customers, customers who received a free or discounted box and customers who ordered during the relevant period but discontinued their orders and registration with HelloFresh before period end).

^[2] Euromonitor International, Economies and Consumers, food represents consumer expenditure on food and catering, value at fixed 2016 exchange rates

^[3] Based on HelloFresh's expenditure for produce in the second quarter of 2017

^[4] According to Financial Times, FT 1000: Europe's Fastest Growing Companies, April 6, 2017

^[5] The average quarterly order rate per active customer varies in the range of 3.5 to 3.8 since Q1 2015 at an average of 3.69