14.09.2020 – 07:00

Allegro.eu

Allegro.eu: Announcement of Intention to Float on the Warsaw Stock Exchange

Poznan, Poland (ots/PRNewswire)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER STATE OR JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

This announcement is an advertisement and not a prospectus for the purposes of Regulation (EU) 2017/1129 (the "Prospectus Regulation") and does not an offer of securities for sale or subscription in any jurisdiction, including in or into the United States, Australia, Canada, Japan or South Africa.

Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. Any offer to acquire shares pursuant to the proposed offering (the "Offering") will be made, and any investor should make their investment decision solely on the basis of the information that is contained in the prospectus (the "Prospectus") expected to be published by Allegro.eu, a public limited liability company (société anonyme) formed and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 4, rue Albert Borschette, L-1246 Luxembourg, Grand Duchy of Luxembourg and registered with the R.C.S. Luxembourg under number B 214830 (the "Company", or the "Issuer") in due course in connection with the admission of its ordinary shares ("Shares") to trading on the Warsaw Stock Exchange ("Admission"). A copy of the Prospectus will, following publication, be available from the Company's website at www.allegro.eu/ipo, subject to applicable securities regulations.

Risk is inherent in each investment decision. Investing in Shares is connected with a number of risks including, but not limited to, the financial risk resulting from a decline in the price of Shares or the limitation of their liquidity. With all investment decisions it is necessary to define future profit and assess the risk connected with it. Investing in shares implies the risk of losing part or all the invested funds, and even the necessity of incurring additional costs.

Nieodl?czn? cz?sci? ka?dej inwestycji jest ryzyko. Inwestowanie w Akcje wi??e si? z szeregiem ryzyk, w tym z ryzykiem finansowym zwi?zanym mi?dzy innymi ze spadkiem kursu Akcji lub ograniczeniem ich plynnosci. Podj?cie ka?dej decyzji inwestycyjnej wi??e si? mi?dzy innymi z koniecznosci? okreslenia przyszlego dochodu oraz oceny ryzyka z nim zwi?zanego. Inwestowanie w akcje wi??e si? z ryzykiem utraty cz?sci lub calosci zainwestowanych srodków, a nawet koniecznosci? poniesienia dodatkowych kosztów.

14 September 2020

Allegro.eu

Announcement of Intention to Float on the Warsaw Stock Exchange

Allegro.eu ("Allegro" and, together with its subsidiaries, the "Group"), Poland's number one commerce platform and the most recognized e-commerce brand in the country with a customer base of approximately 12.3 million active buyers and approximately 117,000 merchants, today announces its intention to undertake an initial public offering via a placing to institutional and retail investors. Allegro intends to apply for listing and admission of the Group's ordinary shares on the main market of the Warsaw Stock Exchange.

Commenting on today's announcement, François Nuyts, Chief Executive Officer, said:

"I am delighted to announce Allegro's intention to float on the Warsaw Stock Exchange. Allegro is a unique success storyshaped over 20 years, from local start-up to a European e-commerce champion. Alongside 12.3 million active buyers and 117,000 merchants, we are leading the digital transformation of Poland's economy and improving the everyday lives of millions of Poles and thousands of SMEs.

Allegro has demonstrated exceptional growth, profitability and cash generation at scale over time. We have seen an acceleration of growth over the last three years thanks to our ongoing strategic initiatives and investments, with annual GMV and net revenue reaching approximately 25% and over 30% growth, respectively, in 2019, and GMV and net revenue growth each over 50% in the first half of 2020. Adjusted EBITDA saw a similar trend, growing at 20% in 2019 and 28% in the first half of 2020 with margins in excess of 45%. Today marks a new phase in Allegro's growth journey as we invest in innovation; bring even more customers to our platform; invest in our people; and create the best possible experience for our buyers and merchants. We are proud to offer institutions and individuals the chance to take part - and we intend for every Allegro employee to become an owner of the company too."

About Allegro

Allegro is the number one commerce platform in Poland and has delivered strong revenue growth, profitability and cash flow at scale. The Group operates the leading online marketplace in Poland, Allegro.pl, and the leading price comparison platform in Poland, Ceneo.pl. The Group targets the retail market in Poland, which had an estimated size of PLN 621 billion (USD 156 billion) in 2019, and the Group's gross merchandise value ("GMV") accounted for approximately 3% of this market, which is forecasted to grow to PLN 724 billion (USD 182 billion) by 2024. As the most recognized e-commerce brand and the largest non-food retailer by GMV in Poland, Allegro.pl is also one of the world's top ten e-commerce websites and among the top 100 websites in the world by visits per month[1].

Merchants on the Group's e-commerce marketplace sell across a variety of categories covering electronics, home and garden; sports and leisure; kids; automotive; fashion and shoes; health and beauty; books, media, collectibles and art; and supermarket. The Allegro.pl marketplace platform facilitates the sale of new products primarily on behalf of merchants through a business-to-customer model and attracts visits from an average of 20 million internet users per month, which is equivalent to 76% of all internet users in Poland. The Group's e-commerce marketplace has a user base of approximately 12.3 million active buyers who connect with approximately 117,000 merchants, which resulted in an average of 32 million monthly transactions in the twelve months ended June 30, 2020. The Group's e-commerce marketplace generated GMV of PLN 28.4 billion (USD 7.1 billion) for the twelve months ended June 30, 2020.

Reasons for the Offering

The Group believes the Offering is a logical and significant next step for the Group in its development. It also believes the Offering will strengthen the Group's financial position by enabling it to repay part of its outstanding debt, support the Group's growth plans by increasing its public profile and brand awareness, and create a new long-term shareholder base for the Group, including employees, as well as liquidity for its existing and future shareholders.

Competitive Strengths

The Group believes its success is attributable to the following key strengths:

Allegro is the go-to commerce platform in a large, resilient and under-penetrated retail market

Platform[2]:

• Allegro is the leading e-commerce brand in Poland and is the preferred online shopping destination for Polish consumers.
• A significant percentage of Polish consumers start their search for products on Allegro.pl rather than on any other website. In June 2020, 43% of Polish surveyed consumers cited Allegro.pl as their initial product search destination, more than twice as many Polish consumers who cited Google (17%), which was the nearest competitor.
• As of June 30, 2020, Allegro.pl had a user base of approximately 12.3 million active buyers who connected with approximately 117,000 merchants, which resulted in an average of 32 million monthly transactions in the twelve months ended June 30, 2020.
• This user base generated GMV of PLN 22.8 billion (USD 5.7 billion) for the year ended December 31, 2019, and PLN 28.4 billion (USD 7.1 billion) for the twelve months ended June 30, 2020, making the Group the largest e-commerce retailer in Poland.
• Allegro's GMV grew by 25.4% in 2019 compared to growth of approximately 16% for the rest of the e-commerce segment in Poland.
• Although the Group attracts a large number of Polish consumers to its e-commerce marketplace, excluding sales of second-hand items on the Group's e-commerce marketplace, the Group's GMV accounted for only 3% of the total Polish retail market by value, which had an estimated size of PLN 621 billion, in 2019. The Group believes there is a significant opportunity to increase growth.

Market[3]:

• Poland is the leading economy in Central and Eastern Europe, the fifth most populous country in the European Union and the thirteenth largest economy among OECD countries in terms of GDP.
• Poland's GDP-per-capita has experienced sustained growth at a CAGR of 6.9% from 2016 to 2019 and is expected to continue growing at a CAGR of 4.3% between 2019 and 2024.
• The country's real GDP growth rate has been consistently above the European Union average growth rate for the last ten years, growing at approximately 2.5 times the average European Union real GDP growth rate in 2019.
• The Polish retail market grew at a CAGR of approximately 5% from 2016 to 2019. It is expected to grow at a CAGR of 4% from 2021 to 2024.
• The Polish e-commerce segment has grown faster than the overall Polish retail market at a 2016- 2019 CAGR of 19%, with growth accelerating throughout the period and exceeding 20% in 2019 year-on-year. This growth rate was faster than the growth experienced in the United States (16%), the United Kingdom (11%) and Germany (9%) over the same period. It is expected to grow at a CAGR of 14% from 2021 to 2024.
• Online penetration in the Polish retail market has grown meaningfully in recent years, from approximately 5.8% in 2016 to approximately 8.4% in 2019. The Group believes that there is still significant room to grow as the online retail market share in Poland remains underpenetrated relative to other markets, including the United Kingdom (18%) and China (27%). The current low online penetration and secular tailwinds driving the ongoing shift from offline to online support further growth in the Polish e-commerce segment.

The Group's superior value proposition benefits from the "flywheel" effect, underpinned by an unparalleled focus on "retail basics".

• The Allegro platform creates powerful network effects that benefit both buyers and merchants.
• As more merchants join the platform, the breadth of the products offered increases and price competitiveness improves, which in turn leads to increases in the number of buyers browsing and purchasing on the Group's e-commerce marketplace. Conversely, as more buyers browse for and buy products, merchants become increasingly attracted to the Group's e-commerce marketplace. The Group refers to this effect as the "flywheel".
• As of June 30, 2020, the Group had approximately 12.3 million active buyers on its e-commerce marketplace, representing an annual increase of 13% from June 30, 2019.

For buyers:

• The Group is relentlessly focused on improving and actively stimulating key "retail basics" - namely, breadth of product assortment, price competitiveness and superior shopping and delivery convenience.
• Selection: Polish consumers can shop a large breadth of products across a broad range of categories from global brands such as Bosch, Adidas and Samsung, as well as unique local brands, such as Cobi, Kruger&Matz and Wittchen, and long tail brands, such as Baseus, Lemfo and Green Cell.
• Price: The Group measures prices on the most popular set of products in each product category. Of these monitored top selection products, Allegro's goal is to offer the best prices across its product range.
• Convenience: The Group is focused on improving multiple levers to drive convenience for Allegro buyers, namely website and app user experience, delivery and returns, payments and customer service. Delivery experience has been a key area of innovation, and the Group believes its delivery experience is market-leading in Poland, with approximately 75% of the products sold on the platform being delivered to buyers within two working days and approximately 30% of orders delivered the next working day.
• All of this drives high buyer satisfaction, demonstrated by its best-in-class global Net Promoter Score ("NPS") of +72 (June 2020), which outpaces the e-commerce industry average of 40, and indicates strong buyer loyalty, with more than 8 out of 10 customers recommend Allegro to family members and friends[4].

For merchants:

• The Group is the number one route for merchants to approximately 12.3 million active buyers as of June 30, 2020, and the leading online gateway for merchants in Poland. Its merchant base ranges from large brands, such as P&G and Reckitt Benckiser, to retailers, such as MediaMarkt and Carrefour, to SMEs.
• In addition to providing access to a large buyer base, the Group has transformed the merchant experience over the last 3 years. Merchants benefit from the SMART! loyalty program which drives sales, access to a range of payment providers, unique delivery solutions, incentives for quality performance, and merchant finance.
• The Group has also developed a comprehensive range of merchant tools and value-added services. This includes leveraging data and analytics to drive automation of key processes; marketing tools and support; trainings through Allegro Academy (a digital entrepreneurship education program launched in 2020); and trade analytics tools to monitor sales performance and manage offer competitiveness.
• Allegro's unique value proposition has driven significant growth in the number of merchants from fewer than 100,000 as of December 31, 2018 to approximately 117,000 as of June 30, 2020.

Allegro's continuous platform innovation,including a focus on delivery and the SMART! loyalty program, drives improving user experience for buyers and merchants

• The Group's SMART! loyalty program, with free delivery and free returns, has proven successful at addressing a crucial historic impediment for e-commerce growth, namely the impact of the cost of delivery on the price competitiveness of goods purchased online as compared to products purchased offline.
• The SMART! subscriber base has grown rapidly from 684,000 as of December 31, 2018 to 1.5 million as of December 31, 2019, before reaching 2.1 million paying subscribers, representing approximately 17% of the Group's active buyers, as of June 30, 2020.
• SMART! subscribers are highly engaged, with 1.4x more site visits and 2.5x more orders than non-subscribers. These customers are also more responsive to the Group's communications and commercial campaigns, with an average uplift in GMV per active buyer for SMART! subscribers of 55% after the first twelve months.
• SMART! merchants experienced 5x higher GMV growth in the twelve months ended June 30, 2020 than merchants without SMART! offers. As a result, SMART! is improving merchant quality and accelerating the "flywheel" and there remains significant opportunity for further growth.

Allegro provides a unique combination of growth, profitability and cash conversion at scale

• Targeted investments in strategic initiatives such as SMART!, the focus on "retail basics" and improvements to user experience on the platform have accelerated the flywheel, resulting in accelerating growth over time: GMV grew at 13.9% and 25.4% for the years ended December 31, 2018 and December 31, 2019, respectively. This acceleration was also evident at the start of 2020, prior to the impact of COVID-19, with GMV growing ahead of 2019 growth in both January and February 2020. During the March to May period, when offline stores were closed for all or part of the month, the Group saw significantly higher monthly GMV growth of 47%, 85% and 73% in March, April and May, respectively. The Group has continued to note much stronger GMV growth in June through August, following the reopening of offline stores in Poland, than in the period immediately preceding the COVID-19 lockdown, with GMV growth of 57%, 48% and 51% in June, July and August, respectively.
• The strong growth in GMV, coupled with moderate take rate increases, as well as high growth from the Group's advertising and price comparison businesses, have further driven net revenue growth at a rate in line with or faster than its GMV growth. Net revenue grew 19.0% and 31.1% over the years ended December 31, 2018 and December 31, 2019, respectively. For the six months ended June 30, 2020, the Group's net revenue grew 51.8%.
• The Group has also achieved high profitability and cash conversion levels, driven by its asset-light 3P business model. As a result, from 2017 to 2019, the Group maintained Adjusted EBITDA/net revenue that consistently exceeded 50% and Adjusted EBITDA/GMV of approximately 6%, with Adjusted EBITDA growing at an 18.5% CAGR over the period. Several key investment initiatives, in particular SMART!, which launched in 2018, have resulted in decreasing margins over time with Adjusted EBITDA/net revenue margins reaching 45.6% and Adjusted EBITDA/GMV of 5.0% in the six months ended June 30, 2020. The Group believes these investments are key to accelerating the "flywheel" and continuing to drive overall growth. Adjusted EBITDA grew 28.0% in the six months ended June 30, 2020.
• The Group benefits from limited capital expenditure requirements due to its fully invested and asset-light business model. The Group has also benefited from high free cash flow generation while also managing to reduce net leverage, with net leverage decreasing from 5.1x net debt/Adjusted EBITDA for the preceding twelve months as of June 30, 2019 to 3.7x as of June 30, 2020.

Allegro's distinctive buyer and merchant-centric culture is nurtured by its highly experienced management team

• Allegro is led by a highly experienced and entrepreneurial management team with complementary skill sets and proven track records of driving innovation.
• The Chairman, CEO and the rest of the executive leadership team bring extensive experience at leading e-commerce, technology, consulting and/or financial institutions. The 86 individuals in the broader leadership team have an average of 15.2 years of business experience and 5.2 years at Allegro.
• Allegro's management team has built a creative workplace for its employees, fostering a diverse, collegial and entrepreneurial culture underpinned by teamwork, commitment, continuous professional development and maximization of value for all stakeholders.
• In a survey conducted in April, 2020, approximately 93% of Allegro employees said they would recommend Allegro as a great place to work; 91% considered Allegro an inclusive workplace; and 90% believe Allegro has open communications. The Group has achieved a 78% engagement index in 2020, higher than the 73% average for technology companies with over 1,000 employees globally.[5]
• Allegro has more than 2,400 employees. It enjoys access to a rich market for technology talent in Poland and has one of the largest tech development team in Poland with more than 850 employees in engineering roles working from five tech hubs across the country.

Future strategy

Allegro's strategy is to offer buyers and merchants continuously improving, unparalleled value. The Group will seek to achieve this through a combination of a focus on "retail basics" relating to its platform in Poland, supported by complementary strategic initiatives and potentially supplemented by international expansion. These initiatives include:

• Enhanced buyer and merchant experience: The Group continues to develop and invest in the buyer and merchant experience and is focusing on a number of initiatives, including further automating and optimizing key merchant processes, advancing search, discovery and sales conversion, improving engagement with mobile web and app users, expanding product assortment breadth with a focus on bringing more Polish and international merchants onto the platform, improving price competitiveness, enhancing SMART! and improving delivery experience for buyers .
• Further expansion of SMART! and delivery services: As of June 30, 2020, only 17% of active buyers had SMART! subscriptions, which leaves significant room for further growth. Allegro aims to continue building on its successes in delivery experience, by increasing the proportion of one/two-day delivery share with a particular focus on next day delivery, further growing the network of out-of-home lockers and pick-up/drop-off points, expanding into innovative delivery services, including scaling up of same day deliveries, and the introduction of "ultra-fast" or "instant" deliveries. These initiatives will be supported by the launch of Allegro Fulfilment, which will be used as a supplementary tool in select cases, such as for international sellers and other selected merchants, in an effort to improve delivery time and ensure delivery promise accuracy.
• Further expansion of advertising and price comparison: Allegro believes there is significant potential to increase advertising revenue through further monetization of its broad reach, improvements in ad technology and favorable online advertising market trends. The Group believes it is well positioned to capture a large share in digital advertising via scalable, automated and AI-driven advertising solutions leveraging the Group's traffic and data. The Group also benefits from operating Ceneo, which is the top price comparison platform in Poland, resulting in increased traffic directed to the Group's e-commerce marketplace, and provides an expanded advertising reach.
• Raising ambition in FinTech: The Group has built a successful financial services business using a third-party model over the years. The Group, however, believes there is significant potential in integrating its financial services with its core platform to better address the market opportunity in Poland, estimated to be approximately PLN 300 billion across consumer credit and SME lending[6]. The Group recently launched Allegro Pay, Allegro's own FinTech offering, with beta-testing expected to continue until the end of 2020.
• Broadening platform and geographic expansion: The Group believes there are various opportunities to strengthen its current business footprint into certain related opportunities which include B2B, international inbound sellers, as well as adjacent verticals in which Allegro is not currently active or runs subscale operations, or through expanding value chain solutions such as logistics. The Group also has the ambition to grow outside of Poland in the medium-term.

Recent Trading

There has been no significant change in the financial or trading position of the Group since June 30, 2020. However, the Group has continued to note strong GMV growth of 48% and 51% in July and August, respectively, based on the Group's internal management accounts. Factors include continued strong additional demand associated with increased e-commerce penetration resulting from changed buyer behavior following the COVID-19 pandemic lockdown.

Offering Highlights

Should the Group proceed with the IPO, it is expected to have the following features:

• The Offering is expected to comprise a primary component with approximately PLN 1.0 billion of expected gross proceeds to the Group, as well a secondary component by existing shareholders, including the Group's private equity owners and certain directors and members of management.
• The Group intends to use the expected net proceeds of the issue of new Shares, together with borrowings under a new credit facility a to repay its outstanding debt in order to improve its net leverage.
• It is the intention of the Group and its shareholders to create a meaningful free float in the Shares on Admission.
• An application is expected to made for the Admission to trading on the regulated (main) market of the Warsaw Stock Exchange.
• The Offering consists of (i) a public offering in the territory of Poland (the "Polish Public Offering"), including (a) a retail offering and (b) an institutional offering; (ii) the offering in the United States to certain qualified institutional buyers, as defined in and in reliance on Rule 144A, or another exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act; and (iii) an offering to certain other institutional investors outside of the United States and Poland in accordance with Regulation S under the U.S. Securities Act. The Polish Public Offering is being conducted exclusively within the territory of Poland.
• The Group and the selling shareholders intend to allocate up to 5% of the final number of the Offer Shares in aggregate to the Retail Investors.
• All employees who are employed by the Group as at the listing date, and who do not hold any Shares pursuant to historic investment arrangements, will receive a one-off Share award with a value of PLN 10,000 (USD 2,570[7]), vesting 360 days after the listing date.
• Corporate governance and other board-related matters will be described in the prospectus, when published. A list of proposed board members is included at the bottom of this announcement.
• Additionally, the Group has entered into a commitment letter with lenders for a new PLN 5.5 billion five-year senior secured term loan and a PLN 500.0 million (equivalent) multi-currency revolving credit facility that will be used to refinance all of the Group's indebtedness under its existing credit facility.

The Group has engaged Goldman Sachs International and Morgan Stanley & Co. International plc, as global coordinators and joint bookrunners; Barclays Bank PLC, BofA Securities Europe SA, Citigroup Global Markets Limited and Dom Maklerski Banku Handlowego S.A., as joint bookrunners; Santander Bank Polska S.A and BM PKO BP as joint bookrunners and co-offering agents in Poland in connection with its offer to retail investors; and Bank Polska Kasa Opieki Spólka Akcyjna, Crédit Agricole Corporate and Investment Bank, Erste Group Bank AG, Pekao Investment Banking S.A. and Raiffeisen Centrobank AG, as co-lead managers, in the event the IPO proceeds.

Lazard & Co., Limited ("Lazard") is acting as Financial Adviser to the Group

The Issuer will be submitting a prospectus to the Luxembourg Financial Supervisory Authority (Commission de Surveillance du Secteur Financier) ("CSSF"). The prospectus has been prepared in accordance with the Prospectus Regulation and the Luxembourg Prospectus Law, as well as with the Act on Public Offering and other applicable legislation governing the public offering of securities in Poland. When the Prospectus is approved by the CSSF it will be published on the Luxembourg Stock Exchange's website ( www.bourse.lu), and once its approval has been notified by the CSSF to the Polish Financial Supervision Authority (Komisja Nadzoru Finansowego), it (together with its summary translated into Polish) will be published on the Issuer's website, for information purposes, and the co-offering agents' websites.

Enquiries

For additional information, please contact:

Media: FTI Consulting (London)
Edward Bridges, Matt Dixon, Adam Davidson, Mike Coombes 
+44 (0)20 3727 1017 |  allegro@fticonsulting.com

NBS Communications (Warsaw)
Anna Krajewska, Piotr Wojtaszek, Krzysztof Woch 
+48 22 826 74 18 |  allegro@nbs.com.pl

Allegro
Pawel Klimiuk - Communication Director 
+48 66 44 12 000

Goldman Sachs International (Global Coordinator and Joint Bookrunner) 
Richard Cormack, Clif Marriott, Alex Garner, John Wilkinson
+44 (0)20 7774 1000

Morgan Stanley (Global Coordinator and Joint Bookrunner)
Henrik Gobel, Enrique Perez Hernandez, Bobby Shoraka, Stefan Krueger
+44 (0)20 7425 8000

Lazard (Financial Adviser)
Charlie Foreman, Nick Fowler, Bozidar Djelic
+44 (0)20 7187 2000

Financial Highlights

	Year ended December 31,			Six months ended June 30,		Twelve months ended June 30,
	2017	2018	2019	2019	2020	2020
				Unaudited		Unaudited
Active Buyers (millions)(1)	9.3	10.4	11.4	10.9	12.3	12.3
LTM GMV per Active Buyer (PLN)(2)	1,711	1,741	1,985	1,856	2,295	2,295
GMV (PLN in millions)(3)	15,966.7	18,185.4	22,801.4	10,361.6	16,006.6	28,445.6
Take Rate (%)(4)	8.0	8.9	9.3	9.3	9.1	9.1
Adj. EBITDA (PLN in millions)(5)	952.8	1,114.8	1,338.1	631.4	808.0	1,514.7
Adj. EBITDA / Net Revenue (%)	57.3	56.4	51.6	54.1	45.6	47.4
Adj. EBITDA / GMV (%)	6.0	6.1	5.9	6.1	5.0	5.3

(1) "Active Buyers" represents, as of the end of a period, each unique email address connected with a buyer that has made a purchase on Allegro.pl (excluding eBilet) in the preceding twelve months.

(2) "LTM GMV per Active Buyer" represents GMV for the preceding twelve months as of the end of a period (excluding eBilet's tickets sales) divided by the number of active buyers at the end of such period.

(3) "GMV" means gross merchandise value, which represents the total gross value of goods and tickets sold on the platforms allegro.pl, allegrolokalnie.pl and ebilet.pl (including value added taxes).

(4) "Take Rate" represents the ratio of marketplace revenue divided by GMV after deducting the GMV generated by 1P retail sales (grossed up for VAT).

(5)"Adjusted EBITDA" represents operating profit before amortization and depreciation further adjusted to exclude transaction costs, monitoring costs, market strategy preparation costs, employee restructuring costs, regulatory proceeding costs, group restructuring costs, donations to various public benefit organizations, bonuses for employees and funds spent on sanitary protection of employees and management investment opportunities.

Board of Directors

The following individuals would be the directors of the board of Allegro as of the listing date.

Darren Huston

Darren Huston is the Chairman of the Issuer. Mr. Huston joined the Group as Executive Chairman in January 2017 and was first appointed as a member of the Issuer's Board on May 12, 2017. Previously, Mr. Huston was CEO of Booking.com and Group CEO of the Priceline Group and he has also held various roles with Microsoft (including as CEO of Microsoft Japan), Starbucks and McKinsey & Company. Mr. Huston is also the CEO and Founder of BlackPines Capital Partners. Mr. Huston has over 25 years of managerial and leadership experience. He holds an MBA degree from Harvard University and an MA in Economics from the University of British Columbia.

François Nuyts

François Nuyts is the CEO of the Group. Mr. Nuyts joined the Group as CEO in August 2018 and was appointed as a member of the Issuer's Board on September 1, 2020. Mr. Nuyts is also a member of the management board of Allegro and a member of the management board of Ceneo. Previously, Mr. Nuyts held various management roles with Amazon across Western Europe (England, France, Spain and Italy) where he was a part of its rapid expansion. Mr. Nuyts has over 20 years of experience in management and strategy consulting, including roles with Accenture and Kellogg's. Mr. Nuyts holds an MBA degree from Babson College MA.

Jonathan Eastick

Jon Eastick is the CFO of the Group. Mr. Eastick joined the Group as CFO in February 2018 and was appointed as a member of the Issuer's Board on September 1, 2020. Mr. Eastick is also a member of the management board of Allegro and a member of the management board of Ceneo. Previously, he was a director at Ernst & Young. Mr. Eastick has over 25 years of experience in finance and management including, over 16 years of experience in CFO roles at Netia, Polska Telefonia Cyfrowa and Lucent Technologies Poland. Mr. Eastick holds a Bachelor of Science in International Trade and Development Economics from London School of Economics and Political Science and is a British Chartered Accountant.

David Barker

David Barker led Cinven's investment in Allegro and has been a member of the boards of the Allegro and Ceneo operating companies since 2017. He was appointed a member of the Issuer's Board on September 1, 2020. Mr. Barker joined Cinven in 1996 and is a partner and a member of the Investment Committee at Cinven. He has been involved in many of Cinven's technology, media and telecom investments. Mr. Barker holds a BA degree from Cambridge University.

Richard Sanders

Richard Sanders led Permira's investment in Allegro and has been a member of the boards of the Allegro and Ceneo operating companies since 2017. He was appointed a member of the Issuer's Board on September 1, 2020. Mr. Sanders joined Permira in 1999 and is a partner and a member of the Investment Committee. At Permira, Mr. Sanders is the Co-Head of Technology and has extensive experience in the sector. Mr. Sanders holds an MA degree from Oxford University and an MBA degree from Stanford University.

Pawel Padusinski

Pawel Padusinski led Mid Europa Partners' investment in Allegro and has been a member of the boards of the Allegro and Ceneo operating companies since 2017. He was appointed a member of the Issuer's Board on September 1, 2020. Mr. Padusinski is a partner and the head of the Warsaw office at Mid Europa Partners where he has worked since 2005. Prior to joining Mid Europa Partners, Mr. Padusinski worked in the corporate finance department at PricewaterhouseCoopers LLP in Warsaw. Mr. Padusinski holds an M.Sc. in Finance & Banking and Strategic Management from the Warsaw School of Economics.

Nancy Cruickshank

Nancy Cruickshank was appointed a member of the Issuer's Board on September 1, 2020. Ms. Cruickshank is currently SVP Chief Digital Officer at Carlsberg, having held a NED position with the company for 18 months prior to joining the executive team. Ms. Cruickshank is also on the board of Bango Plc, OnMobile Global Ltd. and Flutter Entertainment Plc. After a six-year term, Ms. Cruickshank will step down from the OnMobile board by the end of 2020 by mutual agreement with that board's chairman. Previously, she was CEO & Founder of MyShowcase, a fresh and contemporary beauty retailer enabled by smart technology. Ms. Cruickshank has worked in the digital industry for almost 20 years, including launching Conde Nast online in 1996, overseeing Telegraph Media Group's digital business and developing the fashion and beauty market leader, Handbag.com between 2001-2006, leading to a successful sale to Hearst Corporation in 2006. Ms. Cruickshank holds a Bachelor of History from the University of Leeds.

Carla Smits-Nusteling

Carla Smits-Nusteling was appointed a member of the Issuer's Board on September 1, 2020. Ms. Smits-Nusteling is currently Chairwoman of the Board of Tele2 AB, Non-Executive Director and Audit Chair of Nokia Corporation, Non-Executive Director and Audit Chair of ASML and lay judge of the Enterprise Court of the Amsterdam Court of Appeal. Ms. Smits-Nusteling will step down from the ASML board on April 29, 2021 when her second term expires and on November 20, 2020, she will join the Board of Stichting Continuiteit Ahold Delhaize, a foundation organized under the laws of the Netherlands to safeguard the interests of Koninklijke Ahold Delhaize N.V. Previously, Ms. Smits-Nusteling was CFO and member of the Board of Management of Royal KPN N.V. and she held several finance and business related positions at Royal KPN N.V. and PostNL. Ms. Smits-Nusteling holds a Master's degree in Business Economics from the Erasmus University of Rotterdam and an Executive Master of Finance and Control degree from the VU University of Amsterdam.

IMPORTANT NOTICE

The contents of this announcement have been prepared by and are the sole responsibility of the Company.

The information contained in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed by any person for any purpose on the information contained in this announcement or its accuracy, fairness or completeness.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States (including its territories and possessions, any state of the United States and the District of Columbia), Australia, Canada, Japan or South Africa or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

The Shares referred to herein may not be offered or sold in the United States unless registered under the US Securities Act of 1933, as amended (the "U.S. Securities Act") or offered in a transaction exempt from, or not subject to, the registration requirements of the Securities Act and in compliance with applicable state law. The offer and sale of Shares referred to herein has not been and will not be registered under the Securities Act or under the applicable securities laws of Australia, Canada, Japan or South Africa. Subject to certain exceptions, the Shares referred to herein may not be offered or sold in Australia, Canada, Japan or South Africa or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada, Japan or South Africa. There will be no public offer of Shares in the United States or any other jurisdiction other than Poland. Any Shares sold in the United States will be sold only to qualified institutional buyers (as defined in Rule 144A under the Securities Act) in reliance on Rule 144A.

This communication is only addressed to, and directed at, persons in member states of the European Economic Area and the United Kingdom who are "qualified investors" within the meaning of Article 2(e) of the Prospectus Regulation ("Qualified Investors"). In addition, in the United Kingdom, this communication is being distributed only to, and is directed only at, Qualified Investors (i) who have professional experience in matters relating to investments who fall within the definition of "investment professional" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), or (ii) who are high net worth companies, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) of the Order, and (iii) other persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as "relevant persons"). Any investment or investment activity to which this communication relates is available only to and will only be engaged in with such persons. This communication must not be acted on or relied on (i) in the United Kingdom, by persons who are not relevant persons, and (ii) in any member state of the European Economic Area, by persons who are not Qualified Investors.

This announcement does not constitute an offer or invitation for the sale, issuance or subscription for any Shares in any jurisdiction, nor does it purport to give legal, tax or financial advice. Nothing contained herein shall form the basis of or be relied upon in connection with, or act as an inducement to enter into, any investment activity. Any subscription or purchase of Shares in the proposed Offering should be made solely on the basis of the information contained in the final Prospectus to be issued by the Company in connection with the Offering. The information in this announcement is subject to change.

The Offering timetable, including date of Admission, may be influenced by a range of circumstances such as market conditions. There is no guarantee that Admission will occur and you should not base your financial decisions on Company's intentions in relation to Admission at this stage. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all or part of the amount invested. Persons considering making such investments should consult an authorized person specializing in advising on such investments. This announcement does not constitute a recommendation concerning the Offering. The value of shares can decrease as well as increase. Potential investors should consult a professional advisor as to the suitability of the Offering for the person concerned.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "targets", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, outlook, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts and involve predictions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect the Company's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's business, results of operations, financial position, liquidity, prospects, growth or strategies. Forward-looking statements speak only as of the date of this announcement and cannot be relied upon as a guide to future performance.

Each of Goldman Sachs International, Morgan Stanley & Co. International plc, Barclays Bank PLC, BofA Securities Europe SA, Citigroup Global Markets Limited, Dom Maklerski Banku Handlowego S.A., Powszechna Kasa Oszcz?dnosci Bank Polski S.A. Oddzial - Biuro Maklerskie w Warszawie, Santander Bank Polska S.A. - Santander Biuro Maklerski, Bank Polska Kasa Opieki Spólka Akcyjna, Crédit Agricole Corporate and Investment Bank, Erste Group Bank AG, Pekao Investment Banking S.A. and Raiffeisen Centrobank AG (together, the "Managers"), Lazard and the Company, and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any forward-looking statement contained in this announcement whether as a result of new information, future developments or otherwise.

The Managers and Lazard are acting exclusively for the Company and no one else in connection with the Offering. They will not regard any other person as their respective clients in relation to the Offering and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients, nor for providing advice in relation to the Offering, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

In connection with the Offering of the Shares, each of the Managers and any of their affiliates, may take up a portion of the Shares in the Offering as a principal position and in that capacity may retain, purchase, sell or offer to sell for their own accounts such Shares and other securities of the Company or related investments in connection with the Offering or otherwise. Accordingly, references in the Prospectus, once published, to the Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, each of the Managers and any of their affiliates acting in such capacity. In addition, certain of the Managers or their affiliates may enter into financing arrangements (including swaps or contracts for differences) with investors in connection with which they or their affiliates may from time to time acquire, hold or dispose of Shares. None of the Managers nor any of their respective affiliates intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

In connection with the Offering, a stabilization manager (or its agents) acting on behalf of itself and the Managers may to the extent permitted by, and in compliance with, applicable laws and regulations (in particular, Commission Regulation (EC) No. 596/2014 and Commission Delegated Regulation (EC) No. 1052/2016), over-allot shares or effect transactions on or off a regulated market, with a view to supporting the market price of the Shares at a level higher than that which might otherwise prevail in the open market. Such transactions may commence on or after the date of commencement of trading of the Shares on the Warsaw Stock Exchange and will end no later than 30 calendar days thereafter. There is no assurance that such transactions will be undertaken and, if commenced, they may be discontinued at any time. There shall be no obligation on the stabilizing manager to enter into such transactions. All such stabilization shall be conducted in accordance with applicable laws and regulations.

None of the Managers, Lazard or any of their respective affiliates or its or their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies or the selling shareholders, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of, or reliance upon, this announcement or its contents or otherwise arising in connection therewith.

Unless otherwise indicated, market, industry and competitive position data are estimates (and accordingly, approximate) and should be treated with caution. Such information has not been audited or independently verified, and the Company has not ascertained the underlying economic assumptions relied upon therein.

For the reader's convenience, a translation of certain zloty amounts into U.S. dollars has been presented in this announcement. The average exchange rate for the U.S. dollar convenience translations is PLN 3.9806 per USD 1.00, which was the National Bank of Poland exchange rate per U.S. dollar as of June 30, 2020. Such translations should not be viewed as a representation that such zloty amounts actually represent such U.S. dollar amounts, or could be or could have been converted into U.S. dollars at the rate indicated or at any other rate.

Certain data in this announcement, including financial, statistical, and operating information has been rounded. As a result of the rounding, the totals of data presented in this announcement may vary slightly from the actual arithmetic totals of such data. Percentages in tables may have been rounded and accordingly may not add up to 100%.

For the avoidance of doubt, the contents of the Company's website are not incorporated into, and do not form part of, this announcement.

Information to Distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Shares have been subject to a product approval process, which has determined that such Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors should note that: the price of the Shares may decline and investors could lose all or part of their investment; the Shares offer no guaranteed income and no capital protection; and an investment in the Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Offer. Furthermore, it is noted that, notwithstanding the Target Market Assessment, the Managers will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Shares and determining appropriate distribution channels.

[1] Source: SimilarWeb

[2] Source: OC&C

[3] Sources: OC&C, Euromonitor, OECD

[4]Source: CustomerGuru

[5]Source: CAMP

[6]Source: OC&C

[7] Exchange calculated at PLN 3.9806 per USD 1.00, as of June 30, 2020

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