HOMETOGO SE

Annual Report (ESEF) • Apr 30, 2024

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Background to the Group 1.1. General HomeToGo SE, Luxembourg is a public European company (Société Européenne) that is listed on the Frankfurt Stock Exchange, having its registered office at 9, rue de Bitbourg, L-1273 Luxembourg, Luxembourg, and registered with the Luxembourg Trade and Companies Register (Registre de Commerce et des Sociétés de Luxembourg) under number B249273. This Management Report comprises both the Group Management Report and the Management Report of HomeToGo SE. Herein, we report on the business performance as well as the situation and expected development of HomeToGo Group (hereafter also referred to as "HomeToGo" or "Group") and HomeToGo SE (hereafter also referred to as "Company"). 1.2. Business Model The HomeToGo Group operates an international, Software-as-a-Service ("SaaS")-enabled marketplace for vacation rentals, which connects millions of users in their search for a place to stay with thousands of inventory suppliers across the globe, resulting in the world’s most comprehensive inventory coverage in the vacation rental space. At the time of the report, the portfolio of HomeToGo comprises more than 15 million (2022: 15 million) aggregated accommodation offers provided by more than 60,000 (2022: 60,000) online travel agencies, tour operators, property managers and other inventory suppliers (“Partners”) worldwide. HomeToGo operates its business through local websites and apps in 25 countries. Besides the main brand HomeToGo, the national and international market appearance is carried out through its HomeToGo Group brands including Agriturismo.it, Adrialin, AMIVAC, atraveo, Casamundo, CaseVacanza.it, e-domizil, EscapadaRural, Kurz Mal Weg 1, Kurzurlaub 2, Tripping.com, and Wimdu. The HomeToGo marketplace integrates a vast inventory in one platform and enables users to book accommodations from diverse partners, either on the Partners’ external websites or directly on the HomeToGo platform. Furthermore, the Group offers services and SaaS products for the supply side around the marketplace for semi-professional agencies and homeowners, which enables them to centrally control their listings and coordinate their actions across multiple platforms. HomeToGo also effectively improves the quality and synchronization of the existing inventory for its Partners, in particular online travel agencies ("OTAs") and property managers, and grant them access to technology services and qualified demand that otherwise would not be easily available to them. As an internet marketplace, HomeToGo sees itself as an entry opportunity in the search for a vacation rental. With its Onsite solution, there is an option to directly book with the connected Partners via HomeToGo. The use of the platform is thereby free of charge for travelers. Instead, HomeToGo receives a commission from the connected booking partner or host for every successful referral of a booking or for the generation of a query, respectively. 126 COMBINED MANAGEMENT REPORT HomeToGo / Annual Report 2023 1 Acquisition closed as of January 2, 2024 2 Acquisition closed as of January 2, 2024 1.3. Group Structure HomeToGo Group is managed by its ultimate parent company HomeToGo SE and is operated under one segment. The Group comprises the parent entity, HomeToGo SE, domiciled in Luxembourg and serving as holding entity, and its main operating subsidiaries in Germany, Italy, Spain, Switzerland, Lithuania and the U.S. As of December 31, 2023, HomeToGo SE had direct or indirect shareholdings in 17 companies, which belong to the Group and from which all are fully consolidated. Effective January 1, 2023, SECRA GmbH and SECRA Bookings GmbH were merged into a single entity SECRA Bookings GmbH. SUBSIDIARIES AND INVESTMENTS FUNCTION LOCATION SHARE IN CAPITAL 2023 SHARE IN CAPITAL 2022 HomeToGo GmbH operational Berlin, Germany 100% 100% Casamundo GmbH operational Berlin, Germany 100% 100% Smoobu GmbH operational Berlin, Germany 100% 100% Atraveo GmbH operational Düsseldorf, Germany 100% 100% e-domizil GmbH operational Frankfurt, Germany 100% 100% SECRA Bookings GmbH operational Sierksdorf, Germany 100% 100% Travel Center Fehmarn GmbH operational Fehmarn, Germany 100% n/a SMN Verwaltungs-GmbH holding Berlin, Germany 100% n/a Takeoff Travel GmbH holding Berlin, Germany 100% n/a e-domizil AG operational Zurich, Switzerland 100% 100% Feries S.r.l. operational Milan, Italy 100% 100% Escapada Rural S.L. operational Barcelona, Spain 100% 100% AMIVAC SAS operational Paris, France 100% 100% Adrialin d.o.o. operational Rijeka, Croatia 100% 100% UAB HomeToGo Technologies engineering Kaunas, Lithuania 100% 100% UAB HomeToGo Technologies Vilnius engineering Vilnius, Lithuania 100% 100% HomeToGo International, Inc. sales Wilmington, Delaware, USA 100% 100% 1.4. Management System The governing bodies of the Group are the Management Board, the Supervisory Board and the Shareholders’ Meeting of HomeToGo SE. Detailed information on the composition of the Management and Supervisory Board can be found on the Investor Relations website of the Company: https://ir.hometogo.de/websites/hometogo/ English/5000/corporate-governance.html. The Management Board monitors and controls the Group’s development through a comprehensive reporting system. The Management Board reporting informs in detail on current developments in the operating business in the form of absolute and relative key figures. The Supervisory Board receives a monthly report including an income statement, which provides a comprehensive picture of HomeToGo Group’s economic position. Significant items and their changes are explained and discussed in detail in regular meetings between the Management Board and the Supervisory Board. HomeToGo's core financial key performance indicators (KPIs) for the management of the Group are Booking Revenues, IFRS Revenues and Adjusted EBITDA. Besides IFRS Revenues, the Management Board uses the non- COMBINED MANAGEMENT REPORT 127 HomeToGo / Annual Report 2023 GAAP KPIs Booking Revenues and Adjusted EBITDA as Management believes that they enhance investors' ability to evaluate and assess the underlying financial performance of the Group's continuing operations and the related key strategic business drivers. They are additional core metrics used by the Management Board internally to support operating decisions, including those related to evaluating performance, analyzing operating expenses, performing strategic planning and annual budgeting. These additional core metrics should not be considered as a substitute for measures of financial performance, financial position or cash flows reported in accordance with IFRS. Booking Revenues is used in addition to IFRS Revenues as it allows to measure performance as soon as bookings and clicks are made by the traveler. Revenues from Subscription & Services are considered without any difference in revenue recognition for Booking Revenues as under IFRS to complement the view. Thus, Booking Revenues provide the best view to forecast the development of our IFRS Revenues and at the same time better match to the corresponding marketing expenses. Adjusted EBITDA is used as an additional metric to Net Income to assess the Group's performance as it better presents the sustainable operational performance of the business. Adjusted EBITDA is close to cash flows generated and thus provides a useful measure for period-to-period comparisons. 128 COMBINED MANAGEMENT REPORT HomeToGo / Annual Report 2023 Definitions for HomeToGo Group's three core metrics are outlined in the following table: Booking Revenues and Booking Revenues Backlog Booking Revenues is a non-GAAP operating metric to measure performance that is defined as the net Euro value of bookings before cancellations generated by transactions on the HomeToGo platforms in a reporting period (CPA, CPC, CPL and Subscriptions & Services). Booking Revenues do not correspond to, and should not be considered as alternative or substitute for IFRS Revenues recognized in accordance with IFRS. Contrary to IFRS Revenues, Booking Revenues are recorded at the point in time when the booking is made. Revenues from Subscription & Services are considered without any difference in revenue recognition for Booking Revenues as under IFRS to complement the view. Booking Revenues Backlog comprises Booking Revenues before cancellation generated in the reporting period or prior with IFRS Revenues recognition based on check-in date in the following financial year. Please find the reconciliation to IFRS Revenues as the closest GAAP measure under 2.2 Business Development. IFRS Revenues Revenues according to IFRS accounting policies. CPA IFRS Revenues are recognized on check-in date. CPC and CPL Revenues are recognized on booking or click date. IFRS Revenues from Subscriptions & Services are recognized over time or when services are provided. HomeToGo generates revenue through the following main revenue types: • Cost per Action (“CPA”): CPA is the largest revenue stream, whereby HomeToGo receives a percentage-based commission for successful onsite- or offsite booking referrals, which facilitate a stay. Depending on the contractual terms with the respective partner, the revenue for HomeToGo is either calculated as percentage of the commission or as percentage of the booking value. • Cost per Click (“CPC”): HomeToGo receives a fixed commission based on every successful referral click. • Cost per Lead (“CPL”): HomeToGo receives a fixed commission based on every successful referral inquiry (lead). • Subscriptions & Services are related to subscription-based revenue from Partners who can use the platform for listing of their rental objects over a determined period and software services with volume- and subscription based revenue. Adjusted EBITDA Net income (loss) before (i) income taxes; (ii) finance income, finance expenses; (iii) depreciation and amortization; adjusted for (iv) expenses for share-based compensation and (v) one-off items. One-off items relate to one-time and therefore non-recurring expenses and income outside the normal course of operational business. Among others those would include for example income and expenses for business combinations and other merger & acquisition (M&A) activities, litigation, restructuring, government grants, and other items that are not recurring on a regular basis and thus impede comparison of the underlying operational performance between financial periods. * unaudited In addition to the above, HomeToGo uses a range of further KPIs - both financial and non-financial - to support its business. These further KPIs are a function of our core financial KPI Booking Revenues. Thus, the Management Board uses these historical KPIs to further assess operating performance and as a basis for strategic planning. The Management Board believes that such KPIs will also be used by investors and analysts in addition to the three core financial metrics described above to assess the performance of HomeToGo. COMBINED MANAGEMENT REPORT 129 HomeToGo / Annual Report 2023 Overview of HomeToGo Group's further financial KPIs (non-GAAP): Gross Booking Value (GBV) GBV is the gross EUR value of bookings on our platform in a reporting period (including all components of the booking amount except for VAT). GBV is recorded at the time of booking and is not adjusted for cancellations or any other alterations after booking. For CPA transactions, GBV includes the booking volume as reported by the Partner. For CPC, GBV is estimated by multiplying the total click value with the expected conversion rate. The total click value is the duration of the search multiplied with the price per night of the clicked offer. This total click value is multiplied with the average conversion rate of that micro conversion source for CPA Partners in the respective month. Please find the reconciliation to IFRS Revenues under 2.2 Business Development. CPA Take Rate CPA Take Rate is the margin realized on the gross booking amount and defined as CPA Booking Revenues divided by GBV from CPA Booking Revenues. Please find the reconciliation to IFRS Revenues under 2.2 Business Development. Onsite Booking Revenues and Onsite Share Onsite Booking Revenues are a subset of Booking Revenues. Onsite Bookings occur when the complete user journey is conducted on HomeToGo domains. Onsite Share is defined as ratio of Onsite CPA Booking Revenues to Booking Revenues excluding Booking Revenues from Subscriptions & Services that measures the penetration of our Partner base with our Onsite Product. Onsite Bookings allow the Group to realize a higher Take Rate and to establish a closer relationship with the user, which leads to lower marketing expenses over time. Both effects result in a higher profitability of the Group. Please find the reconciliation to IFRS Revenues as the closest GAAP measure under 2.2 Business Development. Cancellation Rate Cancellation Rate reflects the share of Booking Revenues that are cancelled subsequently, however, before being recognized as IFRS Revenues. This metric is monitored continuously and used for forecasting and budget planning. Please find the reconciliation to IFRS Revenues under 2.2 Business Development. * unaudited Our non-financial KPIs are defined as follows: Bookings Bookings represent the number of bookings generated by users of the HomeToGo platforms. CPA Basket Size CPA Basket Size is defined as CPA Gross Booking Value per Booking before cancellations. The Basket Size is the product of the average daily rate and average length of stay. * unaudited 1.5. Research & Development As a technology company, HomeToGo undertakes development in view of optimizing the search intelligence, software solutions provided to its Partners and users of SaaS products and develops self-used IT modules. The technical platform, on the basis of which the Group’s websites and apps are operated, is an important differentiating factor compared to competitors, being continuously further developed in line with the requirements of the market and the expectations of the users. In-house and external experts engage with the continuous development of the platform. Our R&D work aims at achieving innovations that support a more convenient booking experience for our customers. Furthermore, we aim at ensuring our market leadership as the marketplace with the world's largest selection of alternative accommodation. In this regard, the Lithuanian subsidiaries, UAB HomeToGo Technologies and UAB HomeToGo Technologies Vilnius, play a major role in performing most of the development services for the HomeToGo Group. In addition further R&D hubs in Germany, Poland and Vietnam support the overall effort. Over the past year, HomeToGo further added functionalities and products to improve the booking and user experience of its platforms and led additional initiatives to increase the efficiency of its internal processes. The Group’s direct R&D expenses in 2023 amounted to EUR 16.5 million (2022: EUR 13.1 million), resulting in R&D expenses in relation to HomeToGo’s IFRS Revenues 10% (2022: 9%). The capitalization ratio amounts to 41% (2022: 29%) and amortization allocatable to capitalized development expenses amounted to EUR 2.1 million 130 COMBINED MANAGEMENT REPORT HomeToGo / Annual Report 2023 (2022: EUR 1.1 million). The increase in capitalization ratio is due to a higher focus on development projects for new products and projects leading to substantial enhancements as well as an improved effort capturing of the value creation in our product development process. HomeToGo SE as an individual entity and pure financial holding does not conduct any operations related to research and development. 2. Report on Economic Position 2.1. Macroeconomic and Sector-specific Environment Economic growth in 2023 3 has been subdued due to high inflationary pressure and increasing interest rates on the back of monetary policy responses. This was particularly seen in Germany, which entered into a technical recession in June 2023. Inflation remains high in major markets but already came down in the fourth quarter of 2023 and it is expected to come down further as commodity prices decrease and supply chain issues ease. However, the increase in oil prices in the fall due to tight supply are still considered an issue. A normalization of the inflation is now expected at the end of 2024, which would help normalize price levels and stabilize consumer spend. According to a UBS report on Global Economics and Market Outlook for 2024-25 4, the global growth rate in 2024 is expected to be only 0.5pp higher than in 2023 mainly due to weaker growth in the US and China. The forecast for the Eurozone 5 has been cut by 0.1pp to 0.6% for 2024. The overall outlook for 2024 remains weak with growth expected to accelerate in 2025. Inflation is expected to come down to 2.4% 6 in 2024 and to further decrease to 2.1% in 2025. Furthermore, it is expected that Germany would remain the weakest link in the Eurozone with an expected growth rate of only 0.5% in 2024, which corresponds to a cut of 0.2pp from the actual forecast at the beginning of 2023. Given the stability of other countries in the Eurozone and worldwide, the forecast and growth in the travel industry remains relatively stable. The travel and tourism industry's contribution towards global GDP is estimated to be around USD 9.5 trillion 7 almost reaching pre-pandemic 2019 height of USD 10 trillion. Although the post-pandemic travel boom appears to be subsiding as prices rise and the cost of living crisis takes its toll at the consumers' discretionary spending, plenty of online travel agencies have noted stable or even increasing bookings. 8 COMBINED MANAGEMENT REPORT 131 HomeToGo / Annual Report 2023 3 BCD Travel Report: Travel Market Report 2024 Outlook, November 2023 4 UBS: Global Economics and Markets Outlook 2024-2025, November 2023 5 UBS: European Outlook 2024-2025,November 2023 6 UBS: European Outlook 2024-2025, November 2023 7 Webhelp: Travel trends 2024 8 AirBnB Q4 2023 Shareholder Letter; Booking Holdings 2023 Financial Results; Expedia Group 2023 Financial Results 2.2. Business Development HOMETOGO KPI COCKPIT 2023 2022 2023 vs. 2022 Booking Revenues (EUR thousands) 190,096 163,711 16 % CPA Onsite 81,248 76,730 6 % CPA Offsite 47,987 33,965 41 % CPC + CPL 21,908 30,582 (28 %) Subscriptions & Services 38,953 22,433 74 % Onsite Share 54.0% 54.0% +—pp Booking Revenues Backlog ** 37,532 32,459 16 % IFRS Revenues (EUR thousands) 162,033 146,839 10 % CPA Onsite 67,845 66,877 1 % CPA Offsite 37,202 25,716 45 % CPC + CPL 21,902 30,587 (28 %) Subscriptions & Services 35,084 23,660 48 % Adjusted EBITDA 1,791 (20,661) +<100% Adjusted EBITDA margin 1.1% (14.1)% +15 pp Net Income (28,281) (53,499) 47 % Gross Booking Value (EUR thousands) 1,683,741 1,644,265 2 % GBV from CPA 1,190,988 1,149,011 4 % Bookings (#) 1,033,664 1,026,097 1 % CPA Onsite 639,734 745,293 (14 %) CPA Offsite 393,930 280,804 40 % CPA Basket Size (EUR) 1,152 1,120 3 % CPA Take Rate 10.9% 9.6% + 1pp Cancellation Rate 14.5% 13.6% + 0.9pp Cancellations (EUR thousands) (27,556) (22,286) (24 %) Cash & cash equivalents + other highly liquid short-term financial assets (EUR thousands) 140,277 161,557 (13 %) Equity (EUR thousands) 250,121 263,697 (5 %) Equity ratio 77.2% 75.3% + 1.9pp Employees (end of period) 664 650 2 % * unaudited ** Booking Revenues Backlog figure as of January 1, 2024 is EUR 37,532 million and includes acquisitions closed in January 2024. HomeToGo's business continued to grow significantly while breaking major milestones throughout 2023 to achieve its number one priority of reaching Adjusted EBITDA break-even. 132 COMBINED MANAGEMENT REPORT HomeToGo / Annual Report 2023 During 2023, the GBV increased from EUR 1,644.3 million in 2022 to EUR 1,683.7 million. The increase pertains to a strong sustained growth in North American business. The number of CPA bookings increased slightly by 1% as a result of a continued strong demand in both the North American as well as the European business and an increased average CPA basket size by 3% from EUR 1,120 million in 2022 to EUR 1,152 million in 2023. The cancellation rate remained almost stable in comparison with the prior year and has gradually stabilized at low pre-pandemic levels of 14.5%. Booking Revenues increased in line with prior year outlook significantly by 16% from EUR 163.7 million to EUR 190.1 million in 2023 that was driven by a higher CPA Take Rate with an increase of +1.3pp compared to the prior year on the back of the continuously growing CPA Onsite Booking Revenues, resulting from bookings made directly on our platforms. The acquired entities e-domizil and SECRA, which closings were consummated in the first half of 2022, were contributing to the overall growth in 2023 for the whole reporting period. The overall Onsite Share remained stable at 54% compared to the previous year. However, Onsite Share developed slightly below the expectation of a range between 56-61% in prior year outlook due to a strong North American business, a region with a lower Onsite Share than Europe. IFRS Revenues developed favorably and increased by 10% to EUR 162.0 million in 2023, driven by higher booking dynamics in the North American business, a significant growth in IFRS Revenues in the Subscription & Services business of 48% year-over-year as well as transition to vacation rental with a significant increase in booking activity in the first half of 2023. IFRS Revenues developed slightly below the expectation in prior year outlook due to a clear focus on the number one priority of reaching Adjusted EBITDA break-even. The following table presents the reconciliation from GBV over CPA Take Rate to IFRS Revenues: RECONCILIATION GROSS BOOKING VALUE (GBV) to IFRS REVENUES IN EUR THOUSANDS, EXCEPT FOR CPA TAKE RATE THAT IS PRESENTED IN PERCENT 2023 2022 Gross Booking Value (GBV) 1,683,741 1,644,265 t/o GBV from CPA 1,190,988 1,149,011 x CPA Take Rate 10.9% 9.6% Booking Revenues from CPA 129,235 110,695 + Booking Revenues from CPC, CPL and Subscriptions & Services 60,860 53,015 Booking Revenues 190,096 163,711 Cancellations (27,556) (22,286) Bookings with check-in in different reporting period (507) 5,414 IFRS Revenues 162,033 146,839 * unaudited On the supply side, the Group has been managing more than 60,000 partners (2022 60,000). The Group continues to leverage its technical expertise for its Partners by building new solutions around its marketplace model to help Partners thrive across the entire vacation rental ecosystem. For example, HomeToGo launched at the end of 2023 its new HomeToGo Doppelgänger product as part of the new HomeToGo_PRO business segment, which offers Partners a way to integrate HomeToGo's technology and vacation rental inventory into the Partner's own platforms as a white label solution. 2.3. Results of Operations, Financial Position and Net Assets The statements made on the net assets, financial position and results of operations of the HomeToGo Group are based on the values and comparative figures of the consolidated financial statements for the financial year COMBINED MANAGEMENT REPORT 133 HomeToGo / Annual Report 2023 2023, which have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU. More detailed explanations on the accounting and valuation methods applied can be found in the notes to the consolidated financial statements 2023. a) Results of operations Compared to the previous fiscal year, the Group's operating result has developed as shown in the following table: SHORTENED STATEMENTS OF PROFIT or LOSS (IN EUR THOUSANDS) 2023 2022 2023 vs. 2022 IFRS Revenues 162,033 146,839 10% Cost of Revenues (9,105) (12,202) 25% Gross profit 152,928 134,637 14% Product development and operations (35,546) (28,678) (24)% Marketing and sales (113,392) (126,284) 10% General and administrative (36,344) (47,851) 24% Other expenses (1,050) (1,160) 10% Other income 2,062 3,671 (44)% Loss from operations (31,342) (65,666) 52% The following sections outline the development of individual income and expense items: BREAKDOWN OF IFRS REVENUES BY ACTIVITY AREAS (IN EUR THOUSANDS) 2023 2022 2023 vs. 2022 CPA 105,047 92,593 13% thereof: CPA Onsite 67,845 66,877 1% CPA Offsite 37,202 25,716 45% CPC and CPL 21,902 30,587 (28)% Subscriptions & Services 35,084 23,660 48% Total 162,033 146,839 10% In the financial year 2023, the Group’s total IFRS Revenues increased significantly by more than EUR 15.2 million to EUR 162.0 million. The major portion of the IFRS Revenues was generated from CPA (“Cost per Action”), CPC (“Cost per Click”) and CPL (“Cost per Lead”) transactions. The increase in IFRS Revenues in 2023 was strongly driven by a significant organic growth in revenues from Subscription & Services especially from Smoobu as well as from SECRA, which was acquired during the second quarter of 2022 and contributed for a full year for the first time in 2023. 134 COMBINED MANAGEMENT REPORT HomeToGo / Annual Report 2023 BREAKDOWN OF EXPENSES BY FUNCTIONAL AREAS (IN EUR THOUSANDS) 2023 2022 2023 vs. 2022 Cost of revenues 9,105 12,202 25% Product development and operations 35,546 28,678 (24)% Marketing and sales 113,392 126,284 10% General and administrative 36,344 47,851 24% Other expenses 1,050 1,160 9% Total 195,436 216,175 10% A significant portion of the Group's 2023 expenses is explained by expenses for performance marketing within our Marketing and sales function and expenses for share-based compensation. The reconciliation to Adjusted EBITDA below provides a general overview of the impact of share-based compensation on the different cost functions. Cost of revenues decreased by EUR 3.1 million or 25.4% from EUR 12.2 million in 2022 to EUR 9.1 million in 2023 due to the end of the amortization effect amounting to EUR 1.6 million of e-domizil's Booking Revenues Backlog in 2023 (2022: EUR 4.8 million) that was amortized over the period of one year following the acquisition date in April 2022. Further, the Group incurred lower expenses for hosting and domain services compared to prior year resulting from an improved technology and better commercials with the Group's suppliers. The adjusted gross profit margin 9 improved by 0.9 percentage points from 96.4% in 2022 to 97.4% in 2023 is reflecting economies of scale. The increase in expenses for product development and operations by 23.9% to EUR 35.5 million in 2023 (2022: EUR 28.7 million) mainly results from higher license expenses (2023: EUR 3.7 million, 2022: EUR 2.0 million) as well as an increase in external services related to product development and operations due to the increase in the scope of consolidation. The respective cost ratio to IFRS Revenues increased by 2.2 percentage points as a result of the above mentioned cost effects. Marketing and sales expenses decreased substantially by 10.2% from EUR 126.3 million in 2022 to EUR 113.4 million in 2023. The decrease was mainly driven by EUR 12.8 million or 11.8% lower expenses for performance marketing due to improvements in the Group's marketing efficiency that was further driven by a higher share of repeat customers. The Group's increased marketing efficiency is also reflected in the lower marketing and sales cost ratio of 66.2%, which improved by 15.3 percentage points during 2023 compared to the prior year period from 81.5%. The Booking Revenues Backlog 10 of EUR 37.5 million as of December 31, 2023 increased by 15.6% compared to the prior year. Those CPA IFRS Revenues from bookings in the backlog will be realized, unless cancelled, based on their check-in date in 2024 or beyond without requiring any additional marketing expenses. General and administrative expenses decreased by 24.0% (2023: EUR 36.3 million, 2022: EUR 47.9 million) mainly due to lower expenses for share-based compensation (2023: EUR 10.6 million, 2022: EUR 19.0 million) recognized within general and administrative, resulting from grants issued to the Management Board of the Group during the prior year that are accounted for as an equity-settled plan using a graded vesting scheme with a declining vesting expense development. Furthermore, less expenses have been incurred as part of consulting (2023: EUR 3.7 million, 2022: EUR 7.3 million) and third party services (2023: EUR 2.5 million, 2022: EUR 3.1 million) compared to prior year due to the end of an external service contract for a subsidiary that has no own staff. Since the end of 2022 those services are in-housed and provided by employees of HomeToGo Group. Besides, the prior year amount comprised the expense for the recording of a provision for litigation amounting to EUR 1.3 million. The COMBINED MANAGEMENT REPORT 135 HomeToGo / Annual Report 2023 9 Adjusted for expenses for share-based compensation, depreciation, amortization and one-off items 10 Booking Revenues before cancellation generated in 2023 or prior with IFRS Revenues recognition based on check-in date in 2024. The backlog figure is as of January 1, 2024 and includes acquisitions closed in January 2024. respective cost ratio 11 in proportion to IFRS Revenues improved from 15.0% in 2022 by 2.6 percentage points to 12.4% in 2023 mainly due to economies of scale. Other expenses mainly include expenses recognized from disposal of property, plant and equipment and other operating expenses. Other expenses decreased to EUR 1.0 million in 2023 from EUR 1.2 million in 2022. In 2023, the Group incurred a consolidated net loss in the amount of EUR 28.3 million compared to the 2022 net loss of EUR 53.5 million. The strong improvement by EUR 25.2 million compared to the previous period is mainly explained by the improved marketing efficiency of the Group, economies of scale and the strong performance of the Subscriptions & Services entities, especially Smoobu. In order to assess the operating performance of the business, HomeToGo's management uses Adjusted EBITDA as an additional metric to Net Income as it better presents the sustainable operational performance of the business. HomeToGo recorded an Adjusted EBITDA of EUR 1.8 million in 2023 compared to EUR (20.7) million in 2022. The strong improvement of the Adjusted EBITDA as well as the Adjusted EBITDA margin that increased significantly from (14.1)% in 2022 to 1.1% in 2023 is mainly due to an improved marketing cost efficiency. Overall, we assess the development of the Group’s result of operations favorably given the current global economic contraction. The reconciliation of the Group's Adjusted EBITDA is shown in the following table: 136 COMBINED MANAGEMENT REPORT HomeToGo / Annual Report 2023 11 Adjusted for expenses for share-based compensation, depreciation, amortization and one-off items RECONCILIATION TO ADJUSTED EBITDA IN EUR THOUSANDS 2023 2022 Loss from operations (31,342) (65,666) Depreciation and amortization 12,013 12,974 thereof recognized in Cost of Revenues 4,847 6,975 thereof recognized in Product development and operations 1,008 526 thereof recognized in General and administrative 608 571 thereof recognized in Marketing and sales 5,549 4,902 EBITDA (19,329) (52,692) Share-based compensation expenses 16,439 25,652 thereof recognized in: Product development and operations 5,342 4,951 Marketing and sales 544 1,671 General and administrative 10,553 19,030 One-off items 4,681 6,379 thereof one-off items recognized in general and administrative 5,036 6,212 Mergers and acquisitions 1,389 1,348 Litigation 115 1,366 Reorganization & restructuring 1,866 753 Arrangements for contingent payments with service condition 1,548 903 Inflation premium paid to employees — 279 Other 117 1,563 thereof one-off items recognized in product development and operations — 687 Infrastructure — 246 Inflation premium paid to employees — 441 thereof one-off items recognized in marketing and sales — 329 Inflation premium paid to employees — 329 thereof one-off items recognized in other income (354) (849) Income from release of provisions (117) (700) Income from government grants (237) (149) Adjusted EBITDA 1,791 (20,661) Adjusted EBITDA margin 1.1% (14.1)% * unaudited b) Financial position The following table provides an overview of the Group’s financial development: (IN EUR THOUSANDS) 2023 2022 Cash and cash equivalents at the beginning of the year 112,050 152,944 Cash flow from operating activities (10,115) (36,349) Cash flow from investing activities 12,861 (621) Cash flow from financing activities (5,642) (5,253) Foreign currency effects (202) 1,329 Cash and cash equivalents at the end of the year(1) 108,953 112,050 (1) Includes restricted cash and cash equivalents of EUR 0.5 million as of December 31, 2023 (2022: EUR 2.3 million). COMBINED MANAGEMENT REPORT 137 HomeToGo / Annual Report 2023 As of December 31, 2023, the Group has cash and cash equivalents in the amount of EUR 109.0 million (2022: EUR 112.0 million). The cash flow from operating activities improved overall in comparison with prior year due to an improved marketing efficiency and cost discipline of the Group. The Group recorded a cash inflow of EUR 12.9 million from investing activities in 2023 in comparison to the cash outflow of EUR 0.6 million in 2022. The cash flow from investing activities included payments for internally generated intangible assets in the amount of EUR 6.6 million (2022: EUR 3.8 million) which were offset by the proceeds from the sale of a portion of the Group's investments in a short-term money market fund in the amount of EUR 20.0 million resulting in an overall cash inflow. The Group's 2022 cash flow from investing activities in the amount of EUR 0.6 million was made up of payments (net acquired cash) in relation to acquisitions of subsidiaries of EUR 46.2 million, which were offset by the proceeds from the sale of a portion of a portion of the Group's investment into a money market fund in the amount of EUR 50.0 million. The 2023 cash outflow from financing activities consists of repayments of borrowings in the amount of EUR 4.3 million (EUR 4.4 million) and payments for the principal portion of lease liabilities in the amount of EUR 1.1 million (2022: EUR 0.9 million). The following table provides an overview of the outstanding loans within the Group as of December 31, 2023: DEBTOR LOAN AMOUNT (IN EUR THOUSANDS) PAYOUT DATE MATURITY NOMINAL INTEREST RATE CARRYING AMOUNT (IN EUR THOUSANDS) HomeToGo GmbH 10,000 February 2021 September 2025 2.12% 4,139 Feries S.r.l. 400 August 2020 August 2025 1.50% 178 Escapada Rural S.L. 300 May 2020 June 2025 1.55% 102 Adrialin d.o.o 100 February 2022 September 2027 0.25% 93 Total 10,800 n/a n/a n/a 4,513 The following table provides an overview on the outstanding loans within the Group for the comparative period as of December 31, 2022: DEBTOR LOAN AMOUNT (IN EUR THOUSANDS) PAYOUT DATE MATURITY NOMINAL INTEREST RATE CARRYING AMOUNT (IN EUR THOUSANDS) HomeToGo GmbH 6,000 February 2020 December 2023 4.35% 3,000 HomeToGo GmbH 10,000 February 2021 September 2025 2.12% 8,414 Feries S.r.l. 400 August 2020 August 2025 1.50% 376 Escapada Rural S.L. 500 May 2020 June 2023 2.50% 337 Escapada Rural S.L. 300 May 2020 June 2025 1.55% 252 Adrialin d.o.o 100 February 2022 September 2027 0.25% 100 Total 17,300 n/a n/a n/a 8,473 138 COMBINED MANAGEMENT REPORT HomeToGo / Annual Report 2023 In our opinion, HomeToGo Group’s financial position can be stated as positive. The Group has been able to meet its payment obligations at any time. Liquidity shortages have neither occurred nor are such shortages foreseeable for the future. c) Net Assets (IN EUR THOUSANDS) Dec. 31, 2023 Dec. 31, 2022 2023 vs. 2022 Non-current assets 159,862 49% 164,552 47% (4,690) (3)% Current assets 164,091 51% 185,448 53% (21,357) (12)% Total assets 323,953 100% 350,001 100% (26,048) (7)% Equity 250,121 77% 263,697 75% (13,576) (5)% Non-current liabilities 22,346 7% 30,014 9% (7,668) (26)% Current liabilities 51,486 16% 56,290 16% (4,804) (9)% Total equity and liabilities 323,953 100% 350,001 100% (26,048) (7)% The main non-current assets are composed of intangible assets in the amount of EUR 140.3 million (2022: EUR 143.8 million) and property, plant and equipment in the amount of EUR 13.8 million (2022: EUR 15.0 million). The decrease in intangible assets mainly results from the amortization of customer relationships, order backlog, brand assets and software. Those relate to the acquisition of e-domizil, SECRA and AMIVAC acquired in 2022. Property, plant and equipment decreased due to the depreciation of right-of-use assets. Current assets mainly relate to trade receivables including other receivables (2023: EUR 13.5 million, 2022: EUR 14.5 million), cash and cash equivalents (2023: EUR 109.0 million, 2022: EUR 112.0 million) and an investment in a money market fund (2023: EUR 31.3 million, 2022: EUR 49.5 million). The trade receivables amounted to EUR 13.1 million (2022: EUR 13.5 million) whereas current other receivables increased from EUR 0.9 million as of December 31, 2022 to EUR 0.4 million as of December 31, 2023. While IFRS Revenues increased by 10% a better cash conversion of trade receivables in 2023 led to an overall decrease in the trade receivables in comparison with 2022. As of December 31, 2023, the Group’s equity amounts to EUR 250.1 million (2022: EUR 263.7 million). Accordingly, the equity ratio amounts to 77% (2022: 75%) and is above the target equity ratio of 50% that is required by covenants. Non-current liabilities decreased to EUR 22.3 million as of December 31, 2023 compared to EUR 30.0 million in the prior year mainly due to the decrease in fair value of warrants to EUR 0.4 million in 2023 (2022: EUR 1.4 million) compared to the prior year, the release of deferred tax liabilities in the amount of EUR 1.2 million and the repayment of borrowings leading to a decrease in carrying amount of EUR 3.9 million during the reporting period. Current liabilities amount to EUR 51.5 million as of December 31, 2023 compared to EUR 56.3 million as of the prior year. The decrease is explained by a decrease in trade payables in the amount of EUR 3.7 million due to reduced spending for performance marketing compared to the prior year. Furthermore, traveler advance payments owed to homeowners in the amount of EUR 3.9 million as of December 31, 2023 decreased on the compared to the prior year (2022: EUR 5.5 million). A part of the amount of traveler advance payments as a portion of cash and cash equivalents with an amount of EUR 0.5 million as of December 31, 2023 (2022: EUR 2.3 million) is subject to statutory restrictions and not available for general use by the Group. COMBINED MANAGEMENT REPORT 139 HomeToGo / Annual Report 2023 d) Overall statement The Management Board views the business development of 2023 generally as positive. HomeToGo was able to improve Adjusted EBITDA strongly by EUR 22.5 million and thereby reached its number one priority for the financial year 2023: Adjusted EBITDA break-even. Additionally, the highly profitable and rapidly growing Subscriptions & Services business stood for 21.7% of Group's IFRS Revenues at the end of 2023. These two key advancements were already set as goals for 2023 at the time of HomeToGo's public listing in September 2021 and have now been successfully reached. Furthermore, the Booking Revenues from repeat customers could be increased by more than 50% - a stellar increase and significant driver for reaching Adjusted EBITDA break-even. Furthermore, the Group's CPA Take rate could be further expanded to a new yearly record value of 10.9%, a substantial increase by 1.3pp compared to the previous year period. Despite laying the clear focus on significantly improving underlying profitability, top line figures of IFRS Revenues and Booking Revenues increased favorably in 2023, both reaching double-digit growth rates. While the guidance set in March 2023 for the development of the Booking Revenues was met, the Management Board decided consciously to focus on the profitability goal and reducing the performance marketing spend, which led to slightly lower IFRS Revenues than originally expected. Overall, HomeToGo delivered on its number one priority of the year, namely reaching Adjusted EBITDA breakeven, resulting in 2023 to become an extraordinary milestone in HomeToGo's history. 2.4. Employees As of December 31, 2023 the Group had employed 664 employees (2022: 650), representing a slight increase of 2% compared to the prior year as a result of further growth of the Group while leveraging economies of scale. 3. Statutory Results of Operations and Financial Position of the Company The purpose of HomeToGo SE is the creation, holding, development and realization of its investment in HomeToGo GmbH. Due to its sole purpose as a financial holding entity, the Company is subject to the same price, credit and cash flow risks as the Group as a whole. Refer to 4.2. Illustration of Risks for an assessment of risks the Company is exposed to. Results of Operations As a pure financial holding, the Company did not generate any Revenues or income during the financial year 2023 while the incurred expenses of EUR 276.8 million in 2023 (2022: EUR 341.3 million) led to a loss in the same amount in the respective period. The loss results mainly from a further impairment in the amount of EUR 274.4 million (2022: EUR 258.2 million) of the investment in HomeToGo GmbH that was driven by a shortened planning horizon in the approach for the impairment test. Expenses incurred as a public company that are made up of expenses mainly for third-party services amounting to EUR 0.9 million (2022: EUR 1.7 million), insurance expenses EUR 0.6 million (2022: EUR 0.7 million) as well as consulting and audit expenses and EUR 1.8 million (2022: EUR 1.9 million), respectively. Financial Position 140 COMBINED MANAGEMENT REPORT HomeToGo / Annual Report 2023 As of December 31, 2023, the Company had cash and cash equivalents of EUR 1.3 million compared to EUR 1.6 million in the previous year. The Company was always able to meet its payment obligations. No liquidity shortfalls have occurred or are foreseeable in the future. Net Assets (IN EUR THOUSANDS) Dec. 31, 2023 Dec. 31, 2022 2023 vs. 2022 Non-current assets 555,435 96% 833,298 98% (277,863) (33)% Current assets 21,781 4% 20,571 2% +1,211 +6% Total assets 577,217 100% 853,869 100% (276,652) (32)% Equity 575,033 100% 851,846 100% (276,812) (32)% Current liabilities 2,184 —% 2,023 —% +161 8% Total equity and liabilities 577,217 100% 853,869 100% (276,652) (32)% Non-current assets are composed of the Company's investment in HomeToGo GmbH. The decrease during the fiscal year is the result of the aforementioned impairment in the amount of EUR 274.4 million (2022: EUR 258.2 million) of the investment in HomeToGo GmbH. Current assets comprise treasury shares in the amount of EUR 19.3 million (2022: EUR 18.2 million) and cash and cash equivalents of EUR 1.3 million (2022: EUR 1.6 million). During the financial year 2023, 339,406 Class A Shares were transferred to beneficiaries of share-based compensation programs of the Group in 2023 (2022: 1,055,640 Class A shares). On September 13, 2023, the Management Board of HomeToGo SE with the consent of the Supervisory Board approved a share buyback program with a volume of up to EUR 10 million. Under the program, up to 5.7 million shares of the Company could be repurchased in the period between September 13, 2023 and December 31, 2024. In accordance with the authorization provided by the shareholders' meeting, the Management board set an initial price limit of EUR 3.16 per share to be repurchased (excluding ancillary costs), but reserves the right to review this limit, depending on, amongst others, market circumstances and the development of the buybacks. Until December 31, 2023, the Company has bought back 107,353 of shares with an average price of EUR 2.60. 4. Risk and Opportunity Report As an international company, HomeToGo has exposure to macroeconomic, sector-specific, and company- specific risks and opportunities. This risk and opportunity report provides an overview of the implemented risk and opportunity management system and presents the risks and opportunities considered material for HomeToGo. 4.1. Risk and Opportunity Management System The Management Board of HomeToGo SE assumes overall responsibility for the development and operation of an effective risk and opportunity management system (RMS) for HomeToGo. The CFO of HomeToGo SE has implemented the RMS that consists of the following elements: COMBINED MANAGEMENT REPORT 141 HomeToGo / Annual Report 2023 Risk and Opportunity Objectives The objective of the RMS is to create the necessary transparency about risks and opportunities for decision makers, to foster the risk and opportunity culture, and to create a common understanding of risks and opportunities throughout the company. Risk and Opportunity Identification and Monitoring Using multiple instruments, such as workshops and self-assessments, the identification and assessment of risks and opportunities is carried out by both the risk and opportunity owners during day-to-day operations and the CFO on a quarterly basis. Risk and Opportunity Assessment All risks and opportunities identified are evaluated with regard to their probability of occurrence and their potential impact based on a one-year time horizon. The identified single risks and opportunities are finally aggregated. The probability of occurrence represents the possibility that a specific impact for a risk or an opportunity may materialize within the next three to 60 months. The impact assessment is conducted on a quantitative scale that refers to the potential financial impact. The material risks and opportunities are described in the next section of this report. Risk and Opportunity Control Risk and opportunity owners are charged with developing and implementing effective risk mitigating and opportunity supporting measures within their responsibility area. Depending on the type, characteristics, and assessment of the risks, different risk strategies are applied by the risk owners to reduce the risk, considering costs and effectiveness. Risk strategies can be risk avoidance, reduction, transfer to a third party, or acceptance. Risk and Opportunity Management Improvements and Reporting The respective risk owner reports on the overall risk and opportunity situation to the senior management, the Management Board, and the Supervisory Board on a quarterly basis. 4.2. Illustration of Risks Overall assessment of risks Overall, the Management Board identified no risks that might threaten the Company’s and the Group’s ability to continue as an ongoing concern and, from today’s perspective, no such risks are recognizable for the foreseeable future. Cybersecurity and IT risks We operate websites and apps with which we collect, maintain, transmit, and store information about our users, Partners, and others, including personal information, as well as other confidential and proprietary information, including information related to intellectual property. We also employ third-party service providers that store, process, and transmit proprietary, personal, and confidential information on our behalf. Furthermore, we rely on encryption and authentication technology licensed from third parties to securely transmit confidential and sensitive information. While we have a cyber risk management team in place and take extensive steps to protect the security, integrity, and confidentiality of sensitive and confidential information (e.g., password policies and firewalls), our security practices may be insufficient enabling third parties to potentially breach our systems (e.g., through Trojans, spyware, ransomware or other malware attacks, or breaches by our employees or third-party service providers), which may result in unauthorized use or disclosure of information. Such attacks might lead to blackmail attempts, forcing us to pay substantial amounts to release our captured data or 142 COMBINED MANAGEMENT REPORT HomeToGo / Annual Report 2023 resulting in the unauthorized release of such data. Given that techniques used in those attacks change frequently and often are not recognized until launched against a target, it may be impossible to completely secure our systems. In addition, technical advances and continued expansion and increased complexity of our IT infrastructure could increase the likelihood of security breaches. The operation of our business requires a number of licenses and other (usage) rights, e.g., in connection with integrating content into our platform. In the future, we may require additional licenses (e.g., if legal environments change, or we provide additional services). There is, however, no guarantee that we will be able to obtain all required licenses or other (usage) rights or that we will manage to comply with all requirements imposed on us thereunder. If we fail to obtain and maintain such licenses or rights, we may not be able to conduct our business as intended, which may adversely affect our growth and profitability. Service outages might occur by loss of domains of HomeToGo Group brands due to overlooked renewals that could result in a loss of Booking and IFRS Revenues. To mitigate these risks, we continuously review and strengthen our IT security strategy and take an increasing number of technical measures and organizational policies to protect against unauthorized access to our systems and data. We use advanced server solutions scalable by specialized third-party providers and recruit experts in order to ensure system integrity and safety and reduce IT risks to an acceptable level. We constantly review required renewals of all HomeToGo Group domains to ensure the timely renewal of the domain ownership. Furthermore, we are centralizing procedures and responsibilities across the HomeToGo Group to support these measures. In 2023, in collaboration with security experts, we assessed our cybersecurity posture according to the NIST Cybersecurity Framework. Based upon the outcome of this assessment, in FY/23 we have planned and executed a number of specific cybersecurity advancement milestones spanning across our customer-facing product suite, as well as the internal IT estates across the group. For example, we have taken a specific focus on internal user security with advancements to internal/external messaging protection, with enhanced scanning for incoming threats. We have also refreshed and enhanced our internal IT estate with intelligently driven antivirus and anti-malware solutions, which are feeding our expanded IT Security team with enriched insights into areas for improvement and focus regarding our attack surface. This is in addition to the continued successful usage of previous initiatives such as the Bug Bounty program and our edge protection services for our consumer facing applications. The course of the enhancement plan will continue across 2024 with continued focus and funding, with centralized IT Security focus now spanning across the HomeToGo Group and all of its entities. Product risks Our listing products bear the risk that fraudulent homeowners might post fake or not as described offers on our platforms. Travelers would arrive to find no vacation home or not as described vacation home resulting in frustration and customer complaints that could damage the reputation of HomeToGo or one of our other brands leading to lower Booking and IFRS Revenues. To mitigate this risk we are constantly reviewing our fraud detection processes to initiate preemptive detection of potentially fraudulent hosts. We have integrated a third party vendor that is able to detect and block fraudulent accounts and listings creation. Further, we are using know your customer (KYC) verification flows before paying out funds to Partners. For our payment services we rely on a payment service provider (PSP) who then facilitates our one-off or pay later transactions. For inbound payments, we pay these third parties interchange fees and other processing and gateway fees to help facilitate payments from travelers to Partners. As a result, if we are unable to maintain our relationships with these third parties on favorable terms or if these fees are increased for any reason, our profit margin, business, and results of operations could be harmed. Additionally, if these third parties experience service disruptions or if they cease operations, travelers and Partners could have difficulty making or receiving payments, which could adversely impact our reputation, business, and results of operations. Legislative and regulatory risks COMBINED MANAGEMENT REPORT 143 HomeToGo / Annual Report 2023 HomeToGo is subject to numerous laws and regulations, particularly on data protection, competition, consumer protection, online commerce, platform regulation and short-term rentals on the EU, national and local levels. This includes, in particular, the General Data Protection Regulation (GDPR) and extends to local legal frameworks and changes pertaining to the German Telekommunikation-Telemedien-Datenschutz-Gesetz (TTDSG), the German Gesetz gegen den unlauteren Wettbewerb (UWG) as well as the German Plattformen- Steuertransparenzgesetz (PStTG), besides travel-related regulations for platforms offering short-term rentals. On the digital environment as such, the evolving regulatory framework for the use of cookies and similar technologies in many jurisdictions may impair a convenient online service for our users and performance on our platforms that may lead to limitations for our business and digital marketing techniques. Responsible and confidential handling of customer data is key to our business. To mitigate risks of potential violations, our legal team continuously monitors data protection requirements and developments in interpretations, supports in implementing corresponding measures and processes, including cybersecurity advancements, and provides advice. Mandatory training and a regular focus group raise awareness for GDPR compliance, which goes hand in hand with close cooperation and alignment with responsible teams for adequate protection of personal data of customers as well as partners and employees. Appropriate processes are reviewed, updated and implemented with due care, also seeking advice from external (foreign) legal counsels and the external data protection officer(s) to ensure correct interpretation of changing legal requirements and timely incident response. Incident management is closely coordinated with the expanded IT Security team. Evolving platform and consumer protection regulations are reviewed by our legal team seeking advice from external legal counsel, if required, and incorporated in the HomeToGo product and technical environment as well as business operations to ensure transparency for users and hosts with corresponding texts and features. In addition, short-term rental regulations on federal, regional and municipality levels impact the display of our offerings and are considered in operational business processes and product configurations. Those short-term rental regulations are enacted worldwide with the intention to control and restrict the renting of private accommodations. Such law implementations may result in higher legal costs and necessary resources depending on the individual market and jurisdiction. To remain up to date with interpretations and travel- related regulations, HomeToGo is engaged in industry associations, such as the Deutscher Ferienhausverband e.V. (DFV), the European Holiday Home Association (EHHA) as well as other associations and actively advocated the EU-wide harmonization of the regulation on short-term renting. Legislative and regulatory authorities or other policy-making organizations in other countries where we operate may expand the scope of application of laws and regulations in force, enact new laws or regulations or issue revised rules or guidelines on data privacy, short-term rentals, consumer protection or overall online commerce, respectively platform regulation. For instance, the EU Directive 2021/514 (DAC7, Directive of Administrative Cooperation in the field of taxation in the EU) with the consecutive national laws like the German Plattformen- Steuertransparenzgesetz (PStTG) came into force resulting in reporting obligations - on the income realized by sellers offering certain services - applicable to the digital economy. In 2024, the EU Digital Services Act (DSA) further regulates online platforms more generally with more exhaustive additional rules in particular on transparency and further compliance measures. The new tax reporting obligations of platform operators under PStTG in conjunction with DAC7 were assessed in detail for HomeToGo’s different business models and in their applicable jurisdiction in the different EU countries, appropriate operational business processes were developed and delivery prepared in due time. Furthermore, obligations under DSA are scoped and an implementation project launched for timely compliance with these recent requirements in the digital ecosystem. Any failure to comply with dynamically changing data protection or other regulatory provisions and interpretations could result in administrative or civil legal proceedings, harm to our business, operations and reputation or even in significant fines. Marketing risks 144 COMBINED MANAGEMENT REPORT HomeToGo / Annual Report 2023 Another risk factor is the reachable efficiency and effectiveness of marketing expenses. There is a risk of increased user acquisition costs as competition with direct and indirect competitors in online marketing channels is intensifying. Furthermore, there is a risk of losing organic search traffic and revenue due to Google updates and an increasing visibility of Google owned products. Additionally, there is the risk associated with the challenge of building a strong user base for the App. This entails not only attracting new users but also retaining them, which is crucial for lowering overall marketing costs. Moreover, the evolving landscape of organic search, especially with the integration of AI into search engines and changing user search behaviors, poses an additional risk of further disruptions. HomeToGo counters these challenges with investments in the brands of the HomeToGo Group, which are geared to the main brand, HomeToGo, and with investments into inbound channels. For example, through PR, Social Media, targeted CRM campaigns and / or TV and outdoor advertising in order to increase the efficiency of the marketing measures and to reduce the dependency on individual online marketing channels. We perform long-term focused search engine optimization (SEO) in line with Google guidelines and focus on high-quality content. Further, we monitor competition for strategic investments or partnerships. Partner risks Our business depends on our Partners maintaining their offers on our platform and engaging in practices that encourage users to book those offers. If Partners do not establish or maintain a sufficient number of offers and availability for their properties, the number of nights booked declines for a particular period, or the price charged by Partners declines, our revenue would decline and our business, results of operations, and financial condition would be materially adversely affected. While we plan to continue to invest in our Partners and in tools to assist Partners, these investments may not be successful in growing our Partners and offers on our platform. In addition, Partners may not establish or maintain offers if we cannot attract prospective users to our platform and generate bookings from a large number of users. While HomeToGo has experienced only a limited number of contract terminations by Partners in the past, Partners have from time to time taken their inventory temporarily off its websites, e.g., for technical reasons. Since our key Partners, in particular OTAs, typically operate their own platforms and/or also use the services of other platforms, we face the risk that a key Partner may decide to suspend or terminate its partnership with us. Such decisions can be based on factors that are beyond our control. For example, a key Partner may decide to reduce spending on services from us due to a challenging economic environment or other factors, both internal and external, relating to its business. These factors, among others, may include corporate restructuring, pricing pressure, changes to an outsourcing strategy, or switching to another platform. Furthermore, our reliance on certain key Partners for a significant portion of our revenue may give these Partners a certain degree of pricing leverage against us when negotiating contracts and terms of service. The loss of all or a portion of our business with, or the failure to retain a significant amount of business with, any of our key Partners could have a material adverse effect on our business, financial condition and results of operations. Growth Risk With a focus on the Group's future profitability, there is a risk that measures aimed at further realizing cost efficiencies could have an unexpected constraining impact on the growth of the Group's business. Inflation Risk Our financial performance is subject to global macroeconomic conditions being impacted by high inflation rates and a rapid rise in interest rates as a reaction by central banks. High inflation might impact our business model negatively as the consumers' real discretionary income might shrink. Higher interest rates set by central banks as a countermeasure to normalize inflation rates will impact the global economy with adverse effects on consumers' ability to travel. Higher interest rates will lead to higher costs of capital, used as discount rates in our impairment test models. Higher discount rates would reduce valuations, absent any offsetting adjustments to cash flow projections, for example due to inflation. This would be an impairment trigger and could result in an COMBINED MANAGEMENT REPORT 145 HomeToGo / Annual Report 2023 impairment. We are carefully monitoring our cost spending and might be able to pass part of increasing prices on to market participants. Liquidity and default risks Due to the continuing (net) loss situation, there is generally a medium-term liquidity risk. Furthermore, a default risk exists in respect of our Partners’ receivables, which might also adversely affect liquidity. Given the size of our Partners (partly listed companies), we regard a default of large Partners as unlikely whereas there remains a remote risk given contractions in the economic environment at the time of the publication of the combined management report. A slightly higher default risk arises from small and non-professionalized Partners, which is treated through consistent follow-up care. Overall, this refers to a minor volume and does not adversely affect HomeToGo’s further existence. The Group has strong liquidity resources at its disposal and an effective liquidity management. Foreign currency risks We offer our Partners and users integrated payments in more than 28 currencies and a considerable portion of our business is conducted in foreign currencies. Therefore, we are exposed to a certain currency risk. Due to the non-existance of a natural hedge (low cost base in USD, but high IFRS Revenues denominated in USD), we actively manage our long USD positions by opportunistically converting them into our main cost currency (EUR) and by constantly earning a positive yield return as long as the USD rates are higher than the EUR rates. Acquisitions risks HomeToGo has acquired multiple businesses since 2018 and we will continue to regularly evaluate potential acquisitions. We may expend significant cash or incur substantial debt to finance such acquisitions, which indebtedness could result in restrictions on our business and significant use of available cash to make payments of interest and principal. In addition, we may finance acquisitions by issuing equity or convertible debt securities, which could result in further dilution to our existing stockholders. We may enter into negotiations for acquisitions that are not ultimately consummated. Those negotiations could result in diversion of management time and significant out-of-pocket costs. If we fail to evaluate and execute acquisitions successfully, our business, results of operations, and financial condition could be materially adversely affected. In addition, we may not be successful in integrating acquisitions or the businesses we acquire may not perform as well as we expected. While our acquisitions to date have not caused major disruptions in our business, any future failure to manage and successfully integrate acquired businesses could materially adversely affect our business, results of operations, and financial condition. ESG risks ESG continues to persist as a major global trend and companies have a responsibility to report on and advance their ESG activities. 2023 was a turning point for ESG reporting, with Europe issuing extensive regulatory reporting standards with the publication of ESRS rules under CSRD and ISSB standards issued under IFRS. In this regard, we recognize we will need to continue investing significant effort and resources to further develop and align our ESG activities whilst continuing to comply with the changing regulations and policies, specifically in terms of how we measure and report comprehensive ESG data. There is a risk that if our ESG practices do not meet regulatory requirements or investor, traveler or employee expectations, then our reputation could be negatively impacted. Similarly, our failure to fulfill ESG commitments to meet reporting standards could mean we are subject to regulatory punishment that could negatively impact our business. As we approach the forthcoming CSRD mandate for the financial year 2024, we plan to follow the latest reporting standards and specifically mitigate the risk of non-compliance by executing a Double Materiality Analysis in accordance with the ESRS standards as issued by the EU. We will follow a structured framework to evaluate both, impact materiality (the “inside-out” perspective) and financial materiality (the “outside-in” perspective) of HomeToGo. To provide the basis for the assessment, we first gain valuable insights from a survey in which we collect information from affected stakeholder groups and carefully derive and cluster an impact list. We acknowledge 146 COMBINED MANAGEMENT REPORT HomeToGo / Annual Report 2023 that the results we will obtain from the Double Materiality Analysis will require us to prioritize the disclosure of information on the given matters. To this end, we will use the requirements in the respective thematic ESRS books to determine the information that must be disclosed on the identified matters and prioritize them accordingly as part of our annual strategic planning. In 2023 we secured a "Low Risk" ESG rating from Morningstar Sustainalytics. We anticipate a potential risk if we opt for another ESG rating in 2024, where the same inputs would lead to a potentially higher risk rating result due to the annual (and unknown to us) changes in rating assessment mechanisms. Attaining a higher risk exposure rating compared to the previous year would convey a negative message to the capital markets, a scenario we are committed to prevent. We recognize the following risks among ESG pillars Environmental, Social and Governance: Environmental risks There are potential risks inherent in climate protection efforts, reflected in regulatory changes and consumer demand. The overarching need to travel less to protect the planet could affect customers' willingness to book multiple vacations per year and/or long-distance travel. In addition, stakeholder concerns, as well as negative press about sustainable travel trends such as flight- or ‘workation’ “shaming”, could negatively impact a customer’s willingness to travel. The increasing pressure to use sustainable modes of transportation may make it more difficult for some of our inventory to be accessible, and hence less attractive to book. With increasing repercussions caused by the severity of climate change, the inaccessibility of certain regions throughout the year due to extreme weather conditions or natural disasters might make it more difficult or even impossible to travel to relevant destinations. To address concerns about the impact of travel on the planet, we are continuously aiming to encompass proactive efforts to shape a resilient and responsible travel ecosystem. For more details, please refer to the “Commitment to ESG” section in this report. In response to the potential challenges posed by climate change in certain areas of the world, we are constantly diversifying our inventory and have always enjoyed a strong focus on travel destinations that are largely resilient to extreme weather conditions and natural disasters. Utilizing features such as the 'near-me' search button in our product, our travelers can effortlessly choose domestic destinations, reducing environmental impact and facilitating accessibility through public transportation. Globally, a return of Covid-19 or other pandemics may lead to new forms of travel restrictions or travel fatigue. Moreover, we are closely monitoring global health situations or extreme weather events to swiftly adapt to changing travel restrictions and implement robust safety protocols when needed. Our highly flexible and adaptable booking policies, our experienced communication strategies and our highly skilled Guest Relations support team provide reassurance and quick solutions in the face of any unforeseen circumstances. Social risks Our employees’ expertise and commitment are important factors for our successful development and depend on our ability to recruit, train, motivate and retain highly qualified employees and, at the same time, promote our corporate culture. Changes in the macro-economic landscape may impact the stability of HomeToGo's social climate, e.g. the ability to retain and attract top talent in a competitive and ever-evolving environment. A risk factor is the shortage of skilled labor (“Fachkräftemangel”) which continues to prevail in Germany and other countries, which may pose a risk to retain key employees and attract additional top talent and qualified staff, e.g., in the field of software developers. The loss of qualified staff, high employee fluctuation or lasting difficulties in filling vacant positions with suitable applicants might adversely affect our ability to effectively compete in our business, and we might lose important know-how, or our competitors might gain access to such know-how. As HomeToGo has recently announced its product vision to build a fully AI-enabled marketplace, the competition for skilled professionals in the field of Artificial Intelligence, Chat-GPT integrations and other Large Language Model Applications has intensified, giving rise to a new "war of talent" for HomeToGo, as the COMBINED MANAGEMENT REPORT 147 HomeToGo / Annual Report 2023 Company is not just looking to sustain but also to enhance its capabilities and continued innovation power in the realm of AI-driven solutions. Additionally, we note a tendency for the younger generation to seek a "purpose-driven" work environment and increasingly look for jobs in sustainability-related industries (e.g. NGOs and social ventures). We see it as an important task to monitor the mental and physical well-being of our employees who may suffer from the difficult global times we are experiencing, such as the on-going war in Ukraine, the Israel/Palestine conflict, the rising inflation and a prevailing threat of recession or other factors. In addition, we see a risk in ensuring that employees are treated equally and fairly, regardless of gender, ethnicity, culture, sexual orientation and other factors. In order to attract and retain qualified staff, we offer competitive compensation packages with long-term incentive models and other employer benefits, which serve the professional and health promotion of our employees. Furthermore, we strongly invest in our corporate culture and the development and further training of our employees. Maintaining an engaging culture in the face of increasing remote working and a global employee and office base requires special care and attention, while continuing to ensure a high degree of flexibility and independence for our workforce. Governance risks We see a risk in maintaining sound corporate governance while complying with additional reporting requirements, such as all aspects of the Corporate Sustainability Reporting Directive (CSRD) and Commission Delegated Regulation (EU) 2023/2486, an extension of the principles of the EU taxonomy. It is important to ensure that the business is organized in such a way that accounting, treasury and financial operations are satisfactorily controlled in all respects and that the risks inherent in the business are identified, defined, measured, monitored and controlled at all times in accordance with all relevant external and internal reporting frameworks. As our global footprint grows, we closely monitor any risks related to anti-corruption, although we do not consider them to be a material threat to our current business or financial performance as we maintain close and trusting relationships with our partners and, to the best of our knowledge, have not experienced any corruption-related matters since HomeToGo's inception. We proactively monitor matters along our supply chain by complementing our standard partner contracts with compliance standards that we both incorporate for ourselves and expect from business partners. We recognize that limited transparency down the full depth of our supply chain may pose difficulties to enforce adequate compliance with protection from human rights- related risks along the supply chain. In August of 2023, HomeToGo established a Supplier Code of Conduct (SCoC) that emphasizes our commitment to upholding human rights in our supply chains, expecting suppliers to adhere to ethical business practices and comply with laws. We see a risk in the fact that the Supplier Code of Conduct is currently only available on request, but not part of the actual onboarding process for new partners. We will review this procedure to increase its visibility and acknowledgement as well as to improve the access to the reporting mechanism outlined in the SCoC via the HomeToGo Speak-Up system for our supplier and its employees. 4.3. Illustration of Opportunities HomeToGo is operating in a huge yet highly fragmented global vacation rental market. This brings both a lack of professionalism but also an enormous potential for creating additional value with it. As one of the very few sectors worldwide, HomeToGo's sector has not been fully digitalized. This makes it difficult for consumers to have a holistic and transparent overview. But also on the supply side, there is a significant lack of access to the right demand, technology, data and standards. HomeToGo tackles all these issues by offering the world's largest marketplace for vacation rentals where consumers can choose among more than 15 million offers. On the other hand, we offer Software & Service Solutions incl. Subscriptions for the entire B2B market under one umbrella and solving the pain points for our largest partners like Online Travel Agencies and Property Managers to the private host. In general, we observe five underlying market trends which favor our strategic direction. 148 COMBINED MANAGEMENT REPORT HomeToGo / Annual Report 2023 First, online sales channels are increasingly dominating the global travel industry's revenue. We not only see a large market growth of the entire accommodation industry, we also expect to see a further online penetration, especially in the vacation rental space. By 2027, approx. 75% of revenues in the vacation rental market will happen online. 12 Second, younger generations which become increasingly important for us as a customer segment have a very strong preference to book their vacation on mobile devices. 84% of the 18- to 35-year olds search on mobile first, but only 49% actually book via mobile. 13 We expect this gap to close to the upper end in the coming years by making sure that we develop services exactly in the way our customers prefer to consume them and continuously innovating our platform by investing significant resources, we make sure to offer attractive services also for those client segments. Third, work-from-home and workation are here to stay. The average work-from-home days per week is stabilizing at around three times higher than before the pandemic. 14 The possibility for higher share of hybrid work triggers a sustained higher future level of workation-related travel expenditures. Fourth, we see a high potential from first time vacation rental travelers. Up to 37% of guests are staying for the first time ever in a vacation rental. 15 Despite the fact that vacation rentals where already the fastest growing vertical in travel prior the pandemic, there are still millions of people who book a vacation rental for the first time. These first time bookers in Vacation Rentals offer a huge potential to grow our business. Lastly, the vacation rental market is highly fragmented. More than 95% of properties are privately owned. Many of these smaller actors are also unprofessional in their digital offer. HomeToGo is here to solve these pain points for the industry and to lead the ongoing massive digital transformation in the industry. All in all, we anticipate that the vacation rental industry will continue to expand significantly because of several observable trends in the traveler preferences away from traditional hotel and resort reservations and more towards vacation homes. In order to maintain its previous growth trajectory in a sustained manner, HomeToGo will offer its customers and users a fully integrated product portfolio with tailored products and software-based solutions in these new market fields as a result of the growing digitization of this privately and semi- professionally operated tourism sector segment. 5. Significant Events after the Reporting Period In the beginning of February 2024 the Group has started the implementation of a new internal reporting structure that will lead to a new management approach with two reporting segments. While the HomeToGo_Marketplace expects to continue to optimize its unique, multifaceted experience for the traveler with Onsite as its core strategic element, HomeToGo_PRO will be introduced as HomeToGo's new B2B brand and business segment which will be a key growth focus for the Company going forward. HomeToGo_PRO comprises HomeToGo's software and service solutions including subscriptions for the whole travel market, with a special focus on SaaS for the supply side of vacation rentals. This includes both volume-based revenues as well as those resulting from subscriptions. COMBINED MANAGEMENT REPORT 149 HomeToGo / Annual Report 2023 12 Statista Vacation Rentals: Market data & analysis, 2023 13 Google market trend data 14 Deloitte Corporate Travel Study, 2023; Euromonitor International, 2023 15 Google market trend data On December 16, 2023, HomeToGo entered into a sale and purchase agreement with the goal of acquiring a 51% stake in each of the the target companies, KMW Reisen GmbH and Super Urlaub GmbH ('the target companies'). For this purpose an acquisition vehicle was founded by HomeToGo already in 2023 that will act as the management holding for the new subgroup. Following the legal step plan the acquisition vehicle acquired 100% of the issued shares in KMW Reisen GmbH and Super Urlaub GmbH for an estimated consideration of EUR 82.0 million. Thereof EUR 31.6 million were paid in cash by HomeToGo. EUR 14.0 million have been deferred until December 31, 2025 as vendor loan and EUR 6.5 million were financed by upstream loans granted by the target companies, EUR 6.3 million were paid by HomeToGo with Class A Shares in HomeToGo SE. The sellers of the target companies sold their shares in the target companies, besides the received cash, Class A Shares in HomeToGo SE and the granted vendor loans, in exchange for shares in the acquisition vehicle, which acquired the target companies. Consequently, HomeToGo holds 51% in the holding subsidiary as majority shareholder and has control over the two new investments, while the remaining shareholder in the holding subsidiary represent minorities in HomeToGo Group. Furthermore, put and call options were issued giving HomeToGo the opportunity to acquire the remaining minority stake starting in 2029. The acquired entities are expected to expand HomeToGo’s portfolio in thematic travel bundles with hotels for short trips allowing future cross-selling and redistribution of inventory across HomeToGo’s platforms to increase HomeToGo’s market share. Both entities will be part of HomeToGo's new reporting segment HomeToGo Marketplace. The business combination was completed on January 2, 2024 which forms the date of the first-time consolidation of both companies within HomeToGo Group. On December 22, 2023, HomeToGo entered into a sale and purchase agreement to acquire a 75%-stake each in two entities to further increase HomeToGo’s offering in enabling and value-enhancing the experience for travelers and hosts as part of HomeToGo's new reporting Segment "HomeToGo_PRO Software & Service Solutions". Of the total consideration of EUR 15.4 million, EUR 12.4 million were paid in cash and EUR 3.0 million in Class A Shares in HomeToGo SE. 75% of the HomeToGo SE shares have been deferred and are due in 2025. An equivalent cash amount of EUR 2.3 million is currently held in an escrow account as collateral for the deferred share transfer. In addition, put and call options were issued, allowing HomeToGo to acquire the remaining minority stake starting in 2029. The transaction was completed on January 23, 2024, which forms the date of the first-time consolidation within HomeToGo Group. 150 COMBINED MANAGEMENT REPORT HomeToGo / Annual Report 2023 6. Outlook Building on a record Booking Revenues Backlog of EUR 37.5 million as of the beginning of 2024 16 - equivalent to an increase of 15% compared to the beginning of 2023 - the new fiscal year 2024 started well for HomeToGo. Bookings early in the year were driven by traditional early booking markets like DACH and the Netherlands. Due to public holidays in key markets falling on a weekend the beginning of January was rather muted before catching up in the second half and then strongly developing during February. Overall, booking momentum across markets was in line with expectations. In terms of overall sector growth rates, we are witnessing a continued positive outlook. According to a market research study published by Custom Market Insights (2023) 17, the global Vacation Rental Market revenue was valued at approximately USD 117 billion in 2023 and is expected to reach around USD 318 billion by 2032. This corresponds to a compounded annual growth rate (CAGR) of around 14% between 2023 and 2032. Further, in terms of travelers’ preference for work location the Deloitte Corporate Travel Study from and Euromonitor International (2023) both showed that the average work-from-home days per week are around three times higher than before the Covid-19 pandemic. As a result, the vacation rental market has witnessed and continues to witness a high interest in workation-related stays triggering the doubling of workation-related travel spend compared to the pre-pandemic level. Lastly, besides the very solid market growth of the entire accommodation industry, we also expect to see a further online penetration, especially in the vacation rental space due to its fragmented market structure. The global data and business intelligence platform Statista expects that online sales channels are increasingly dominating the global travel industry's revenue. Until 2027, roughly 75% of all revenues are happening online. 18 All studies underline that the online travel business and the alternative accommodation industry continues to be a fast growing market. For the short-term future, the Group will continue its growth path by further expanding its business in both Europe and North America by acquiring new customers with the help of our technology-driven solutions enabling access to incredible homes. We aim to further scale our operations across geographic areas and replicate our proven marketing playbook from the DACH region to drive repeat demand globally. With travel as a priority for leisure spending for the majority of consumers and consciousness for environmental and sustainable use of resources rising, we see that the trend of choosing alternative accommodation for vacations persists and proves to be resilient even during periods of economic contractions and political instability. At HomeToGo, we will continue to strive for an unparalleled experience for our users on our platform to drive repeat demand and brand loyalty. Starting from the financial year 2024 onwards, we will introduce a new segment reporting in order to provide higher transparency to the capital markets. HomeToGo combines a traveler-facing B2C Marketplace with the largest selection of vacation rentals and a newly introduced B2B Software & Service Solutions segment: HomeToGo_PRO. Here, we have a dedicated focus on SaaS for the supply-side of vacation rentals and will COMBINED MANAGEMENT REPORT 151 HomeToGo / Annual Report 2023 16 Booking Revenues before cancellation generated in 2023 or prior with IFRS Revenues recognition based on check-in date in 2024. The backlog figure is as of January 1, 2024 and includes acquisitions closed in January 2024. 17 Vacation Rental Market Size, Trends, and Insights By Accommodation Type (Home, Resort/Condominium, Apartments), By Booking Mode (Online, Offline), and By Region - Global Industry Overview, Statistical Data, Competitive Analysis, Share, Outlook, and Forecast 2023–2032, Custom Market Insights, released in October 2023, retrieved at https://www.custommarketinsights.com/request-for-free-sample/? reportid=22982 18 Vacation Rentals: market data & analysis, Statista, released in August 2023, retrieved at https://www.statista.com/outlook/mmo/travel- tourism/vacation-rentals/worldwide support our professional Partners with Software and Service Solutions, continuing to prove the integration potential of our Marketplace to drive acceleration for both the demand and supply side. A key piece of fostering our path to profitability is our focus on delivering an incredible experience that travelers want to return to, combined with an efficient marketing strategy to drive and scale repeat demand at lower costs. We have taken operating measures to optimize our resource allocation and pace our overhead investments. On a topline level, we have consolidated contracts within HomeToGo Group plus offered new, add-on services to drive revenues and additional margins. For the financial year 2024, the HomeToGo Group expects to grow Booking Revenues by more than 30% to more than EUR 250 million. IFRS Revenues are expected to grow by more than 35% to at least EUR 220 million. We expect further economies of scale and an improved efficiency of our marketing activity that will enable us to improve Adjusted EBITDA to more than EUR 10 million. Luxembourg, March 25, 2024 Management Board of HomeToGo SE Dr. Patrick Andrae Wolfgang Heigl Co-Founder & CEO Co-Founder & CSO Valentin Gruber Steffen Schneider COO CFO 152 COMBINED MANAGEMENT REPORT HomeToGo / Annual Report 2023 COMBINED MANAGEMENT REPORT 153 HomeToGo / Annual Report 2023 HomeToGo SE Consolidated Financial Statements for the Financial Year 2023 Registered office: 9, rue de Bitbourg L - 1273 Luxembourg R.C.S. Luxembourg: B249273 154 COMBINED MANAGEMENT REPORT HomeToGo / Annual Report 2023 Consolidated Statements of Profit or Loss and Other Comprehensive Income for the Years Ended December 31 (IN EUR THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) NOTE 2023 2022 IFRS Revenues 9 162,033 146,839 Cost of Revenues 10 (9,105) (12,202) Gross profit 152,928 134,637 Product development and operations 11 (35,546) (28,678) Marketing and sales 12 (113,392) (126,284) General and administrative 13 (36,344) (47,851) Other expenses 14 (1,050) (1,160) Other income 14 2,062 3,671 Loss from operations (31,342) (65,666) Finance income 4,066 8,822 Finance expenses (800) (1,894) Financial result, net 15 3,267 6,928 Loss before tax (28,075) (58,738) Income taxes 16 (206) 5,239 Net loss (28,281) (53,499) Other comprehensive income / (loss) (775) (222) Total comprehensive loss (29,056) (53,721) Basic and diluted earnings (loss) per share 17 (0.25) (0.47) Weighted average ordinary shares outstanding (basic and diluted) 114,761,982 113,367,886 The accompanying notes are an integral part of these consolidated financial statements. CONSOLIDATED FINANCIAL STATEMENTS 155 HomeToGo / Annual Report 2023 Consolidated Statements of Financial Position as of December 31 (IN EUR THOUSANDS) NOTE 2023 2022 (Adjusted) Assets Non-current assets Intangible assets and goodwill 19 140,283 143,787 Property, plant and equipment 20 13,777 15,023 Income tax receivables (non-current) 108 95 Other financial assets (non-current) 22 5,467 5,504 Other assets (non-current) 23 228 143 Total non-current assets 159,862 164,552 Current assets Trade and other receivables (current) 21 13,515 14,466 Income tax receivables (current) 1,767 1,622 Other financial assets (current) 22 33,567 51,778 Other assets (current) 23 6,290 5,533 Cash and cash equivalents 108,953 112,050 Total current assets 164,091 185,448 Total assets 323,953 350,001 Equity and liabilities Equity Issued Capital 2,441 2,441 Capital reserves 523,991 519,032 Foreign currency translation reserve (1,015) (240) Share-based payments reserve 96,159 85,638 Retained Earnings (371,456) (343,174) Total shareholder´s equity 24 250,121 263,697 Borrowings (non-current) 25 1,730 5,631 Other financial liabilities (non-current) 27, 35 12,194 15,517 Provisions (non-current) 26 539 518 Other liabilities (non-current) 28 1,016 404 Income tax liabilities (non-current) 106 13 Deferred tax liabilities 29 6,761 7,930 Non-current liabilities 22,346 30,014 Borrowings (current) 25 2,783 2,844 Trade payables (current) 8,875 12,544 Other financial liabilities (current) 27 13,550 15,440 Provisions (current) 26 2,338 1,645 Other liabilities (current) 28 20,903 19,824 Income tax liabilities (current) 3,037 3,993 Current liabilities 51,486 56,290 Total liabilities 73,833 86,304 Total shareholder´s equity and liabilities 323,953 350,001 ) Refer to note 6 - Business Combinations for the resulting effects from the completion of the purchase price allocation for the acquisition of e-domizil GmbH. 156 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 Consolidated Statements of Changes in Equity for the Years Ended December 31 (IN EUR THOUSANDS) NOTE SUBSCRIBED CAPITAL CAPITAL RESERVES OWN SHARES RETAINED EARNINGS FOREIGN CURRENCY TRANS- LATION RESERVE SHARE- BASED PAYMENTS RESERVE TOTAL SHARE- HOLDERS' EQUITY As of Jan 1, 2022 2,441 611,656 (102,692) (289,681) (18) 68,745 290,450 Net loss — — — (53,499) — — (53,499) Other comprehensive loss — — — — (222) — (222) Total comprehensive loss — — — (53,499) (222) (53,721) Re-issuance of treasury shares as consideration for acquisitions - net of transaction costs and tax — (7,701) 11,521 — — — 3,821 Share-based compensation 31 — (4,309) 10,556 — — 16,893 23,141 As of Dec 31, 2022 2,441 599,646 (80,615) (343,175) (240) 85,638 263,696 As of Jan 1, 2023 2,441 599,646 (80,615) (343,175) (240) 85,638 263,696 Net loss — — — (28,281) — — (28,281) Other comprehensive loss — — — — (775) — (775) Total comprehensive loss — — — (28,281) (775) — (29,056) Buyback of treasury shares 24 — (279) — — — (279) Share-based compensation — 1,851 3,388 — — 10,522 15,760 As of Dec 31, 2023 2,441 601,497 (77,506) (371,456) (1,016) 96,160 250,121 The accompanying notes are an integral part of these consolidated financial statements. CONSOLIDATED FINANCIAL STATEMENTS 157 HomeToGo / Annual Report 2023 Consolidated Statements of Cash Flows for the Years Ended December 31 (IN EUR THOUSANDS) Note 2023 2022 Loss before income tax (28,075) (58,738) Adjustments for: Depreciation and amortization 12,013 12,974 Non-cash employee benefits expense - share-based payments 30 17,988 25,652 VSOP - Exercise tax settlement charge (384) (1,683) VSOP - Cash paid to beneficiaries (55) (262) Finance costs - net 15 (3,267) (6,928) Net exchange differences (7) (1,047) Change in operating assets and liabilities (Increase) / Decrease in trade and other receivables 714 6,722 (Increase) / Decrease in other financial assets 22 57 (187) (Increase) / Decrease in other assets 23 (2,513) 3,726 Increase / (Decrease) in trade and other payables (3,789) (5,834) Increase / (Decrease) in other financial liabilities 27 (3,056) (4,986) Increase / (Decrease) in other liabilities 28 718 (4,782) Increase / (Decrease) in provisions 26 697 770 Cash generated from operations (8,960) (34,602) Net interest result 532 (997) Income taxes (paid) / received (1,687) (750) Net cash used in operating activities (10,115) (36,349) Proceeds from / (Payments for) financial assets at fair value through profit and loss 22 20,000 50,000 Payment for acquisition of subsidiaries, net of cash acquired 6 114 (46,199) Payments for property, plant and equipment 20 (250) (382) Proceeds from sale of property, plant and equipment (2) (25) Payments for purchased intangible assets 19 (425) (187) Payments for internally generated intangible assets 19 (6,576) (3,828) Net cash used in investing activities 12,861 (621) Repayments of borrowings 25 (4,260) (4,362) Payments in relation to Share buyback (279) — Principal elements of lease payments (1,103) (891) Net cash provided by financing activities (5,642) (5,253) Net increase (decrease) in cash and cash equivalents (2,896) (42,223) Cash and cash equivalents at the beginning of the period 112,050 152,995 Effects of exchange rate changes on cash and cash equivalents (202) 1,329 Cash and cash equivalents at the end of the period 108,953 112,050 The accompanying notes are an integral part of these consolidated financial statements. 158 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 HomeToGo SE, Luxembourg Notes to the Consolidated Financial Statements (Amounts in EUR thousands, except stated otherwise) 1 - Corporate information The HomeToGo Group (“HomeToGo” or “Group”), comprises the parent entity HomeToGo SE ("HomeToGo SE"), Luxembourg, Luxembourg (the “Company”), and its direct and indirect subsidiaries. The Company is registered in the commercial register of the Registre de commerce et des sociétés in Luxembourg under number B249273. The Company’s address is Rue de Bitbourg 9, 1273, Luxembourg, Luxembourg. The business activities of HomeToGo include the operation of an international marketplace for alternative accommodations that connects millions of users searching for a place to stay with thousands of inventory suppliers across the globe, resulting in the world’s most comprehensive inventory coverage in the alternative accommodation space. At the time of the report, HomeToGo’s portfolio comprised more than 15 million aggregated accommodation offers provided by over 60,000 online travel agencies, tour operators, property managers and other inventory suppliers (“Partners”) worldwide. HomeToGo operates its business through localized websites and apps in 25 countries. The marketplace seamlessly integrates a vast inventory in one simple search and enables users to book accommodations from diverse Partners, either on the Partner’s external accommodation websites or directly on the HomeToGo marketplace platform. The consolidated financial statements of HomeToGo were initially authorized for issue by the Management Board on March 25, 2024. 2 - Basis of preparation The accompanying consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and the interpretations issued by the International Financial Reporting Standards Interpretations Committee (“IFRIC”) as adopted by and to be applied in the European Union. The official version of the accounts is the ESEF version available at the Officially Appointed Mechanism (OAM) of Luxembourg under https://www.bourse.lu/issuer/HomeToGo/102802. HomeToGo’s financial year ends December 31. All intercompany transactions are eliminated during the preparation of the consolidated financial statements. The consolidated financial statements have been prepared on a historical cost basis, unless otherwise stated. The consolidated financial statements are presented in Euro (“EUR”), which is the functional currency of the Company and all subsidiaries of HomeToGo. All values are rounded to the nearest thousand, except when otherwise indicated. Due to rounding, differences may arise when individual amounts or percentages are added together. CONSOLIDATED FINANCIAL STATEMENTS 159 HomeToGo / Annual Report 2023 The consolidated financial statements are prepared under the assumption that the Group will continue as a going concern. Management believes that HomeToGo has adequate resources to continue operations for the foreseeable future. 3 - Scope of consolidation The consolidated financial statements include the balances and results of the Company and its wholly-owned subsidiaries. Subsidiaries are entities directly or indirectly controlled by the Company. The Company controls an entity when it is exposed to, or has the right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are consolidated from the date on which control commences until the date on which control ceases. Besides the Company, the following subsidiaries are included in the scope of consolidation as of December 31, 2023: SUBSIDIARY LOCATION PERCENTAGE OF OWNERSHIP HomeToGo GmbH Berlin, Germany 100% Casamundo GmbH Berlin, Germany 100% Smoobu GmbH Berlin, Germany 100% Atraveo GmbH Düsseldorf, Germany 100% e-domizil GmbH Frankfurt, Germany 100% SECRA Bookings GmbH Sierksdorf, Germany 100% Travel Center Fehmarn GmbH Fehmarn, Germany 100% SMN Verwaltungs-GmbH Berlin, Germany 100% Takeoff Travel GmbH Berlin, Germany 100% e-domizil AG Zurich, Switzerland 100% Feries S.r.l. Milan, Italy 100% Escapada Rural S.L. Barcelona, Spain 100% AMIVAC SAS Paris, France 100% Adrialin d.o.o. Rijeka, Croatia 100% UAB HomeToGo Technologies Kaunas, Lithuania 100% UAB HomeToGo Technologies Vilnius Vilnius, Lithuania 100% HomeToGo International, Inc. Wilmington, Delaware, USA 100% Effective from January 1, 2023, SECRA GmbH was merged onto SECRA Bookings GmbH and ceased to exist. No further major changes compared to the prior year have occurred to the scope of consolidation during the year ended December 31, 2023. In accordance with provisions of section 264 paragraph 3 of German Commercial Code (Handelsgesetzbuch), Casamundo GmbH, e-domizil GmbH, Atraveo GmbH, SECRA Bookings GmbH, Smoobu GmbH and SMN Verwaltungs GmbH are exempt from the requirement to prepare notes to the financial statements and a management report (where applicable) as well as to publish their financial statements and management reports (where applicable). Takeoff Travel GmbH was incorporated in December 2023 to perform the acquisitions of KMW Reisen GmbH and Super Urlaub GmbH, completed in January 2024, for further details refer to note 35 - Subsequent events after the reporting period. 160 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 4 - Summary of significant accounting policies a) Current versus non-current classification HomeToGo classifies assets and liabilities by maturity. They are classified as current in the consolidated statement of financial position if they mature or are otherwise settled or realized within one year. Deferred tax assets and liabilities are consistently presented as non-current in the consolidated statement of financial position. b) Foreign currency translation HomeToGo’s consolidated financial statements are presented in Euro, which is the functional and presentation currency of the Company and its subsidiaries. For each entity, the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency. Functional currency is defined as the currency of the primary economic environment in which each entity operates. Any transactions denominated in foreign currencies are translated at the exchange rates prevailing on the date of transaction. Balance sheet items denominated in foreign currencies are translated at the closing rate for each reporting period, with resulting translation differences recognized within the consolidated statement of profit or loss and comprehensive income. The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the reporting currency as follows: • assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet • income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and • all resulting exchange differences are recognized in other comprehensive income. On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings are recognized in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale. c) Profit or loss structure HomeToGo uses a cost of revenue structure to present its expenses by function. See Note 10 and the following paragraph for further explanations about the content in the different profit or loss line items. d) Revenue recognition HomeToGo applies IFRS 15 Revenue from Contracts with customers. The standard establishes principles for reporting information to users of financial statements, about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. Management applies the five-step model according to IFRS 15 when determining the timing and amount of revenue recognition. HomeToGo operates a marketplace for alternative accommodations that connects millions of travelers searching for a perfect place to stay with thousands of inventory suppliers across the globe. HomeToGo generates revenue through the following main revenue types: CONSOLIDATED FINANCIAL STATEMENTS 161 HomeToGo / Annual Report 2023 • Cost per Action (“CPA”): CPA is the largest revenue stream, whereby HomeToGo receives a percentage- based commission for successful onsite- or offsite booking referrals, which facilitate a stay. Depending on the contractual terms with the respective partner, the revenue for HomeToGo is either calculated as percentage of the commission or as percentage of the booking value (sometimes called revenue share). • Cost per Click (“CPC”) HomeToGo receives a fixed commission based on every successful referral click. • Cost per Lead (“CPL”): HomeToGo receives a fixed commission based on every successful referral inquiry (lead). • Subscriptions & Services are related to Software as a Service ("SaaS") and online advertising services from Partners who can use the platform for listing of their rental objects over a determined period, both regularly subscription-based revenue. CPA transactions are commission-based revenues where the Partner compensates HomeToGo for facilitating bookings that resulted in a stay of the traveler. HomeToGo is acting as an agent in either scenario as described above. The Company considers its Partners, in particular online travel agencies (“OTAs”), or the rental property owners and managers to be its customers. Only the CPA contracts and the specific bookings taken together would constitute a contract under IFRS 15. Typically, these bookings are cancellable at any time. The contracts with the OTA partners stipulate that HomeToGo only earns CPA for bookings that facilitate a stay. Furthermore, for the majority of contracts the payment claim of HomeToGo only comes into existence once the check-in of the traveler has occurred. HomeToGo also engages in a multitude of post-booking activities that facilitate the check-in (hence the stay of the traveler), e.g. customer support for the traveler. These activities are not distinct from each other and are not separate performance obligations. It is therefore management’s judgement to define the single performance obligation of the Group’s CPA transactions as ‘successful booking’ which facilitates a stay. Therefore, the revenues for CPA transactions are recognized at the same point in time as the check-in date of the traveler when HomeToGo’s performance obligation is satisfied. Payments received from Partners for bookings where check-in has not occurred yet are recognized as contract liabilities. For CPC or CPL transactions, HomeToGo receives a fixed commission based on every successful inquiry or referral click. As opposed to CPA transactions, each click or inquiry initiated by the traveler through the HomeToGo platform with referral to the partner website is considered a distinct promised service. HomeToGo has an enforceable payment claim based on the monthly click volume and is not subject to cancellation or similar risks. Therefore, the ‘simple referral’ through CPC meets the criteria of a performance obligation which is satisfied at a point in time i.e. with the click through the partner website. HomeToGo recognizes the revenue for CPC at the corresponding click date. In HomeToGo’s subscription contracts, property managers or owners mainly pay in advance for SaaS and online advertising services related to the listing of their properties for rent over a fixed period, which is usually one year. As the performance obligation is the SaaS or listing service and is provided to the property manager/ owner over time of use (SaaS) or the life of the listing period, the Subscriptions & Services IFRS Revenues are recognized on a straight-line basis over the time of use (SaaS) or listing period respectively. Amounts received as prepayment are recognized as contract liabilities. Variable consideration might occur in the form of performance-based bonuses with respect to revenue based on bonus agreements that can be agreed for CPL and CPA transactions. HomeToGo includes variable consideration estimated in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. 162 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 e) Intangible assets and goodwill Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any. The useful life of intangible assets is assessed as either finite or indefinite. Refer to Note 19 - Intangible assets and goodwill for further details regarding the carrying amount of HomeToGo’s intangible asset balances. Intangible assets with a finite useful life Intangible assets with a finite useful life consist of licenses, trademarks and domains, customer relationships, order backlog and internally generated software. In accordance with IAS 38, development costs that are directly attributable to the design, coding and testing of identifiable software modules controlled by the Group are recognized as intangible assets where the following criteria are met: 1) It is technically feasible to complete the software so that it will be available for use, 2) management intends to complete the software and use or sell it, 3) there is an ability to use or sell the software, 4) it can be demonstrated how the software will generate probable future economic benefits, 5) adequate technical, financial and other resources to complete the development and to use or sell the software are available, 6) and the expenditure attributable to the software during its development can be reliably measured. Directly attributable costs that are capitalized as part of the software include employee costs and other directly attributable costs. Software maintenance costs are recognized as an expense incurred. Intangible assets with a finite life are amortized over their estimated useful life on a straight-line basis and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method of intangible assets with a finite useful life are reviewed at least annually, with any changes treated as changes in accounting estimates. Changes in the expected useful life or the expected pattern of consumption of the assets’ future economic benefits are considered when assessing the amortization method and useful life of the asset. The estimated useful lives are as follows: ASSET TYPE ESTIMATED USEFUL LIFE Software and licenses 3 to 5 years Trademarks 3 to 15 years Customer relationship up to 10 years Order backlog 1 year Internally generated software 3 to 7 years Goodwill indefinite Intangible assets and goodwill HomeToGo’s goodwill originated from the acquisitions of subsidiaries and is included in intangible assets and goodwill. Goodwill represents the difference between the purchase price and the net identifiable assets acquired at fair value. Goodwill is not subject to amortization but tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Refer to accounting policy on business combination and goodwill in section p). f) Property, plant and equipment Property, plant and equipment is stated at historical cost, net of accumulated depreciation and accumulated impairment losses, if any. Historical cost includes any expenditures that are directly attributable to the acquisition of the asset, including costs incurred to prepare the asset for its intended use. CONSOLIDATED FINANCIAL STATEMENTS 163 HomeToGo / Annual Report 2023 Property, plant and equipment is depreciated on a straight-line basis over each asset’s expected useful life. Depreciation methods, useful lives and residual values are reviewed at least annually and adjusted prospectively, if appropriate. HomeToGo applies the following useful lives when estimating depreciation of property and equipment: ASSET TYPE ESTIMATED USEFUL LIFE Leasehold improvements 2 to 15 years Other equipment and office equipment 2 to 13 years Leasehold improvements are amortized over the shorter of the underlying lease or the expected useful life of the asset. All repair and maintenance costs are expensed when incurred. HomeToGo assesses property, plant and equipment for impairment whenever there is an indication of potential impairment. g) Leases The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at inception. The arrangement is, or contains, a lease if fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement. HomeToGo assesses at the inception of the contract whether the contract is or contains a lease. HomeToGo identified leases of real estate and company cars. Lease terms are negotiated on an individual basis and may contain a range of different terms and conditions. Lease contracts may be negotiated for fixed period or include extension options. To determine the lease terms, all facts and circumstances which offer economic incentives to exercise extension options are included. If it is reasonably certain that a lease term will be extended, the related extension option is included. The lease terms include fixed payments as well as variable payments that depend on an index or rate. Management of HomeToGo reviews the contractual and current market conditions individually when determining whether an extension option is reasonably certain to be exercised. The lease liability is measured at the date of commencement of the lease as the present value of the expected lease payments. To determine the present value, HomeToGo discounts the remaining lease payments with the incremental borrowing rate of the lessee. The incremental borrowing rate is the interest rate that HomeToGo would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset as the underlying lease agreement in a similar economic environment. Right-of-use assets are measured at cost at the date of commencement of the lease. The cost is comprised of the initial lease liability measurement and any lease payments made before the commencement date, less any lease incentives received and estimated cost of dismantling and removing the underlying asset incurred by the lessee. 164 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 Right-of-use assets are presented in the balance sheet as part of property, plant and equipment. The useful life of right-of-use assets with reference to real estate and car leasing amounts to up to 15 and 3 years. After the commencement date, HomeToGo measures right-of-use assets at cost less accumulated depreciation and any accumulated impairment losses. For subsequent measurement, the carrying amount of the lease liability is increased to reflect the interest on the lease liability and reduced to reflect the lease payments made. The finance expenses associated with the lease term are recognized in the consolidated statement of profit or loss and other comprehensive income over the lease term. No impairment losses have been identified on HomeToGo’s right-of-use assets in 2023 and 2022. HomeToGo elected to apply an exemption for low value leases and short-term leases in accordance with IFRS 16. Low value leases are leases with contract amounts below EUR 5 thousand. Short-term leases relate to lease agreements with a lease term of less than 12 months. Lease payments associated with low value leases and short-term leases are expensed on a straight-line basis over the lease term. Accordingly, no right-of-use assets or lease liabilities are recognized for low value and short-term leases. h) Impairment of non-financial assets HomeToGo assesses whether an asset may be impaired at each reporting date. If any indication of impairment exists, or when annual impairment testing for such an asset is required, HomeToGo estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash generating unit's (CGU) fair value less costs of disposal or its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. HomeToGo does not use the fair value less costs of disposal method when assessing the recoverable amount of its non-financial assets. HomeToGo bases its impairment calculation on detailed budgets and forecasted cash flows. Impairment losses are recognized in the consolidated statement of profit or loss and other comprehensive income in expense categories consistent with the function of the impaired asset. For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognized impairment losses no longer exist or has decreased. If such indication exists, HomeToGo estimates the asset’s or CGU’s recoverable amount. Financial instruments - Initial recognition and subsequent events A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets INITIAL RECOGNITION AND MEASUREMENT Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income (OCI), and fair value through profit or loss. CONSOLIDATED FINANCIAL STATEMENTS 165 HomeToGo / Annual Report 2023 The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and HomeToGo’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient, HomeToGo initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which HomeToGo has applied the practical expedient are measured at the transaction price. In order for a financial asset to be classified and measured at amortized cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI are classified and measured at fair value through profit or loss, irrespective of the business model. HomeToGo’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and measured at amortized cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows while financial assets classified and measured at fair value through OCI are held within a business model with the objective of both holding to collect contractual cash flows and selling. Subsequent measurement For purposes of subsequent measurement, financial assets are classified in four categories: • Financial assets at amortized cost (debt instruments) • Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments) • Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments) • Financial assets at fair value through profit or loss (equity instruments, money market funds) FINANCIAL ASSETS AT AMORTIZED COST (DEBT INSTRUMENTS) Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired. In the case of a financial asset not at fair value through profit or loss (FVTPL), financial assets are measured at amortized cost and include trade and other receivables and other financial assets. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (EQUITY INSTRUMENTS) The group subsequently measures all equity investments at fair value. Changes in the fair value of financial assets at FVTPL, in particular to investments in money market funds, are recognized in profit or loss in the period in which it arises. Derecognition A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized (i.e., removed from HomeToGo’s consolidated statement of financial position) when: • The rights to receive cash flows from the asset have expired • or • HomeToGo has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) HomeToGo has transferred substantially all the risks and rewards of the asset, or (b) HomeToGo 166 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. When HomeToGo has transferred its rights to receive cash flows from an asset or has entered into a pass- through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, HomeToGo continues to recognize the transferred asset to the extent of its continuing involvement. In that case, HomeToGo also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that HomeToGo has retained. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that HomeToGo could be required to repay. Impairment HomeToGo recognizes an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss, if the exposure is material, which is presented under General and administrative expenses. For trade receivables, HomeToGo applies a simplified approach in calculating ECLs. Therefore, HomeToGo does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date if the exposure is material. HomeToGo has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The Group considers a financial asset in default when contractual payments are 365 days past due. However, in certain cases, HomeToGo may also consider a financial asset to be in default when internal or external information indicates that HomeToGo is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by HomeToGo. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. HomeToGo holds trade receivables from contracts with partners as of December 31, 2023 of EUR 13.1 million, as of December 31, 2022 of EUR 13.5 million. These have been impaired by EUR 3.6 million, 2022: EUR 3.2 million. Financial liabilities INITIAL RECOGNITION AND MEASUREMENT Financial liabilities are classified, at initial recognition, either as financial liabilities at fair value through profit or loss or as financial liabilities at amortized cost. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and other payables, net of directly attributable transaction costs. HomeToGo’s financial liabilities include trade and other payables, as well as loans and borrowings including bank overdrafts as well as financial liabilities from warrants. Subsequent measurement For purposes of subsequent measurement, financial liabilities are classified in two categories: • Financial liabilities at fair value through profit or loss • Financial liabilities at amortized cost CONSOLIDATED FINANCIAL STATEMENTS 167 HomeToGo / Annual Report 2023 FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognized in the statement of profit or loss. The Group has classified the Class A Warrants and Class B Warrants as financial liabilities as at fair value through profit or loss. FINANCIAL LIABILITIES AT AMORTIZED COST This is the category in accounting for loans and borrowings, except for Class A and Class B Warrants described above. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the effective interest rate (EIR) method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit or loss. Derecognition A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss. Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously. Fair value measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date in the principal or, in its absence, the most advantageous market to which HomeToGo has access at that date. The fair value of a liability reflects its non- performance risk. HomeToGo measures the fair value of an instrument using the quoted price in an active market for that instrument, if such price is available. A market is regarded as ‘‘active’’ if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. If there is no quoted price in an active market, then HomeToGo uses valuation techniques that maximize the use of relevant observable inputs and minimize the use of unobservable inputs. The chosen valuation technique incorporates all factors that market participants would take into account in pricing a transaction. In determining the appropriate fair value measurement for financial assets and liabilities, the Group involves an independent external valuation expert, who uses appropriate valuation techniques. 168 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 Based on the input parameters used for measuring the fair values are assigned to one of the following levels of the fair value hierarchy for purposes of disclosure: • Level 1: Quoted (unadjusted) market prices in active markets for identical assets and liabilities, • Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices), and • Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). i) Treasury Shares Treasury shares of HomeToGo SE are recognized with their acquisition costs paid to repurchase its own shares. They result from the redemption process as part of the de-SPAC transaction on September 21, 2021 as well as from share buyback. All shares redeemed are Class A Shares. The acquisition costs for the own shares are deducted from equity. Management may use treasury shares to settle share-based payment obligations, service warrant exercises and as part of consideration in case of business combinations. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of the own shares. j) Provisions HomeToGo recognizes provisions when it has a present obligation, legal or constructive, as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the present value of management´s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The increase in provision due to the passage of time and unwinding of the discount rate is recognized as finance expenses. k)Income taxes Current income taxes Current income tax is the expected tax payable or receivable based on the taxable income or loss for the period and the tax laws that have been enacted or substantively enacted as of the reporting date. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate based on amounts expected to be paid to the tax authorities. In case of uncertainties related to income taxes, they are accounted for in accordance with IFRIC 23 and IAS 12 based on the best estimate of those uncertainties. HomeToGo establishes tax liabilities based on expected tax payments. Liabilities for trade taxes, corporate taxes and similar taxes on income are determined based on the taxable income of the consolidated entities less any prepayments made. Calculation of tax liabilities is based on the recent tax rates applicable in the tax jurisdiction of HomeToGo. Deferred taxes Deferred taxes are recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable income and are accounted for using the balance sheet-liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable income will be available against which deductible temporary differences can be utilized. However, deferred tax liabilities are not recognized if the temporary difference arises from goodwill. Furthermore, deferred tax assets and deferred tax liabilities are not recognized if the temporary difference CONSOLIDATED FINANCIAL STATEMENTS 169 HomeToGo / Annual Report 2023 arises from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither taxable income, nor the accounting profit, unless the transactions give rise to equal taxable and deductible temporary differences such as right-of-use assets and lease liabilities. Current and deferred tax is charged or credited in the consolidated statement of profit or loss and other comprehensive income, except when it relates to items charged or credited directly to equity, in which case the current or deferred tax is also recognized directly in equity. Deferred tax assets and liabilities are calculated using tax rates expected to be in place in the period of realization of the associated asset or liability, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period in the respective jurisdiction. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the asset to be recovered. I) Earnings (Loss) per share HomeToGo presents earnings (loss) per share data for its ordinary shares. Basic earnings (loss) per share is calculated by dividing the net income of the period attributable to the owners of the Company by the weighted average number of ordinary shares outstanding during the period. HomeToGo only issued ordinary shares according to IAS 33, all of which are outstanding, because all share classes are subject to the same dividend entitlement with regard to the earnings for the period. The potential ordinary shares were not taken into account, because the effect on loss per share would have been antidilutive. The weighted average number of shares is calculated from the number of shares in circulation at the beginning of the period adjusted by the number of shares issued during the period and multiplied by a time-weighting factor. The time-weighting factor reflects the ratio of the number of days on which shares were issued and the total number of days of the period. m) Segment reporting An operating segment is a component of HomeToGo that engages in business activities from which it may earn Revenues and incur expenses and for which discrete financial information is available and used by the Chief Operating Decision Maker (“CODM”) to make decisions around resource allocation and review operating results of HomeToGo. HomeToGo identified the Management Board of the Company as the CODM and operates under one operating segment. n) Share-based compensation and other employee benefits The Group granted remuneration in the form of share-based payments, whereby management and employees render services as consideration for equity instruments of the Group (equity-settled transactions). The measurement of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model in accordance with IFRS 2. Costs are recognized within profit or loss together with a corresponding increase in equity (share-based payment reserves), over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period). The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period. Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of HomeToGo’s best 170 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions. No expense is recognized for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied. When the terms of an equity-settled award are modified, the minimum expense recognized is the grant date fair value of the unmodified award, provided the original vesting terms of the award are met. An additional expense, measured as at the date of modification, is recognized for any modification that increases the total fair value of the share- based payment transaction, or is otherwise beneficial to the employee. Where an award is cancelled by the entity or by the counterparty, any remaining element of the grant date fair value of the award is credited immediately through profit or loss. The Group sometimes engages in share-based payment transactions to acquire goods or services from parties other than employees, e.g. as part of business combinations. The goods or services received in exchange for shares should be measured at the fair value of those goods or services. It is presumed that the fair value of goods or services can be measured reliably in the case of transactions with parties other than employees. If this presumption is rebutted, the fair value is measured indirectly by reference to the fair value of the equity instruments granted as consideration. Employee services or unidentifiable goods or services are measured indirectly at the date on which the equity instruments are granted. The fair value is not subsequently re- measured after the grant date. Employee Benefits The Group also has liabilities for long service leave and annual leave that are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. These obligations are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period, using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the end of the reporting period of high-quality corporate bonds with terms and currencies that match, as closely as possible, the estimated future cash outflows. The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least 12 months after the reporting period, regardless of when the actual settlement is expected to occur. Termination benefits are payable when employment is terminated by the group before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The group recognizes termination benefits at the earlier of the following dates: (a) when the group can no longer withdraw the offer of those benefits; and (b) when the entity recognizes costs for a restructuring that is within the scope of IAS 37 and involves the payment of terminations benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value. The Group has long-term incentive plans for two managing directors as a result of a business combination. The managing directors will be entitled to a payment of up to EUR 2.0 million each after fulfilling a service period of CONSOLIDATED FINANCIAL STATEMENTS 171 HomeToGo / Annual Report 2023 30 months after acquisition and meeting related sales-based performance goals. The liability is presented under long-term financial liabilities and subjected to linear vesting over the service period. If one of the managing directors is leaving before the end of the service period the respective claim is forfeited while the other managing directors claim is not. o) Government grants Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognized as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. The Group has chosen to present grants related to an expense item as other operating income in the statement of profit or loss and other comprehensive income. p) Business combinations and goodwill Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date fair value. Acquisition- related costs are expensed as incurred and included in General and administrative expenses. The Group determines if a transaction is to be accounted for as a business combination, using the concentration test and by determining that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create outputs. The acquired process is considered substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organized workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs. Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of IFRS 9 Financial Instruments, is measured at fair value with the changes in fair value recognized in the statement of profit or loss in accordance with IFRS 9. Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group reassesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognized in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to the group of CGUs. The allocation is made to those groups of CGUs that are expected to benefit from the business combination in which the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for internal management purposes, being the one operating segment. HomeToGo Group operates under one segment that comprises seven CGUs. Besides the CGU HomeToGo that comprises the operating entities HomeToGo and Casamundo the Management Board identifies the acquired businesses Feries, Escapada Rural, Smoobu, AMIVAC, e-domizil and SECRA as separate CGUs for the purpose of testing assets, other than goodwill, for impairment. Goodwill is tested for impairment on the basis of the seven combined CGUs as the synergies from the business combinations are benefiting the business of the 172 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 whole Group. The Group level is the lowest at which the Management Board captures information for internal management reporting purposes about the benefits of goodwill. Impairment losses relating to goodwill cannot be reversed in future periods. 5 - New and revised standards New and revised standards issued, but not yet effective At the date of authorization of these financial statements, the amendments to accounting standards listed in the table below have been published that are not mandatory for reporting periods ending on December 31, 2023 and have not been early adopted by the Group. These amendments are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions. NEW OR REVISED STANDARDS – ENDORSEMENT COMPLETED EFFECTIVE DATE IAS 1 (A) Presentation of Financial Statements: Classification of Liabilities as Current or Non-current January 1, 2024 IAS 1 (A) Presentation of Financial Statements: Non-current Liabilities with Covenants January 1, 2024 IFRS 16 (A) Leases: Lease Liability in a Sale and Leaseback January 1, 2024 IFRS 7 and IAS 7 (A): Supplier Finance Arrangements January 1, 2024 (A) Amendment New disclosure requirements and changes in accounting policies There were no material changes to the financial reporting requirements this year that affected the disclosures in our financial statements. Amendments to IAS 12 Income Tax narrow the scope of the initial recognition exception, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as and right-of-use assets and lease liabilities. The amendments had no material impact on the Group’s consolidated financial statements. While the International Accounting Standards Board (IASB) has made a few amendments to accounting standards that apply from 1 January 2023, these are largely clarifications and none of them required a material change in the Group's accounting policies. 6 - Business Combinations Acquisition of e-domizil With signing on March 31, 2022, HomeToGo GmbH and e-vacation Group Holding GmbH (the former shareholder) entered into a sale and purchase agreement (‘SPA’) for 100% of the shares in e-domizil GmbH (‘e- domizil’) located in Frankfurt am Main, Germany. The total preliminary consideration was composed of a preliminary cash consideration in the amount of EUR 42.8 million and shares of HomeToGo SE equivalent to the amount of EUR 1.9 million. As of December 31, 2022 the cash purchase price determination had not been finalized. As a result of the cash purchase price determination finalized in 2023 the total consideration increased to EUR 50.1 million. (in EUR thousands) Preliminary fair value Purchase price adjustment Fair value Cash consideration 42,814 5,383 48,197 Cash and cash equivalents acquired 13,311 13,311 Net cash to be paid for e-domizil 29,503 34,886 CONSOLIDATED FINANCIAL STATEMENTS 173 HomeToGo / Annual Report 2023 The payment of the purchase price adjustment to the seller in the amount of EUR 5.4 million is outstanding as of December 31, 2023. The goodwill resulting of the business combination increased retrospectively by the same amount of the purchase price adjustment given no change in the underlying fair value of assets and liabilities acquired. (in EUR thousands) As previously reported Adjustment As adjusted Intangible assets and goodwill 138,404 5,383 143,787 Other financial liabilities (current) 10,057 5,383 15,440 7 - Critical accounting judgments, key estimates and assumptions The preparation of HomeToGo’s consolidated financial statements in accordance with IFRS requires Management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying notes disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. Estimates and underlying assumptions are subject to continuous review. Below is a summary of the critical measurement and accounting judgements, including disclosure of the key assumptions used by Management in applying accounting policies based on future developments, and which could have significant effects on carrying amounts stated in the consolidated financial statements, or for which there is a risk that significant adjustments may need to be made to the carrying amount of assets and liabilities in subsequent years. a) Critical accounting judgements Internally generated intangible assets For individual software modules, the Management Board sometimes applies judgement to determine the point in time where research can be separated from development activities. In connection with management judgement about the future economic benefit of software modules, the Group uses assumptions regarding the future performance of the software modules concerned and their implications on the Group's business activities to distinguish between substantial enhancements and maintenance/bug fixing. While development expenses for substantial enhancements are capitalized, efforts for maintenance/bug fixing are operating expenses. In 2023 HomeToGo capitalized EUR 6.6 million (2022: 3.8 million) as internally generated software. Government Grants In 2020, HomeToGo received governments grants recognized as income for investment in new employments. The granting of subsidies is subject to the condition that investments are made in permanent jobs and that the payroll exceeds a certain amount in the grant period. The management of HomeToGo assumed that the conditions of reaching a certain level of personnel-related expenses are and will be met with reasonable assurance. Therefore, HomeToGo initially recognized the full receivable amounting to EUR 1.9 million under the grant in 2020 which was reassessed during the reporting period leading to a reduction of EUR 0.4 million of the grant amount due to a reduction in personnel-related expenses subject to the subsidy. EUR 0.5 million have already been received in 2021 and further EUR 0.5 million were received in January 2023. Until December 31, 2023 EUR 1.5 million were accrued as other income out of which EUR 0.2 million relate to the year 2023. 174 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 b) Key estimates and assumptions Incremental borrowing rate The incremental borrowing rate for lease accounting is determined based on interest rates from various external financial data adjusted to reflect the terms of the lease and the nature of the leased asset. For additional information with respect to extension options refer to Note 4. Impairment of goodwill and trademarks At least annually, or when circumstances indicate a potential impairment event may have occurred, HomeToGo assesses whether goodwill acquired in business combinations are impaired. The CGUs which resulted from the business combinations were tested for impairment as part of the annual goodwill impairment test. Key assumptions used in HomeToGo’s impairment assessments of these assets include forecasted cash flows of the business, estimated discount rate, and future growth rates. Management uses internal and external data to develop these key assumptions. This includes consideration of any impact of inflationary pressure including rising interest rates with negative impact on consumers discretionary income, fears in regard to a broader war in Europe and of any impact of the ongoing discussion about climate change. Refer to Note 19 - Intangible assets and goodwill. Litigation HomeToGo Group has set up provisions for litigations that could not be settled by the date the consolidated financial statements of HomeToGo were authorized for issue. The provisions are measured with the best estimate of the amount to be paid. Due to the inherent uncertainty of a litigation the possible financial risk might even be higher than the estimated amount. Refer to Note 26 - Provisions (current and non-current). Fair value determination for share-based payment arrangements and derivative financial liabilities The Group operates equity-settled share-based compensation plans, pursuant to which certain participants are granted virtual shares or stock options of the Company. Prior to the de-SPAC transaction, due to the lack of quoted market prices prior, the Group determined the grant date fair value for the measurement of the equity- settled transactions at the grant date with a valuation model, considering certain assumptions relating to the volatility of stock price, the determination of an appropriate risk-free interest rate and expected dividends. The share price input is based on the company's valuation. See Note 30 - Share-based payments for details on the plan. In past settlements the beneficiaries' claim was settled partially in equity and cash to fulfill the tax withholding obligations of the Company and transfer the tax payable to the tax authority. In the process an excess amount between the general tax rate applied and the actual personal tax rate was transferred directly to the beneficiary. For future settlements the expected amounts in excess of the employee's tax obligation associated with the share-based payment are accounted for as a cash-settled share-based payment plan. The resulting liability is remeasured at each reporting date. 8 - Segment and geographic information In line with the management approach, the operating segment was identified on the basis of HomeToGo’s internal reporting and how the CODM assesses the performance of the business. On this basis, HomeToGo identifies as a single operating and therefore the consolidated financial information represents the segment reporting. In the reporting period two single customers accounted for more than 10% of HomeToGo’s Revenues: CONSOLIDATED FINANCIAL STATEMENTS 175 HomeToGo / Annual Report 2023 YEAR ENDED DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Customer 1 34,387 25,838 Customer 2 20,436 28,053 54,823 53,891 IFRS Revenues from customers can be attributed to the entity's country of domicile in the amount of EUR 83.5 million, 2022: EUR 78.0 million, the United States of America in an amount of EUR 29.9 million, 2022: EUR 19.2 million and to the rest of world in total EUR 48.6 million, 2022: EUR 64.8 million. Due to the reverse acquisition of HomeToGo SE (formerly Lakestar SPAC) by HomeToGo GmbH in 2021, Germany is still treated as the entity's country of domicile, because the Group's main operations sit here. Non-current assets located in the entity's country of domicile amounting to EUR 119.9 million (2022: EUR 119.9 million) and in all foreign countries amounting to EUR 39.9 million (2022: EUR 39.9 million). 176 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 9 - Revenues HomeToGo recognizes its Revenues as follows: YEAR ENDED DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 IFRS Revenues recognized at a point in time CPA 105,047 92,593 thereof CPA Onsite 67,845 66,877 CPA Offsite 37,202 25,716 CPC and CPL 21,902 30,587 IFRS Revenues recognized over time Subscriptions & Services 35,084 23,660 162,033 146,839 CPA Onsite reflect IFRS Revenues from bookings made directly on HomeToGo platforms while CPA Offsite IFRS Revenues are generated on Partner's platforms. For CPA and CPC IFRS Revenues, typically the payment occurs shortly after the performance obligation is satisfied. However, some partners also pay in advance leading to deferred revenues which are presented under contract liabilities. Subscription & Services IFRS Revenues are generally collected before the performance obligation is satisfied over time leading to a high balance of contract liabilities, which is subsequently released over the performance period. IFRS Revenues recognized in the financial years 2023 and 2022 from contract liabilities were EUR 11.8 million and EUR 11.9 million respectively. No information is provided about remaining performance obligations as of December 31, 2023 and December 31, 2022 since all performance obligations are originally expected to be satisfied within one year or less, as allowed by IFRS 15.121. Refer to Note 28 - Other liabilities (current and non- current) for further information on contract liabilities. CONSOLIDATED FINANCIAL STATEMENTS 177 HomeToGo / Annual Report 2023 10 - Cost of revenues YEAR ENDED DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Depreciation and amortization 4,847 6,975 Hosting and domains 3,181 4,363 Other 1,077 863 9,105 12,202 Hosting and domain services comprise the expenses for server hosting services and the expenses for domain subscriptions. Depreciation and amortization also contains the amortization of the internally generated intangible assets. The decrease in depreciation and amortization goes back to the end of the amortization of an order backlog acquired as part of the business combination with the subsidiary e-domizil in April 2022 - the order backlog was amortized over a period of one year following the acquisition and contributed EUR 1.6 million of amortization expense during the reporting period and EUR 4.8 million during the prior year. 11 - Product development and operations YEAR ENDED DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Personnel-related expenses 15,758 15,854 Software expenses 6,542 4,651 Share-based compensation 5,342 4,951 License expenses 3,720 2,024 Depreciation and amortization 1,008 526 Other 3,175 671 35,546 28,678 Personnel-related expenses for product development and operations comprise expenses for the workforce for development and maintenance of the platform and system infrastructure as well as customer service. Personnel expenses decreased due to higher capitalized personnel expenses for software development. License expenses increased following investments within the Group's IT infrastructure. Other includes overhead costs directly attributable to the product development and operations function and increased during the reporting period due to the increase in scope of consolidation as well as an increase in external services related to product development and operations. 178 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 12 - Marketing and sales YEAR ENDED DECEMBER 31, (in EUR thousands) 2023 2022 Performance marketing 95,625 108,404 Personnel-related expenses 8,936 10,080 Depreciation and amortization 5,549 4,902 Share-based compensation 544 1,671 Other 2,738 1,227 113,392 126,284 Performance and inbound marketing comprises paid marketing services, search engine marketing (“SEM”), content marketing and other forms of inbound marketing as well as on- and off-site search engine optimization. Marketing activities are scaled to bringing demand in Group's booking platforms and converting website visitors to users who make bookings. Performance and inbound marketing expenses as well as personnel-related expenses decreased during the reporting period due to improvements in the Group's marketing efficiency. This increase in efficiency was driven by a higher share of repeat customers. Other increased due to the increased scope of consolidation leading to higher overhead costs attributable to the marketing and sales function as well as higher channel manager expenses during the reporting period compared to the prior year. 13 - General and administrative YEAR ENDED DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Personnel-related expenses 14,053 12,935 Share-based compensation 10,553 19,030 Consulting expenses 3,730 7,346 Expenses for third-party services 2,519 3,131 Expected credit loss and write-offs 1,491 1,499 Depreciation and amortization 608 571 License expenses 585 753 Other 2,804 2,586 36,344 47,851 The decrease within share-based compensation is due to the lower vesting expense for the grants for the Management Board in 2022 that are measured following a graded vesting approach. Refer to 30 - Share-based payments for further explanations. Consulting expenses decreased compared to prior year due to the end of an external service contract for a subsidiary that has no own staff. Since the end of 2022 those services are in-housed and provided by employees of HomeToGo Group. Besides, the prior year amount comprised the expense for the recording of a provision for litigation amounting to EUR 1.3 million. The increase in other is explained by restructuring costs as well as higher overhead costs due to the increased scope of consolidation. CONSOLIDATED FINANCIAL STATEMENTS 179 HomeToGo / Annual Report 2023 14 - Other income and expenses Other income and expenses includes other operating income and expenses, among them income from the release of provision in the amount of EUR 0.4 million (2022: EUR 0.8 million), income from a government grant in the amount of EUR 0.2 million (2022: EUR 0.1 million) and a loss from the disposal of property plant and equipment in the amount of EUR 0.2 million (2022: EUR 0.0 million). Other income in prior year comprised a gain of EUR 1.6 million in the prior period went back to the depreciation of the EUR against the USD that led to a positive conversion effect from the Group's USD account balances in the comparative period while in the reporting period the EUR depreciated against the USD constituting to a marginal loss of EUR 0 million. 15 - Financial result, net YEAR ENDED DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Finance income Interest income 1,041 5 Other 232 4 Income from remeasurement to fair value 2,793 8,813 Finance expenses Interest expenses 234 521 Expenses from remeasurement to fair value — 757 Interest expenses on leases 514 517 Other 51 98 Financial result, net 3,267 6,928 The decrease in income from remeasurement to fair value in the amount of EUR 2.8 million in 2023 (2022: income of EUR 8.8 million) relates on the one hand to a decrease resulting from the effects of the revaluation of warrants in both periods that are measured at fair value through profit or loss. In prior year the revaluation led to a significantly lower fair value of the warrants that resulted in an income of EUR 8.8 million. In 2023 the revaluation led to a further decrease in the fair value of the warrants, but the decrease was not as strong as in prior year only leading to an income of EUR 1.0 million. On the other hand, income from remeasurement to fair value include the revaluation of a money market fund in the amount of EUR 1.8 million (2022: expense from remeasurement to fair value in the amount of EUR 0.5 million). Interest expenses pertain to leases recognized under IFRS 16 as well as interests on bank loans whereas interest income is related to interest earned from treasury management during the reporting period. 16 - Income taxes HomeToGo SE is subject to taxation under the laws of Luxembourg. In 2023, the overall tax rate is 24.94% (2022: 24.94%), consisting of corporate tax rate of 17%, a 7% solidarity surcharge on the corporate tax rate and a municipal business tax rate of 6.75%. 180 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 YEAR ENDED DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Current tax (1,375) (2,567) Deferred tax 1,169 7,806 Income tax -206 5,239 Current taxes in 2023 comprise an amount of EUR 0.4 million related to prior year income taxes (2022: EUR 0.2 million). The following table shows the reconciliation between the expected and the reported income tax expense: YEAR ENDED DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Loss before tax (28,075) (58,738) Tax at the expected group tax rate (24.94%, 2022: 24,94%) 7,002 14,649 Tax effects of: Deviations from group tax rate 24.94% (2022: 24,94%) 1,936 4,198 Tax effect due to changes of tax rate (214) 326 Taxes relating to other periods 704 (240) Share-based compensation programs (3,037) (6,657) Permanent differences (994) (321) Non-deductible expenses (159) (63) Non-recognition of DTA on current year tax losses (5,265) (8,560) Non-recognition of DTA on temporary differences — 2,056 IRE Leasing and dismantling obligation — (28) Other tax effects (179) (122) Total income tax expense (206) 5,239 Effective total income tax rate (%) 0.73% (8.92)% 17 - Earnings (loss) per share Basic earnings per share: YEAR ENDED DECEMBER 31, 2023 2022 Net income (loss) for the period (in EUR thousands) (28,281) (53,499) Weighted average number of ordinary shares issued 114,761,982 113,367,886 Total basic and diluted earnings per share attributable to the ordinary equity holders of the Company (in EUR) (0.25) (0.47) For details on the composition of equity refer to note 24 - Shareholder’s equity. For the calculation of diluted earnings per share, the share-based payment programs were considered. In accordance with IAS 33.58, settlement in ordinary shares was assumed for contracts where the Company has the option to settle in cash or in ordinary shares. These potential ordinary shares were not taken into account, because the effect on loss per share would have been antidilutive. meaning the loss per share would become CONSOLIDATED FINANCIAL STATEMENTS 181 HomeToGo / Annual Report 2023 smaller when considering the potential ordinary shares. As a result, basic earnings per share corresponds to diluted earnings per share. Number of potential ordinary shares: AS OF DECEMBER 31, 2023 2022 Share-based payment programs 6,181,667 5,648,672 182 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 18 - Personnel expenses The average number of employees is presented below: YEAR ENDED DECEMBER 31, (NUMBER OF EMPLOYEES) 2023 2022 female 316 256 male 346 325 Total 662 581 Employee benefits expense are composed of the items as shown in the following table: YEAR ENDED DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Wages and salaries 30,490 23,220 Social security expenses 6,194 7,015 thereof: Retirement benefit costs 32 38 The increase in personnel expenses as well as the number of employees goes back to the increase in the scope of consolidation with subsidiaries being acquired during the second quarter of the year 2022 now being consolidated for a full financial year in 2023. 19 - Intangible assets and goodwill (IN EUR THOUSANDS) GOODWILL TRADE- MARKS AND DOMAINS SOFTWARE AND LICENSES INTERNALLY GENERATED SOFTWARE CUSTOMER RELATION- SHIPS ORDER BACKLOG INTANGIBLE ASSETS Cost As of January 1, 2022 40,318 8,882 3,024 5,845 12,433 1,249 71,752 Additions — 1 187 — — — 188 Additions from business combinations 48,764 8,423 3,731 — 22,728 6,345 89,990 Additions from internal development — — — 3,828 — — 3,828 Disposals — (184) (27) — — — (211) Reclassifications — (361) (414) 571 (163) — (367) As of December 31, 2022 89,082 16,761 6,502 10,244 34,998 7,594 165,181 Accumulated amortization and impairment As of January 1, 2022 — 2,503 302 3,173 3,164 1,249 10,391 Amortization charge of the year — 1,321 1,111 1,139 3,040 4,759 11,370 Disposals — — (1) — — — (1) Reclassifications — (545) 559 (218) (163) — (367) As of December 31, 2022 — 3,279 1,971 4,095 6,040 6,008 21,393 CONSOLIDATED FINANCIAL STATEMENTS 183 HomeToGo / Annual Report 2023 Carrying amount As of January 1, 2022 40,318 6,379 2,722 2,672 9,270 — 61,361 As of December 31, 2022 89,082 13,482 4,530 6,150 28,958 1,586 143,788 Cost As of January 1, 2023 89,082 16,762 6,502 10,244 34,998 7,594 165,182 Additions — 547 — — — — 547 Additions from internal development — — — 6,588 — — 6,588 Additions from business combinations 110 — 1 — — — 111 Disposals — — (209) — — — (209) Reclassifications and Currency Translation — 1 — — 7 — 10 As of December 31, 2023 89,194 17,310 6,293 16,833 35,005 7,594 172,229 Accumulated amortization and impairment As of January 1, 2023 — 3,279 1,971 4,095 6,040 6,008 21,393 Amortization charge of the year — 1,480 1,462 2,120 3,640 1,586 10,287 Disposals — 45 221 — — — 266 Reclassifications and Currency Translation — — — — 1 — — As of December 31, 2023 — 4,804 3,654 6,214 9,680 7,594 31,946 Carrying amount As of January 1, 2023 89,082 16,762 6,502 10,244 34,998 7,594 165,182 As of December 31, 2023 89,194 12,506 2,639 10,618 25,325 — 140,283 ) Refer to note 6 - Business Combinations for the resulting effects from the completion of PPA for the acquisition of e-Domizil GmbH. Amortization in relation to trademarks and domains and customer relationships are presented within marketing sales expenses, while order backlog and internally generated software amortization is presented within cost of revenues. 184 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 Material intangible assets comprise of the following: (IN EUR THOUSANDS) 2023 2022 REMAINING USEFUL LIFE AS OF DEC 31, 2023 Trademarks 10,111 13,481 e-domizil GmbH 3,518 3,783 8 years SECRA Bookings GmbH 2,408 2,694 8 years Casamundo GmbH 1,927 2,135 5 years Smoobu GmbH 1,325 1,510 7 years Feries Srl 933 1,076 5 years Customer relationships 23,674 28,958 e-domizil GmbH 13,831 15,507 8 years SECRA Bookings GmbH 3,835 4,291 8 years Escapada Rural S.L. 2,433 2,725 6 years Feries Srl 1,906 2,196 5 years Smoobu GmbH 1,669 1,901 7 years The intangible assets were identified as part of the business combination in the corresponding period. Goodwill impairment test The recoverable amount of the group of CGUs is determined based on the value in use. The key assumptions for determining the value in use are those regarding the cash flows, discount rates and growth rates. The values assigned to the key assumptions represent management’s assessment of future trends in the relevant industry and have been based on historical data from both external and internal sources. The future cash flows were estimated with the underlying assumption that vacation rentals is a fast growing market and has a sustainable positive trend in the upcoming years resulting from the shift of typical hotel accommodations. Vacation rentals offer a high flexibility by nature, safety of vacation rental, the often convenient and short distances to domestic locations, the offering of maximum independence and seclusion, as well as a wide range of amenities that help travelers control their budget. Further expansion of trends such as "workations" are expected as consumers are adding additional days before or after their vacations and just work from away. Thus, travelers are staying in a holiday area for three weeks instead of two weeks. These effects, are further accelerated by the diversification of the current business. HomeToGo plans to grow its offered services for the supply side and hosts as well, which are an additional lever for growing the traveler's marketplace. Combined with the Group’s growth ambitions and improvements of profitability the underlying assumptions are driving an optimistic business plan and therefore higher IFRS Revenues and Adjusted EBITDA. Moreover, the increasing awareness in respect of the ecological impact of air travel contributes to the general trend to prefer domestic or nearby vacation destinations. With its innovative platforms and an increasing number of users and website visitors, the Management Board believes that HomeToGo is well placed with its offerings to meet that expected change in travelling behavior and therefore expects that it will be able to achieve its growth ambition. On that basis, the Group expects significant double-digit growth over the next years. Hence, significant progress is already expected for 2024. The cash flow projections are based on a detailed business plan for 5 years. Due to the high growth stage of HomeToGo, the business plan was prolonged by a transition period of two years to reflect a smoother declining growth of the Group until the terminal value. Management estimates discount rates as a pre-tax measure derived from the historical industry average weighted-average cost of capital. The WACC takes into account cost of equity and cost of debt, weighted according to the portion of debt and equity in the Group's target capital structure. The cost of equity and cost of debt are derived from the expected return an investor would require for an equity investment or debt CONSOLIDATED FINANCIAL STATEMENTS 185 HomeToGo / Annual Report 2023 investment with similar risk. Segment-specific risks of the travel market are incorporated by applying a beta factor. The beta factor is evaluated annually based on publicly available market data of comparable companies. Adjustments to the discount rate are made to reflect a pre-tax discount rate. The additional basis was a market risk premium and the risk-free interest rate. The growth rates are based on industry growth forecasts. Management has considered the lower end of commonly applied growth rates to be appropriate as the planned growth for the coming years is expected to exceed industry growth but will level out the long-term. FINANCIAL YEAR 2023 2022 Discount rate (pre-tax) 18.7% 18.4% Growth rate 1.0% 1.0% During the periods presented, no impairment was recognized. No major change in a key assumption considered possible by management would cause the carrying amount to exceed the recoverable amount. Even if the free cash flows decreased by 50 % or the terminal growth rate was 0%, this would not result in any impairment. 186 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 20 - Property, plant and equipment (IN EUR THOUSANDS) RIGHT-OF- USE REAL ESTATE RIGHT-OF- USE ASSET CAR LEASING LEASEHOLD IMPROVE- MENTS OTHER EQUIPMENT, FACTORY AND OFFICE EQUIPMENT TOTAL PROPERTY, PLANT AND EQUIPMENT Cost As of January 1, 2022 16,499 45 2,158 960 19,662 Additions 537 — 35 354 926 Additions from business combinations 470 — — 32 503 Disposals — — — (110) (110) As of December 31, 2022 17,506 45 2,193 1,237 20,982 Accumulated depreciation and impairment As of January 1, 2022 3,525 24 370 547 4,466 Depreciation charge of the year 1,232 12 135 225 1,605 Disposals — — — (109) (109) As of December 31, 2022 4,757 36 505 664 5,962 Carrying amount As of January 1, 2022 12,974 22 1,788 412 15,197 As of December 31, 2022 12,749 10 1,687 573 15,022 Cost As of January 1, 2023 17,506 45 2,193 1,237 20,981 Additions — 74 1,548 1,159 2,781 Additions from business combinations 141 — — — 142 Disposals (141) — (1,244) (95) (236) As of December 31, 2023 17,506 119 2,496 1,298 21,420 Accumulated depreciation and impairment As of January 1, 2023 4,757 36 505 664 5,962 Depreciation charge of the year 1,376 19 36 360 1,791 Disposals (16) — — (1) (17) As of December 31, 2023 6,116 54 541 931 7,644 Carrying amount As of January 1, 2023 17,506 45 2,193 1,237 20,981 As of December 31, 2023 11,390 65 1,955 367 13,776 Leasing activity during the reporting periods presented is comprised of office buildings and cars. The most significant contract, which commenced in 2020, is the office building in Berlin, also resulting in significant dismantling obligations. Expenses related to low value leases and short-term leases amounted to EUR 11 thousand in the financial year 2023 (2022: EUR 15 thousand) and to EUR 29 thousand in the financial year 2023 (2022: EUR 100 thousand), respectively. CONSOLIDATED FINANCIAL STATEMENTS 187 HomeToGo / Annual Report 2023 The total cash outflow for leases amounted to EUR 1,103 thousand in 2023 (2022: EUR 1,507 thousand). It includes the payment of the principal amounts, interest and short-term and low value leases. Extension options are assumed to be reasonably certain to be exercised for all leases and are therefore considered within the calculation of the right-of-use assets and lease liabilities. Lease liabilities are included in Other liabilities. See Note 27 - Other financial liabilities (current and non-current). For the interest expense related to leases refer to Note 15 - Financial result, net. 21 - Trade and other receivables (current and non-current) Current trade and other receivables are composed of the following carrying amounts at year-end: DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Trade receivables 13,069 13,544 Other receivables 446 921 13,515 14,464 The loss allowances for trade receivables reconcile to the opening loss allowances as follows: DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Opening loss allowance as of January 01, 2023 3,166 1,806 Increase in loss allowance recognized in profit or loss during the year 1,491 1,950 Receivables written off during the year as uncollectible (1,068) (590) Closing loss allowance as of December 31, 2023 3,589 3,166 The aging of trade receivables is as follows: (IN EUR THOUSANDS) December 31, 2023 Days overdue Carrying amount in EUR Loss Allowance Net Amount issued but not overdue 9,789 96 9,693 up to 30 498 60 438 31 to 60 830 98 731 61 to 90 664 79 585 < 90 days 4,878 3,256 1,621 Total 16,658 3,589 13,069 (IN EUR THOUSANDS) December 31, 2022 Days overdue Carrying amount in EUR Loss Allowance Net Amount issued but not overdue 9,858 152 9,707 up to 30 835 17 819 31 to 60 668 15 653 61 to 90 1,170 28 1,142 < 90 days 4,177 2,954 1,223 Total 16,709 3,166 13,544 188 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 22 - Other financial assets (current and non-current) Other current financial assets consist of: DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Money market fund 31,323 49,507 Deposits 2,191 2,270 Other financial assets 52 — 33,567 51,777 The current portion of other financial assets contains an investment into a short-term money market fund accounted for at fair value through profit and loss. During the reporting period, a portion of the money market fund in the amount of EUR 20.0 million was redeemed. Other non-current financial assets consist of: DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Deposits 5,467 5,504 5,467 5,504 23 - Other assets (current and non-current) Other current assets consist of: DECEMBER 31, ( IN EUR THOUSANDS) 2023 2022 Prepaid expenses 3,907 3,659 Other tax receivables 804 774 Advance payments made 1,568 633 Other non-financial assets 11 466 6,290 5,533 Other assets include prepaid expenses and other tax receivables. Prepaid expenses increased by EUR 0.2 million to EUR 3.9 million in 2023 (2022: EUR 3.7 million). Advance payments increased by EUR 0.9 million in 2023 due to down payments made in regards with server costs in the amount of EUR 1.2 million in comparison with 2022. CONSOLIDATED FINANCIAL STATEMENTS 189 HomeToGo / Annual Report 2023 Other non-current assets consist of: DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Other tax receivables 136 28 Prepaid expenses 44 58 Other non-financial assets 48 57 228 143 24 - Shareholder’s equity The different shareholder classes can be summarized as follows: HomeToGo SE shares (0.0192 EUR nominal value) CLASS A SHARES CLASS B2 SHARES CLASS B3 SHARES As of December 31, 2021 122,555,649 2,291,667 2,291,666 As of December 31, 2022 122,555,649 2,291,667 2,291,666 As of December 31, 2023 122,555,649 2,291,667 2,291,666 On September 21, 2021 HomeToGo GmbH and Lakestar SPAC (now HomeToGo SE) consummated the business combination agreement which led to the listing on the Frankfurt Stock Exchange and a capital reorganization of the Group. The Company's Class A through Class B3 Shares in HomeToGo SE are non-par value shares and have been fully paid. Class A Shares are publicly traded. As part of the de-SPAC transaction in September 2021 a total of 10.1 million Class A Shares were redeemed against capital reserves. Regarding the current stock of these treasury shares, reference is made to the following paragraph under "Treasury Shares". Class B1 to B3 Shares are only transferable, assignable or sellable to the permitted transferees mentioned in Article 7.6 of HomeToGo SE's articles of association. Holders of Class A to B3 Shares are entitled to the same dividend and liquidation rights and have one vote per share at general meetings. As part of the consummation of the de-SPAC transaction all Class B1 shares were automatically converted into Class A Shares at a ratio one for one. As at December 2023 and 2022, 4,583,333 Class B shares are issued and outstanding. All Class B2 Shares will automatically convert into Class A Shares at a ratio one for one, once the closing price of the Class A Shares for any ten trading days within a thirty trading day period exceeds EUR 12. Similarly, all Class B3 Shares will automatically convert into Class A Shares at a ratio one for one, once the closing price of the Class A Shares for any ten trading days within a thirty trading day period exceeds EUR 14. There is no expiry date for the conversion of Class B2 Shares or Class B3 Shares into Class A Shares. Capital reserves Subscribed capital and capital reserves include received capital through the issuance of shares for cash or premium in kind. See above for share issuances during the presented periods. 190 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 Retained earnings Retained earnings include the accumulated losses attributable to the shareholders. There are no non-controlling interests. Treasury Shares Treasury shares are shares in HomeToGo SE that are held by the Company as a result of the redemption process as part of the de-SPAC transaction in September 2021 or resulting from share buyback. The shares redeemed in 2021 prior to the de-SPAC transaction were recognized at their redemption price of EUR 10.00 per share and deducted from equity attributable to the owners as treasury shares until the shares are cancelled or reissued. On September 13, 2023, the Management Board of HomeToGo SE with the consent of the supervisory board approved a share buyback program with a volume of up to EUR 10 million. Under the program, up to 5.7 million shares of the Company could be repurchased in the period between September 13, 2023 and December 31, 2024. In accordance with the authorization provided by the shareholders' meeting, the Management Board set an initial price limit of EUR 3.16 per share to be repurchased (excluding ancillary costs), but reserved the right to review this limit, depending on, amongst others, market circumstances and the development of the buybacks. Until December 31, 2023, the Company has bought back 107,353 of shares with an average price of EUR 2.60. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the owners of the Company. As of the reporting the number of treasury shares held is 8.1 million (2022: 8.1 million). Foreign currency translation reserve Exchange differences arising on translation of the foreign controlled entity are recognized in other comprehensive income, and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net investment is disposed of. Share-based payments reserve The share-based payments reserve is used to capture the effect of share-based payment transactions. The Group operates share-based payment plans, see Note 30 - Share-based payments for details of these plans. The Company does not reclassify amounts for vested awards to other equity items. 25 - Borrowings The following table provides an overview on the outstanding loans within the Group as of December 31, 2023: DEBTOR LOAN AMOUNT (IN EUR THOUSANDS) PAYOUT DATE MATURITY NOMINAL INTEREST RATE CARRYING AMOUNT (IN EUR THOUSANDS) HomeToGo GmbH 10,000 February 2021 September 2025 2.12% 4,139 Feries S.r.l. 400 August 2020 August 2025 1.50% 178 Escapada Rural S.L. 300 May 2020 June 2025 1.55% 102 Adrialin d.o.o 100 February 2022 September 2027 0.25% 93 Total 10,800 4,513 CONSOLIDATED FINANCIAL STATEMENTS 191 HomeToGo / Annual Report 2023 The following table provides an overview on the outstanding loans within the Group as of December 31, 2022: DEBTOR LOAN AMOUNT (IN EUR THOUSANDS) PAYOUT DATE MATURITY NOMINAL INTEREST RATE CARRYING AMOUNT (IN EUR THOUSANDS) HomeToGo GmbH 6,000 February 2020 December 2023 4.35% 1,500 HomeToGo GmbH 10,000 February 2021 September 2025 2.12% 6,333 Feries S.r.l. 400 August 2020 August 2025 1.50% 278 Escapada Rural S.L. 500 May 2020 June 2023 2.50% 85 Escapada Rural S.L. 300 May 2020 June 2025 1.55% 177 Adrialin d.o.o 100 February 2022 September 2027 0.25% 100 Total 7,300 8,473 26 - Provisions (current and non-current) Provisions consist of: 2023 (IN EUR THOUSANDS) DISMANTLING OTHER TOTAL Beginning of financial year 483 1,680 2,163 Additions — 2,462 2,462 Acquired through business combination — 18 18 Releases — (1,497) (1,497) Utilizations — (267) (267) End of financial year 483 2,395 2,878 Thereof: non-current 483 56 540 Thereof: current — 2,338 2,338 2022 (IN EUR THOUSANDS) DISMANTLING OTHER TOTAL Beginning of financial year 483 807 1,290 Additions — 1,683 1,683 Acquired through business combination 103 103 Releases — (837) (837) Utilizations — (76) (76) End of financial year 483 1,680 2,163 Thereof: non-current 484 35 519 Thereof: current — 1,645 1,645 Other provisions include provisions with regard to employment lawsuits, which were not settled in or out of court at the time this annual report was prepared. The prospects of success are uncertain at the time of writing the annual report due to the lack of a supreme court ruling in similar cases. The total amount of the provision for litigation amounts to EUR 1.4 million and reflects the Managements' best estimate of the amount probable to be 192 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 paid resulting from the suits. Other provisions also include provisions for personnel-related expenses that may arise during the year such as work anniversaries to the amount of EUR 1.2 million in 2023. The provision for dismantling relates to HomeToGo's dismantling provisions for leasehold improvements. 27 - Other financial liabilities (current and non-current) Other current financial liabilities consist of: DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 (adjusted) Lease liabilities 1,512 1,512 Other financial liabilities 8,122 8,447 Traveler advance payments owed to Homeowners 3,916 5,480 13,550 15,439 ) Refer to note 6 - Business Combinations for the resulting effects from the completion of PPA for the acquisition of e-Domizil GmbH. Current other financial liabilities contain traveler advance payments collected in the amount of EUR 3.9 million as of December 31, 2023 (2022: EUR 5.5 million). These advance payments mainly relate to the subsidiary e-domizil that provides collection services for home owners. As part of these payment services, e-domizil collects travelers' advance payments as well as advance payments for the booking services prior to the traveler's check- in at the booked accommodation. The travelers' advance payments that e-domizil needs to transfer to the homeowners right before check-in of the traveler are shown here under Other financial liabilities, while the advance payments received for booking services are presented under Contract liabilities as part of Other liabilities (current). Refer to the table under Note 28 - Other liabilities (current and non-current). The amount of traveler advance payments as a portion of cash and cash equivalents with an amount of EUR 0.5 million as of December 31, 2023 (2022: EUR 2.3 million) is subject to statutory restrictions and not available for general use by the Group. Other non-current financial liabilities consist of: DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Lease liabilities 11,746 12,787 Class A and Class B Warrants 448 1,425 Other financial liabilities — 1,305 12,194 15,517 Other financial liabilities include a liability arising from a service component as part of the SECRA business combination leading to a payable of up to EUR 4.0 million until December 31, 2024. Class A and Class B Warrants include public and non-public warrants, which had been issued by Lakestar SPAC prior to the de-SPAC transaction in September 2021 of EUR 1.4 million. On February 19, 2021, the Company issued 9,166,666 Class A Warrants for a price of EUR 10.00 per unit. Class A Warrants are publicly traded under ISIN of LU2290524383. Each Class A Warrant entitles its holder to subscribe for one Class A Share, with a stated exercise price of EUR 11.50 subject to customary anti-dilution adjustments. Holders of Class A Warrants can exercise the warrants on a cashless basis unless the Company elects to require exercise against payment in cash of the exercise price. Class A Warrants may only be exercised for a whole number of shares. Class A CONSOLIDATED FINANCIAL STATEMENTS 193 HomeToGo / Annual Report 2023 Warrants expire five years from the date of the consummation of the de-SPAC transaction, consummated on September 21, 2021, or earlier upon redemption or liquidation. The Company may redeem Class A Warrants upon at least 30 days’ notice at a redemption price of EUR 0.01 per Class A Warrant (i) if the closing price of its Class A Shares for any 20 out of the 30 consecutive trading days following the consummation of the Business Combination equals or exceeds EUR 18.00 or (ii) if the closing price of its Class A Shares for any 20 out of the 30 consecutive trading days following the consummation of the Business Combination equals or exceeds EUR 10.00 but is below EUR 18.00, adjusted for adjustments to the number of Class A Shares issuable upon exercise or the exercise price of Class A Share as described in the prospectus. Holders of Class A Warrants may exercise them after the redemption notice is given. On February 18, 2021, the Company issued 5,333,333 Class B Warrants at a price of EUR 1.50 per warrant. Class B Warrants are identical to the Class A Warrants underlying the Units sold in the private placement, except that the Class B Warrants are not redeemable and may always be exercised on a cashless basis while held by the SPAC Founders or their Permitted Transferees (defined in the prospectus). Class B Warrants are not part of the private placement and are not listed on a stock exchange. 28 - Other liabilities (current and non-current) Other current liabilities consist of: DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Personnel-related liabilities 7,133 3,883 Other tax liabilities 436 637 Other non-financial liabilities 1,495 3,394 Contract liabilities 11,839 11,909 20,903 19,824 Other non-current liabilities consist of: DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Personnel-related liabilities 437 393 Other non-financial liabilities 579 11 1,016 404 29 - Deferred taxes The unrecognized deferred tax assets (DTAs) amount to EUR 73.6 million (2022: EUR 63.0 million) and are mainly attributable to unused tax losses. The tax losses almost entirely incurred in Germany and Luxembourg. EUR 250 million (2022: EUR 205 million) of the tax losses are attributable to German corporate income tax and EUR 248 million (2022: EUR 203 million) to German trade tax. There is no expiry date for the cumulative tax losses except for tax losses in the amount of EUR 559 million (2022: EUR 281 million) in Luxembourg, which will expire after 17 years following the year in which Incurred according to local tax regulations. 194 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 The Group has recognized a DTA on tax losses that arose in Luxembourg for HomeToGo SE of EUR 132.8 million, mainly explained by the impairment of the investment in HomeToGo GmbH, netted by a DTL arising from temporary difference on the investment held in the subsidiary of EUR 132.8 million. The Group has further unused tax losses that arose in Luxembourg of EUR 26.5 million (2022: EUR 22 million) that is available for 17 years, following the year in which incurred, for offsetting against future taxable profits of the Company. No DTA has been recognized in respect of these losses as they may not be used to offset taxable profits elsewhere in the Group. They have arisen in Luxembourg, where there's neither taxable income in current year nor is expected in the incoming years. There are no other tax planning opportunities or other evidence of recoverability in the near future. There are temporary differences resulting from the Group's share-based compensation programs due to different valuation methods according to IFRS and the tax base, leading to EUR 10.1 million deductible differences according to IFRS compared to the tax deduction in 2023. It is uncertain to which extent and when these temporary differences would reverse. They cannot be measured reliably as the future settlements of claims resulting from exercises are dependent on several external factors that cannot be predicted reliably, especially considering the Company's short history on the stock exchange. Thus, for these temporary differences no DTA was recognized as December 31, 2023. For the Class A and Class B Warrants, a DTA of EUR 0.1 million (2022: EUR 0.4 million) was not recognized as it has been considered not recoverable. The total amount of temporary differences associated with investments in subsidiaries for which DTLs have not been recognized amount to EUR 1.8 million (2022: EUR 1.3 million). DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Deferred tax liabilities, net Beginning of fiscal year (7,930) (3,874) Recognized through profit or loss 1,169 7,806 Recognized through acquisition of subsidiaries — (11,863) End of fiscal year (6,761) (7,930) Deferred tax assets and liabilities are recognized for the following types of temporary differences and tax loss carryforwards. DECEMBER 31, 2023 2022 DEFERRED TAX DEFERRED TAX (IN EUR THOUSANDS) ASSETS LIABILITIES ASSETS LIABILITIES Intangible assets — (15,063) — (16,890) Financial assets — (132,752) — (64,579) Right of Use asset — (3,510) — — Other assets 201 (573) 15 (176) Provisions 138 — 148 — Lease liabilities 3,601 — — — Tax losses 141,195 — 73,553 — Total Gross 145,136 (151,898) 73,715 (81,645) Offsetting (145,136) 145,136 (73,715) 73,715 Total after offsetting — (6,761) — (7,930) CONSOLIDATED FINANCIAL STATEMENTS 195 HomeToGo / Annual Report 2023 30 - Share-based payments Virtual Option Plans prior to the de-SPAC transaction - General Prior to the de-SPAC, HomeToGo had implemented several virtual stock option programs ("VSOPs"). These old programs were closed or settled as part of the de-SPAC transaction, i.e. no new beneficiaries can enter these programs and no further awards are granted to existing beneficiaries. In the financial year 2023, these programs were continued in an ordinary course considering settlements for leavers and releases of the IFRS 2 reserve in case of targets not being met for some performance-dependent vesting of options. All material terms and conditions and the classification remain unchanged. The number of virtual options of all share-based payment programs other than the new long-term incentive program that is further described below developed as follows: 2023 NUMBER OF VIRTUAL OPTIONS WEIGHTED AVERAGE OF EXERCISE PRICES Outstanding as of Jan 1 11,130 3,419 forfeited during the year 13 4,450 exercised during the year 1,380 3,361 Outstanding as of Dec 31 9,736 3,426 Of the outstanding 9,736 options as of December 31, 2023, 3,316 were vested. These options were exercisable at the same date (December 31, 2023) as it was the next scheduled settlement date. The settlement took place in February 2024. The liability for cash-settled obligations resulting from the settlement process as of December 31, 2023 amount to EUR 0.6 million and was measured at the share price as of December 31, 2023 of EUR 2.47. Long-term incentive program - LTI In 2022, a long-term incentive ("LTI") program was established. The LTI comprises two different virtual programs, the Virtual Stock Option Program (VSOP 2022) and the Restricted Stock Unit Program (RSUP 2022). Under both programs, Virtual Stock Options (VSOs) and Restricted Stock Units (RSUs) are granted to beneficiaries at the same time. Both the VSOP 2022 and the RSUP 2022 entitle the beneficiary to receive a cash payment upon exercise of their VSOs / RSUs. The target group for the LTI are HomeToGo's employees, advisors of the Group as well as managing directors of affiliated companies. For the Management Board, a similar program was launched with slightly different terms to comply with rules for Management Board remuneration. General Terms and conditions - LTI The participants can select the allocation of their overall grant between VSOP 2022 and RSUP 2022. Both programs differ in terms of the risk profile from the perspective of the beneficiaries, because the RSUs do not have a strike price, whereas the VSOs do. As of December 31, 2023, the aggregate maximum plan volume of the RSUP 2022 and VSOP 2022 was limited to the value of 3,676,668 Class A Shares of the Company. VSOs / RSUs may be granted to the participants in one or more tranches at any time until the end of the year 2025. Therefore, hereinafter the two programs are described together as one program and specified terms and conditions of each program are highlighted if necessary. 196 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 VSOs / RSUs are granted to the respective beneficiary based on the terms stipulated in each program by concluding an individual grant agreement between the respective beneficiary and HomeToGo. All grants are subject to a service condition. The strike price for the VSOs is specified in the individual grant agreement with the beneficiary and is always calculated based on the average share price of the last ten trading days prior to the respective grant date. RSUs are granted without a certain strike price. The vesting period for the VSOs / RSUs is two years in total, and the vesting period shall begin following the grant date or another vesting start date specified in the grant agreement. For the first year, there is a cliff in the case of new hires and a quarterly vesting in the second year. For existing employees, the number of granted VSOs / RSUs shall vest, unless otherwise determined in the grant agreement, in installments of 1/8 for each full quarter on a linear basis. After the exercise of the RSUs the beneficiary shall have a payment claim against the Company equal to HomeToGo's share price at the time of the exercise. The exercise of the VSOs shall lead to a payment claim equal to the difference between the share price at the time of exercise and the individual strike price stipulated in the grant agreement. The beneficiary may exercise the VSOs / RSUs within three years following the vesting date. VSOs / RSUs do not need to be exercised collectively, i.e. some parts of the grants may already be exercised while others are still vesting. HomeToGo is entitled, in its sole discretion, to fulfill the payment claim in whole or in part by transfer of shares, in lieu of paying a cash amount, based on the share price then applicable. Special Terms and conditions - LTI for Management Board The terms and conditions of the LTI for the Management Board are generally in line with the terms and conditions described above except for the following: • The aggregate maximum plan volume of the MB-RSUP 2022 and the MB-VSOP 2022 shall be limited to the value of 2,979,058 Class A Shares of the Company. • The vesting period for the VSOs / RSUs is four years instead of two. • There is a mandatory cliff of one year. Classification and accounting - LTI The classification of the VSOP and RSUP do not differ from the classification of the previous Virtual Option Plans of the Group. Since HomeToGo has a settlement choice in its sole discretion and has the ability to fulfill the payment claim through shares of the Company, based on the assessment of the Company’s intent and past practice in the Group's other share-based compensation schemes, the LTI is classified as equity-settled. Hence, the fair value of each VSO / RSU is determined at the grant date, as further described below. Vesting conditions are treated as graded, depending on the individual terms and conditions summarized above. HomeToGo recognizes personnel expenses related to employee services as they are received. The communication of the grant promise (= entitlement) with the amount of the grant and the other major terms and conditions is treated as the earlier service commencement date as per IFRS 2 IG4, notwithstanding that the beneficiary may still choose from the allocation of VSOs / RSUs. In case a beneficiary is already performing his service knowingly of his future LTI grant and a specified vesting start date, the vesting start date is considered the earlier service commencement date, and the expenses are already recognized as of the vesting start date. In the IFRS 2 valuation, management estimates the grant date fair value for the purpose of recognizing the CONSOLIDATED FINANCIAL STATEMENTS 197 HomeToGo / Annual Report 2023 expense during the period between the earlier service commencement date and the grant date. Management will revise the estimate in each reporting period until the grant date has been established. Fair value measurement - LTI For the RSUs the fair value at the grant date is determined by the share price at grant date since these do not have a certain strike price. For the VSOs the fair value at the grant date is determined by the Company using the Black-Scholes-option pricing model and a binomial option pricing model of Cox-Ross-Rubinstein, as the option can only be exercised at several discrete points in time. The fair value was measured based on the following significant parameters: a weighted average share price of EUR 2.72, a volatility of 49.75%, a risk-free interest rate of 2.51%, and a dividend yield of 0.0%. Due to the fact that there is not sufficient historical data of the share price of the Company available the expected volatility was derived from the historical volatility of peer group companies. The exercise of the VSOs may take place in tranches after the respective vesting date and up to three years afterward. The weighted average term of the virtual shares outstanding is 4.3 years. The valuation resulted in a weighted average fair value of EUR 1.14 per VSO. The number of VSOs / RSUs of the new LTI program developed as follows during the period ending December 31, 2023: 2023 2023 NUMBER OF VSOs WEIGHTED AVERAGE OF EXERCISE PRICES NUMBER OF RSUs WEIGHTED AVERAGE OF EXERCISE PRICES Outstanding as of January 1 11,495,628 3.50 2,019,310 — granted during the year 4,494,572 2.78 1,007,045 — forfeited during the period 443,457 2.89 123,706 — exercised during the period 42,635 2.39 54,525 — Outstanding as of December 31 15,504,108 3.31 2,848,124 — The total expenses in relation to all existing share-based compensation including the virtual option plans prior to the de-SPAC are allocated as follows: YEAR ENDED DEC 31, (IN EUR THOUSANDS) 2023 2022 Product development and operations 5,342 4,951 Marketing and sales 544 1,671 General and administrative 10,553 19,030 Total 16,439 25,652 The IFRS 2 reserve thus developed as follows: 198 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 2023 2022 CHANGE CHANGE January 1 85,636 68,744 VSOP and LTI Exercise equity settlement (4,610) (6,248) VSOP Exercise tax settlement charge (2,399) (1,787) VSOP Exercise cash settlement charge not through Profit or loss (55) (423) Regular VSOP and LTI charge 17,586 25,350 Year end 96,158 85,636 31 - Related party transactions HomeToGo’s related parties are comprised of a significant shareholder of HomeToGo, the members of the Management Board and the Supervisory Board, the close members of the family of these persons and controlled entities by these persons. Entities with significant influence over the Group Until the public listing of HomeToGo in 2021, the largest shareholder of the Group had significant influence over the Group and constituted a related party according to IAS 24. Since this investor was also represented on the Supervisory Board of HomeToGo SE until June 30, 2022, the investor was still assumed to have significant influence over the Group until that date, although the percentage share in the parent company significantly reduced through the public listing. Key management personnel of the Group The Management Board as well as the Supervisory Board of the Group constitute the key management personnel and therefore related persons according to IAS 24 for HomeToGo. Compensation paid and granted to the key management personnel is summarized in the table below. DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Short-term benefits 1,465 1,435 Share-based payments 7,304 20,667 8,769 22,102 Share-based payments expenses for key management personnel arose from the Virtual Stock Option Program and Long-Term Incentive Plans described under Note 30 - Share-based payments. The Group has not granted any loans, guarantees, or other commitments to or on behalf of any of the related persons. Other than the remuneration disclosed above the following transactions occurred with entities controlled by key management personnel: NFQ UAB Technologies ("NFQ") a software company registered in the Republic of Lithuania, has been identified as a related party according to IAS 24. During the reporting period, an agreement with NFQ has been in place on the provision of certain software development services, office space and other services by NFQ to entities of HomeToGo for cash consideration. Other services mainly include the provision of payroll, accounting and car rental services. The business transactions under the scope of the agreement were made at arm's length terms. Furthermore, the Group purchased services from NFQ X GmbH, Germany which were identified as a related party. CONSOLIDATED FINANCIAL STATEMENTS 199 HomeToGo / Annual Report 2023 Below listed amounts resulted from related party transactions with NFQ and NFQ X GmbH, Germany during the reporting period: DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Product development and operating expenses 8,468 8,765 Other Services 120 206 Office Rent 209 241 Payables towards NFQ 207 409 32 - Auditor's fees The following expenses were incurred for services provided by the auditors and related companies of the auditors for the HomeToGo Group: DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Audit fees 1,225 1,219 thereof: audit fees for previous fiscal year audits — 261 Other services — 35 Total 1,225 1,254 33 - Financial instruments The table below shows the net gains and losses, presented as positive and negative amounts respectively, of financial instruments per measurement category as defined by IFRS 9: DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Financial assets measured at Amortized cost (AC) (96) (1,623) Financial assets and financial liabilities measured at fair value through profit or loss (FVTPL) 1,816 (625) Financial liabilities measured at Amortized cost (AC) (736) (2,508) Financial liabilities measured at fair value through profit or loss (FVTPL) 977 8,813 Total interest expenses including amortization from the effective interest method on financial liabilities that are measured at amortized cost for the year was EUR 0.7 million (2022: EUR 0.8 million). The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. The table excludes fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount reasonably approximates fair value. The carrying amounts of cash and cash equivalents, trade and other receivables as well as trade payables are approximately their fair value due to their short-term maturities. For all other financial assets and liabilities, no 200 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 changes have occurred that would have had a material effect on the fair value of these instruments since their initial recognition. Financial instruments as of December 31, 2023 are as follows: DECEMBER 31, 2023 (IN EUR THOUSANDS) CARRYING AMOUNT CATEGORY IN ACCORDANCE WITH IFRS 9 FAIR VALUE FAIR VALUE LEVEL Non-current assets Other receivables — Amortized cost Other financial assets 5,467 thereof deposits 5,467 Current assets Trade and other receivables 13,515 Amortized cost thereof trade receivables 13,069 thereof other receivables 446 Cash and cash equivalents 108,953 Amortized cost Other financial assets 33,567 thereof deposits 2,191 thereof money market funds 31,323 FVTPL 31,323 Stufe 1 Non-current liabilities Borrowings 1,730 Amortized cost Other financial liabilities 12,194 thereof lease liabilities 11,746 N/A thereof warrants 448 FVTPL Level 3 Current liabilities Borrowings 2,783 Amortized cost Trade payables 8,875 Amortized cost Other financial liabilities 13,550 thereof lease liabilities 1,512 N/A thereof other liabilities 8,122 Amortized cost Traveler advance payments owed to Homeowners 3,916 Amortized cost CONSOLIDATED FINANCIAL STATEMENTS 201 HomeToGo / Annual Report 2023 Financial instruments as of December 31, 2022 are as follows: DECEMBER 31, 2022 (IN EUR THOUSANDS) CARRYING AMOUNT CATEGORY IN ACCORDANCE WITH IFRS 9 FAIR VALUE FAIR VALUE LEVEL Non-current assets Other receivables 814 Amortized cost Other financial assets 8,249 thereof deposits 1,502 thereof investments 3,597 FVTPL 3,597 Level 3 Current assets Trade and other receivables 18,992 Amortized cost thereof trade receivables 9,755 thereof other receivables 9,237 Cash and cash equivalents 152,944 Amortized cost Other financial assets 101,960 thereof deposits 1,995 thereof money market funds 99,965 FVTPL 99,965 Level 1 Non-current liabilities Borrowings 9,371 Amortized cost Other financial liabilities 23,187 thereof lease liabilities 12,949 N/A thereof warrants 10,238 FVTPL 10,238 Level 3 thereof other liabilities 5 Current liabilities Borrowings 3,007 Amortized cost Trade payables 15,395 Amortized cost Other financial liabilities 8,885 thereof lease liabilities 1,228 N/A thereof other liabilities 7,656 Amortized cost The carrying amounts of the financial assets and liabilities measured at amortized cost listed above and defined by IFRS 9 as of December 31, 2023 and 2022 were as follows: DECEMBER 31, (IN EUR THOUSANDS) 2023 2022 Carrying amount Financial assets measured at amortized cost 161,554 134,289 Financial assets measured at fair value through profit or loss (FVTPL) 31,323 49,507 Financial liabilities measured at amortized cost 31,985 26,555 Financial liabilities measured at fair value through profit or loss (FVTPL) 448 1,425 As HomeToGo does not meet the criteria for offsetting, no financial instruments are netted. Where quoted prices in an active market do not exist, HomeToGo uses valuation techniques that maximize the use of relevant observable inputs and minimize the use of unobservable inputs. The valuation technique used incorporates all factors that market participants would consider in pricing such a transaction, e.g. the fair values 202 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 disclosed in the notes for the host contract of convertible loans are determined by using credit-risk specific discount factors. The following paragraph shows the valuation technique used in measuring Level 3 fair values at December 31, 2023 and December 31, 2022 for financial instruments measured at fair value in the statement of financial position as well as the significant unobservable inputs used: • Valuation techniques: The valuation of the embedded derivative is performed using an option price model. More specifically the valuation was performed using binomial trees for HomeToGo’s share price and refinancing rate to derive a fair value of the conversion right. As part of the de-SPAC transaction, HomeToGo took over Class A and Class B warrants, which had been issued by Lakestar SPAC prior to the transaction. These warrants are in scope of IFRS 9. The valuation of the warrants is performed using an option pricing model (Black-Scholes model). • Significant unobservable inputs: The option pricing model uses different inputs. The most significant unobservable input is the refinancing rate of HomeToGo. Further inputs for the valuation model are the Company value and the volatility of equity. Both inputs have a lower impact on the fair value of the entire embedded derivative. The primary inputs used in the valuation of the warrants are the share price of HomeToGo at valuation date, the risk-free interest rate and the volatility of the underlying share price as well as the term of the instruments. The risk-free interest rate is based on yields of German sovereign bonds. The share price as well as the risk-free rate are observable in the market. The share price volatility is based on a peer group and is therefore not observable in a market. The following tables show a reconciliation for Level 3 fair values: (IN EUR THOUSANDS) WARRANTS Opening balance Jan 1, 2022 (10,238) Gains recognized in finance income 8,813 Closing balance Dec 31, 2022 (1,425) Opening balance Jan 1, 2023 (1,425) Gains recognized in finance income 977 Closing balance Dec 31, 2023 (448) In 2021 HomeToGo took over Class A and Class B Warrants, which were issued by Lakestar SPAC prior to the de-SPAC transaction. The Class A Warrants are public listed warrants. At the acquisition date the Class A Warrants constitute a level 1 instrument. The price for the Class A Warrants was directly observable in the market as sufficient trades were observable. As of December 31, 2022, as well as December 31, 2023, no trades of the Class A Warrants were observable. Hence, the valuation was performed by using an option price model with a peer group volatility as an unobservable input. As of December 31, 2023, and December 31, 2022 the Class A public Warrants constitute a level 3 instrument. HomeToGo transferred the Class A Warrants from level 1 to level 3 in 2021. The Class B warrants are not publicly listed. The valuation of the Class B Warrants was performed by using an option price model with a peer group volatility as an unobservable input. Hence, the Class B Warrants constitute a level 3 instrument as of the acquisition date, December 31, 2023 and December 31, 2022. There was no level transfer regarding the Class B Warrants. There were no further transfers between the different levels of the fair value hierarchy during the periods presented. HomeToGo’s policy is to recognize transfers into and transfers out of fair value hierarchy levels at the end of the reporting period. The following tables show the impact on the fair value of the warrants, as well as the impact on the financial result, by shifting the significant inputs in the valuation model of the warrants: CONSOLIDATED FINANCIAL STATEMENTS 203 HomeToGo / Annual Report 2023 CLOSING BALANCE DEC 31, 2023 (IN EUR THOUSANDS) EFFECT ON FINANCIAL RESULT (in EUR thousands) EFFECT ON FINANCIAL RESULT (in EUR thousands) Change in Share Price +10% (10)% Change in Warrant Price (460) 389 Change in Volatility +10% (10)% Change in Warrant Price (1,473) 947 CLOSING BALANCE DEC 31, 2022 (IN EUR THOUSANDS) EFFECT ON FINANCIAL RESULT (IN EUR THOUSANDS) EFFECT ON FINANCIAL RESULT (IN EUR THOUSANDS) Change in Share Price +10% (10)% Change in Warrant Price (211) 160 Change in Volatility +10% (10)% Change in Warrant Price (769) 359 34 - Financial risk management HomeToGo is exposed to the following risks from the use of financial instruments: a) Credit risk b) Liquidity risk c) Market risk, interest rate and currency risk The Company´s Management Board have the overall responsibility for the establishment and oversight of HomeToGo’s risk management framework. HomeToGo’s risk management policies are established to identify and analyze the risks faced by HomeToGo and to minimize negative impact on the financial position of HomeToGo related to those risks. Capital risk management HomeToGo’s objective when managing capital is to safeguard HomeToGo’s ability to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. Management monitors capital usage by overseeing the decrease and increase of cash and cash equivalents as presented in the consolidated statement of financial position. To optimize interest income and to minimize negative interest rates the Group invested surplus funds in highly liquid money market funds. The Group is subject to a financial covenant with regard to some loans issued in 2020 for which no breach has occurred. HomeToGo needs to achieve an economic equity ratio of 50% or higher. Management expects to achieve the necessary equity ratio. a) Credit risk Credit risk is the risk of financial loss to HomeToGo if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk includes both the immediate default risk and the danger of a decline in the customer’s creditworthiness. HomeToGo is exposed to credit risk on cash and cash equivalents and current other financial assets, which it monitors centrally. HomeToGo maintains its cash deposits at financial institutions with top credit ratings. The creditworthiness of these financial institutions is constantly monitored. HomeToGo considers that its cash and 204 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 cash equivalents and current other financial assets have low credit risk based on the external credit ratings of these financial institutions. HomeToGo is generally exposed to the credit risk that its partners are cash-strapped or in financial difficulties and thus, would not pass the agreed share of commission to HomeToGo. Overall, the credit risk for trade and other receivables is considered moderate. The maximum risk exposure for all financial assets is the carrying amount. Refer to Note 4 regarding the application of the expected credit loss model. b) Liquidity risk Liquidity risk is the risk that HomeToGo will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. HomeToGo’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to HomeToGo’s reputation. In case needed, HomeToGo uses regular external financing options such as bank loans to quickly raise larger amounts of fresh capital and thus always ensure a certain liquidity buffer. The following are the remaining contractual maturities of financial liabilities at the balance sheet date. Apart from lease liabilities, the amounts are gross and undiscounted and include contractual interest payments and exclude the impact of netting agreements. DECEMBER 31, 2023 (IN EUR THOUSANDS) <1 year 1 - 5 years > 5 years TOTAL CARRYING AMOUNT Trade and other payables 8,875 — — 8,875 8,875 Other liabilities 20,903 1,016 — 21,919 21,919 Other financial liabilities 12,038 — — — 12,038 Warrants — 448 — 448 448 Borrowings 2,783 1,730 — 4,513 4,513 Lease liabilities 1,545 7,067 8,694 17,306 13,258 Total 46,143 10,261 8,694 53,060 61,051 DECEMBER 31, 2022 (IN EUR THOUSANDS) <1 year 1 - 5 years > 5 years TOTAL CARRYING AMOUNT Trade and other payables 12,544 — — 12,544 12,544 Other liabilities 19,824 404 — 20,228 20,228 Other financial liabilities 8,545 1,305 — — 9,850 Warrants — 1,425 — 1,425 1,425 Borrowings 2,844 5,631 — 8,475 8,475 Lease liabilities 1,590 5,870 10,021 17,481 14,299 Total 45,346 14,636 10,021 60,154 66,822 CONSOLIDATED FINANCIAL STATEMENTS 205 HomeToGo / Annual Report 2023 The following table shows changes in liabilities arising from financing activities: (IN EUR THOUSANDS) JANUARY 1, 2023 CASH FLOWS CHANGES IN FAIR VALUES NEW LEASES ADDITIONS FROM BUSINESS COMBINATIONS RECLASSIFICA- TION / CONVERSION MODIFICATIONS AND OTHER EFFECTS INTEREST DECEMBER 31, 2023 Borrowings (non-current) 5,631 — — — (4,200) 298 1,730 Warrants (non-current) 1,425 — (977) — 448 Lease liabilities (non-current) 12,787 — — 74 (1,115) 11,746 Borrowings (current) 2,843 (4,260) — — 4,200 2,783 Lease liabilities (current) 1,512 (1,103) — — 1,115 (74) 62 1,512 Total 24,199 (5,363) (977) 74 — — (74) 360 18,219 (IN EUR THOUSANDS) JANUARY 1, 2022 CASH FLOWS CHANGES IN FAIR VALUES NEW LEASES ADDITIONS FROM BUSINESS COMBINATIONS RECLASSIFICA- TION / CONVERSION MODIFICATIONS AND OTHER EFFECTS INTEREST DECEMBER 31, 2022 Borrowings (non-current) 9,371 — — — — (4,024) — 285 5,631 Warrants (non-current) 10,238 — (8,813) — — — — — 1,425 Lease liabilities (non-current) 12,949 — — 537 466 (1,164) — 12,787 Borrowings (current) 3,007 (4,187) — — — 4,024 — — 2,843 Lease liabilities (current) 1,229 (896) — 1,164 (481) 496 1,512 Total 36,792 (5,083) (8,813) 537 466 — (481) 781 24,199 Market, interest rate and currency risk Market risk is the risk that changes in market prices, such as foreign exchange rates or interest rates will affect HomeToGo’s income or the value of its financial instruments. HomeToGo manages its market risk on a centralized basis with the objectives of managing and controlling market risk exposures within acceptable parameters. Exposure to interest rate risk normally arises from variable interest-bearing financial instruments. HomeToGo only has fixed interest loan agreements and therefore is not exposed to an interest rate risk. HomeToGo is not exposed to a material transactional foreign currency risk. 35 - Subsequent events after the reporting period In the beginning of February 2024 the Group has started the implementation of a new internal reporting structure that will lead to a new management approach with two reporting segments. While HomeToGo Marketplace expects to continue to optimize its unique, multifaceted experience for the traveler with Onsite as its core strategic element, HomeToGo_PRO will be introduced as HomeToGo's new B2B brand and business segment which will be a key growth focus for the Company going forward. HomeToGo_PRO comprises HomeToGo's software and service solutions including subscriptions for the whole travel market, with a special 206 CONSOLIDATED FINANCIAL STATEMENTS HomeToGo / Annual Report 2023 focus on SaaS for the supply side of vacation rentals. This includes both volume-based revenues as well as those resulting from subscriptions. On December 16, 2023, HomeToGo entered into a sale and purchase agreement with the goal of acquiring a 51% stake in each of the the target companies, KMW Reisen GmbH and Super Urlaub GmbH ('the target companies'). For this purpose an acquisition vehicle was founded by HomeToGo already in 2023. Following the legal step plan the acquisition vehicle acquired 100% of the issued shares in KMW Reisen GmbH and Super Urlaub GmbH for an estimated consideration of EUR 82.0 million. Thereof EUR 31.6 million were paid in cash by HomeToGo. EUR 14.0 million have been deferred until December 31, 2025 as vendor loan and EUR 6.5 million were financed by upstream loans granted by the target companies, EUR 6.3 million were paid by HomeToGo with Class A Shares in HomeToGo SE. The sellers of the target companies sold their shares in the target companies, besides the received cash, Class A Shares in HomeToGo SE and the granted vendor loans, in exchange for shares in the acquisition vehicle (subsidiary of HomeToGo), which acquired the target companies. Consequently, HomeToGo holds 51% in the holding subsidiary as majority shareholder and has control over the two new investments, while the remaining shareholder in the holding subsidiary represent minorities in HomeToGo Group. Furthermore, put and call options was issued giving HomeToGo the opportunity to acquire the remaining minority stake starting in 2029. The acquired entities are expected to expand HomeToGo’s portfolio in thematic travel bundles with hotels for short trips allowing future cross-selling and redistribution of inventory across HomeToGo’s platforms to increase HomeToGo’s market share. Both entities will be part of HomeToGo's new reporting segment HomeToGo Marketplace. The business combination was completed on January 2, 2024 which forms the date of the first-time consolidation of both companies within HomeToGo Group. The disclosure of certain disclosure requirements according to IFRS 3 is impracticable because of the short time frame since the acquisition and the initial purchase price allocation for the business combination is not yet complete. On December 22, 2023, HomeToGo entered into a sale and purchase agreement to acquire a 75%-stake each in two entities to further increase HomeToGo’s offering in enabling and value-enhancing the experience for travelers and hosts as part of HomeToGo's new reporting Segment "HomeToGo_PRO Software & Service Solutions". Of the total consideration of EUR 15.4 million, EUR 12.4 million were paid in cash and EUR 3.0 million in Class A Shares in HomeToGo SE. 75% of the HomeToGo SE shares have been deferred and are due in 2025. An equivalent cash amount of EUR 2.3 million is currently held in an escrow account as collateral for the deferred share transfer. In addition, put and call options were issued, allowing HomeToGo to acquire the remaining minority stake starting in 2029. The transaction was completed on January 23, 2024, which forms the date of the first-time consolidation within HomeToGo Group. The disclosure of certain disclosure requirements according to IFRS 3 is impracticable because of the short time frame since the acquisition and the initial accounting for the purchase price allocation of the business combination is not yet complete. Luxembourg, March 25, 2024 Management Board of HomeToGo SE Dr. Patrick Andrae Wolfgang Heigl Co-Founder & CEO Co-Founder & CSO Valentin Gruber Steffen Schneider COO CFO CONSOLIDATED FINANCIAL STATEMENTS 207 HomeToGo / Annual Report 2023