Delivery Hero SE

Quarterly Report • May 1, 2017

Quarterly report of Delivery Hero GmbH Berlin

MARCH 31, 2017

Content

01. Quarterly financial statements

A. Consolidated statement of financial position
B. Consolidated statement of profit or loss and other comprehensive income	08
C. Consolidated statement of changes in equity	09
D. Consolidated statement of cash flows	11

02. Selected notes to quarterly financial statements

A. General information on the quarterly financial statements 01 Company information 02 Basis of financial reporting in accordance with IFRS a) Basis of preparation b) New standards and interpretations that have not yet been applied B. Seasonal influences on business operations	14
	14
	14
	14
	15
	16
	17
01 Operating segments	17
a) Reconciliation of segment reporting	17
b) Information on geographical areas	19
C. Notes to the quarterly financial statements 02 Discontinued operations	20

01 Revenue	20
02 Cost of sales	21
03 Marketing expenses	21
04 Share-based payment	22
05 Income taxes	22

E. Notes on the consolidated statement of financial position
01 Property, plant and equipment	23
02 Intangible assets	24
03 Other provisions	24
04 Trade payables and other payables	25
F. Other disclosures
01 Financial instruments	25
a) Notes on financial instruments	25
b) Market risks	30
02 Related parties	32
a) Related entities	32
b) Key management personnel and other person	33
03 Earnings per share	34
04 Events after the reporting period	35

Quarterly earning and segment information 37

01. Quarterly financial

statements

A. Consolidated statement of financial position

Assets		Note	Mar. 31, 2017 KEUR	Dec. 31, 2016 KEUR
A.	Non-current assets
I.	Intangible assets	E.02.	1,275,263	1,304,993
II.	Property, plant and equipment	E.01.	16,012	15,520
III.	Other financial assets	–	5,215	6,709
IV.	Trade and other receivables	–	128	4
V.	Other assets	–	942	57
VI.	Deferred tax assets	–	3,639	4,372
VII.	Investements accounted for using the equity method	–	6,514	3,286
			1,307,712	1,334,941
B.	Current assets
I.	Inventories	–	600	593
II.	Trade and other receivables	–	49,572	53,346
III.	Other assets	–	14,199	11,251
IV.	Income tax receivables	–	985	640
V.	Cash and cash equivalents	–	218,824	230,853
	Assets included in a disposal group classified as held for sale	–	431	525
			284,612	297,209
	Total assets		1,592,324	1,632,150

Equity and liabilities		Note	Mar. 31, 2017 KEUR	Dec. 31, 2016 KEUR
A.	Equity
I.	Subscribed capital	–	464	464
II.	Capital reserves	–	1,552,945	1,582,837
III.	Retained earnings and other reserves	–	-756,757	-681,480
IV.	Treasury shares	–	-5	-5
	Equity attributable to shareholders of the parent	–	796,647	901,815
V.	Non-controlling interests	–	-905	-9,607
			795,743	892,208
B.	Non-current liabilities
I.	Liabilities to banks	–	117,073	116,403
II.	Pension provisions	–	1,399	1,191
III.	Other provisions	E.03.	17,844	11,831
IV.	Trade and other liabilities	E.04.	298,684	264,958
V.	Other liabilities	–	180	247
VI.	Deferred tax liabilities	–	100,281	108,061
			535,461	502,690
C.	Current liabilities
I.	Other provisions	–	63,165	68,412
II.	Trade and other liabilities	–	153,784	127,792
III.	Other liabilities	–	37,563	34,255
IV.	Income tax liabilities	–	6,543	6,710
	Liabilities included in a disposal group classi fied as held for sale	–	65	83
			261,120	237,252
	Total equity and liabilities		1,592,324	1,632,150

B. Consolidated statement of profit or loss and other comprehensive income

	Continuing operations	Note	Jan. 1 - Mar. 31, 2017 KEUR	Jan. 1 - Mar. 31, 2016 KEUR
1.	Revenue	D.01.	121,179	62,784
2.	Cost of sales	D.02.	-41,535	-19,675
	Gross profit	–	79,644	43,109
3.	Marketing expenses	D.03.	-72,929	-54,953
4.	IT expenses	–	-10,350	-9,178
5.	General administrative expenses	–	-28,940	-31,040
6.	Other operating income	–	1,756	901
7.	Other operating expenses	–	-4,883	-1,863
	Operating result	–	-35,703	-53,025
8.	Net interest income	–	-8,793	-8,578
9.	Other finance income/costs	–	-3,179	-1,911
	Earnings before income taxes	–	-47,692	-63,514
10.	Income taxes	D.05.	1,225	570
	Consolidated net profit or loss for the period from continuing operations	–	-46,467	-62,944
	Consolidated net profit or loss for the period from discontinued operations	–	-4,377	-1,904
	Consolidated loss	–	-50,844	-64,848
	Other comprehensive income (net)
	Items not reclassified to consolidated profit or loss:
11.	Remeasurement of net liability (asset) arising on defined benefit pension plans	–	-13	3
	Items be reclassified to profit or loss in the future:
12.	Effect of movements in exchange rates	–	-24,967	-6,399
	Total other comprehensive income	–	-24,980	-6,396
	Total comprehensive income for the period	–	-75,825	-71,244
	Net profit or loss (consolidated loss) for the period attributable to:
	Shareholders of the Parent	–	-50,960	-61,803
	Non-controlling interests	–	116	-3,045
	Consolidated comprehensive income attributable to:
	Shareholders of the parent	–	-75,276	-68,222
	Non-controlling interests	–	-548	-3,022
	Diluted and undiluted earnings per share from continuing operations	–	-102	-153
	Diluted and undiluted earnings per share from continuing and discontinued operations	–	-111	-158

C. Consolidated statement of changes in equity

01.01.2017 - 31.03.2017

Attributable to the owners of the Parent

	Retained earnings and other reserves
KEUR	Subscribed capital	Capital reserves	Retained earnings	Currency translation reserve	Revaluation reserve from pension commitments	Treasury shares	Total	Non-con trolling interests	Equity
Balance as of Jan. 1, 2017	464	1,582,837	-587,592	-93,703	-185	-5	901,815	-9,607	892,208
Net income/loss for the year	–	–	-50,960	–	–	–	-50,960	116	-50,844
Other compre hensive income	–	–	–	-24,305	-11	–	-24,316	-664	-24,980
Total comprehensive income	–	–	-50,960	-24,305	-11	–	-75,276	-548	-75,824
Transactions with owners - payments received and change in non-controlling interests
Capital increases	1	–	–	–	–	–	1	–	1
Loan equity component	–	–	–	–	–	–	–	–	–
Share-based payment (IFRS 2 program)	–	234	–	–	–	–	234	–	234
Acquisition of non-controlling interests without change of control	–	–	–	–	–	–	–	–	–
Acquisition of a subsidiary with non-controlling interests	–	–	–	–	–	–	–	–	–
Other transactions with non-controlling interests without change of control	–	-30,126	–	–	–	–	-30,126	9,251	-20,875
Disposal of non-con trolling interests without change of control	–	–	–	–	–	–	–	–	–
Other changes in the consolidated group	–	–	–	–	–	–	–	–	–
Other changes	–	–	-–	–	–	–	–	–	–
Transactions with owners	1	-29,892	–	–	–	–	-29,891	9,251	-20,640
Balance as of Mar. 31, 2017	464	1,552,945	-638,552	-118,008	-196	-5	796,647	-904	795,743

01.01.2016 -

31.03.2016 Attributable to the owners of the Parent

	Retained earnings and other reserves
KEUR	Subscribed capital	Capital reserves	Retained earnings	Currency translation reserve	Revaluation reserve from pension commitments	Treasury shares	Total	Non-con trolling interests	Equity
Balance as of Jan. 1, 2016	394	1,204,179	-400,147	-32,214	-247	-5	771,960	-6,469	765,491
Net income/loss for the year	–	–	-61,803	–	–	–	-61,803	-3,045	-64,848
Other compre hensive income	–	–	–	-6,421	2	–	-6,419	23	-6,396
Total compre hensive income	–	–	-61,803	-6,421	2	–	-68,222	-3,022	-71,244
Transactions with owners - payments received and change in non-controlling interests
Capital increases	4	18,875	–	–	–	–	18,880	–	18,880
Loan equity component	–	–	–	–	–	–	–	–	–
Share-based payment (IFRS 2 program)	–	234	–	–	–	–	234	–	234
Acquisition of non-controlling interests without change of control	–	-839	–	–	–	–	-839	-106	-945
Acquisition of a subsidiary with non-cont rolling interests	–	–	–	–	–	–	–	–	–
Other transac tions with non-controlling interests without change of control	–	-3,483	–	–	–	–	-3,483	-55	-3,538
Other changes in the consolidated group	–	7	–	–	–	–	7	–	7
Other changes	–	–	–	–	–	–	–	–	–
Transactions with owners	4	14,796	–	–	–	–	14,800	-161	14,639
Balance as of Mar. 31, 2016	398	1,218,975	-461,949	-38,635	-245	-5	718,538	-9,652	708,886

D. Consolidated statement of cash flows

		Note	Jan. 1 - Mar. 31, 2017 KEUR	Jan. 1 - Mar. 31, 2016 KEUR
1.	Cash flow from operating activities
	Consolidated loss	–	-50,844	-64,848
	Elimination of taxes on income	–	-1,215	-591
	Income taxes paid (-)	–	-1,866	-1,232
	Depreciation, amortization and impairment	E.01./E.02.	12,337	10,697
	Increase (+)/decrease (-) in provisions	–	1,872	140
	Other non-cash income and expenses	–	-7,680	-4,416
	Non-cash income and expenses from share-based payments	–	-302	10,092
	Gain (-)/loss(+) on the disposals of fixed assets	–	122	-1
	Gain (-)/loss (+) on deconsolidation	–	0	-303
	Increase (-)/decrease (+) in inventories, trade receivables and other assets	–	1,425	-13,893
	Increase (-)/decrease (+) in trade payables and other liabilities	–	-2,814	15,939
	Interest income (-) and expense (+)	–	18,138	9,271
	Cash flow from operating activities	–	-30,827	-39,145
2.	Cash flow from investing activities
	Inflows (+) from the disposal of property, plant and equipment	–	79	21
	Outflows (-) for investments in property, plant and equipment	E.01.	-1,696	-1,050
	Inflows (+) from the disposal of intangible assets	–	28	138
	Outflows (-) for investments in intangible assets	E.02.	-1,828	-1,988
	Outflows (-)/inflows (+) to acquire financial assets	–	54	-1,820
	Outflows (-)/inflows (+) for loans to third parties	–	-407	-130
	Net outflows (-)/inflows (+) for the acquisition of shares in consolidated companies	–	0	-797
	Interest received (+)	–	308	92
	Cash flow from investing activities	–	-3,461	-5,535

		Note	Jan. 1 - Mar. 31, 2017 in KEUR	Jan. 1 - Mar. 31, 2016 in KEUR
3.	Cash flow from financing activities
	Inflows (+) from equity contributions	–	1	1
	Inflows (+) from the issue of loans and raising of (financial) credit	–	25,213	120,030
	Outflows (-) from the redemption of loans and (financial) credit	–	-333	-110,511
	Interest paid (-)	–	-2,040	-4,171
	Cash flow from financing activities	–	22,840	5,349
4.	Cash and cash equivalents at the end of the period
	Net change in cash and cash equivalents (subtotals 1 - 3)	–	-11,447	-39,330
	Effect of exchange rate movements on cash and cash equivalents	–	-581	-487
	Cash and cash equivalents at the beginning of the period	–	230,853	160,150
	Cash and cash equivalents at the end of the period	–	218,824	120,332

02. Selected notes to quarterly financial statements

A. General information on the quarterly financial statements

01 COMPANY INFORMATION

The Delivery Hero Group ('Delivery Hero' or 'Group') offers online food ordering services in more than 40 countries on six continents. The Group operates in online food ordering and online food delivery services in various countries in Europe, Latin and South America and also in Asia, Africa, North America and Australia.

Delivery Hero GmbH is the Group Parent; its registered office is located in Oranienburger Straße 70, 10117 Berlin. It is entered in the commercial register of Berlin-Charlottenburg District Court under number HRB 135090 B.

The comparability of the consolidated statement of profits or loss and other comprehensive income as of March 31, 2017 on the previous year's quarter is limited due to the acquisition of the shares in Emerging Markets Online Food Delivery Holding S.á.r.l. as of December 31, 2016.

Management prepared the consolidated quarterly financial statements as of May 19, 2017, and submitted these directly to the shareholders for approval.

02 BASIS OF FINANCIAL REPORTING IN ACCORDANCE WITH IFRS

a) Basis of preparation

The condensed Group interim report of DH Group for the first quarter of 2017 was prepared in accordance with IAS 34 Interim Financial Reporting and complies with the International Financial Reporting Standards (IFRS) as adopted by the European Union for interim financial reporting that are valid as of the reporting date.

The condensed Group interim report does not contain all information and disclosures in the notes that are required for consolidated financial statements and should thus be read in conjunction with the consolidated financial statements as of December 31, 2016. To gain an understanding of the significant changes in the financial position and financial performance since the prior consolidated financial statements, selected disclosures in the notes for significant events and transactions are nevertheless included in the Group interim report.

The condensed consolidated interim financial statements are prepared in euro. Unless otherwise stated, all figures have been rounded to the nearest EUR thousand (KEUR). For computational reasons, there may be rounding differences to the exact mathematical values in tables and references.

In preparing the condensed consolidated interim financial statements, the accounting policies used for the preparation of the consolidated financial statements as of December 31, 2016, remain unchanged.

The continuation of the Group and the Parent Company, the subsidiaries and the Group as well as the ability of the Parent Company and subsidiaries to continue as a going concern depends on the implementation of additional measures to secure capital and liquidity by the shareholders and other potential investors or by other capital providers. Furthermore, recoverability of the reported carrying amounts for goodwill is dependent on realization of the revenue and EBITDA growth assumed in the budget.

The preparation of consolidated financial statements in accordance with IFRSs requires management estimates and judgements.

b) New standards and interpretations that have not yet been applied

The evaluation of the expected effects of the new standards and interpretations on the consolidated financial statements of DH is presented in the following table.

Standard	Issued by the IASB	To be applied from	Effects
IFRS 15 Revenue from contracts with customers	May 2014/Septem ber 2015	January 1, 2018	The likely effects are assessed by DH.
IFRS 9 Financial instruments	July 2014	January 1, 2018	The likely effects are assessed by DH.
IFRS 16 Leases	January 2016	January 1, 2019	The likely effects are assessed by DH.
Amendments to IAS 7: Disclosu res in the notes	January 2016	January 1, 2017 (IASB)	Likely effects on the notes to the financial statements
Amendments to IAS 12: Recog nition of Deferred Tax Assets for Unrealized Losses	January 2016	January 1, 2017 (IASB)	No effect expected
Annual Improvements to the IFRS 2014-2016 Cycle: Amendments to IFRS 12, IFRS 1 and IAS 28	December 2016	January 1, 2017 January 1, 2018 (IASB)	No effect expected
Amendments to IFRS 2: Classifi cation and Measurement of Sha re-based Payment Transactions	June 2016	January 1, 2018 (IASB)	Likely effects on the notes to the financial statements
Amendments to IFRS 4: Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts	September 2016	January 1, 2018 (IASB)	No effect expected
IFRIC 22: Foreign Currency Transactions and Advance Consi deration	December 2016	January 1, 2018 (IASB)	No effect expected
Amendments to IAS 40: Transfers of Investment Property	December 2016	January 1, 2018 (IASB)	No effect expected

The new standards IFRS 9, IFRS 15 and IFRS 16 are currently being examined by DH for their effect on information to be presented in the consolidated financial statements. At the time of preparing the quarterly financial statements, DH cannot yet completely assess the effects of the new provisions. DH will conduct a more precise assessment of the effects in the near future.

B. Seasonal influences on business operations

Business operations are affected by fluctuations related to weather conditions and public holidays at the level of the individual entity and the operations are exposed to seasonal influences in some regions, such as Northern Europe. In these regions, order demand is typically higher in autumn and winter due to shorter daylight hours and usually bad weather conditions.

At Group level, seasonal influences are less pronounced due to the diversification of the group and mitigated by organic and external growth. Political and economic crises have also not had an impact on the development of the Group.

C. Notes to the quarterly financial statements

01 OPERATING SEGMENTS

The profitability of the operating segments is measured on the basis of adjusted EBITDA. Adjusted EBITDA relates to the earnings from continuing operations before income tax, finance income/costs, depreciation and amortization and non-operating effects on earnings.

a) Reconciliation of segment reporting

Revenue

KEUR	Jan. 1 - Mar. 31, 2017	Jan. 1 - Mar. 31, 2016
Europe	47,130	32,777
MENA (Middle East and North Africa)	29,568	15,432
Asia	31,628	9,812
Americas	9,775	4,230
Total segment revenue	118,101	62,251
Consolidation adjustments	0	0
Reconciliation effects	3,078	533
Group revenue	121,179	62,784

Adjusted EBITDA

KEUR	Jan. 1 - Mar. 31, 2017	Jan. 1 - Mar. 31, 2016
Europe	-9,444	-17,763
MENA	8,344	2,794
Asia	-12,268	-11,295
Americas	-5,007	-5,157
Total segment adjusted EBITDA	-18,375	-31,421
Consolidation adjustments	-665	-60
Management adjustments	-2,077	-2,130
Expenses for share-based payment	302	-10,092
Other reconciliation items	-2,647	1,271
Amortization, depreciation and impairments	-12,240	-10,593
Interest and financial result	-11,990	-10,489
Earnings before income taxes from continuing operations	-47,692	-63,514

Management adjustments include expenses for services related to corporate transactions and funding rounds of KEUR 1,142 (PY: KEUR 1,276), expenses for achieving access to capital markets of KEUR 550 (PY: KEUR 710), expenses for reorganization measures of KEUR 385 (PY: KEUR 20) and expenses for implementing information technology of KEUR 0 (PY: KEUR 123).

Other reconciliation items include non-operating income and expenses. In the first quarter 2017 this item includes in particular expenses for non-income tax-related taxes of KEUR 1,530 (PY: KEUR 216), losses on the disposal of fixed assets of KEUR 123 (PY: KEUR -2) and gains on the disposal of subsidiaries of KEUR 0 (PY: KEUR 533).

The segment structure presented by geographic features was used for the first time in the consolidated financial statements as of December 31, 2016. In addition to the comparative period in 2016 presented in this section, please refer to the presentation of the development of the respective quarters of the prior year in Appendix I.

b) Information on geographical areas

The tables below show the Group's revenue and non-current assets for Germany and other significant Group countries. The geographic assignment of revenue and assets is made according to the respective country of registration of the entity.

Revenue

KEUR	Jan. 1 - Mar. 31, 2017	Jan. 1 - Mar. 31, 2016
Germany	21,451	17,898
South Korea	15,259	8,346
Turkey	11,426	9,165
Sweden	8,394	4,109
Kuwait	7,652	3,813
Other countries	56,997	19,453
Subtotal continuing operations	121,179	62,784
United Kingdom	10,003	9,008
Total	131,182	71,792

Non-current assets

KEUR	Mar. 31, 2017	Dec. 31, 2016
Germany	283,317	281,452
Turkey	413,842	435,967
Kuwait	127,276	129,106
Saudi Arabia	131,055	121,872
Other countries	343,240	355,458
Total	1,298,730	1,323,855

Non-current assets do not include financial instruments, deferred tax assets or assets from employee benefits.

02 DISCONTINUED OPERATIONS

The disposal plan of hungryhouse Group is unchanged and can be derived from the consolidated notes for the 2016 financial year.

The transaction continues to be conditional on the approval of the United Kingdom's Competition and Markets Authority (CMA). Approval is expected during the 2017 financial year.

D. Notes on the consolidated statement of profit or loss and other comprehensive income

01 REVENUE

Revenue is broken down as follows:

KEUR	Jan. 1 - Mar. 31, 2017	Jan. 1 - Mar. 31, 2016
Revenue from
- Commissions	79,029	45,437
- Delivery service	19,288	4,766
- Prime placings	9,489	6,102
- Credit card use	4,139	2,281
- Other	9,234	4,198
Total	121,179	62,784

Revenue of KEUR 58,395 is 93% over the prior year's level. The geographic distribution of revenue can be derived from the information on geographical areas, see Section C.01.

02 COST OF SALES

Cost of sales is broken down as follows:

Jan. 1 - KEUR Mar. 31, 2017 Personnel expenses 15,598 Delivery costs 13,050 Fees for payment services 4,462 Goods and merchandise 3,757 Purchase of terminals and other POS systems 1,304 Server hosting 1,447 Data transfer costs 1,157
			Jan. 1 - Mar. 31, 2016
			3,288
			8,598
			2,581
			794
			2,271
			704
			446
	Call center	244	331
Other costs of sales 516			662
Total 41,535			19,675

03 MARKETING EXPENSES

Marketing expenses are broken down as follows:

KEUR	Jan. 1 - Mar. 31, 2017	Jan. 1 - Mar. 31, 2016
Customer acquisition	37,948	25,263
Restaurant acquisition	16,925	15,153
Expenses for write-downs on brands	5,525	5,622
Expenses for write-downs on customer/supplier base	4,491	3,869
Other marketing expenses	8,041	5,047
Total	72,929	54,953

04 SHARE-BASED PAYMENT

The DH Group has been operating a share-based payment program since 2011 to participate top management in the performance of the Company and to appreciate their contribution to the sustained success of the DH Group. The group of beneficiaries comprises members of management board and the top management of Delivery Hero GmbH as well as management bodies and the top management of affiliates of the DH Group.

As of March 31, 2016, the share-based program comprised six DH virtual share programs (VSP I-VI), VSP foodora, Option foodora, F-Food and other IFRS 2 programs.

05 INCOME TAXES

For the calculation of period income tax expenses and income for entities for which income tax expenses and income are expected for the current financial year, the Group uses the respective tax rate that would be applicable for the total expected income and expenditure.

E. Notes on the consolidated statement of financial position

01 PROPERTY, PLANT AND EQUIPMENT

		Operating	Advance payments
Cost in KEUR	Leasehold improvements	and office equipment	for property, plant and equipment	Total
As of Jan. 1, 2017	4,854	21,265	4	26,123
Additions	108	1,357	231	1,696
Reclassifications	4	-3	15	16
Disposals	-38	-341	0	-378
Exchange rate differences	67	188	1	256
As of Mar. 31, 2017	4,995	22,466	251	27,712
Accumulated amortiza tion and depreciation in KEUR
As of Jan. 1, 2017	-1,542	-9,061	0	-10,603
Amortization, depreciati on and write-downs	-140	-924	0	-1,063
Impairment losses	0	-2	0	-2
Reclassifications	0	7	2	9
Disposals	7	171	0	177
Exchange rate differences	-18	-201	0	-219
As of Mar. 31, 2017	-1,693	-10,010	2	-11,700
Carrying amount as of Mar. 31, 2017	3,302	12,457	253	16,012
Carrying amount as of Jan. 1, 2017	3,311	12,204	4	15,520

Movements in property, plant and equipment in 2017:

02 INTANGIBLE ASSETS

Movements in intangible assets:

Cost in KEUR	Goodwill	Licenses and similar rights	Trade marks	Software	Advance payments on intangib le assets and capitalized develop ment costs	Internally generated intangible assets	Customer / supplier base and other intangible assets	Total
As of Jan. 1, 2017	717,669	4,926	479,216	11,494	3,918	6,687	177,887	1,401,796
Additions	0	356	4	208	406	349	505	1,828
Reclassifications	0	558	-1	646	61	0	-476	787
Disposals	0	-10	0	-15	-16	0	-11	-52
Exchange rate differences	-8,038	-17	-13,056	871	11	840	-323	-19,712
As of Mar. 31, 2017	709,631	5,813	466,163	13,204	4,380	7,875	177,581	1,384,647
Accumulated amortization in KEUR
As of Jan. 1, 2017	-15,454	-3,465	-42,215	-5,110	-343	-377	-29,840	-96,804
Amortization	-1	-170	-5,653	-552	0	-507	-4,040	-10,923
Impairment losses	0	0	0	0	0	0	-4	-4
Reclassifications	0	-232	92	-773	0	0	244	-668
Disposals	0	2	0	136	0	0	-115	24
Exchange rate differences	0	24	770	-877	-8	-957	40	-1,008
As of Mar. 31, 2017	-15,455	-3,840	-47,007	-7,176	-351	-1,841	-33,715	-109,384
Carrying amount as of Mar. 31, 2017	694,176	1,973	419,157	6,028	4,028	6,035	143,866	1,275,263
Carrying amount as of Jan. 1, 2017	702,214	1,461	437,001	6,385	3,575	6,310	148,047	1,304,993

03 OTHER PROVISIONS

The increase in non-current other provisions relative to December 31, 2016, is mainly attributable to a change in the due date of an employee share ownership plan. Corresponding current other provisions have decreased.

04 TRADE PAYABLES AND OTHER PAYABLES

The increase in trade payables and other payables mainly results from the drawdown of third-party loans in the first quarter 2017 in the amount of KEUR 25,000

On March 31, 2017, Delivery Hero agreed an investment with minority interests that includes a put/call option to acquire treasury shares. For this purpose, a liability was recognized at fair value in the amount of KEUR 20,900 and the anticipated acquisition method was applied. Since the allocated loss on the non-controlling interests amounts to KEUR 9,251 as of March 31, 2017, the capital reserve has been reduced by KEUR 30,151.

F. Other disclosures

01 FINANCIAL INSTRUMENTS

a) Notes on financial instruments

Financial assets and liabilities by measurement category and class are shown in the following table.

The following abbreviations are used for the measurement categories:

• • LaR: Loans and Receivables
• • AfS: Available for Sale
• • FLaC: Financial Liability at Cost
• • FAHfT: Financial Assets Held for Trading
• • FLHfT: Financial Liabilities Held for Trading

	Classification pursuant to IAS 39		Measured at amortized cost	Measured at fair value	Total line items
Mar. 31, 2017 KEUR		Carrying amount	Fair value	Carrying amount	Carrying amount
Investments1)	AfS	2,531	n/a	–	2,531
Loans granted	LaR	1,498	1,498	–	1,498
Bank deposits	LaR	255	255	–	255
Derivative financial instruments	FAHfT	–	–	99	99
Security deposits	LaR	832	832	–	832
Other financial assets	–	5,116	2,585	99	5,215
Trade receivables	LaR	41,851	41,851	–	41,851
Loans granted	LaR	21	21	–	21
Other securities1)	AfS	153	n/a	–	153
Security deposits	LaR	1,447	1,447	–	1,447
Derivative financial instruments	FAHfT	–	–	0	0
Bank deposits and related receivables	LaR	6,228	6,228	–	6,228
Trade and other receivables	–	49,700	49,546	0	49,700
Cash and cash equivalents	–	218,824	218,824	–	218,824
Total financial assets	–	273,640	270,956	99	273,739
Liabilities to banks	FLaC	117,074	117,898	–	117,074
Trade payables	FLaC	53,776	53,776	–	53,776
Other financial liabilities	FLaC	50,160	50,160	–	50,160
Other purchase price obligation2)	FLHfT	–	–	20,345	20,345
Security deposits received	FLaC	682	682	–	682
Derivative financial instruments2)	FLHfT	–	–	61,413	61,413
Liabilities from finance leases	FLaC	4,564	4,564	–	4,564
Loans2)	FLaC	261,528	229,200	–	261,528
Trade and other payables	–	370,710	338,381	81,758	452,468
Total financial liabilities	–	487,784	456,279	81,758	569,542

1) Investments and other securities are measured at cost

2) Level 3 of the fair value hierarchy. Measurement methods for fair value according to level 3 are unchanged and can be derived from the consolidated notes to the financial statements for the 2016 financial year.

	Classification pursuant to IAS 39		Measured at amortized cost	Measured at fair value	Total line items
Dec. 31, 2016 KEUR		Carrying amount	Fair value	Carrying amount	Carrying amount
Investments1)	AfS	2,560	n/a	–	2,560
Loans granted	LaR	1,894	1,894	–	1,894
Bank deposits	LaR	250	250	–	250
Derivative financial instruments	FAHfT	–	–	991	991
Security deposits	LaR	1,013	1,013	–	1,013
Other financial assets	–	5,718	3,157	991	6,709
Trade receivables	LaR	48,913	48,913	–	48,913
Loans granted	LaR	11	11	–	11
Other securities1)	AfS	205	n/a	–	205
Security deposits	LaR	2,887	2,887	–	2,887
Derivative financial instruments	FAHfT	–	–	0	0
Bank deposits and related receivables	LaR	1,335	1,335	–	1,335
Trade and other receivables	–	53,351	53,146	0	53,351
Cash and cash equivalents	–	230,853	230,853	–	230,853
Total financial assets	–	289,921	287,156	991	290,913
Liabilities to banks	FLaC	116,403	118,960	–	116,403
Trade payables	FLaC	52,761	52,761	–	52,761
Other financial liabilities	FLaC	48,300	48,300	–	48,300
Other purchase price obligation2)	FLHfT	–	–	14,225	14,225
Security deposits received	FLaC	596	596	–	596
Derivative financial instruments2)	FLHfT	–	–	41,433	41,433
Liabilities from finance leases	FLaC	4,636	4,636	–	4,636
Loans2)	FLaC	230,799	228,478	–	230,799
Trade and other payables	–	337,092	334,771	55,658	392,750
Total financial liabilities	–	453,495	453,731	55,658	509,153

1) Investments and other securities are measured at cost

2) Level 3 of the fair value hierarchy. Measurement methods for fair value according to level 3 are unchanged and can be derived from the consolidated notes to the financial statements for the 2016 financial year.

All derivative financial instruments are classified in the fair value hierarchy as level 3 as the measurement is carried out on the basis of unobservable input factors.

The carrying amount of cash and cash equivalents, trade reveivables, granted loans, received securities, liabilities on deliveries and services, liabilities from finance leases and other liabilities corresponds approximately to fair value as of the repoting date.

The reconciliation of level 3 instruments measured at fair value is as follows:

KEUR	Assets	Liabilities	Total
As of Jan. 1, 2016	2,892	-54,791	-51,899
Additions due to acquisition and issuances	346	-3,959	-3,613
Disposals due to sale and settlement	-2,892	–	-2,892
Profits recorded in the consolidated statement of profit or loss and other comprehensive income	1,184	12,609	13,793
Losses recorded in the consolidated statement of profit or loss and other comprehensive income	-539	-7,842	-8,381
As of Dec. 31, 2016	991	-53,983	-52,992
As of Jan. 1, 2017	991	-53,983	-52,992
Additions due to acquisition and issuances	0	-20,900	-20,900
Disposals due to sale and settlement	-715	1,713	998
Profits recorded in the consolidated statement of profit or loss and other comprehensive income	0	1,139	1,139
Losses recorded in the consolidated statement of profit or loss and other comprehensive income	-177	-9,751	-9,928
As of Mar. 31, 2017	99	-81,782	-81,683

No changes between the different levels of the fair value hierarchy took place in the quarter.

Realized gains and losses from the change in level 3 instruments are recognized in finance income/expense. Unrealized gains or losses are recognized in retained earnings.

The fair value of the separable embedded derivatives is determined using an option pricing model at each relevant reporting date. As part of the measurement process, the required publicly available market data is collected and unobservable input parameters are updated using internal calculations. The latter relates in particular to the value determined for each company share of DH using a discounted cash flow model as well as the specific risk premium for DH. Both parameters are updated on each measurement date. The calculation of the sensitivities for unobservable input parameters is presented in the 'Market risks' section.

The future payment obligation for non-controlling shares for PedidosYa and Clickdelivery is linked via different contractual parameters to the corporate value of DH at the date of the exit event. Owing to this interdependence, the fair value of put/call options is determined using Monte Carlo simulations. Measurement is made at each relevant reporting date. As part of the measurement process, the required publicly available market data is collected and unobservable input parameters are updated at the respective reporting date using internal calculations. The latter relates in particular to the value determined for each company share of DH based on a discounted cash flow approach; this value represents the key variable influencing the measurement result. Volatility is derived from the historical volatility of peer group companies as of the reporting date.

In line with the above presentations, recourse is made to a value determined for each company share of DH using the discounted cash flow approach for the calculation of the fair value of the variable purchase price component of PedidosYa Group valued in own DH shares. The option value is calculated using the Black-Scholes model. The following table shows the significant, unobservable input parameters of the model for calculating the value of DH shares:

	Inputs
Revenues growth p.a. in the planning horizon (CAGR)	32.7%
Ø EBITDA margin in the planning horizon	8.9%
Revenues growth p.a. after the end of planning horizon	2.1%
EBITDA margin after the end of the planning horizon	30.0%
Ø Discount rate in the planning horizon	9.9%
Age of entity	7 years

The estimated fair value of options would rise (decline) if the DH share price were to be higher (lower).

The addition of acquisition and issuance results from put-call option agreements for the acquisition of outstanding shares in RGP Korea Ldt. in the first quarter.

The contingent payment obligations for the earn-out provision at OFD as well as the put-call option agreements are linked via various contractual parameters to key financial and operational performance indicators of of the respective entity over the next few years. Due to the mutual dependency and the uncertainty as to future variables, the financial and operational benchmarks are derived from a Monte Carlo simulation. Based on the results of the simulation, the value of a potential payment at the respective future dates is determined based on contractual agreements. The measurement is based on publicly available, observable market data and on unobservable input parameters. The unobservable input parameters include mainly future financial and operational key performance indicators. These were simulated using a Monte Carlo approach with the model being calibrated based on development in line with existing budget planning for the relevant companies. Other financial key performance indicators were taken from the available financial statements of the relevant companies and extrapolated in line with the simulation results. Measurement is made at each relevant reporting date and the parameters updated accordingly. This relates to both the publicly available market data and unobservable input parameters, e.g. the OFD's budget planning.

The measurement method previously described is also used for the measurement of the put-call option arrangements for the acquisition of additional shares in Foodarena GmbH, Biel, Switzerland.

b) Market risks

Some of the loans utilized by the Group have floating interest rates based on reference interest rates. Changes in market interest rates may increase the interest payable in the future, which would negatively affect the Company's financial performance. If the market interest rate were 1% higher (lower), this would have an earnings effect of KEUR 808 (KEUR 0).

Based on derivatives held or issued by the DH Group as of the reporting date, a hypothetical change (quantified using sensitivity analysis) for the share values relevant to the respective instruments would have the following listed effects (before tax) as of the reporting date:

		Effect on profit or loss
Financial instruments as of Mar. 31, 2017 in KEUR	+10%	-10%
Separable embedded derivatives	-604	753
Variable purchase price component of PedidosYa	-437	447
Derivatives from put/call options	-1,297	2,776

With respect to the determined value of the separable embedded derivatives (similar to the derivatives from put/call options and the variable purchase price component), the value per DH company share determined using the discounted cash flow method is a parameter which has a material impact on the measurement result. As of December 31, 2016, the sensitivity analysis is as follows:

		Effect on profit or loss
Financial instruments as of Dec. 31, 2016 in KEUR	+10%	-10%
Separable embedded derivatives	-693	861
Variable purchase price component of PedidosYa	-298	298
Derivatives from put/call options	-3,608	3,869

In terms of the separable embedded derivatives, DH's risk premium is another unobservable input factor in addition to the DH share value. If the risk premium were 1% higher or lower, this would have an earnings effect of KEUR -879 or KEUR 1,210 (PY: KEUR -866 or KEUR 1,155) for the first quarter.

The expected future revenue is a key unobservable input factor in the measurement of the contingent purchase price obligations resulting from company acquisitions. If revenue were 5% higher or lower, this would of KEUR -1,283 or KEUR 1,272 (PY: KEUR -1,245 or KEUR 1,260). The estimated fair value of the obligation would rise (decline) if the expected revenue were to be higher (lower).

The expected future gross merchandise value (GMV) is a key unobservable input factor in the measurement of the contingent purchase price obligations from company acquisitions. If GMV were 5% higher or lower, this would have an earnings effect of KEUR -108 or KEUR 100 (PY: KEUR -92 or KEUR 99). The estimated fair value of the obligation would rise (decline) if the expected revenue were to be higher (lower).

02 RELATED PARTIES

a) Related entities

The following lists show the receivables and payables from/to related entities as well as expenses and income resulting from transactions with related entities.

KEUR	Mar. 31, 2017	Dec. 31, 2016
Statement of financial position
Receivables from affiliated companies	10	22
Receivables from associates	41	258
Liabilities to affiliated companies	5	6
Liabilities to associates	0	2

KEUR	Jan. 01 - Mar. 31, 2017	Jan. 01 - Mar. 31, 2016
Statement of comprehensive income
Income from associates	26	166
Income from entities controlled by related parties	6	7
Expenses payable to entities controlled by related parties	2	34

b) Key management personnel and other person

In the first quarter of 2017 the management board and top management received the following remuneration:

Management compensation KEUR	Mar. 31, 2017	Mar. 31, 2016
Short-term employee benefits	284	279
Termination benefits	0	59
Expenses related to share-based payments (VSPs)	374	1,263

The company's Advisory Board does not receive any remuneration.

Provisions for virtual share options issued to former members of management and C-level amount to KEUR 2,721 (December 31, 2016: KEUR 3,005); beyond this, there are no obligations to former members of management and C-level.

The composition of provisions due to virtual share options issued to current related parties is broken down as follows:

Measurement date	Mar. 31, 2017	Dec. 31, 2016
No. of shares owed	6,322	6,322
No. of tendered shares	4,888	4,515
Fair value (in KEUR)	13,508	13,134
Addition to the provisions recognized under expenses (in KEUR)	374	4,935

03 EARNINGS PER SHARE

Basic earnings per share from continuing operations is calculated by dividing the earnings from continuing operations attributable to the ordinary shares by the weighted average number of undiluted shares in the respective financial year.

Basic earnings per share from continuing and discontinued operations is calculated by dividing total comprehensive income attributable to the ordinary shares by the weighted average number of undiluted shares in the respective financial year.

The weighted average number of ordinary 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 issues and the total number of days of the period.

KEUR	01.01.- 31.03.2017	01.01.- 31.03.2016
Net income/loss from continuing operations	-46,467	-62,944
Comprehensive income attributable to non-controlling interests	-116	3,045
Income/loss from continuing operations attributable to shareholders	-46,583	-59,899
Weighted average number of shares issued	459	391
Diluted and undiluted earnings per share from continuing operations	-101	-153
Quarterly earnings from continuing and discontinued opera tions attributable to shareholders	-50,960	-61,803
Weighted average number of shares issued	459	391
Diluted and undiluted earnings per share from continuing and discontinued operations	-111	-158

For the calculation of diluted earnings per share, the share-based payment systems and other contracts which can be settled in ordinary shares or cash were taken into account. 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. Dilution protection is in place for all equity instruments. As a result, basic earnings per share corresponds to diluted earnings per share.

The following equity instruments were not taken into account in determining the diluted earnings per share as they would display dilution protection.

Number of potential ordinary shares	Mar. 31, 2017	Mar. 31, 2016
Put/call option	1,316	421
Virtual share programs	637	241
Escrow loan	1,348	4,906
Total number of potential ordinary shares	3,301	5,568

The following transactions occurred after the reporting period and would have changed significantly the number of shares at the end of the period if those transactions had occurred before the end of the reporting period according to IAS 33.70 (d):

• • By resolution of May 4, 2017, the nominal share capital of the company was increased to EUR 465,976.
• • By resolution of May 12, 2017, the nominal share capital of the company was increased to EUR 508,943.

04 EVENTS AFTER THE REPORTING PERIOD

On April 1, 2017, the Company announced a regional partnership with AmRest Holding SE, the largest publicly traded restaurant operator in Central Europe. Within the scope of this agreement, Delivery Hero GmbH's share in Restaurant Partner Polska Sp. Z o.o. was reduced by 51% to 49% through the issuance of new shares. The partnership gives Delivery Hero the exclusive opportunity to integrate a large number of AmRest's most popular restaurants and brands throughout Poland into its own food delivery platform. As part of the agreement, AmRest will also bring its brands onto the Delivery Hero platforms DameJidlo.cz in the Czech Republic and NetPincér.hu in Hungary. The companies have also agreed to consider further collaborations in other Central and Eastern European countries.

In May 2017, the company and its shareholders concluded an investment agreement with a company of the Naspers group. The Naspers group will acquire shares in Delivery Hero GmbH for a total of EUR 387 million. The acquisition is to a large part carried out by means of a cash capital increase against the issue of new shares. The Naspers group will in future be represented by a member of the Supervisory Board of Delivery Hero.

Appendix I

Quaterly earning and segment information

	Continuing operations	Q1 2016 KEUR	Q2 2016 KEUR	Q3 2016 KEUR	Q1-Q2 2016 KEUR	Q1-Q3 2016 KEUR
1	Revenue	62,784	67,479	72,907	130,263	203,169
2	Cost of sales	-19,675	-18,180	-17,877	-37,855	-55,733
	Gross profit	43,109	49,299	55,029	92,408	147,437
3	Marketing expenses	-54,953	-51,137	-56,587	-106,091	-162,677
4	IT expenses	-9,178	-7,397	-6,950	-16,575	-23,525
5	General administrative expense	-31,040	-27,266	-39,623	-58,306	-97,929
6	Other operating income	901	629	-7	1,529	1,522
7	Other operating expenses	-1,863	-1,668	-1,326	-3,532	-4,858
	Operating result	-53,025	-37,541	-49,464	-90,567	-140,030
8	Net interest result	-8,578	-6,394	-7,054	-14,972	-22,026
9	Other financial income / costs	-1,911	-16,227	-11,263	-18,138	-29,402
	Earnings before income taxes	-63,514	-60,163	-67,782	-123,677	-191,458
10	Income taxes	570	-633	13,204	-62	13,142
	Consolidated net profit or loss for the period from continuing operations	-62,944	-60,796	-54,578	-123,739	-178,317
	Consolidated net profit or loss for the period from discontinued operations	-1,904	98	-1,336	-1,806	-3,142
	Consolidated loss	-64,848	-60,698	-55,914	-125,546	-181,459
	Other comprehensive income (net)
	Items not reclassified to profit or loss:
11	Remeasurement of net liability (asset) arising on defined benefit pensions plans	3	-5	-11	-2	-13
	Items reclassified to profit or loss in the future:
12	Effects of movements in exchange rates	-6,399	3,836	-21,079	-2,563	-23,642
	Total other comprehensive income (loss)	-6,396	3,831	-21,090	-2,565	-23,655
	Total consolidated comprehensive income for the period	-71,244	-56,867	-77,004	-128,111	-205,114
	Net profit or loss (consolidated loss) for the period attributable to:
	Shareholders of the parent company	-61,803	-59,585	-54,993	-121,388	-176,381
	Non-controlling interests	-3,045	-1,113	-921	-4,157	-5,078
	Consolidated comprehensive loss attributable to:
	Shareholders of the parent	-68,222	-55,644	-75,724	-123,866	-199,589
	Non-controlling interests	-3,022	-1,223	-1,280	-4,245	-5,525

Revenue in KEUR	Q1 2016	Q2 2016	Q3 2016	Q1-Q2 2016	Q1-Q3 2016
Europe	32,777	34,807	31,916	67,584	99,500
MENA	15,432	17,225	19,353	32,656	52,009
ASIA	9,812	11,327	13,455	21,139	34,594
Americas	4,230	5,622	6,683	9,852	16,535
Total segment revenue	62,251	68,983	71,406	131,233	202,639
Consolidation	0	0	0	0	0
Reconciliation	533	-1,503	1,500	-970	530
Group revenue	62,784	67,479	72,907	130,263	203,169

Adjusted EBITDA in TEUR	Q1 2016	Q2 2016	Q3 2016	Q1-Q2 2016	Q1-Q3 2016
Europe	-17,763	-9,818	-10,198	-27,581	-37,779
MENA	2,794	4,880	5,695	7,674	13,369
ASIA	-11,295	-5,985	-4,749	-17,280	-22,029
Americas	-5,157	-4,624	-4,775	-9,781	-14,556
Total segment adjusted EBITDA	-31,421	-15,547	-14,027	-46,968	-60,995
Consolidation	-60	-400	-1,457	-460	-1,917
Management adjustments	-2,130	-1,368	-784	-3,498	-4,282
Expenses for share based payments	-10,092	-9,074	-21,979	-19,167	-41,145
Other reconciling items	1,271	-865	-333	406	73
Depreciation, amortization	-10,593	-10,286	-10,885	-20,879	-31,764
Interest and other financial result	-10,489	-22,621	-18,318	-33,110	-51,428
Earnings before income taxes from continuing operations	-63,514	-60,163	-67,782	-123,676	-191,458

www.deliveryhero.com