zooplus SE — Interim / Quarterly Report 2018

May 17, 2018

2018 Q1 Report

Notes Consolidated interim financial statements Interim Group management report To the shareholders

Highlights of the first three months 2018

Sales increase 26% year-on-year in the first quarter of 2018

Continuation of consistent growth strategy; Sales retention rate at 94% on a currency-adjusted basis; Number of registered new customers up by 28%; Private label food and cat litter brands grow 37%

Earnings before taxes (EBT) amount to EUR -5.5 m

Earnings reflect the stronger focus on investment to expand market leadership since the second half of 2017 as well as temporary effects from annual discussions not yet completed with the industry that impact the gross margin

Positive operating cash flow of EUR 10.0 m

High growth financed by cash flows from operating activities despite lower earnings as a result of further improvements in working capital

Outlook for full year 2018 confirmed

Sales growth of 21% to 23% and earnings before taxes (EBT) based on sales in the range of -0.5% to +0.5% expected for full-year 2018

Table of contents

Report on outlook, risks

and opportunities 16

To the Shareholders	2	Consolidated interim financial statements	17
The zooplus AG share	2	Consolidated balance sheet	18
		Consolidated statement of comprehensive income	20
		Consolidated statement of cash flows	21
		Consolidated statement of changes in equity	23
Interim Group
management report	5	Notes	24
Business report	6	Notes to the consolidated
Subsequent events	15	financial statements	25
		Imprint	35

To the Shareholders

The zooplus AG share

Stock chart zooplus AG: January 2, 2018 to March 29, 2018

The share

zooplus AG shares were admitted for trading on the Frankfurt Stock Exchange in the Entry Standard segment on May 9, 2008. Almost one and a half years later, on October 22, 2009, the company successfully moved to the Prime Standard segment, which has the most stringent transparency and disclosure requirements in Germany. After an uninterrupted rise in the company's market capitalization and trading volume, zooplus AG entered the SDAX on June 29, 2011.

The sentiment emerging on the stock market in the first three months of 2018 was increasingly cautious. The rise in the euro versus the US dollar, fears of further US interest rate hikes, as well as US tariffs on steel and aluminum imports coupled with punitive tariffs on Chinese products were some of the issues weighing on stock markets in the first quarter of 2018. Among the German indices, the DAX (–6.4%), MDAX (–2.3%) and TecDAX (–1.4%), recorded declines as of the last trading day of the quarter on March 29, 2018 compared to their year-end levels on December 29, 2017. Of the two benchmark indices – the SDAX and DAXsubsector All Retail Internet – which are relevant for zooplus, the DAXsubsector All Retail Internet sector index has risen 6.5% by the end of March 2018 compared to its year-end close in 2017. At the end of the first quarter, the SDAX was up a slight 0.3% versus its level at the end of 2017. The price of zooplus shares initially rose in the first quarter of 2018 and temporarily exceeded the level of EUR 180 per share. In the course of publishing the financial results for the year 2017 at the end of March, zooplus shares declined, reaching a Xetra closing price of EUR 148.00 on March 29, 2018, or 1.53% below the 2017 closing price of EUR 150.30. This meant that the price on the last day of the quarter was also the lowest price during the reporting period. The highest closing price for zooplus shares in the first three months of 2018 was EUR 184.80 on March 19, 2018.

The company's market capitalization as ofMarch29, 2018 was EUR 1,056.36 m based on the total outstanding shares on that date of 7,137,578.

Analysts

Institution	Analyst	Date	Recom menda tion	Price target (EUR)
Baader Bank	Bosse, Volker	19/04/2018	Hold	185.00
Berenberg	Paganetty, Henrik	25/01/2018	Hold	155.00
Commerzbank	Riemann, Andreas	19/04/2018	Hold	148.00
Deutsche Bank Naizer, Nizla		25/01/2018	Hold	160.00
Hauck & Aufhäuser	Dannenberg, Lars	26/03/2018	Sell	126.00
J.P.Morgan CAZENOVE	Olcese, Borja	19/04/2018	Buy	205.00
Kepler Cheuvreux	Mauder, Nikolas	19/04/2018	Sell	140.00
Liberum	Brown, Wayne 10/04/2018		Buy	200.00
Bankhaus Lampe	Schlienkamp, Christoph	19/04/2018	Hold	145.00
ODDO Securities		Decot, Martin 23/03/2018	Hold	150.00
quirin Bank		Marinoni, Ralf 19/04/2018	Sell	115.00
Warburg Research	Kleibauer, Thilo	19/04/2018	Hold	159.00

Shareholder structure

As of April 26, 2018

Share ownership according to the published voting rights notifications

* Free float of 86.61 % according to the definition of Deutsche Börse

** Including equity instruments

Disclaimer: The shareholder structure depicted is based on the published notifications of voting rights and company information. zooplus AG does not assume responsibility for the accuracy, completeness and timeliness of this information.

Key data

WKN	511170
ISIN	DE0005111702
Ticker symbol	Z01
Trading segment	Regulated market (Prime Standard)
Class of shares	No par-value ordinary bearer shares
Share capital in EUR as of December 31, 2017	7,137,578.00
Share capital in EUR as of March 31, 2018	7,137,578.00
Number of shares as of March 31, 2018	7,137,578
Initial listing	May 9, 2008
Initial issue price*	EUR 13.00
Share price as of December 29, 2017	EUR 150.30
Share price as of March 29, 2018	EUR 148.00
Percentage change (since December 29, 2017)	– 1.53 %
Period high	EUR 184.80
Period low	EUR 148.00

Closing prices in Deutsche Börse AG's Xetra trading system

* Taking into account capital increase from company resources

in July 2011

2018 financial calendar

June 13, 2018	Annual General Meeting 2018
July 19, 2018	Preliminary H1 2018 Revenues
August 22, 2018	Semi-Annual Report H1 2018
October 17, 2018	Preliminary Q3 2018 Revenues
November 14, 2018	9-Monthly Report 2018

Business report 6 Subsequent events 15 Report on outlook, risks and opportunities 16

Interim Group management report

Interim Group management report as of March 31, 2018

1. Business report

A. Business performance and economic environment

a. Group structure and business activities

i. Business divisions

zooplusAG, the parent company of the Group, was founded in Munich in 1999. The Group operates in the e-commerce segment as a web-based retailer of pet supplies to private end consumers. The zooplus Group is the distinct market leader in Europe in this segment measured in terms of sales and active customer base.

The overriding business objectives are sustained growth, the systematic penetration of existing markets, and the further expansion of the company's online market leadership in Europe. zooplus is working to achieve these objectives by continually expanding its infrastructure to enable it to maintain its technological edge in the segment.

Altogether, zooplus offers customers roughly 8,000 different food and accessory products for dogs, cats, small animals, birds, fish and horses. These products include everyday staples, such as brand name foods generally available at specialty retailers; zooplus's private labels; specialty articles, like toys, care, and hygiene products; and other accessories. The majority of sales is generated from products for dogs and cats. zooplus also offers a wide range of free content and information on its websites, including veterinary and other animal-related advice, as well as interactive features such as discussion forums and blogs.

zooplus generates its sales from products shipped out of its central fulfillment centers located in Hörselgau, Germany; Tilburg, Netherlands; Wroclaw, Poland; Chalon-sur-Saône, France; and Antwerp, Belgium. Certain types of orders for individual markets are assumed by medium-sized and more specialized logistics centers located in Coventry, Great Britain; Strasbourg, France; Mühldorf, Germany; Jirikov, Czechia; Boleslawiec, Poland; and Istanbul, Turkey. This ensures an increasingly denser logistics infrastructure and provides even closer proximity to customers. Expanding this capacity provides zooplus the logistical infrastructure to achieve its planned future growth.

The company's central warehouse locations ensure fast and efficient delivery, as well as a high degree of general product availability for its customers across Europe. "Finalmile" deliveries to end customers are made using national and international parcel service providers.

From a customer perspective, zooplus sets itself apart from the competition by means of its business model, which combines a broad product range, continuous product availability, attractive prices and an efficient flow of goods with simple and convenient handling.

ii. Markets

zooplus operates in 30 countries across Europe through a variety of localized and cross-national online shops. According to the German Pet Trade and Industry Association (Zentralverband zoologischer Fachbetriebe Deutschland e.V.), the total gross market volume of the European pet supplies segment in 2016 was estimated at roughly EUR 26 bn. According to the company's proprietary estimates, zooplus AG is the clear online market leader in terms of sales and active customer base by a wide margin across Europe. The company also believes that, in absolute terms, it is clearly the fastest growing company in its sector.

As of May 2018, zooplus operated a total of 25 localized online shops. In addition to the high-volume markets of Germany, France, United Kingdom, the Netherlands, Spain, Italy and Poland, the company also operates online shops in Belgium, Denmark, Finland, Ireland, Croatia, Austria, Romania, Slovakia, Switzerland, Slovenia, Sweden, the Czech Republic, Hungary, Portugal, Bulgaria, Norway, Greece and Turkey. This effectively makes zooplus the sector's dominant provider in the online segment across Europe by a substantial margin compared to smaller local and national competitors.

Next to its zooplus brand, the Group operates under its bitiba brand, which is a discount concept with a limited range of products already available in 14 countries.

iii. Key influential factors

Two critical influential factors define the online retailing business for pet supplies: the evolution of the overall European pet supplies market, and the general and sector-specific development of Internet users' online purchasing behavior.

Evolution of the European pet supplies market

According to the German Pet Trade & Industry Association, the European pet supplies market currently comprises a total gross market volume of approximately EUR 26 bn. The markets of Germany, France, the United Kingdom, Spain, the Netherlands and Italy alone account for some EUR 19 bn of this total.

In all European countries, the primary sales channels for pet supplies are the bricks-and-mortar pet stores, garden centers, DIY stores, conventional supermarkets and discounters. The key difference between the individual bricks-and-mortar retail concepts for pet supplies are the product range and product positioning. While large-scale supermarkets and discounters usually limit themselves to a product range of approximately 150 to 200 smaller, typically lower-priced pet food products, larger pet store chains offer a complete product range of pet food (from entry-level to premium prices) and accessories (including toys, hygiene products, pet furniture and equipment). zooplus has defined its relevant market segment as the conventional specialty retailer segment, including the related specialty product areas of the core supermarket segment.

zooplus expects the market's overall volume to increase slightly in the years ahead.

The zooplus AG Management Board is forecasting a market growth of roughly 2% to 3% in Europe in the year 2018. In Germany, around one-third of all households own one or more pets. Changes in the market are brought about by changes in the animal population, the shift in sales toward higher value products and categories within the food and accessories segments ("premiumization"), and the increasing "humanization" of pets.

Thanks to recurring patterns of demand, especially in the pet food segment, the pet supplies market has very low seasonality. For example, around 84% of the total demand at zooplus relates to pet food itself, which means the Group enjoys exceptionally stable medium to longterm demand.

Development of online retailing

The Internet's development as a distribution channel for pet supplies is critically important to the Group. The availability of fast and reliable Internet access to large segments of the population is a basic prerequisite for European online retailing to consumers. The primary drivers are the availability of high-speed fixed Internet access and growing mobile access. Expanded access has driven the number of Internet users sharply higher in recent years, which in combination with higher Internet usage has prompted a significant increase in the general interest and participation in online shopping. zooplus customers, for example, can access the zooplus websites using their desktop computers, tablets, mobile phones or by using the zooplus app.

Over the past several years, e-commerce has gained tremendous significance as an ever more important distribution channel for retailers. According to publications by the German Retail Federation (Handelsverband Deutschland), B2C e-commerce sales in Germany will amount to roughly EUR 53.4 bn in 2018 (previous year: EUR 48.7 bn), corresponding to a year-on-year increase of 10%. Further growth in European online retailing appears more than likely, particularly given the inherent advantages of online retailing compared to existing bricksand-mortar retail concepts such as a broader product range, more convenient shopping and more attractive prices. In addition, logistics service providers and parcel services are making a significant effort to become their services more flexible and further improve their quality of service for end customers, which will also provide an added boost to the online market's growth momentum. Based on these trends, independent market observers such as Statista expect online retailing to continue to enjoy annual double-digit percentage growth rates in the years to come.

The share of products sold in the pet supply segment over the Internet is still relatively low compared to other product categories and largely driven by the sales zooplus itself generates across Europe. Based on the company's internal estimates, the Management Board believes that, until now, only around 9% of the total European pet market has migrated online.

This means zooplus, as the market leader, is in a unique position to benefit from these lasting shifts in the existing distribution and retail structures.

iv. Competitive position

Advantages over online competitors

Generally, there are lower barriers to market entry in online retail than in bricks-and-mortar retail. As a result, zooplus not only faces international (online) retailers such as Amazon in the European market but also a number of mostly regional online pet suppliers. A growing number of larger bricks-and-mortar retailers are also setting up online retail infrastructure while other local online retailers are entering new countries. These trends increase the number of retailers coming into direct competition with zooplus.

In contrast to both of these groups, zooplus has the advantage that its size and market leadership in Europe give it the structural capacity to reap crucial benefits from higher efficiency and economies of scale that are not equally available to smaller providers. This structural advantage in areas such as purchasing, private label development, logistics, technology, customer service, and marketing is the basis for zooplus's confidence in its competitive position. Other relative advantages such as brand recognition and the Group's financial strength also play a role.

In addition, the company's existing base of active European customers also helps to provide substantial momentum for acquiring new customers through wordof-mouth recommendations.

Advantages over bricks-and-mortar competitors

zooplus's business model is based on a lean, technologically efficient and scalable value creation chain combined with an outstanding shopping experience in terms of selection, price, convenience and especially easy home delivery.

zooplus does not operate any physical stores or outlets. Instead, from 11 fulfillment centers, it supplies customers throughout Europe with a significantly larger product range than existing bricks-and-mortar retailers. At the same time, the Group's centralized structure and related efficiency advantages combined with predominantly automated business processes help offset certain size-based advantages still enjoyed by the larger bricks-and-mortar pet store chains, particularly in product procurement. zooplus assumes that it is already today's cost leader in the online retailing of pet supplies.

zooplus's goal is and will continue to be to solidify and expand its lead in the online segment while strengthening its position in the overall online and bricks-and-mortar markets and profiting substantially from the continued high growth of online retailing.

v. Group structure

As of March 31, 2018, the Group's scope of fully consolidated companies included zooplus AG, Munich, and the following subsidiaries:

Subsidiary	Interest in share capital	Business activity
MATINA GmbH, Munich, Germany	100%	Private label business
BITIBA GmbH, Munich, Germany	100%	Secondary brand business
zooplus services Ltd., Oxford, Great Britain	100%	Service company for Great Britain
zooplus italia s.r.l., Genoa, Italy	100%	Service company for Italy
zooplus polska Sp. z o.o., Krakow, Poland	100%	Service company for Poland
zooplus services ESP S.L., Madrid, Spain	100%	Service company for Spain
zooplus france s.a.r.l., Strasbourg, France	100%	Service company for France
zooplus Nederland B.V., Tilburg, the Netherlands	100%	Service company for the Netherlands
zooplus Austria GmbH, Vienna, Austria	100%	Service company for Austria
zooplus Pet Supplies Import and Trade Ltd., Istanbul, Turkey	100%	Sales company for Turkey
Tifuve GmbH, Munich, Germany	100%	Dormant company
zooplus EE TOV, Kiev, Ukraine	100%	Dormant company
zooplus d.o.o., Zagreb, Croatia	100%	Dormant company

The consolidated financial statements as of March 31, 2018 include the following for the first time:

• the wholly owned subsidiary zooplus EE TOV, Kiev, Ukraine, founded in the second quarter of 2011, with share capital of kEUR 10
• the wholly owned subsidiary zooplus d.o.o., Zagreb, Croatia, founded in February 2013, with share capital of kEUR 3
• the wholly owned subsidiary Tifuve GmbH, Munich, Germany, founded in May 2013, with share capital of kEUR 25

zooplus AG was managed by the following Management Board members during the first quarter of 2018 and as of March 31, 2018:

• Dr. Cornelius Patt, CEO (Corporate Management, overall responsibility for Business Development & System Development, IT, Logistics, Supply Chain Management and Human Resources)
• Andrea Skersies (Sales & Marketing, Category Management)
• Andreas Grandinger (Finance, Controlling, Legal, Investor Relations, Internal Audit and Procurement)

The Management Board is advised and controlled by the Supervisory Board. During the first quarter of 2018 and as of March 31, 2018, the Supervisory Board consisted of the following members:

• Christian Stahl (Chairman of the Supervisory Board), Partner and Managing Director of Amlon Capital LLP, London, United Kingdom
• Moritz Greve (Deputy Chairman of the Supervisory Board), Partner and Managing Director of Maxburg Capital Partners GmbH, Munich, Germany
• Karl-Heinz Holland, freelance business consultant, Oberstenfeld, Germany
• Ulric Jerome, Director of MatchesFashion Limited (MatchesFashion.com), London, United Kingdom
• Henrik Persson, founder and manager of Sprints Capital Management Ltd., London, United Kingdom
• Dr. Norbert Stoeck, freelance corporate consultant, Munich, Germany

b. Corporate strategy – Sustainable

and profitable pan-European growth

The Group's aim is to maintain and expand its salesbased market leadership in the European online pet supplies segment and thereby dramatically increase the company's medium and long-term earnings potential. From the company's standpoint, both the Internet and Internet retailing in Europe continue to offer excellent growth opportunities. This is the reason it is important that the Group set up the necessary structures and position itself today to generate significant medium- and long-term positive returns by virtue of its size and market leadership.

With this in mind, the following goals lie at the core of the company's activities:

• continuing sales growth in all European markets
• further penetrating existing regional markets
• defending and expanding sales-based market leadership
• expanding the customer base and securing high customer loyalty in all European markets
• further improving the total cost ratio

The overriding priority is to continue generating high growth in order to expand our leading market position and to improve cost efficiency while maintaining sustainable operating profitability. Management sees this as the most logical strategy for the long-term appreciation in the company's value in the quarters and years to come based on the excellent growth opportunities for the Group available throughout Europe.

Targets are managed and monitored in all areas using key performance indicators that are reviewed regularly and modified over the short- to medium-term when necessary. The company places special importance on clearly communicating its goals to employees and the public.

Employees are a key factor in the company's success. Regular internal training and widespread participation in external training courses have improved the employees' work quality and potential to create added value.

c. Technology and development

zooplus views itself first and foremost as a technologydriven Internet retailing group. The new and ongoing development of the core processes and key components of the company's business model is usually initiated and executed internally. External partners are brought in when they can make a meaningful contribution to the company's internal expertise and implementation capacity.

In the past, proprietary systems and highly specialized software solutions in all key company areas have played a decisive role in the success of zooplus AG and the zooplus Group. zooplus believes that these systems and solutions will continue to remain a fundamental building block to reaching the company's goals. zooplus is currently investing heavily in expanding its IT software development capacity in order to emphasize the importance of the proprietary systems even more, further improve its product quality and optimize the company's internal processes and algorithms. The existing proprietary systems will be enhanced using standardized systems to meet the Group's specific requirements at all times.

B. Results of operations, net assets and financial position

a. Financial and non-financial performance indicators

i. Financial performance indicators

The yardstick for gauging the Group's growth and business success is sales. The key earnings indicator for measuring the Group's success is earnings before taxes (EBT).

In order to manage and monitor the earnings situation, the zooplus Group mainly focuses on gross margins, fulfillment expenses and marketing expenses.

The performance indicator for the net assets is the equity ratio. The key ratios are calculated at the Group level in accordance with IFRS.

ii. Non-financial performance indicators

In addition to financial performance indicators, the Group also steers its activities using non-financial performance indicators. The key non-financial performance indicator measures the company's extent of market leadership in the European online pet supplies segment based on sales.

Two other key performance indicators are the sales retention rate (recurring sales in the financial year from existing and new customers in the prior year as a percentage of the previous year's sales) and the number of new customers – both of which have an influence on zooplus AG's sustained growth and stand at the center the company's corporate management.

b. Business performance Q1/2018

i. The economy and overall market

There is a risk that the euro debt crisis and currency exchange risks within and outside Europe could have a considerable adverse impact on Europe's real economy. It is also not yet clear what the additional risks and consequences might be from the Brexit vote and its aftermath. In light of these and other risks to the global political stability, it cannot be ruled out that negative economic developments could have an impact on zooplus AG's business in the future. It is also not yet clear how protectionist tendencies will affect the international trade in goods and thereby overall economic growth and consumer purchasing power. The management believes that the development of the specific industry and online retailing environment in the respective individual markets will still have a significantly stronger influence on zooplus AG than the general economic environment described above.

ii. Performance of the zooplus Group in the reporting period

In the first three months of 2018, sales increased 26% year-on-year, with the strong growth trend in the final quarter of 2017 continuing in the first quarter of 2018 in a highly competitive market environment. The Management Board considers this performance a confirmation that the path taken in the second half of 2017 was the right one and the measures to accelerate sales growth have proven to have a positive effect. The sales retention rate, which is the key figure for measuring customer loyalty, remains at a very high level of 93% (currency-adjusted: 94%). The investment made in strengthening the company's market leadership and penetrating the whole of Europe impacted the gross margin, fulfillment costs and marketing expenses also in the first quarter of 2018.

The gross margin (sales less cost of materials) achieved in the first quarter of 2018 is not directly comparable with the gross margin in the first quarter of the previous year as a result of reclassification effects from the mandatory application of IFRS 15 as of January 1, 2018. Whereas income for marketing services in the form of marketing refunds from suppliers in previous years was reported within other operating income, since January 1, 2018, this income is now directly offset against the cost of materials in the form of a reduction in the cost of materials. This results in an increase in the gross margin as of January 1, 2018 compared to the previous year, and a corresponding reduction in other operating income.

If for comparability purposes, the income from marketing services had been included in the cost of materials in the same period of the previous year, the gross margin would have fallen by 1.9% to 27.1% in the first three months of 2018 compared to 29.0% for the first three months of 2017. This decrease and the increase in fulfillment and marketing expenses led largely to a decrease in EBT to EUR –5.5 m compared to EUR 3.4 m in the same period of 2017.

Following the results for the first three months of 2018, the Management Board confirms the 2018 full-year forecast for sales growth of 21% to 23% and an EBT margin based on sales in the range of +0.5% to –0.5%.

c. Results of operations

i. Sales and income development

In the first quarter of 2018, zooplus significantly increased sales again achieving a growth rate of 25.6% compared to the same period of the previous year. Sales in the first quarter of 2018 amounted to EUR 322.6 m compared to EUR 256.9 m in the same period of 2017.

This growth was primarily driven by a vast expansion in the customer base in all of the Group's geographic markets accompanied by double-digit growth rates in both new and existing customers in all 30 countries. The number of registered new customers increased by 28%. zooplus strengthened its leading market position in the European online retailing of pet supplies in terms of sales and number of customers.

The strong loyalty of existing customers and the highquality of new customers resulted in a sales retention rate at the prior year's level of 93%. Both trends underscore the sustainability of the business model.

Sales consist solely of the sale of merchandise. Sales of pet supplies are largely immune to seasonal fluctuations. The development of sales clearly shows that zooplus, as the online market leader, is profiting comparatively more from the migration of demand from the traditional bricksand-mortar sales channels to online retailing. Based on continued double-digit growth in all regional markets, the company's strategic market position is well-established and represents a good basis for further growth.

The adjustments described under the new provisions of IFRS 15 led to a sharp reduction in other operating income to EUR 1.2 m in the first three months of 2018 compared to EUR 11.6 m in the first quarter of 2017. Income from marketing services in the form of marketing refunds totaled EUR 12.6 m in the first quarter of 2018 (2017: EUR 9.3 m) and are offset against the cost of materials in contrast to previous years. Other operating income includes other income and income from foreign currency gains.

zooplus is focusing more intently on expanding and improving its proprietary software platform. The increase in proprietary software development capacity and the resulting development work led to the capitalization of internally generated intangible assets and own work capitalized in the amount of EUR 0.9 m.

ii. Expense items

Cost of materials

The cost of materials in the first quarter of 2018 is not directly comparable with the same period of the previous year as a result of reclassification effects from the mandatory application of IFRS 15 as of January 1, 2018. Whereas income from marketing services in the form of marketing refunds from suppliers was reported within other operating income in previous years, since January 1, 2018, this income is now directly offset against the cost of materials in the form of a reduction in the cost of materials. This results in an increase in the gross margin as ofJanuary 1, 2018 compared to the previous year, and a corresponding reduction in other operating income.

If for comparability purposes, the income from marketing services had been included in the cost of materials in the same period of the previous year, the gross margin would have fallen by 1.9% to 27.1% in the first three months of 2018 compared to 29.0% for the first three months of 2017. The gross margin calculation is based on a cost of materials ratio for the first quarter of 2018 of 72.9% based on sales and a rate of 71.0% adjusted for comparability purposes for the same period in 2017. The gross margin development in the first quarter of 2018 is a result of the ongoing, highly competitive market environment for pet supplies, price increases from suppliers and annual supplier contracts that were not yet completed.

Personnel expenses

Personnel expenses increased disproportionately from EUR 9.0 m in the first three months of 2017 to EUR 10.8 m in the first quarter of 2018. This corresponds to a 0.2 percentage point reduction in the personnel expense ratio to 3.3% based on sales.

Depreciation and amortization

Scheduled depreciation and amortization increased to EUR 1.7 m in the first three months, compared to EUR 1.0 m in the same period of 2017. This increase is mainly attributable to depreciation due to both the addition as well as the capitalization of property, plant and equipment stemming from finance leases in connection with the extension of the warehouse logistics contract in Tilburg, Netherlands.

Other expenses

During the first quarter of 2018, other expenses increased year-on-year from EUR 63.3 m to EUR 82.3 m. Other expenses mostly consist of expenses for logistics/fulfillment, marketing and payment transactions. These expenses rose to 25.5% of Group sales compared to 24.6% in the prior year. This change was largely due to the measures introduced in the second half of 2017 and continued in 2018 to expand and optimize the logistics network combined with a lower year-over-year value of shopping baskets and higher expenses incurred to accelerate new customer growth.

Logistics and fulfillment expenses

Logistics and fulfillment expenses increased slightly in the first quarter of 2018 reaching a level of 20.1% of sales compared to 19.5% in the same quarter of the prior year.

The higher ratio of logistics expenses was also a result of further optimization undertaken at the existing fulfillment centers and lower values of shopping baskets versus the prior year.

In the context of the capitalization of property, plant and equipment resulting from finance leases, expenses for logistics services in the amount of EUR 1.0 m were classified as depreciation and recorded under depreciation and amortization. In addition, a total of EUR 0.1 m was classified and reported as interest expenses. In the 2017 comparable period, logistics expenses of EUR 0.5 m were classified as depreciation, and EUR 0.1 m were classified and reported as interest expenses.

Marketing expenses

The increase in the share of marketing expenses as a percentage of sales from 1.4% in the first quarter of 2017 to 2.0% in the first three months of 2018 reflects the course the company has taken to intensify its acquisition of new customers and sustainably expand its market position. The acceleration of new customer growth since the third quarter of 2017 confirms this path. Once again, the very high level of the indicator measuring customer loyalty clearly shows the strong effectiveness of the zooplus marketing approach.

Despite the increase in marketing expenses, the overall very modest marketing expense ratio and the very high level of customer loyalty are further evidence of the company's highly effective marketing approach.

The sales retention rate in the first three months remained at a very high level of 93% and was slightly higher than in the prior year.

Payment transaction expenses

Total payment transaction expenses in the first three months amounted to EUR 3.2 m compared to EUR 2.5 m in the previous year's period and remained at a level of 1.0% of sales as in the prior year.

Other expenses

In addition to the expenses for logistics and fulfillment, marketing, and payment transactions described above, other expenses included customer relationship service costs, office rentals, general administrative costs, technology costs and other expenses incurred as part of the ordinary operating activities. Other expenses as a percentage of sales were 2.4% in the first quarter of 2018 compared to 2.7% in the first three months of 2017.

iii. Earnings development

In the first quarter of 2018, zooplus generated earnings before taxes (EBT) of EUR –5.5 m versus EUR 3.4 m in the prior year period. Earnings came under pressure from a lower gross margin and expenses for the expansion and optimization of logistics activities to accelerate new customer growth in a market offering tremendous potential.

The consolidated net profit/loss reached EUR –3.8 m (previous year: EUR 2.0 m). At EUR –4.3 m (previous year: EUR 1.1 m) total comprehensive income differed from the consolidated net profit/loss due to the hedge reserve of EUR –0.4 m and currency translation differences of EUR –0.1 m.

d. Net assets

Non-current assets as of March 31, 2018 totaled EUR 46.5 m compared to EUR 28.1 m at the end of 2017. This rise is mainly the result of the capitalization of property, plant and equipment related to the finance lease in Tilburg, the Netherlands, due to the extension of the warehouse logsitics contract. The net carrying amount of the finance lease amounted to EUR 16.9 m as of March 31, 2018.

Within current assets, inventories declined slightly from EUR 104.5 m at the end of 2017 to EUR 103.7 m as of March 31, 2018. It is important to note that especially when it comes to general product availability and private label and direct import products, which are subject to longer procurement cycles, the crucial drivers of sales per customer are sufficient inventory levels and, consequently, high product availability.

Accounts receivable reached a net EUR 29.4 m as of March 31, 2018 (previous year: EUR 26.4 m).

The decline in other assets from EUR 27.5 m at the end of 2017 to EUR 15.9 m as of March 31, 2018 is mainly the result of the reclassifications under IFRS 15, which were mandatory as of January 1, 2018. Other receivables from suppliers due to marketing refunds of EUR 12.7 m are now classified as contract assets and reported in the separate line item "contract assets".

Compared to their level of EUR 51.2 m in the prior year, cash and cash equivalents recorded an increase of EUR 6.7 m to EUR 57.9 m as of March 31, 2018. This increase stemmed mainly from the positive cash flows from operating activities in the first quarter of 2018.

Equity as of March 31, 2018 totaled EUR 107.5 m compared to EUR 111.4 m at the end of 2017, declining mainly due to the lower net profit/loss achieved in the first quarter of 2018. As a result, the equity ratio as of March 31, 2018 was 40.1% and within the company's target range.

The increase in non-current and current lease liabilities as of March 31, 2018 results from the classification as finance leasing of property, plant and equipment related to the extension of the warehouse logsitics contract in Tilburg, Netherlands. The corresponding lease liabilities of the newly leased property amounted to EUR 16.9 m, of which EUR 2.5 m was recognized under current lease liabilities. The remaining lease liabilities concern future lease payments related to leased property at the fulfillment center in Wroclaw, Poland.

Accounts payable rose to EUR 94.0 m as ofMarch31, 2018 compared to EUR 78.1 m as of the end of 2017. Other liabilities mainly consist of value-added tax liabilities.

In accordance with the provisions of IFRS 15, applicable as of January 1, 2018, all transactions classified as other current liabilities, provisions or deferred income in the previous year have been recorded under the separate balance sheet item "contract liabilities" starting with the 2018 financial year. These are contract liabilities from advance customer payments received, customer refunds, customer loyalty programs, sales coupons, customer returns and applicable discount plans. Other current liabilities, other provisions and deferred income showed a corresponding decline as of March 31, 2018.

The Group's total assets amounted to EUR 268.1 m at the end of the reporting period compared to EUR 239.5 m as of December 31, 2017.

e. Financial position

Cash flows from operating activities totaled a positive EUR 10.0 m in the first quarter of 2018 compared to EUR 16.8 m in the first quarter of 2017. The operating cash flow was mainly the result of the year-over-year decline in earnings before taxes for the reporting period and the development in working capital.

The cash outflow from investing activities (EUR –1.9 m in the first quarter of 2018 compared to EUR –0.5 m in the same period of 2017) was impacted by investments made in operating and office equipment as well as in both hardware and software in the form of purchases and investments in internally generated intangible assets.

Cash flows from financing activities (EUR –1.1 m in the first quarter of 2018 compared to EUR –0.6 m in the same period of 2017) mainly relate to repayments of finance lease liabilities of EUR –1.0 m and interest paid.

As a retail group, zooplus experiences substantial volatility in balance sheet and cash flow items such as inventories, liabilities and VAT. This means there is considerably more fluctuation in these figures during the year than what is indicated in the earnings figures presented.

The overall changes in cash and cash equivalents during the year were primarily the result of the company's strong growth and changes in working capital.

The available liquidity based on the Group's available lines of credit significantly exceeded the level required to secure business operations at all times. During the past financial year, zooplus was able to meet all payment commitments at all times.

f. Overall statement on the financial situation

With sales growth of 26% in a highly competitive market environment and a further acceleration in growth in the reporting period, the company's performance in the first quarter of 2018 can be considered positive in terms of zooplus's sales performance and future long-term development. The negative earnings development in the first quarter of 2018 was somewhat below the company's expectations but still confirms zooplus's strategy of placing the expansion of its excellent market position and the exploitation of the market's tremendous potential at the forefront of its activities. It is also important to highlight that the company has been able to finance this consistently high level of growth through its operating cash flow.

2. Subsequent events

After the end of the first quarter of 2018, there were no events of particular importance that impact the results of operations, financial position and net assets.

3. Report on outlook, risks and opportunities

A. Outlook

Based on the latest forecasts, the underlying economic conditions are not expected to change materially in 2018. It remains to be seen what impact the Brexit decision will have on the EU member states and companies operating across Europe. Furthermore, it is currently impossible to foresee the effect of protectionist tendencies on international trade in goods and therefore on overall economic growth and the purchasing power of consumers.

Irrespective of these factors, the company anticipates that the Internet will continue to grow in its importance as a sales channel (e-commerce) in the years ahead and develop at a faster rate than the market overall. zooplus, as the leader in the European online market for pet supplies, will benefit substantially from these trends. The expectation for our pet supply segment is for slightly higher sales overall in 2018.

In the 2018 financial year, we will continue to focus on the company's growth and long-term value appreciation. To do this, we will concentrate on generating sustainable and profitable growth in the long term and are therefore investing specifically in our product range, logistics and IT. All of this is in an effort to expand our position as the European market leader in the online retailing of pet supplies.

In summary, the Group expects to achieve the following financial targets in the 2018 financial year:

• Year-over-year sales growth of 21 % to 23 %
• EBT margin in the range of + 0.5 % to 0.5% based on sales

Excluding the effects from changes in accounting and valuation regulations resulting from the introduction of new IFRS provisions, zooplus expects the following to occur in terms of the year-on-year development of the key factors influencing the results of operations, net assets and financial position:

• a gross margin based on sales in the 2018 financial year at the prior year's level
• logistics and fulfillment expenses as a percentage of sales in 2018 at the prior year's level
• marketing expenses related to customer acquisitions to remain stable or increase slightly in 2018 as a percentage of sales
• an equity ratio in the range of 35% to 55% prior to the conclusion of new finance leases
• another year in which the Group reasserts its leading market position based on sales in the online retailing of pet supplies
• a stable year-on-year sales retention rate
• a moderate year-on-year increase in new customers

Growth will continue to be the priority in 2018. Our focus will be on building future sustainable, profitable growth.

B. Risk report

The risk assessment for zooplus AG has not changed materially from the situation described in the 2017 Annual Report (pages 65 to 70).

C. Opportunity report

The opportunities assessment for zooplus AG has not changed materially from the situation described in the 2017 Annual Report (pages 71 to 72).

The Management Board

Dr. Cornelius Patt Andrea Skersies Andreas Grandinger

Munich, May 17, 2018

Consolidated balance sheet	18
Consolidated statement of comprehensive income	20
Consolidated statement of cash flows	21
Consolidated statement of changes in equity	23

Consolidated interim financial statements

Consolidated balance sheet as of March 31, 2018 according to IFRS

Assets

in EUR		31/03/2018	31/12/2017
A.	NON-CURRENT ASSETS
I.	Property, plant and equipment	31,592,401.36	14,953,996.71
II.	Intangible assets	13,960,506.30	13,068,635.16
III.	Other financial assets	0.00	37,708.71
IV.	Deferred tax assets	925,877.10	0.00
	Non-current assets, total	46,478,784.76	28,060,340.58
B.	CURRENT ASSETS
I.	Inventories	103,694,850.09	104,542,066.62
II.	Advance payments	916,957.61	628,240.48
III.	Accounts receivable	29,411,582.69	26,387,959.32
IV.	Other current assets	15,857,470.80	27,474,816.50
V.	Contract assets	12,667,784.34	n/a
	VI. Tax receivables	1,196,702.85	1,169,804.50
	VII. Cash and cash equivalents	57,911,681.16	51,191,242.91
	Current assets, total	221,657,029.54	211,394,130.33
		268,135,814.30	239,454,470.91

Equity and liabilities

in EUR		31/03/2018	31/12/2017
A.	EQUITY
I.	Subscribed capital	7,137,578.00	7,137,578.00
II.	Capital reserves	99,092,132.51	98,831,984.63
III.	Other reserves	–1,908,163.07	–1,379,456.36
IV.	Profit/loss for the period and profit carried forward	3,219,386.20	6,789,493.63
	Equity, total	107,540,933.64	111,379,599.90
B.	NON-CURRENT LIABILITIES
I.	Provisions	1,175,169.67	1,190,060.16
II.	Deferred tax liabilities	0.00	1,010,240.95
III.	Finance lease liabilities	22,708,676.48	8,869,681.49
	Non-current liabilities, total	23,883,846.15	11,069,982.60
C.	CURRENT LIABILITIES
I.	Accounts payable	93,967,328.21	78,132,936.61
II.	Derivative financial instruments	1,093,817.91	509,085.60
III.	Other current liabilities	19,585,317.38	24,564,100.54
IV.	Contract liabilities	14,631,055.03	n/a
V.	Tax liabilities	108,784.41	1,344,271.91
	VI. Finance lease liabilities	4,616,371.41	2,078,750.41
	VII. Provisions	2,708,360.16	7,447,738.92
	VIII. Deferred income	0.00	2,928,004.42
	Current liabilities, total	136,711,034.51	117,004,888.41
		268,135,814.30	239,454,470.91

Consolidated statement of comprehensive income from January 1 to March 31, 2018 according to IFRS

in EUR	Q1 2018	Q1 2017
Sales	322,596,842.48	256,909,147.22
Other income	1,223,238.84	11,649,147.56
Own work capitalized	888,098.62	0.00
Cost of materials	–235,223,125.61	–191,838,024.53
Personnel expenses	–10,796,389.49	–8,996,993.39
of which cash	(–10,536,241.61)	(–8,589,182.46)
of which stock-based and non-cash	(–260,147.88)	(–407,810.93)
Depreciation and amortization	–1,746,540.57	–975,109.15
Other expenses	–82,307,515.46	–63,251,684.88
of which logistics/fulfillment expenses	(–64,880,206.86)	(–50,188,922.23)
of which marketing expenses	(–6,574,256.74)	(–3,515,673.42)
of which payment transaction expenses	(–3,200,174.93)	(–2,514,523.83)
of which other expenses	(–7,652,876.93)	(–7,032,565.40)
Earnings before interest and taxes	–5,365,391.18	3,496,482.83
Financial income	–7,971.28	14.25
Financial expenses	–150,280.09	–108,146.18
Earnings before taxes	–5,523,642.54	3,388,350.90
Taxes on income	1,726,882.73	–1,407,060.40
Consolidated net profit	–3,796,759.81	1,981,290.50
Other gains and losses (after taxes)
Differences from currency translation	–136,789.88	–126,110.15
Hedge reserve	–391,916.83	–751,591.87
Items subsequently reclassified to profit or loss	–528,706.71	–877,702.02
Total comprehensive income	–4,325,466.52	1,103,588.48
Earnings per share
Basic	–0.53	0.28
Diluted	–0.53	0.28

Consolidated statement of cash flows from January 1 to March 31, 2018 according to IFRS

in EUR	Q1 2018	Q1 2017
Cash flows from operating activities
Earnings before taxes	–5,523,642.54	3,388,350.90
Adjustments for:
Depreciation and amortization	1,746,540.57	975,109.15
Non-cash personnel expenses	260,147.88	407,810.93
Other non-cash business transactions	–136,789.88	–132,069.72
Interest and similar expenses	150,280.09	108,146.18
Interest and similar income	7,971.28	–14.25
Changes in:
Inventories	847,216.53	8,056,486.46
Advance payments	–288,717.13	–2,972,558.58
Accounts receivable	–3,023,623.37	–391,497.68
Other current assets	11,617,345.70	11,064,724.03
Contract assets	–12,667,784.34	n/a
Accounts payable	15,834,391.60	–4,894,011.44
Other liabilities	–4,978,783.16	2,946,242.58
Contract liabilities	14,631,055.03	n/a
Current provisions	–4,739,378.76	156,514.19
Non-current provisions	–14,890.49	150,815.29
Deferred income	–2,928,004.42	83,014.40
Income taxes paid	–762,178.63	–2,190,055.93
Interest received	–7,971.28	14.25
Cash flows from operating activities	10,023,184.67	16,757,020.76
Cash flows from investing activities
Payments for property, plant and equipment/ intangible assets	–1,934,221.12	–528,240.46
Cash flows from investing activities	–1,934,221.12	–528,240.46

Continued on next page.

in EUR	Q1 2018	Q1 2017
Cash flows from financing activities
Payments for the redemption of finance lease liabilities	–969,636.30	–517,253.35
Interest paid	–150,280.09	–108,146.18
Cash flows from financing activities	–1,119,916.39	–625,399.53
Currency effects on cash and cash equivalents	–248,608.91	10,103.46
Net change of cash and cash equivalents	6,720,438.25	15,613,484.23
Cash and cash equivalents at the beginning of the period	51,191,242.91	54,923,661.37
Cash and cash equivalents at the end of the period	57,911,681.16	70,537,145.60
Composition of cash and cash equivalents at the end of the period
Cash on hand, bank deposits	57,911,681.16	70,537,145.60
	57,911,681.16	70,537,145.60

Consolidated statement of changes in equity as of March 31, 2018 according to IFRS

in EUR	Subscribed capital	Capital reserves	Other reserves	Net profit/loss for the period and profit/loss carried forward	Total
As of January 1, 2018	7,137,578.00	98,831,984.63	–1,379,456.36	6,789,493.63	111,379,599.90
Increase from stock options	0.00	260,147.88	0.00	0.00	260,147.88
Currency translation differences	0.00	0.00	–136,789.88	0.00	–136,789.88
Loss Q1 2018	0.00	0.00	0.00	–3,796,759.81	–3,796,759.81
IFRS 9 adjustment	0.00	0.00	0.00	226,652.38	226,652.38
Hedge reserve	0.00	0.00	–391,916.83	0.00	–391,916.83
As of March 31, 2018	7,137,578.00	99,092,132.51	–1,908,163.07	3,219,386.20	107,540,933.64
As of January 1, 2017	7,060,902.00	94,810,944.46	1,147,161.06	4,851,179.83	107,870,187.35
Increase from stock options	0.00	407,810.93	0.00	0.00	407,810.93
Currency translation differences	0.00	0.00	–126,110.15	0.00	–126,110.15
Net profit Q1 2017	0.00	0.00	0.00	1,981,290.50	1,981,290.50
Hedge reserve	0.00	0.00	–751,591.87	0.00	–751,591.87
As of March 31, 2017	7,060,902.00	95,218,755.39	269,459.04	6,832,470.33	109,381,586.76

Notes to the consolidated
financial statements	25
Imprint	35

Notes to the consolidated financial statements

Notes and explanations to the interim consolidated financial statements

Accounting principles

This quarterly financial report as of March 31, 2018, was prepared in accordance with International Financial Reporting Standards as applicable in the European Union (EU). These consolidated financial statements comply with IAS 34 "Interim Financial Reporting".

Except for the mandatory first-time application of the following new standards, the same accounting policies were applied as those applied to the consolidated financial statements for the financial year ended December 31, 2017.

Application of IFRS 15

IFRS 15 replaces IAS 18, which previously governed the sale of goods and rendering of services, as well as IAS 11, which governed the accounting of construction contracts. The new standard introduces a uniform, principle-based five-level model for recognizing revenue from contracts with customers. The standard also defines comprehensive disclosure requirements. zooplus will apply IFRS 15 prospectively for financial years as of January 1, 2018. The effect of the transition will be recognized starting with the 2018 financial year and in subsequent periods. The first-time application of the standard requires changes to the Group's accounting policies and will have an effect on the presentation of the circumstances described below.

IFRS 15 requires the separate recording of contract assets and contract liabilities on the balance sheet. As of January 1, 2018, this regulation resulted in the reclassifications of receivables from marketing services and liabilities from advance payments and refunds, provisions for customer coupons and customer loyalty programs, returns as well as deferred income that are currently included in other balance sheet items. The following issues were either identified and reclassified as of January 1, 2018, or a change was made to their recognition and reporting. In accordance with the transition method chosen by zooplus under IFRS 15, the prior year's figures were not adjusted.

The changes in the accounting policies had the following effect in the first quarter of 2018:

• Accounts receivable from marketing services in the form of marketing refunds of EUR 14.5 m, which were previously accounted for as other current assets, were reclassified as contract assets as of January 1, 2018.
• Liabilities from advance payments received, and customer refunds of EUR 6.1 m that were previously accounted for as other current liabilities were reclassified as contract liabilities as of January 1, 2018.
• Deferred income of EUR 2.9 m was reclassified as contract liabilities as of January 1, 2018.

• Provisions under the customer loyalty/loyalty reward program of EUR 4.0 m that were previously accounted for as other provisions were reclassified as contract liabilities as of January 1, 2018.

• Provisions for customer returns of EUR 0.8 m that were previously accounted for as other provisions were reclassified as contract liabilities as of January 1, 2018.

• Provisions for customer coupons yet to be redeemed of EUR 0.4 m that were previously accounted for as other provisions were reclassified as contract liabilities as of January 1, 2018.
• Income from marketing services in the form of marketing refunds, which were previously accounted for as other income, will be reclassified as cost of materials as of the 2018 financial year. Income from marketing services totaled EUR 12.7 m in the first quarter of 2018.

EUR m	IAS 18 carrying amounts Dec. 31, 2017	Reclassification	IFRS 15 carrying amounts Jan. 1, 2018
Other current assets	27.5	–14.5	13
Contract assets	0	14.5	14.5
Other current liabilities	24.6	–6.1	18.5
Contract liabilities	0	14.2	14.2
Current provisions	7.4	–5.2	2.2
Deferred income	2.9	–2.9	0

The following table illustrates the reclassifications of balance sheet items:

Application of IFRS 9

The final version of IFRS 9 (2014) replaces IAS 39 Financial Instruments: Recognition and Measurement and all other previously published provisions. The standard contains regulations on the recognition and measurement of financial assets and provides for a new impairment model based on expected credit losses. Additionally, IFRS 9 contains new regulations on the application of hedge accounting. zooplus has applied the new standard for the first time in the 2018 financial year.

According to IFRS 9, financial assets are to be classified upon acquisition as "measured at fair value through profit or loss (FVPL)", "measured at fair value through other comprehensive income" or "measured at amortized cost". The classification of debt instruments depends on the underlying business model and the contractual terms of the respective instrument. Financial assets that are held to collect the contractual cash flows (business model: "Hold") and whose cash flows exclusively represent principal and interest payments on the principal amount outstanding are to be allocated to the category "at amortized cost". This applies to all of zooplus's financial assets.

Equity instruments, on the other hand, must generally be classified as "measured at fair value through profit or loss". However, when the instruments are not held for trading, there is the irrevocable option upon initial recognition to recognize fair value changes in other comprehensive income. zooplus will fully consolidate its subsidiaries previously not included in the consolidated financial statements due to immateriality and record them at cost as "financial assets available for sale" under IAS 39 as of the 2018 financial year.

With regard to the classification of financial liabilities, changes only arose for financial liabilities measured at fair value as a result of the fair value option. zooplus is not affected by this change because the fair value option has not been utilized under IAS 39 and will not be utilized under IFRS 9.

The new impairment model contained in IFRS 9 is based on the "expected loss model" rather than the previous "incurred loss model". Using the general approach (or three-stage model) for impairment, the level of impairment is derived from the development of the credit risk. Excluded from the impairment model are accounts receivable and contract assets under IFRS 15 when they do not contain a significant financing component or lease receivables for which the "simplified impairment approach" is used. Under this model, impairment is recognized in the amount of the expected losses over the remaining term, irrespective of the credit quality. Financial assets that are impaired based on the simplified approach are to be reclassified as impaired financial assets once there is an objective indication of their impairment. The application of the simplified impairment approach to accounts receivable will slightly change the total level of impairment.

The new regulations contained in IFRS 9 for hedge accounting introduce an approach that aligns risk management more closely with accounting. The new provisions for hedge accounting have no significant impact on the Group's net assets, financial position or results of operations. The existing hedges as of January 1, 2018 may be continued without any modifications.

The first-time application of IFRS 9 must be made retrospectively, whereby simplifications are allowed. Among others, zooplus utilizes the option to leave the prior year's comparable figures unadjusted. The accumulated effect of first-time application is recognized directly in equity.

The following table illustrates the reconciliation of the prior measurement categories and carrying amounts according to IAS 39 to the new measurement categories and carrying amounts according to IFRS 9 as of January 1, 2018:

kEUR	Measurement categories		Carrying amounts
	IAS 39	IFRS 9	IAS 39	IFRS 9
Financial assets
Accounts receivable	LaR	AC	26,388	26,615
Other financial assets	AFS	n/a1	38	n/a
Other current assets – thereof financial instruments		AC	23,598	9,091
	LaR	n/a2		n/a²
Derivative financial instruments	n/a³	n/a³	0	0
Cash and cash equivalents	LaR	AC	51,191	51,191

1 Subsidiaries previously not included in the consolidated financial statements due to immateriality are fully consolidated as of January 1, 2018. ² Contract assets under IFRS 15.

3 Derivatives were designated as hedging instruments for hedge accounting under IAS 39 and will continue to be so under IFRS 9 and are therefore not allocated to any category.

kEUR	Measurement categories	Carrying amounts
	IAS 39	IFRS 9	IAS 39	IFRS 9
Financial liabilities
Accounts payable	FLaC	FlaC	78,133	78,133
Other liabilities –	FlaC		518
thereof financial instruments	FLaC	n/a1	6,600	n/a 1
Derivative financial instruments	n/a 2	n/a2	509	509

1Contract liabilities under IFRS 15.

2 Derivatives were designated as hedging instruments for hedge accounting under IAS 39 and will continue to be so under IFRS 9 and are therefore not allocated to any category.

Financial assets according to the IAS 39 measurement categories are reconciled to the measurement categories of IFRS 9 as follows:

kEUR	AC (LaR 2017)	AfS at cost (only 2017)	FVTPL	Total financial assets
Carrying amount 31/12/2017 (IAS 39)	101,537	38	0	101,575
Reclassification as contract asset under IFRS 15	–14,507			–14,507
Adjustment due to full consolidation		–38		–38
Remeasurement according to IFRS 9	227			227
Carrying amount 1/1/2018 (IFRS 9)	87,257	0	0	87,257

Impairment recognized for accounts receivable decreased by kEUR 227 as of January 1, 2018 due to the first-time application of IFRS 9. The effect was recognized in equity.

The following table illustrates the reconciliation of the previous impairment losses under IAS 39 to the new impairment losses under IFRS 9 as of January 1, 2018:

kEUR	Accounts receivable
Measurement categories
Under IAS 39	LaR
Under IFRS 9	AC
Impairment losses
As of December 31, 2017 (IAS 39)	3,206
Remeasurement according to IFRS 9	–227
As of January 1, 2018 (IFRS 9)	2,979

For reasons of materiality, impairment losses were not recognized for cash and cash equivalents, contract assets and financial assets contained within other current assets.

Property, plant and equipment

This increase is mainly attributable to the capitalization of property, plant and equipment stemming from finance leases in connection with the extension of the warehouse logistics contract in Tilburg, Netherlands. The net carrying amount of the new finance lease amounted to EUR 16.9 m as of March 31, 2018.

Deferred taxes

Deferred tax assets			Deferred tax liabilities
31/03/2018	31/12/2017	31/03/2018	31/12/2017
361	168	0	0
0	0	9,026	3,623
9,010	3,610	0	0
2,083	0	0	0
148	164	0	0
0	0	1,650	1,329
11,602	3,942	10,676	4,952
7,488	2,925	9,117	4,262
4,114	1,017	1,559	690
11,602	3,942	10,676	4,952

Sales

kEUR	Q1 2018	Q1 2017
Germany	75,049	63,714
France	54,995	44,021
Italy	26,110	21,463
Great Britain	26,076	20,951
Poland	25,923	17,464
The Netherlands	20,518	17,121
Spain	18,233	14,675
Belgium	14,418	11,269
Switzerland	9,400	6,999
Austria	8,886	7,620
Czech Republic	7,843	5,741
Denmark	7,071	5,865
Sweden	6,504	4,912
Finland	5,722	4,822
Other countries	15,849	10,271
Total	322,597	256,909

The Group's sales mainly consist of the sales of pet supplies in Germany and other European countries. A total of 84% of sales were mainly generated from the sale of food and the remaining 16% mainly from the sale of accessories.

Fair value disclosures

Fair value is the amount for which an asset could be exchanged or a liability settled between knowledgeable, willing and mutually independent parties in an arm's length transaction.

The table below shows financial instruments measured at fair value broken down into the levels of the fair value hierarchy. The different levels are defined as follows:

• Level 1: Unadjusted quoted prices on active markets for identical assets and liabilities
• Level 2: Directly or indirectly observable inputs that are not allocated to Level 1
• Level 3: Unobservable inputs

The following table shows the assets and liabilities measured at fair value on March 31, 2018:

	Level 1	Level 2	Level 3
Assets in kEUR
Derivative financial instruments as hedging instruments	0	0	0
Liabilities in kEUR
Derivative financial instruments as hedging instruments	0	1,094	0

The following table shows the assets and liabilities measured at fair value on December 31, 2017:

	Level 1	Level 2	Level 3
Assets in kEUR
Derivative financial instruments as hedging instruments	0	0	0
Liabilities in kEUR
Derivative financial instruments as hedging instruments	0	509	0

There were no reclassifications within the respective levels during the reporting period. The reclassification of items is carried out on a quarterly basis when circumstances arise that require a change in classification.

The fair value of financial instruments that are traded on an active market is based on the quoted market price on the reporting date. A market is considered to be active if quoted prices are easily and regularly available on a stock exchange or from a dealer, broker, industry group, pricing service or regulatory authority, and if these prices represent current and regularly occurring market transactions at arm's length conditions. For assets held by the Group, the appropriate quoted market price corresponds to the bid price offered by the buyer.

The fair value of financial instruments that are not traded on an active market (e.g., over-the-counter derivatives) is determined using valuation methods based as much as possible on market data and as little as possible on companyspecific data. If all data required to determine the fair value are observable, the instrument is assigned to Level 2. If one or more important data are not based on observable market data, the instrument is assigned to Level 3.

Specific valuation methods used to measure financial instruments include net present value models based on market data applicable on the reporting date.

Additional information on financial instruments

The following table shows the carrying amounts and fair values of all financial instruments recognized in the consolidated financial statements and the allocation of assets, liabilities and some of the balance sheet items to measurement categories in accordance with IFRS 9:

	Measurement category Carrying amount						Fair value
kEUR	31/03/2018	31/12/2017	31/03/2018	31/12/2017	31/03/2018	31/12/2017
Financial assets
Accounts receivable	AC	LaR	29,412	26,388	29,412	26,388
Other financial assets	n/a	AfS	n/a	38	n/a	n/a
Other current assets of which financial instruments pursuant to IFRS 7	AC	LaR	10,886	23,958	10,886	23,958
Derivative financial instruments	n/a	n/a	0	0	0	0
Cash and cash equivalents	AC	LaR	57,912	51,191	57,912	51,191
Total			98,210	101,575	98,210	101,537
Financial liabilities
Accounts payable	FLaC	FLaC	93,967	78,133	93,967	78,133
Other liabilities of which financial liabilities pursuant to IFRS 7	FLaC	FLaC	455	6,600	455	6,600
Finance lease liabilities	n/a	n/a	27,325	10,949	27,325	10,949
Derivative financial instruments	n/a	n/a	1,094	509	1,094	509
Total			122,841	96,191	122,841	96,191

AC (Amortized Cost)

LaR (Loans and Receivables)

AfS (Available for Sale) FLaC (Financial Liability at amortized Cost)

The market values of the cash and cash equivalents, accounts receivable, current assets, accounts payable and other current liabilities reported as of March 31, 2018 and December 31, 2017, correspond to their carrying amounts. This is mainly due to the short-term maturities of such instruments.

	Measurement category		Carrying amount		Fair value
kEUR	31/03/2018	31/12/2017	31/03/2018	31/12/2017	31/03/2018	31/12/2017
Financial assets
Loans and receivables	AC	LaR	98,210	101,537	98,210	101,537
Available for sale	n/a	AfS	n/a	38	n/a	n/a
Financial liabilities
Financial liability at amortized cost	FLaC	FLaC	94,422	84,733	94,422	84,733

Aggregated by IFRS 9 measurement categories, the Group's financial assets and liabilities are as follows:

For materiality reasons, the impairment losses recognized in the first quarter were not recorded separately in the Group's statement of income but included in the line item other operating expenses.

Scope of consolidation

As of March 31, 2018, the Group's scope of fully consolidated companies comprised zooplus AG, Munich, and the following subsidiaries:

Interest in share capital	Business activity
100%	Private label business
100%	Secondary brand business
100%	Service company for Great Britain
100%	Service company for Italy
100%	Service company for Poland
100%	Service company for Spain
100%	Service company for France
100%	Service company for the Netherlands
100%	Service company for Austria
100%	Sales company for Turkey
100%	Dormant company
100%	Dormant company
100%	Dormant company

The consolidated financial statements as of March 31, 2018 include the following for the first time:

• the wholly owned subsidiary zooplus EE TOV, Kiev, Ukraine, founded in the second quarter of 2011, with share capital of kEUR 10;
• the wholly owned subsidiary zooplus d.o.o., Zagreb, Croatia, founded in February 2013, with share capital of kEUR 3; and
• the wholly owned subsidiary Tifuve GmbH, Munich, Germany, founded in May 2013, with share capital of kEUR 25.

Segment reporting

The zooplus Group operates in only one business segment – the distribution and sale of pet supplies in the EU and other European countries. The products sold by the company are homogeneous and cannot be sub-divided. As an online retailer, the company offers its products centrally from one location irrespective of the end customers' geographic location. Consequently, there are no geographical segments as defined by IFRS. There is also no internal reporting by segment at present and, for this reason, the Group does not prepare segment reporting.

Earnings per share

Basic earnings per share are computed using the net profit for the period attributable to parent company shareholders divided by the weighted average number of ordinary shares outstanding during the reporting period. Consolidated net profit for the first three months of 2018 amounted to EUR – 3.8 m (previous year: EUR 2.0 m). The average number of shares outstanding in the first three months of 2018 was 7,137,578, resulting in basic earnings per share of EUR – 0.53 (previous year: EUR 0.28).

Diluted earnings per share are computed using the net profit for the period attributable to parent company shareholders divided by the weighted average number of ordinary shares outstanding during the reporting period plus any share equivalents that could lead to dilution. This computation results in notional earnings per share of EUR – 0.53 (previous year: EUR 0.28).

Information in accordance with Section 115 (5) of the WpHG

As with all of the company's regular interim reports, these interim financial statements and the interim management report have not been reviewed by an auditor.

German Corporate Governance Code

zooplus Aktiengesellschaft has submitted the declaration on the German Corporate Governance Code that is required under Section 161 of the German Stock Corporation Act (Aktiengesetz) and has made this declaration available to its shareholders on its website at http://investors.zooplus.com/en/page.php?P=41&l=en.

Munich, May 17, 2018

The Management Board

Dr. Cornelius Patt Andrea Skersies Andreas Grandinger

Imprint

Publisher

zooplus AG Sonnenstraße 15 80331 Munich Germany Tel.: +49 (0) 89 95 006 – 100 Fax: +49 (0) 89 95 006 – 500

Email: kontakt@zooplus.de www.zooplus.de

Investor Relations

cometis AG Unter den Eichen 7 65195 Wiesbaden Germany Tel.: +49 611 20 58 55 – 0 Fax: +49 611 20 58 55 – 66

Email: info@cometis.de www.cometis.de

Concept, editing, layout and typesetting

cometis AG

Photos

zooplus AG

The 3-Monthly report is also available in German. In case of discrepancies the German version prevails.

A digital version of this zooplus AG 3-Monthly report as well as the annual reports can be downloaded from the Investor Relations section of www.zooplus.com.

Forward-looking statements

This report contains forward-looking statements. These statements are based on current experience, estimates and projections of the management and currently available information. They are not guarantees for the realization of the future developments and results stated. The future developments and results are dependent on a wide range of factors. They encompass various risks and uncertainties, and are based upon assumptions as to future events thatMay not be accurate. Such factors include those discussed in the report on risks on page 16. We do not assume any obligation to update the forward-looking statements contained in this report.

zooplus AG Sonnenstraße 15 80331 Munich Germany