Coolblue GmbH

Coolblue GmbH

Düsseldorf

Befreiender Konzernabschluss zum Geschäftsjahr vom 01.01.2021 bis zum 31.12.2021

Coolblue Holding B.V.

Rotterdam/Niederlande

01 HELLO

02 COOLBLUE STATS

03 THE COOLBLUE STORY

04 A YEAR IN REVIEW

05 COOLBLUE AS AN EMPLOYER

06 GO GREEN

07 RISK MANAGEMENT

08 CORPORATE GOVERNANCE

09 THE NUMBERS GAME

01.

HELLO.

The hi-lights.

Welcome to the Coolblue Yearbook 2021. I am proud to share our achievements and results of 2021.

2021 was an eventful year, but also a year of growth. We opened new online and offline stores, including our first physical store in Germany, showed our work behind the screens through our Code Museum, and installed new machines in our Warehouse. We shipped more packages than ever before and we launched Coolblue Energy: the energy company for anyone that wants to reduce their energy consumption.

Our efforts in 2021 allow us to continue to grow in 2022. We will expand our infrastructure in Germany and continue to do Alles fur ein Lacheln. We will proceed with integrating the Coolblue Energy proposition to help customers to further reduce their energy bill. Lastly, we will do everything we can to see each other more often again.

All that is left for me to say is: thank you. To our customers, who inspire us to do a little bit better every day. To our shareholders, for their support and trust in Coolblue. And to all Coolbluers, who make anything for a smile possible.

With a smile,

02.

COOLBLUE STATS.

Scantastic.

We love data. If we cannot measure it, we cannot improve it. That is why we have 139 Data Analysts at Coolblue who measure and analyze everything: from the number of app visits to the 52 Coolbluers called Thomas.

03.

THE COOLBLUE STORY.

Anything for a smile.

Coolblue is more than just an e-commerce company. With our obsessive focus on customer satisfaction, we build leading customer journeys by integrating our website, app, own delivery services, own customer service, and our 20 physical stores. This way, we do anything for a smile in the Netherlands, Belgium, and Germany.

OUR GOALS.

Real keepers.

With everything we do at Coolblue, we keep our 2 goals in mind: setting the bar for customer-centric entrepreneurship and creating value. They are of equal importance and although optimizing NPS and EBITDA might seem like 2 contradictory goals, in practice, we actually see that they reinforce each other.

NPS & EBITDA

In order to realize our goals, we measure everything, because only then can we improve our performance and continue to exceed the customer's expectations. Using value trees, we map out the impact of every underlying driver of the NPS and EBITDA. This approach enables us to optimize every step of our product journeys, either by adding value or by reducing costs. This way, making customers happy not only leads to customers coming back more often and recommending us to others, but it is often also the most cost-effective approach on an operational level.

THE MOST CUSTOMER- CENTRIC PRODUCT JOURNEY.

Ticket to success.

In order to truly make a difference for our customers and stand out in our market, we offer customer-centric product journeys instead of competing on picture, price, and button. We develop product journeys from start to finish that make the customer happy. In every step of these product journeys, we want to exceed the customer's expectations and maximize the service we can offer. To achieve this, we have built our own infrastructure in the Netherlands, Belgium, and Germany, which consists of, among others, our own delivery network, installation services, bike network, and stores.

Per product type, we identify the underlying needs of customers, select the elements of our infrastructure that support these needs, and implement them in the product journey. The result is the most customer-centric product journey, in which we can add value and reduce costs in every step.

To demonstrate how we do this, an example is given for our customercentric product journeys for washing machines, televisions, and laptops.

The most customer-centric product journey for washing machines

A customer usually buys a new washing machine because their current appliance broke down. They need it quickly, but cannot transport an 80-kilogram appliance themselves and have to be home for delivery. To fulfill these needs, we have our 2-man delivery service, CoolblueDelivers. Through our realtime route planning, we even offer the customer the choice of a time slot for delivery and installation, every day of the week, including evenings. That way, they do not need to take a day off or skip a tennis lesson.

During the chosen time slot, Coolblue delivery drivers place and install the appliance where the customer needs it, even if this is on the 4th floor or in their basement. Our delivery drivers also bring external components for installation from our own BlueBuilt brand, which they can instantly supply if the customer needs them.

Creating circular value

If the customer wants us to, we take their old appliance back with us. We try to recover as much value as we can from these appliances, by repairing and refurbishing them at our depots. Refurbished washing machines are sold at a discounted price through various channels. What remains of the disposed appliances is processed in an environmentally friendly manner.

254 Vans

10 Depots

1,273 Delivery drivers

The most customer-centric product journey for televisions

The journey for televisions is one that heavily relies on the experience of the product. First of all, the customer needs to find the right size. To help them assess whether the television suits the location the customer has in mind, we have built an in-app augmented reality functionality. With it, a customer can virtually place televisions in their home to assess what size would fit best.

Integrating online and offline

In addition to the size of a television, the customer also needs to determine what image quality they want. To this end, we offer an elaborate explanation of the corresponding technical acronyms on our website. Still, we understand that the customer might prefer to assess the image quality with their own eyes, which they can do in our stores.

Through our website, the customer can schedule an appointment with our television experts, who are trained to help them choose the right size and image quality. These experts also explain which peripheral equipment, such as a soundbar or wall mount, would allow the customer to enjoy their television even more. Once the customer has chosen the best television for them, we deliver and install the television through our 1-man delivery and installation service. Along with any peripheral equipment, of course.

35 Television delivery vans

20 Stores

90 Installation experts

The most customer-centric product journey for laptops

A customer usually starts browsing for a new laptop when their current laptop is becoming slower. Understanding what specifications best meet their needs often requires expert knowledge. And even with a thorough understanding of the options and specifications, it still is not always clear which laptop best suits the customer's specific needs.

Coolblue's Choice

Data-driven laptop configurations

To ensure that the customer can find the best laptop for their needs, we have specialized product managers who analyze customer feedback every day to determine what customers really want and need. Based on their findings, we design and offer built-to-order laptops for every use case, such as gaming, video editing, or text editing. These laptops are sold exclusively at Coolblue and, like all laptops in our assortment, come with free antivirus software. The best laptops per use case can easily be found, thanks to the "Coolblue's Choice" label.

Bike delivery network

Once the customer has found their laptop, they can choose whether they want to pick it up at our stores or have it delivered to their home during a specified time slot. In and around major cities, we deliver them with our own environmentally friendly bike delivery service. Because of their recognizable color and design, these bikes improve our visibility. The orders they deliver are packed in paper shipping bags, which require significantly less cardboard. Additionally, they allow us to transport more orders with a single bike.

28 Bike hubs

144 Bikes

382 Bike delivery drivers

LEADING CUSTOMER JOURNEYS.

The complete package.

We have a diversified sales portfolio, but we do not sell everything. We offer leading customer journeys for over 1,100 product categories. Because we are not a platform for third parties, we can focus on and guarantee quality throughout the entire customer journey. We see that this approach works, as we consistently achieve a high NPS and EBITDA in all of our markets.

Creating leading customer journeys starts with building an integrated online offering. To support this offering, we have our own technology and software development in addition to our own physical infrastructure.

In-house technology and software development

With over 330 developers, working in small dedicated multidisciplinary development teams, we aim to make our customer journeys a little bit better every day. We leverage third-party knowledge and solutions when suited, but develop applications internally to gain competitive advantages. By improving and expanding the software and technology we have built in-house, we are able to continuously test and optimize every part of the product journey. This allows us to fully customize it to our and the customer's needs.

Warehouse

Because we own and operate our solar-powered warehouse ourselves, we are able to continuously improve our NPS and EBITDA. Our stock levels and purchasing strategy ensure ample availability of our assortment and we treat every order with the utmost care.

Our warehouse processes are optimized for 3 main product categories: white goods, XL products, and parcel products. Each category requires different ways to pick, pack, and store from arrival in our warehouse until the product is shipped to the customer. In 2021, we implemented an automated inbound, storage, and order-picking solution, which can handle up to 75% of the parcel volume automatically. Parcel products are packed to size by our packing machines.

Integrated delivery network

We achieve a high NPS by constantly delivering on our promises and improving it a little bit every day. From our central warehouse, we ship to our own hubs, stores, and customers. Shipment to our customers is done by CoolblueDelivers, CoolblueBikes, and our delivery partners. This includes guaranteed next-day delivery 7 days a week and a high first time right. Because we fully control each step of the logistical process, we can optimize cost to serve throughout our entire supply chain; from incoming goods to storage and delivery.

More than just a website

Our website provides detailed information about all of our products and is constantly optimized to help the customer find the best product for them. But Coolblue is more than just a website. We enhance the customer journey with our app, expert advice from our customer service employees, and the benefits of physical touchpoints.

The app

With the Coolblue App, we fulfill unique customer needs through functionalities like augmented reality, checking your phone's compatibility with the phone case in your shopping cart, or assessing whether your WiFi signal meets the minimum requirements for certain products.

Customer service

Our in-house, multilingual customer service assists customers in various stages of the customer journey. It can easily be reached 7 days a week until midnight via phone, email, social media, and directly on the website.

Customer contact is registered in our self-built tool Cassie. By reporting on customer contact reasons, we are able to optimize the customer journey at an earlier stage. This way, we reduce the customers' need to contact our customer service, which contributes to a higher NPS.

Specialist customer service teams

Coolblue has specialist customer service teams that consist of experts who either specialize in a specific product type, like washing machines, or a specific stage of the product journey, such as payments. On top of expert advice, these specialist customer service teams offer an improved customer experience, prevent unnecessary returns, reduce customer effort, and lower operational costs overall.

Stores

Our website, app, and customer service are there to best serve our customers. Still, we see that for some of our journeys, something extra is needed. That is why we have an expanding network of strategically located stores. Customers visit our stores to try and experience the products and get advice from an expert to help them choose the product that best suits their needs.

This advice is also available on appointment. Our instore experts can provide assistance with the use of a product, repair broken products, and help with returns.

App integration in stores

Even in our stores, we want customers to fully enjoy the benefits of our online offering. We have created an in-store mode for our app, which notices when a customer enters our store. If they have an appointment, it notifies our queueing system automatically, so they do not have to wait in line. With the in-store mode, the customer can easily scan the QR code or NFC tag next to products. This way, they have all the information we have available right at their fingertips.

GROWTH OPPORTUNITIES.

Make us sprout.

Customer needs are for the most part universal. This means that we can apply our integrated and scalable approach in building leading customer journeys in multiple directions. Next to the growth we can still achieve in the Netherlands and Belgium, we see 3 clear directions for growth: geographical expansion, new customer segments, and new business propositions.

Germany

In 2020, we made our first delivery in Germany. It was a logical choice to expand to after Belgium, because Germany is close to the Netherlands, both geographically and culturally. With 83 million inhabitants, the addressable market is huge, and the lagging online penetration compared to the Dutch market, provides strong potential for the future. With a proven playbook taken from our Belgian expansion, Coolblue is well-positioned in the competitive market and first results show that German customers love the Coolblue proposition.

Business Journeys

When Coolblue was founded in 1999, it was mainly a consumer brand. Over the years, we gradually expanded towards the business market by leveraging on our leading customer journeys created for consumers. In 2020, our growth was further accelerated by the shift to working from home. With our Home Office Stores, we created a scalable solution that continues to show strong growth potential.

Home Office Stores

In 2020, we introduced our Home Office Stores to help employers adapt to the new situation of remote and hybrid working. Home Office Stores are tailor-made Coolblue storefronts, for which the employer can determine the amount of shopping credit and the assortment they offer their employees, ranging from sit-stand desks to headsets. After the employee has chosen the best setup for them, we deliver and install the products when desired. In 2021, we developed 158 of these stores for Dutch and Belgian employers. In addition, these personalized storefronts perfectly lend themselves to other needs of employers as well, such as Choose Your Own Device.

Coolblue Energy

In 2021, Dutch households were faced with a considerable increase in their monthly energy bill. Unsurprisingly, they started looking for ways to save energy. This was reflected in the sales of our solar panels, which literally went through the roof. It was also reflected in how customers used our website. For instance, energy consumption became one of the best-used filters on our white goods pages.

Energy-efficient household appliances can significantly lower energy consumption and, as such, a customer's energy bill. A modern dryer, for example, can help customers save up to € 150 a year in energy costs. As the largest consumer electronics retailer in the Netherlands, well-known for our product expertise, we are perfectly positioned to help our customers save energy. Which is why in 2021, we launched Coolblue Energy: the energy company for anyone who wants to save energy. We provide green energy, advice on how to save energy, and a substantial discount on energy-saving products in our assortment, such as solar panels, charging stations, household appliances, and smart plugs.

Our first acquisition

To make the launch of Coolblue Energy possible, we acquired ServiceHouse, a fully-licensed energy and mobility company, in 2021. This acquisition has allowed us to launch our own energy label and enabled us to introduce the Coolblue Charge Card for electrical vehicles. Customers can use this card at over 150,000 charging stations throughout Europe. More than anything, this acquisition provided us with the in-house developed software platform to combine all our energy propositions in a single, integrated customer journey.

CULTURE.

Company ingredient #1.

These are our core values. They describe who we are, what we represent, what unites us, and how we interact. Our core values define our culture and help us make choices for the future. We use these values for every decision, no matter how small, to see if it would suit us or not.

UNCONVENTIONAL.

One of a kind.

We are proud of our real, unconventional Coolbluers. That is why they appear on our websites and in our commercials, just the way they are.

Being unconventional means that Coolbluers can and dare to be themselves, regardless of whether they are outgoing or a little more quiet. Although this may sound contradictory, it is precisely this unconventionality that unites us.

We are all doing this for the first time. We might not have all the answers right away, but we will surely try. Because only by doing what no one has done before can we be truly unconventional.

People who are true to themselves are hard to copy. That is why we always ask ourselves with everything we create whether it really suits us. If we were to cover our logo and the remainder cannot be recognized as Coolblue, it needs to be more unconventional.

FRIENDS.

Honest, direct, open.

There are few companies where so many colleagues are friends as well. Friendship is our strength because together, we know more, we can achieve more, and we have more fun.

People take notice. Such as our customers, who happily visit us again and our suppliers, who view us as long-term partners. We are always honest and direct, even if it is difficult at times. We keep our promises and we are open to feedback.

Friendship can only prosper between equals. That is why ties are the leastcommon item worn at Coolblue, why Coolbluers honestly speak their minds, and why we are always honest, direct, and open to our customers.

GO FOR IT.

A little bit better every day.

Our no-nonsense, entrepreneurial attitude can be phrased in many ways. Less talk, more action. Actions speak louder than words. At Coolblue, we simply refer to this attitude as go for it.

An idea only becomes valuable when given a follow-up. We got to where we are now by preferring immediate action over endless discussions and by doing things a little bit better every day. We improve step by step and detail after detail. Not everything works the first time around, but we take the risk and go for it. We make mistakes and learn from them.

FLEXIBLE.

Dare to change.

We are constantly changing, either because we can or because we have to. Coolblue has had a flexible structure from the start to support our rapid growth. This is how we have always done it' is never a valid reason for us.

Our flexibility shows in our Coolbluers who do not mind working with a sudden change of plans or team. It also shows in Coolbluers who continue to learn outside of their own expertise. And lastly, our flexibility is reflected by the systems we build that can handle twice the expected load.

Flexibility is also key in our obsessive focus on customer satisfaction. We gladly go the extra mile for our customers and are convinced that exceptions exist to be made. 'Just because' is also a valid reason to us.

SIMPLY AMAZE.

Anything for a smile.

The words simply amaze appear to be contradictory, but describe exactly who we are as Coolblue: both unconventional and down-to-earth.

The term simply speaks volumes. We have simply built a straightforward website where customers can quickly and easily place an order. We then simply package that order in a bag or box and simply ship it to our customers. For free, of course.

Amaze means that we need to exceed expectations and that we need to go the extra mile to surprise our customers, to make them smile. A smile might be a common gesture, but it often requires something amazing.

04

A YEAR IN REVIEW

Favorite past-time.

In 2021, we kept building on the learnings we took from the year before and continued to be flexible and unconventional, despite the ongoing pandemic and related measures. We even learned what it means to be IPO ready. And most importantly: we did it together.

Flexible

2021 remained challenging with the constantly changing circumstances and guidelines related to COVID-19. We kept building on our operational learnings from 2020 and by continuing to be flexible we were able to expand our services to make even more customers happy.

Flexible employability

In 2021, our flexibility showed more than ever throughout the whole of Coolblue. We became increasingly adept at adjusting our way of working. At our customer service, working from home became the default. This eliminated the factor of distance between home and the office. Customer service employees only came to the office occasionally for training and teambuilding activities. As an added advantage, customer service employees can now plan their shifts more flexibly. While our stores were temporarily closed, we learned that store employees can also take up customer service tasks, which they continue to do now that the stores are open again.

100 million YouTube views

We offer customers product advice on our website, in our stores, and through our customer service. To further assist our customers in choosing the best product for their needs and explain how to use it, we record videos in which we showcase specific products. We then upload these videos to our YouTube channel where anyone can view them. In 2021, we reached a milestone of 100 million views on our YouTube channel.

Video calling with customers

The installation of a built-in appliance requires exact measurements before delivery. That is why we enhanced our customer service for built-in white goods in 2021 by adding a video-calling option. During the call, customers can ask for advice about measuring the niche dimensions. Of course, they can also get advice about the use of their new appliance. Because our experts can see what the customer sees, they can tailor their advice exactly to the customer's needs.

Go for it

In 2021, we continued our entrepreneurial journey. We took all the necessary steps to launch a successful IPO. And even though we had to postpone our intended listing due to adverse market conditions, we kept focusing on growth and opportunities.

Initial Public Offering

In October 2021, we announced our intention to float. We had finalized all the required preparations and were ready to welcome many new shareholders. However, as market conditions deteriorated quickly in the e-commerce and retail sector, as evidenced by adjusted full-year profit expectations of European peers, we had to postpone our listing at Euronext Amsterdam.

Warehouse mechanization continued

We took the next step in creating the warehouse of the future. We automated the picking process for parcel-sized products as well as part of our returns process. This allows us to reduce handling times and unnecessary manual movement of our products. We also installed 2 new packaging machines for medium and large-sized products.

Business Journeys

Triggered by the increasing demand from business customers, we further expanded our Home Office Store proposition in 2021. We opened 158 Home Office Stores for employers in the Netherlands and Belgium. Through these personalized storefronts, employers offer their 46,000 employees a suitable home office, with products ranging from desks to headsets. Via our CoolblueDelivers proposition, we deliver and install the products directly at the employees' home. The concept of a personalized storefront has allowed us to launch a variety of similar propositions, such as Choose Your Own Device and Christmas Stores. Each of these propositions offers both Coolblue's assortment and all the services that employers have come to expect from Coolblue.

International growth

Over the course of 2021, we grew significantly in both Belgium and Germany. We opened our sixth Belgian store in Kuurne and moved our Antwerp store to a new building that is 3 times larger. In Germany, we laid the foundation for future growth by expanding our infrastructure. We opened a new depot and our first German store in Dusseldorf. And we welcomed many new German Coolbluers. Our first results show that Germans love the Coolblue proposition.

Unconventional

We started supplying energy and became head sponsor for Solar Team Eindhoven. And we gave our software developers a place in the spotlight.

Coolblue Energy

In 2021, we ventured into the energy market and acquired ServiceHouse. We launched Coolblue Energy and became the first and only energy company that aims to sell its customers less energy. Coolblue Energy customers receive a discount on energy-saving products and on solar panels and charging stations we offer.

Sunny sponsorship

We became head sponsor of Solar Team Eindhoven. This sponsorship was right up our street, because it fully aligns with our energy proposition. Solar Team Eindhoven wants to demonstrate that solar energy is enough to live on and power your electric vehicle. In September 2021, they presented their Stella Vita and successfully took it for a test drive all the way to Tarifa, Spain.

Code Museum

Software development mostly takes place behind the screens, while the output is seen by a large number of people. To give our developers the stage they deserve, we opened the Coolblue Code Museum at 6 locations in the Netherlands and online in 2021. Here, visitors can see the actual code and listen to the developers that wrote it.

Digital store opening in Dusseldorf

We celebrate successes together. And if we cannot physically attend a store opening in Dusseldorf, we organize a livestream so that everyone who wants to can still attend.

Friends

We did not see each other as much as we wanted to in 2021. Still, we had lots of fun together.

Friend shares

With an official certificate, Coolbluers were given their own piece of Coolblue.

Mud Masters

In the brief window in which this was allowed, we rolled through the mud together during Mud Masters.

Coolblue Radio

In the week of Black Friday, we hit the airwaves again with our own Coolblue radio channel through which we celebrated successes together.

Smile Express

To thank Coolbluers for their work, especially now that we do not see each other as often at the office, we sent them Smile Express mail, such as a plant for in their home office.

Online Sinterklaasfeest

We celebrated Sinterklaas for over 800 mini-Coolbluers through the online livestream of an original Coolblue Sinterklaas story. Afterwards, we delivered a Sinterklaas gift to the mini-Coolbluers through our bike delivery proposition.

LOOKING AHEAD.

Forward thinking.

To make sure that 2022 will be the best Coolblue year ever, we will again heavily invest in growth. We share some of our plans here, while others will be revealed as 2022 progresses.

Warehouse

We will continue to realize our vision of a warehouse of the future. We will further optimize the way shipments are packed and explore ways in which we can reduce our CO ₂ emission even more. Additionally, we will, among others, invest in research and software development to further optimize our product journeys.

Delivery network and stores

In 2022, we will open more stores in the Netherlands, Belgium, and Germany. From these stores, we are able to expand our bike delivery infrastructure. Of course, we will also expand the infrastructure for 1 and 2-man delivery.

Germany

We made our first delivery in Germany in 2020 and opened our first German store in 2021. For 2022, we plan to color North Rhine-Westphalia a little more blue by expanding our infrastructure further and opening at least one more store in Germany. With this growth, we are one step closer to our goal of reaching 1 billion euros worth of revenue in Germany in 2025.

Coolblue Energy

Through Coolblue Energy we will help an additional 100,000 customers reduce their energy consumption in 2022.

RESULTS.

Fruits of our labor.

We continuously strive to improve our customer satisfaction and our profitability. The various customer journey improvements we implemented in 2021 have contributed to our EBITDA and a high NPS. We look back on our results and the investments made in 2021.

NPS results

In order to keep setting the bar for customercentric entrepreneurship, we always strive to improve our NPS. Thanks to various improvements to our customer journeys and despite the challenges in 2021 we have been able to keep our NPS at a high level: 67. Despite some operational challenges, we have been able to structurally grow our customer base with more and more happy customers.

Income statement & Balance sheet performance

In 2021, our revenue increased by € 348 million to € 2.34 billion (+ 18%), compared to € 1.99 billion in 2020. Next to the structurally growing online market, the growth accelerated as a result of the Covid-19- related measures taken by the Dutch and Belgian governments. We outperformed the market for consumer electronics, which decreased by 0.3% in the Netherlands and increased by 1.7% in Belgium (GfK 2021). Furthermore, our revenue in Germany increased to € 94 million. The Coolblue Energy revenue increased, because of the growth of our solar and EV charging propositions and the acquisition of ServiceHouse.

The gross profit margin was in line with 2020 (2021: 21.4%, 2020: 21.5%). We further improved purchase conditions, pricing optimization, the rationalization of our product assortment, and optimal cross-sell opportunities, but also saw a more normalized market trend in pricing and availability compared to 2020 and a shift in product mix, e.g. with working from home and our sales in Germany. We focused on offering an improved range of products and services that would suit our customers best, for instance with Coolblue Energy and by further developing our own BlueBuilt brand.

The Selling & Distribution expenses as a percentage of revenue increased to 17.0% (2020: 15.6%). Where 2020 was an atypical year with lower marketing spend and stretching of our capacity, this normalized in 2021. In addition we invested in new stores and the growth of CoolblueDelivers, in the Netherlands, Belgium, and Germany, resulting in start-up costs. We also invested in our new energy proposition Coolblue Energy.

Administrative expenses as a percentage of revenue slightly increased to 2.3% (2020: 2.1%) as a result of the expansion of CoolblueEnergy with the acquisition of ServiceHouse B.V.

The Adjusted EBITDA decreased from € 114.2 mln to € 91.5 mln due to investments in new businesses like Coolblue Energy, the expansion in Germany. The EBITDA decreased from € 114.2 million in 2020 to € 88.6 million in 2021. The Adjusted EBITDA is adjusted for costs of share based payments as we made a large number of Coolbluers shareholders.

In conclusion, our net profit decreased from € 61.1 million in 2020 to € 39.2 million in 2021. The results are below last year's, but we are pleased with the developments shown in 2021 which form a solid base for further growth in 2022. We served many new customers, whom we expect to return in 2022. We expect further growth in 2022, in part supported by a growing number of employees. The financing facilities currently in place support these growth plans.

Working capital development

The main developments in our working capital are explained by the increased inventory and the negative working capital from the acquisition of ServiceHouse with energy-related working capital balances. Our inventory increased in 2021 as a result of opening of stores, higher stock to support our private label development, and higher stock levels to prevent scarcity. We finance our growth by reinvesting our profits and optimizing our working capital. Our working capital was -/- € 266.9 million at the end of 2021 compared to -/- € 270.7 million at the end of 2020.

Investments

In 2021, we invested € 40.3 million in tangible fixed assets (2020: € 17.0 million). This mainly relates to investments in our infrastructure, such as new stores, significant investments in mechanisation of our warehouse in Tilburg, and IT hardware, but it also relates to the growth of our white goods subscriptions Products-as-a-Service. We invested € 13.5 million in intangible fixed assets (2020: € 11.9 million). This relates to a part of the software development costs of our website and back-office systems, such as a new warehouse management system and Coolblue Energy.

Improved statement of financial position

Adding the net result for 2021 to equity results in a solvability of 20% (2020: 18%), while the current ratio ( ****** ) (excluding receivables from shareholder) remained stable at 0.9 (2020: 0.9). We did not pay any dividends and strengthened our equity position instead. The receivable from the shareholder is available on demand. Our shareholder Mondhoekie B.V. extended the financing in 2021, which resulted in a credit facility for a 3-year period.

^(*) EBITDA = Operating profit + Depreciation and Amortization
^(**) Adjusted EBITDA = EBITDA +/+ costs share-based payments
^(***) The presentation of the income statement changed in 2020 from a mix by function and nature, to a presentation by function. Gross profit as % of revenue 2016 till 2018 reflects the previous situation.
^(****) Working capital excluding receivable from shareholder = Inventory + Receivables -/- Receivable from shareholder -/- Trade and other payables
^(*****) Solvability = Equity / (Equity + Liabilities)
^(******) Current ratio = Current assets / Trade and other payables

05

COOLBLUE AS AN EMPLOYER

It's working.

We have 7,386 Coolbluers working with us, each with their own speciality and ambitions, and all fundamental to our success. We offer them careers rather than jobs, with all the facilities to make their growth possible.

7,386 Coolbluers.

1,711 Delivery employees.

1,893 Warehouse and Returns employees

808 Store employees.

1,781 Office employees.

2,684 Next steps.

861 Customer service employees.

96,523 Applications.

332 Tech employees.

73 Nationalities.

ENTREPRENEURIAL CULTURE.

Of great values.

Coolblue has a unique entrepreneurial culture. It is what Coolbluers make together, what connects us, and what we preserve together. This culture is rooted in our 4 core values: Unconventional, Friends, Go for it, and Flexible. They are of such importance to us, that they can even be found written on our walls.

Recruitment

In our recruitment process, we look at more than just a candidate's suitability for the position. We also establish whether they are a match with our culture.

Customized application journeys

We create customized application journeys for different target groups, such as delivery drivers and software developers. Throughout the entire journey, we tailor to the needs of the applicants, allowing us to make the perfect match. We provide locationspecific vacancies, which give applicants a more detailed explanation of the position. Vacancies applicable for international candidates are displayed on our English recruitment website with information about relocation possibilities we offer included. Our approach, for which we received the "Digitaal Werven" award in 2021, allows us to attract new talent. In 2021, we received 96,523 job applications, of which the majority was generated organically.

We also differentiate in the way we select candidates. Once a candidate for our customer service or stores has submitted their application, we invite them for a virtual trial day at one of our locations. This allows both us and the candidates to see whether we are a real match. For CoolblueDelivers, we invite candidates for selection days, for which they first receive videos via WhatsApp to prepare themselves. During the selection day, we simulate the delivery of a white goods appliance at one of our depots. This enables us to assess candidates on their practical competencies as well.

Onboarding

New Coolbluers are immersed in our company culture from day one. During our Paint it Blue day, all our new friends learn about Coolblue, its history, its core values, and how they translate into the goals of their specific department. To make these core values more tangible, we have created domain-specific culture booklets. These booklets contain practical examples and behaviors for each of our core values, such as how we do something extra for our customers, especially when they do not expect it. Or that we embrace the fact that we are all unique.

COOLBLUE CAREERS.

Firm belief.

We believe in careers rather than jobs, which is why we strongly emphasize training and growth. We offer our Coolbluers various educational opportunities and (online) training courses to help them shape their own growth plan.

Structured growth paths

We encourage Coolbluers to take the next step in their career. To help them with this, we have established various growth paths. One of the starting points for logistical careers in our warehouse is the Schuurschool. This 2-year training at secondary vocational level teaches students everything there is to know about logistical processes. On top of this, we offer them a position at Coolblue and plenty of next-step options.

Delivery employees also have distinctive growth paths they can follow. If they choose to specialize, they can grow into the role of television or white goods installation expert. From there, they can ultimately become certified solar panel installers at our Suniversity. Should they opt for a managerial role, they are first trained to become team leads. After various steps, they can grow into the role of Operations Manager.

NEXT STEPS.

5, 6, 7, 8.

In 2021, 2,684 Coolbluers grew into a new position. We share the success stories of Sanne Govers, Rik Rustenhoven, and Mark Wassenaar.

Sanne Govers

Sanne started as a Landing Page Specialist. From there, she grew into the role of Customer

Journey Specialist, then became Manager Closed Communities, and now fulfills the role of Manager Candidate Journeys. With her team, Sanne ensures that our Careers at Coolblue websites meet our various target audiences, ranging from delivery employees to developers, so every candidate wants to apply for the job at Coolblue they like.

Rik Rustenhoven

Rik started at Coolblue in January 2020 as a Customer Service Employee while he was still completing his studies. When he graduated, he had already become part of the support team for televisions. He became curious about the underlying processes, in particular customer journeys. In December 2021, he became the Product Manager for tablet covers. He currently works on the improvement of the assortment and cross-sell possibilities for this product type.

Mark Wassenaar

Mark started as a Bike Delivery Driver as a job for the summer holidays when we were starting up CoolblueBikes in Utrecht. After the holidays, he stepped it up a gear and, as newly appointed Front Runner, became responsible for onboarding new colleagues and managing the morning shift. Not long after, he took on the role of Junior Shift Lead and became responsible for multiple hubs. He now works as a Medior Shift Lead, manages the largest bike hub in Utrecht, and represents CoolblueBikes in the Works Council.

Proactive support in personal development

To facilitate personal growth in the organization, we offer various educational opportunities. At our Coolblue University, we offer over 90 training courses, 368 e-learning modules, and 6 internal internships. All these are aimed at different target groups within Coolblue and are taught by specialized internal and external trainers. Through the mentorship program, we stimulate experienced Coolbluers to share their knowledge with Coolbluers who seek to improve their skills. At the same time, this 3-month program allows the mentors to perceive the organization from a different perspective. Thus, they also learn from their mentees. In 2021, we introduced a new Growth Accelerator program for Coolbluers who work at our office and pursue a role as a senior or team lead. Over the course of the program, they improve their interpersonal and leadership skills to become more proficient in coaching colleagues and managing stakeholders.

Friend Shares

We do not just want Coolbluers to feel part of the organization, but actually be a part of it. For this reason, we directly employ almost everyone working at Coolblue. As a way of thanking them and underlining their importance to Coolblue, everyone who had been working at Coolblue for at least a year in 2021 received Friend Shares. This means that they are not just Coolbluers, but also Coolblue co-owners. They received a physical certificate that states their ownership. This ownership allows Coolbluers to personally benefit from achieving Coolblue's 2 goals: optimizing NPS and EBITDA.

06

GO GREEN.

Eco-logical.

We actively aim to make our business and each step of the product journey increasingly environmentally friendly. On top of that, we continuously encourage our customers to make environmentally conscious choices. Combined, we call these efforts Go Green, which manifests itself in 4 pillars: reducing energy consumption, minimizing waste, decreasing CO ₂ emissions, and extending product life cycles.

Materiality Assessment

(ESG) approach and performed our first official materiality assessment. To learn more about effective approaches, we have chosen a group of internal stakeholders for this first assessment. For 2022, we are considering broadening this group of stakeholders. Our target group consisted of the top 50 managers, members of the Dutch and Belgian Works Councils, and the Management Board. The results confirmed that the topics we have been focusing on are in line with what these groups find important. We have made sure we have covered these topics results in the Go Green, People, and Governance chapters of this report.

The members of the target group were asked to rate Environmental, Social, and Governance topics based on Importance and Impact, which they could rate on a 5-point scale. The average of these ratings determined the topic's position in the materiality matrix. Importance: The first scale on which the topics were rated was the impact a topic can have on Coolblue's economic, environmental, and social performance. Impact: Impact forms the second scale on which the topics were rated. Here, we assess of how much ethical importance a topic is to the target group.

REDUCING ENERGY CONSUMPTION.

Less is more.

We make an effort to reduce our energy consumption and ensure that the energy we do use is as green as possible.

Reducing our own energy consumption

Solar roof

Our warehouse has a solar roof the size of 16 soccer fields, making it one of the largest solar roofs in the Netherlands. The energy it generated in 2021 was enough to make the 88,000m ² warehouse close to energy neutral.

Renewable energy contracts

For the energy we use in our daily operations, and do not generate ourselves the way we do in our warehouse, we aim to use energy which is as green as possible. Therefore, all our buildings in the Netherlands of which we own the energy contracts are supplied with renewable energy via Coolblue Energy. This energy is generated by Dutch solar panels and wind turbines.

Reducing our customer's energy consumption

We can reduce energy consumption much more if we help all our customers do the same. For this reason, we offer advice for energyefficient products, provide customers with energy, and help them generate their own.

Coolblue's Green Choice

To help customers in their search for an environmentally conscious product, we have the Coolblue's Green Choice label. We use this label on our website, in our app, and in our stores with products that our experts have identified as the best green choice for our customers. These products have a relatively low energy consumption and the best customer reviews, allowing customers to always make a green choice that makes them happy.

Generating and using own energy

Besides energy-efficient products to help reduce energy consumption, we sell and install solar panels via our Coolblue Solar proposition. This enables customers to generate their own renewable electricity. They can use their selfgenerated energy to charge their means of transport as well, because we also sell and install charging stations. And if they need to charge their car somewhere else, they can do so with the charge card we supply.

3,200

Solar roofs installed.

1,792

Charging stations installed

Coolblue Energy

Coolblue Energy is the energy company for anyone who wants to reduce their energy consumption. We offer renewable energy and CO ₂ -compensated gas throughout the Netherlands. This, in combination with our knowledge of the energy consumption of products, allows us to provide Coolblue Energy customers with advice to further reduce their energy consumption. We explain for example how replacing an old freezer in the shed can save a significant amount of energy and money on an annual basis.

Energy-saving products

We do not just give advice about reducing their energy consumption, but also provide Coolblue Energy customers with an opportunity to follow up on it. In an online portal available to just these customers, they can obtain energy-efficient products from the Coolblue assortment at a discounted price.

MINIMIZING WASTE.

Bin there.

We aim to minimize waste throughout the product journey, such as by using as little packaging material as possible. At the same time, we maximize the amount of sustainable materials we use, both in our packaging and in the manufacturing of products for our own private label BlueBuilt.

Packaging

At the end of 2021, we installed 2 new machines in our Warehouse that will help reduce our cardboard consumption. They tailor the cardboard packaging to the exact size of medium and large products, thus reducing the amount of cardboard required. Moreover, we have started using paper-based tape to further reduce the amount of plastic we use.

No additional packaging

Some products, such as vacuums and printers, already come in sturdy packaging. As a result, there is no reason for us to pack it for transport. In 2021, we sent 25% of our orders without additional packaging.

Packaging design

We have reviewed our fully blue packaging and shifted to a design that is still recognizably Coolblue, but more sustainable. This allowed us to stop using bleached paper and start using a higher percentage of recycled cardboard for 96% of our packages. All other paper and cardboard we use carries the trademark for responsible forestry, the FSC certification.

Paper shipping bags

In 2020, we introduced the paper shipping bag for smaller products that do not need to be wrapped in cardboard. This bag requires significantly less cardboard, making it a more environmentally friendly way of packing. As a bonus, this also allows us to load products more efficiently in our delivery bikes, so we can deliver more orders during a single bike ride. To maximize the number of orders we can pack this way, we will install our first automated paper bag machine in 2022. It will greatly improve the speed at which we can pack smaller products, which in turn supports the rapid growth of our bike delivery network.

BlueBuilt

BlueBuilt is our private label brand, through which we offer responsibly sourced, high-quality products. We design these products based on customer feedback and create them using low-impact materials that in addition require little to no additional packaging.

DECREASING CO ₂ EMISSIONS.

Exhaustive approach.

We aim to reduce our CO ₂ emissions in the delivery phase of the product journey as best we can. For example by delivering more orders by bike and using as little energy or fuel as possible. And what we do need to use, we make as green as possible.

Delivery fleet

Our delivery network constantly expands. In 2021, we identified various opportunities to further reduce our CO ₂ emission related to deliveries.

CoolblueBikes

CoolblueBikes is our greenest delivery proposition. This last mile delivery proposition with 144 active bikes has virtually no emission. It delivers up to 90% of the parcel-sized orders in 27 of the largest cities in the Netherlands, Belgium, and Germany. In 2021, we delivered 1.3 million products via this last-mile delivery method and saved 391 tonnes of CO ₂ emission.

CoolblueDelivers

We reduce our CO ₂ emission for CoolblueDelivers by planning the most efficient routes to drive. Additionally, we ensure that we visit customers when it suits them by offering time slot selection. We even send a text message 15 minutes before we arrive, so the customer knows exactly when we will be at their door. As a result, we nearly never have to visit a customer a second time.

Biofuel

We conducted a pilot with biofuel in 2021. This pilot has been so successful that our Dutch delivery and installation fleet of over 180 vans will have shifted entirely to biofuels in 2022. These biofuels have a 90% lower emission rate than regular diesel, meaning that we will significantly reduce the exhaust of this delivery proposition. Once the roll-out in the Netherlands has been completed, we will look into making this possible for CoolblueDelivers in Belgium and Germany as well.

EXTENDING PRODUCT LIFE CYCLES.

Positive chain reaction.

Go Green goes further than a product's delivery. We actively provide assistance in prolonging a product's life cycle through information, maintenance assistance, and repairs. Once a product has reached the end of its initial life cycle, we aim to recover as much value from it as we can via refurbishment and recycling.

Information and advice

To ensure that customers enjoy their products to the fullest, we create advice content about the installation, efficient use, and timely maintenance of products. In total, we offer close to 2,000 of such advice articles. They also include instructions for simple repairs, which the customer can perform themselves. In addition, we started to send push notifications with maintenance reminders, such as for descaling the coffee machine. This way, customers can enjoy their product for longer. And it reduces unnecessary returns.

Second Chance

While we have a relatively low return ratio at Coolblue, returns are an inherent part of the product journey. Some returns are still unopened or undamaged, meaning that they can be resold as new. Products that have been opened or show slight signs of usage are sold as Second Chance products on our website. This approach allowed us to resell over 90% of the products returned to our warehouse in 2021.

Value recovery

To further optimize the amount of returned products that can be reused, we have a dedicated value recovery team. They repair products by taking components of other returned products, thus making optimum use of the available materials. Products repaired this way are sold on our website at a discounted price.

Repairing

We help customers enjoy their product longer by offering repair services should it break down. We offer these services in our stores and started repairing various white goods appliances at customers' homes.

Tablet & phone repairs

In all of our Dutch and Belgian stores and via our website, we offer a repair service for a large variety of devices. Our CoolblueRepairs staff is trained in-house, which offers advice experts an interesting growth opportunity. In 2021, we repaired 29% more devices than in 2020.

Repairs at home

Usually, the product journey of white goods starts with the breaking down of an already owned appliance, too large for the customer to carry in for repairs. If the appliance was still relatively energy efficient, however, it would be a waste to already replace it. That is why we introduced a step before the purchase of a new appliance: our Repairs at Home proposition. In 2021, we grew to over 400 repairs at customers' homes per month.

Refurbishing

A product that has stopped working may still contain operational elements. We examine the phones and white goods we take in and create refurbished products from those elements.

Device trade-in

We want to make reuse of mobile devices as easy and interesting as possible. To this end, we give customers a discount on new mobile devices if they hand in their old device. And if possible, we refurbish the old device to give it a second life.

White goods refurbishment

When we deliver a new household appliance, we take the old appliance with us as a service. This makes us the largest party to take in white goods in the Benelux. By refurbishing these appliances, we create restored appliances that are sold at a reduced price. In 2021, we expanded this proposition and refurbished almost 12,000 appliances, which means 812,000 kilograms worth of appliances that had otherwise been discarded.

Recycling

If we truly cannot repair or refurbish a product, we opt for recycling at the highest grade possible. At our depots and warehouse, all our waste is separated into recyclable flows. In 2021, 92% of our waste was recycled.

07.

RISK MANAGEMENT

Challenge accepted.

Entrepreneurship and taking risks go hand in hand. And as an organization grows, so does the number of risks, their scope, and their impact. For this reason, we continuously optimize our risk management.

Risks & opportunities

An important success factor in reaching our goals is how we consciously deal with risks. We balance risks and their impact with the opportunities and advantages that they offer, based on which we determine our risk strategy.

Risk Culture

Risks can occur anywhere in the organization. That is why it is important that every Coolbluer is aware of risks and can identify them. For this reason, every Coolbluer is responsible for managing their own risks, with the Management Board bearing the ultimate responsibility. They are not alone in this, as they are supported by our Risk & Compliance, Tax, Security & Fraud, Tech Security, Finance, and Legal departments. This approach allows us to create a risk culture in which risk management stays top of mind throughout the organization and in which risks are managed when and where they occur.

Internal guidelines

To provide Coolbluers with the means to decide how to go about a risk, we have various internal policies in place, which are in part based on external regulation. These policies are written in an honest, direct, and open manner and are easily available to every Coolbluer in multiple languages. We periodically review these policies to ensure they continue to meet legislative demands. Examples of our internal guidelines are:

Increasing awareness

In 2021, we continued to increase awareness about risk management among Coolbluers. For example, we further defined our information security policy. We also expanded our risk workshops to provide insight into the rapidly evolving threat landscape and continued to offer e-learning modules and training courses that address topics such as the GDPR, labor law, competition law, and integrity.

In total, we identified and profiled 11 risks in 2021. This means that our general risk profile is virtually unchanged compared to 2020. However, scale adjustments for individual risks have been made.

Likelihood

The first scale on which we rate a risk, is the likelihood of occurrence within a set time frame. We assign a rating on a 5-point scale.

Impact

Impact forms the second scale on which we rate a risk. Here, we assess the extent to which a risk would negatively affect the achievement of our goals, promises, and ambitions.

Risk appetite

The third and final scale, risk appetite, is based on the former 2. It defines our willingness to run or take a risk. The lower the appetite, the better our risk management has to be arranged. On the other hand, a higher risk appetite is at times required to achieve our strategic goals.

Strategic Risks

1. Reputation

Coolblue has a strong reputation. We want to uphold this reputation and prevent any damage to it, as this could negatively influence our business. During the 22 years that Coolblue has existed, we have grown immensely. We have entered new markets and have expanded internationally. The effect of this growth on risks is twofold. On the one hand, new risks are introduced, for example by new or changing legislation. On the other hand, the risks we already identified could have a larger impact on our reputation, as our brand becomes increasingly wellknown.

In the assessment of this risk, it became apparent that the overarching risk remained unchanged in 2021. Coolblue is a strong brand that delivers on its promise and has earned the customer's trust by doing so. To safeguard our reputation, we closely monitor external influences, such as press coverage, and protect ourselves and our customers from parties that unlawfully use our name.

2. Competition

We operate in highly competitive markets. We have a relatively high risk appetite in this respect, because we see it as an opportunity to go the extra smile for our customers. Additionally, we believe that the way we identify and provide for underlying customer needs does not limit itself to a single market or country. It provides us with a strong competitive advantage. This has enabled us in recent years to successfully cross the language barriers into Wallonia and Germany, extend our offering tailored to business customers, and expand our services to the energy and mobility sectors. Through growth, we fortify and safeguard our position in the market and make more customers happy every day.

3. Health crisis

This strategic risk has had the most tangible influence over the past 2 years. When it first presented itself in 2020, this risk had a significant impact on our stock management, delivery propositions, and operations in our stores and warehouse. It also affected other risks, such as supply chain continuity, financing, and health, safety, and environment. We took what we learned from 2020 and further applied and improved this throughout 2021. Because of the flexibility of our systems and employees, we are increasingly better equipped to decrease the impact of this risk within our organization.

Operational risks

4. Information security & data privacy

Safeguarding our data and technology is vital to Coolblue. We constantly improve our IT security measures and do everything in our power to secure our data, prevent data leaks, and minimize the impact a leak may have. This applies to both data we generate ourselves and information that customers provide us with, for example when they place an order. We have improved our access structure for all data and further enforced access on a need-to-know basis. Through periodic review of this structure, we ensure that Coolbluers only have access to the data they need to perform their tasks.

We have a cloud-first strategy in which all systems and applications are moved to the cloud if possible. This guarantees the continuity and scalability of our IT landscape. As Coolblue grows and cybersecurity attacks become more advanced every day, our exposure to this risk and its impact increase. To counteract and stabilize this, we continuously evaluate and improve our security policy and standards. We do this with advanced tooling which employs Artificial Intelligence and Machine Learning. We also hire ethical hackers and award bug bounties if vulnerabilities are reported to us.

5. Availability of systems & critical processes

We constantly apply optimizations in our processes and operations, such as mechanization in our warehouse. This means that our dependency on systems increases. Moreover, because we continue to operate from a single warehouse for all our business and open new locations, our supply chain becomes increasingly complex. To minimize the chance of a disruption in our operations due to unavailability of a system, such as our automated picking process, we have identified our critical operations and risks. In addition, we continue to identify the various scenarios that can occur during such unavailability, so that we can maintain and restore critical operations.

6. Attract and retain qualified Coolbluers

Qualified and talented people are key to our success. We see that the competition for skilled personnel is becoming increasingly severe, in part because of the significant shift in market and employment conditions. To attract and retain qualified Coolbluers, we continue to expand our unique application journey and have several in-house training institutions that allow Coolbluers to shape and realize their career path within Coolblue. Additionally, we offer a unique company culture and competitive rewards. For some job roles, such as developers, we even attract talent from all over the world.

7. Stock management

Stock management risks come in 2 categories: excess stock and insufficient stock. We minimize these risks by applying algorithms that calculate the expected sales patterns every day and aligning our purchasing activities accordingly. To this end, we have mutually favorable agreements with our suppliers that allow us to quickly scale our purchasing. Moreover, our financial capacity allows us to guarantee a constant supply of products if we see that a shortage might arise. This way, we can order the optimal number of products at all times and closely monitor our stock health.

8. Supply chain continuity

The pandemic has caused a global shortage of materials and products. This also has an impact on the availability of a number of product types we sell, such as laptops and tablets. We make an effort to ensure continuous availability of these products. We do so by leveraging on our strong financial structure and by working very closely with our suppliers to guarantee a constant optimum supply of these products.

We have expanded our own delivery infrastructure in the Netherlands, Belgium, and Germany, by opening various depots and bike delivery hubs. Together with the collaboration with delivery partners such as PostNL, Budbee, bpost, and DHL, this ensures that we can live up to the promise we make in our delivery proposition.

9. Health, safety, and environment

The health and safety of our Coolbluers is of the highest importance. We have procedures in place that outline in detail how to act in certain situations, such as what to do in case of an emergency. We also have Safety Coordinators and Prevention Officers, who for example give health and safety courses to Coolbluers. Together, they ensure optimum safety under all working conditions.

Finance & reporting risk

10. Finance and liquidity

Our operations are financed by our operating cash flow, a negative working capital, and reinvestment of our profits. Because we continuously improve our underlying debtor management, stock management, and treasury processes, we are always able to meet our payment obligations. In addition, we have a longterm financing arrangement in place to provide us with additional liquidity to cover business continuity.

Finance & reporting risk

10. Finance and liquidity

The growth of our business and expansion into other geographies and markets, such as Germany and the Dutch energy market, introduces different types of legislation. We want to ensure our full compliance with all governing legislation, simply because it is the right thing to do. We implement regulatory developments that influence our operations, such as the GDPR, throughout our organization. Moreover, we are constructing an overarching internal control framework. It will provide a complete overview of all compliance-related risks, measures, and related subject matter within Coolblue. This framework is being built in such a way that we can act on both current and future regulations.

We have a zero-tolerance approach to bribery, corruption, fraud, and any other form of (illegal) misconduct. This is strongly highlighted in our code of conduct and other internal guidelines, which are made available to every Coolbluer. We also offer mandatory training courses that are geared to the relevant legislation within departments. This further ensures our consistent compliance.

Enhancement of our risk management system

We pay undivided attention to the improvement of our risk management operations. And as Coolblue grows, so do our Risk & Compliance, Tax, Security & Fraud, Tech Security, Finance, and Legal departments. To improve our risk management in 2021, we have implemented both risk-specific measures and enhancements on the internal control framework. These improvements are aimed at driving business involvement and ownership within the domains, in order to expand the integrated view of risks and controls.

Internal controls

To ensure that our risk control measures are applied consistently throughout the organization, we are transitioning from a multitude of risk control matrices to a singular control framework. This internal control framework will encompass the key risks and related controls of all processes. As a result, we can better identify and classify the main risks associated with the processes, test the implementation and operating effectiveness of controls, and determine the degree of control we have over them. A summary of the status of internal control and issue tracking will be reported to the Management Board and the Audit Committee.

Further formalizing our Compliance Management

The internal control framework will also contribute to the formalization of our Compliance Management. This will provide more insight into the risks that are mainly related to compliance with competition, financial services, privacy legislation, and health and safety. For compliance risks, relevant processes and controls are continuously implemented, tested, and monitored.

Cybersecurity

Another main point of focus has been the further enhancement of our Security policy. We have substantially increased our Tech Security team and unified the various standards that were applied across the domains. The result is a singular, comprehensive approach towards information security. Additionally, we have hired a Security Awareness Officer, who is tasked with improving organization-wide security awareness. Lastly, we have upgraded our control measures that deal with digital threats, such as DDOS attacks.

Fraud Detection and Prevention

In order to further prevent fraud throughout our organization, we have created and implemented fraud detection tooling which detects fraud using various patterns and analyses. This enables us to assess an order's validity without blocking a legitimate sale, for example.

Looking ahead

We are pleased with the steps we were able to take in 2021 in improving our risk management and internal control framework. They will form a solid basis for further enhancements we have planned for 2022.

Reinforcing internal control

We constantly build on our existing control environment to establish an even better insight into key risks and improve our ability to mitigate them. In 2022, we will do so by expanding our in-depth, end-toend assessments of operational processes. The findings, along with resulting recommendations, will be reported to the relevant stakeholders.

Safeguarding privacy

We have an unceasing focus on the protection of data, both our own and our customers'. To ensure that this remains top of mind for each and every Coolbluer, we will continue to further develop existing educational courses and roll out training courses that are tailored to our specific domains. In addition, we will continue to monitor existing processes to identify potential improvements to further ensure the safety of information we store.

Enhancing our Cybersecurity posture

Cyber security is a dynamic and evolving field. To improve our company-wide efforts regarding security and privacy, we will continue to increase awareness through content that focuses on the specific threats of the respective domains. Examples hereof are training courses aimed at the handling of confidential data and incident exercises. Moreover, our recently expanded Tech Security team will continue to improve our security measures and safeguard the continuity of our website and logistical processes. With the growing complexity of our supply chain, we will also continue to improve our third-party risk management.

08.

CORPORATE GOVERNANCE

In good company.

Pieter Zwart (Sourire B.V.), HAL Investments B.V., management, and employees are the shareholders in Mondhoekie B.V., the parent company of Coolblue..

Friend Shares

All Coolbluers who have been working for more than a year at Coolblue are also Coolblue co-owner, as they have been awarded Friend Shares. These depositary receipts for shares were granted in January and July 2021. In January 2022, Friend Shares will be granted to Coolbluers who have not yet received Friend Shares and have been working at Coolblue for more than 1 year at that time

Structure

For the sake of transparency, we keep our corporate structure as simple as possible. The chart below shows an overview of the various group companies. We are present in the Netherlands, Belgium, and Germany via various corporate entities. These are all fully owned by Coolblue Holding B.V., a private company with limited liability (besloten vennootschap) under Dutch law, which in turn is fully owned by Mondhoekie B.V. In 2021, we acquired the company ServiceHouse.

Management Board

Coolblue's Management Board consists of CEO Pieter Zwart and CFO Daphne Smit. The Management Board is supported by an experienced Leadership Team consisting of the heads of various domains, such as Stores, Delivery & Installation, Tech, and Category Teams.

These heads are responsible for the dayto-day operations of their respective domains. They have the responsibility and the necessary means to make their domain a little bit better every day.

We acknowledge the importance of diversity in a working environment, which is why we strive for an equal composition of men and women as members of our Management Board. However, when it comes to the selection criteria for candidates, competencies are key.

Pieter Zwart

Age: 44

Position: CEO

Working at Coolblue since: 1999

Education: Business Administration at Erasmus University Rotterdam.

Responsibilities at Coolblue: Category Teams, Customer Experience, Stores, Tech, Purchasing, Germany, Business Journeys, Solar Panels, Energy, and Marketing

Daphne Smit

Age: 36

Position: CFO

Working at Coolblue since: 2014

Education: International Business Administration at Erasmus University Rotterdam.

Prior to Coolblue: Trainee, Account manager, and Credit Analyst at Rabobank.

Responsibilities at Coolblue: Finance, Warehousing, Delivery & Installation, Returns & Repairs, Customer Service, Corporate, and Human Resources

Remuneration

The Management Board's salaries are determined by the Supervisory Board. Members of the Management Board receive a fixed salary, which has been amended in the course of 2021 to make it in line with market practice. They are not entitled to bonuses, options, or shares in the company as part of their remuneration. CEO Pieter and CFO Daphne are shareholders in Mondhoekie B.V. Any shares they have acquired, have been acquired on commercial terms.

Corporate Governance Code

Although we are not legally obliged to follow the Dutch Corporate Governance Code, we acknowledge the importance of good governance. We actively monitor relevant developments in the Corporate Governance Code and incorporate the principles that are relevant to us as a private company.

Supervisory Board

Coolblue's Supervisory Board is a group of experienced entrepreneurs and investors. Together, they form an independent body that supervises Coolblue's policies and daily order of business. They also serve as a friendly yet critical sounding board to the Management Board. Each Supervisory Board member is committed to Coolblue's interests, its customers, and all other parties involved. The board is free from the influence of external parties and independent of secondary interests.

Warm welcome and goodbye

In 2021, we welcomed 2 new members to our Supervisory Board: Maurine Alma and Hajir Hajji. They both have an extensive portfolio which will greatly benefit Coolblue. However, at the start of 2022, Hajir was promoted to CEO of Action, which led her to resign from her role in the Coolblue Supervisory Board again. Currently, our Supervisory Board consists of 5 members, each with their own background, experience, and expertise relating to different aspects and activities of Coolblue.

Jaap van Wiechen

Jaap van Wiechen (49) is a member of the Executive Board of HAL Holding N.V. and serves as a member of the Supervisory Board of Boskalis, SBM Offshore, and Atlas Services Group. Jaap acts as chairman of the Supervisory Board and is a member of the Audit Committee.

Maurine Alma

Maurine Alma (53) is currently the CMO at Just Eat Takeaway.com, Supervisory Director of the Van Gogh Museum, a member of the supervisory board of Floramedia Group, and sits on the Advisory Board of Nimbus Ventures.

Theo Kiesselbach

Theo Kiesselbach (56), a German national, is a retail expert. He started his professional career at McKinsey & Co. Afterwards, he held executive roles in a number of German retail companies. Until May 2018, he was CEO of Grandvision. In 2019, he moved to Singapore and established an advisory and investment company.

Bert Groenewegen

Bert Groenewegen (58) is the current CFO of Nederlandse Spoorwegen and a member of the Supervisory Board of Teslin Participaties Coöperatief UA. Bert's previous positions include CFO at Exact Holding, CFO/CEO at PCM Uitgevers, and CFO at Ziggo. He is chairman of Coolblue's Audit Committee.

Harold Goddijn

Harold Goddijn (61) is the co-founder and CEO of TomTom. Previously, he co-founded Psion Nederland before becoming Executive Director at Psion Computers Plc. Harold has also been the chairman of the Dutch Committee for Entrepreneurship (Comité voor Ondernemerschap) since 2018.

Hajir Hajji

Hajir Hajji (41) is the Chief Executive Officer at Action Holding B.V. Previously, she served as its Commercial Director. Hajir was also a member of the supervisory board of GXT Holding B.V. from January 2019 until January 2020.

Supervisory Board report

Hello everyone,

Coolblue is a large organization that is known for its unconventionality. To keep up with its rapid expansion, we as its Supervisory Board (installed at Mondhoekie B.V. level) also have to adopt the flexible mentality that characterizes Coolblue. This proves an interesting and challenging assignment, especially in a year like 2021 with the intended IPO, the ongoing and regularly changing Covid-19 government measures, and their related impact on our business. Still, we gladly take on this challenge. To strengthen the supervisory board we welcomed 2 new members: Hajir Hajji and Maurine Alma. In light of her promotion, Hajir decided to discontinue her work for the Supervisory Board. We understand and respect Hajir's decision and wish her all the best.

Activities of the Supervisory Board

In 2021, we met 4 times (both digitally and in the Tilburg warehouse) with the Coolblue Management Team. Of course, we also had frequent interactions in between. During these meetings, we discussed recurring topics such as customer satisfaction (NPS), strategy, market developments, and financial and operational results.

Additionally, we discussed more specific topics, such as the announced intention to float and the postponement of our listing, the acquisition of ServiceHouse, the way to handle the challenges presented by the government measures related to the Covid-19 pandemic, the expansion to Germany, and the mechanization of the warehouse. These were introduced by a presentation, given by the responsible manager. We greatly appreciate the explanations given by these managers, because they provided us with a better insight into the dynamics of the business and the people that make Coolblue.

Audit Committee

The Audit Committee supports the Supervisory Board in the supervision of financing, reporting, internal controls, and risk management.

The Audit Committee met 4 times in 2021 with the CFO, Head of Finance, and the external auditor. During these meetings, the following topics were discussed: the financial statements of 2020, the audit planning for 2021, the requirements for an IPO, the acquisition of ServiceHouse, the findings of the interim audit and internal control findings in 2021, reporting structures and standards, risk management, tech security, fraud, and compliance with laws and regulations.

Closing thoughts

The Supervisory Board is happy with the growth and results that Coolblue has shown in 2021 in the Netherlands and Belgium, and especially with the expansion in Germany and of Coolblue Energy. We appreciate the flexibility and continuous effort of every Coolbluer during a time in which government measures related to Covid-19 strongly affect our operations. Furthermore, we are impressed by how Coolblue was able to draw upon its lessons from last year and we are confident that these will continue to be valuable takeaways for the future.

Coolblue's shareholders and management decided to explore a potential IPO. The main reasons for this were attracting new capital to fund further growth in Germany, Coolblue Energy, and mechanization of the warehouse, as well as creating liquidity optionality for existing shareholders. Both Pieter Zwart and HAL would commit to remain significant shareholders for the long term. The company and management spent considerable time and effort to prepare for this IPO, both by further improving the internal organization and complying with all additional external requirements. We are pleased with the steps that have been taken to further professionalize the organization. We concluded that the company was ready and supported the idea.

Right before the intended launch, the financial markets and in particular the sentiment for e-commerce stock developed unfavorably. Despite good interest from investors, the company decided to postpone the IPO for the time being. This was obviously disappointing. At the same time, the process helped in further sharpening the strategy and strengthened our confidence about the chosen way forward. Shareholders have committed to support the business in its new growth areas and remain fully committed to Coolblue.

The Supervisory Board also appreciates how Coolblue keeps taking increasing corporate and social responsibility. Coolblue takes its responsibility to society through new propositions and by building on already existing propositions, for example by strongly reducing its cardboard consumption through installing machines that tailor packaging to size. The acquisitions of ServiceHouse and entry to the energy market in 2021 especially show great commitment. The Supervisory Board is confident that the acquisition of ServiceHouse and the combination with the activities of Coolblue in its Coolblue Energy proposition has unlocked a huge potential for the Coolblue brand in a growing market.

The expansion to Germany in 2020 took place at an impressive speed, resulting in a revenue of € 94 million in 2021. It makes us happy that Coolblue has begun investing in its German infrastructure by opening a depot for white goods and television delivery and its first German store in Dusseldorf. We are confident that Coolblue will apply all learnings from these steps to further expand in 2022.

Coolblue also continued with the mechanization of its central warehouse. In 2021, the organization started mechanizing parts of the picking process and installing new packaging machines, which will unlock benefits by optimizing the processes. With the mechanization of the return process and the full go-live of a new warehouse management system, the warehouse will gradually become the warehouse of the future.

Looking back on what has been another eventful year for Coolblue, we thank every Coolbluer for their efforts and flexibility. With such dedication to each other and to the organization, 2022 is bound to become a great year.

On behalf of the Supervisory Board,

09

THE NUMBERS GAME.

Count me in.

Consolidated Financial Statements

Consolidated income statement For the year ended 31 December 2021.

Notes 1 to 31 are an integral part of these consolidated financial statements.

Consolidated statement of comprehensive income

For the year ended 31 December 2021.

Consolidated statement of financial position

As at 31 December 2021 (before appropriation of result).

Consolidated statement of changes in equity For the year ended 31 December 2021.

Additional information is disclosed in note 23 and note 24.

Notes 1 to 31 are an integral part of these consolidated financial statements.

Consolidated statement of cash flows For the year ended 31 December 2021.

Notes 1 to 31 are an integral part of these consolidated financial statements.

Notes to the consolidated financial statements

1. Corporate information

You are reading the consolidated financial statements of Coolblue Holding B.V. (company number 24330083) and its subsidiaries (hereinafter 'the Company', 'the Group', or 'Coolblue') for the year ended 31 December 2021. The financial statements have been authorized by the Board of Directors on 16 February 2022.

Coolblue is a limited liability company established in Rotterdam, the Netherlands, and has its registered office at Weena 664, 3012 CN Rotterdam, the Netherlands. Coolblue's ultimate parent company is Regoliet B.V. The shareholder Mondhoekie B.V. has two statutory directors: CEO Pieter Zwart and CFO Daphne Smit. Each director has one vote. Decisions are taken by majority voting. In the case of a tie, Pieter Zwart will make the final decision.

Coolblue is principally engaged in the trading, delivery, and installation of consumer products. Trading occurs through the Internet and physical stores.

2. Basis of preparation and significant accounting policies

2.1 Basis of preparation

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board (IASB) and adopted by the EU (hereinafter IFRS).

The consolidated financial statements have been prepared on a historical cost basis. The consolidated financial statements are presented in Euros and all values are rounded in millions, except when indicated otherwise.

Where applicable, comparatives included in the financial statements have been reclassified compared to their prior year presentation. This has had no impact on the result or the shareholders' equity.

2.2 Basis of consolidation

The consolidated financial statements comprise the financial statements of Coolblue and its subsidiaries as at 31 December 2021. Control is achieved when Coolblue is exposed to or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, Coolblue controls an investee if, and only if, Coolblue has:

Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when Coolblue has less than a majority of the voting or similar rights of an investee, Coolblue considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

Coolblue reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when Coolblue obtains control of the subsidiary and ceases when Coolblue loses control of the subsidiary. Assets, liabilities, income, and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements, starting from the date that Coolblue gains control until the date that Coolblue ceases to control the subsidiary.

Profit, or loss, and each component of other comprehensive income (OCI) are attributed to the equity holders of Coolblue's parent. If necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with Coolblue's accounting policies. All intercompany assets and liabilities, equity, income, expenses, and cash flows relating to transactions between members of Coolblue are eliminated in the consolidated financial statements.

If Coolblue Holding B.V. loses control of a subsidiary, it derecognizes the related assets, liabilities, non-controlling interest, and other components of equity while any remaining gain or loss is recognized in profit or loss. Any investment retained is recognized at fair value.

Company information - Information about subsidiaries

The consolidated financial statements of Coolblue Holding B.V. include:

Coolblue Holding B.V. has issued a 403 liability statement for Coolblue B.V., Coolblue Verwonderdiensten B.V., Productreizen B.V., ServiceHouse B.V., and Windcentrale B.V.

For Coolblue GmbH, Coolblue Holding B.V. has issued a 264 liability statement. The exemption of disclosure according to sec 264 (3) German statutory law (HGB) is applicable for Coolblue GmbH. As a result Coolblue Holding B.V. is jointly and severally liable for the debts arising from legal acts of those companies.

In accordance with Article 2:402 DCC, the company income statement is presented in abbreviated form.

2.3 Summary of significant accounting policies

The significant accounting policies are included in the relevant notes. Note that the numbers presented in the financial statements and disclosures thereto may not sum precisely to the totals provided and percentages may not precisely reflect the absolute figures due to rounding.

Foreign currencies

Coolblue's consolidated financial statements are presented in Euros, which is also the parent company's functional currency. Coolblue determines the functional currency for each separate entity. Items included in the financial statements of each entity are measured using the appropriate functional currency.

Transactions in foreign currencies are initially recorded in the respective functional currency spot rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Differences arising on settlement or translation of monetary items are recognized in profit or loss.

Current versus non-current classification

Coolblue presents assets and liabilities in the statement of financial position based on current versus non-current classification. An asset is current when it is:

All other assets are classified as non-current. A liability is current when:

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

Coolblue classifies all other liabilities as non-current.

Consolidated cash flow statement

The cash flow statement has been prepared in accordance with the indirect method.

Cash and cash equivalents consist of cash at bank and in hand. Cash flows in foreign currencies are translated at average rates. Cash exchange differences are presented separately in the statement of cash flows.

Interest received and paid, dividends received, and profits tax are included under cash flows from operating activities. Dividend paid is stated under net cash flow from financing activities.

The cost of acquired group companies and proceeds of sold group companies are included in the cash flow from investing activities. When a payment in cash has been made, the amount is shown net of cash and cash equivalents held by the concerning group companies.

Transactions for which no cash or cash equivalents are exchanged, including leases if applicable, are not included in the cash flow statement. Lease payments under IFRS 16 are considered to be cash outflows from financing activities, to the extent that they relate to repayment installments. Interest payments under IFRS 16 are considered to be cash flows from operating activities.

2.4 Changes in accounting policies and disclosures

IAS 8 requires an entity to select and apply its accounting policies consistently for similar transactions, events, and/or conditions, unless an IFRS specifically requires or permits categorization of items for which different policies may be appropriate. Where an IFRS requires or permits such categorization, an appropriate accounting policy is selected and applied consistently to each category. Therefore, once a choice of one of the alternative treatments has been made, it becomes an accounting policy and must be applied consistently. Changes in accounting policy should only be made if required by a standard or interpretation, or if the change results in the financial statements providing reliable and more relevant information.

Coolblue applies new standards and amendments issued by the International Accounting Standards Board (IASB), when effective and endorsed by the European Union. Coolblue has not opted for early adoption for any of these standards.

Thefollowing standards have been applied as of 1 January 2021 or later in 2021. These amendments have no material impact on the financial statements.

The IASB has issued several new standards and amendments with an effective date of 1 January 2022 or later. The newly issued standards are not expected to have a significant impact on Coolblue. Coolblue intends to adopt these standards and interpretations, if applicable, when they become effective.

Coolblue has not early adopted any standards, interpretations, or amendments that have been issued but are not yet effective.

2.5 New accounting policies applied

Share-based payments

Within Coolblue, 2 share-based payment plans exist, being Participation plan I (participation plan for leadership team) and Participation plan II (participation plan for all employees). Both plans are fully accounted for as equity-settled share-based payment arrangements in accordance with IFRS 2: Share-based payments. The share certificates are fully vested

Equity-settled transactions

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model, of which further details are given in Note 24. The grant-date fair value is recognized as Employee Benefit Expense within the Selling & Distribution or Administrative expenses (allocation based on the function of the employee) and a corresponding entry in equity (Share premium). The cumulative expense recognized for equity-settled transactions reflects that the equity instruments are fully vested and the Group's best estimate of the number of equity instruments that will ultimately be settled. The expense or credit in the income statement for a period represents the movement in cumulative expense recognized as at the beginning and end of that period.

Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group's best estimate of the number of equity instruments that will ultimately be settled. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expense of an award unless there are also service and/or performance conditions.

Both plans are disclosed in further detail in note 24.

Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date at fair value, and the amount of any non-controlling interests in the acquiree. For each business combination, Coolblue elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree's identifiable net assets. Acquisition-related costs are expensed as incurred and included in administrative expenses.

When Coolblue Holding acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances, and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree. Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date.

Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests) and any previous interest held over the net identifiable assets acquired and liabilities assumed. If the fair value of the new assets acquired is in excess of the aggregate consideration transferred, Coolblue Holding re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognized in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to the cash generating unit(s) that is (are) expected to benefit from the combination.

Goodwill is tested for impairment based on value in use annually as at 31 December and when there specific triggers. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised.

In assessing if the recoverable amount makes use of a value in use calculation, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money.

The Group bases its impairment calculation on a 5-year forecast for each CGU, thereafter a long-term growth rate is applied.

For assets other than goodwill, an assessment is made at each reporting date to determine whether there is an indication of impairment. If such indication exists, the Group estimates the asset's recoverable amount.

Impairment losses are presented in the income statement consistent with the function of the impaired asset.

3. Significant accounting judgements, estimates and assumptions

The preparation of Coolblue's financial statements requires management to make judgements, estimates, and assumptions that affect the reported amounts of the financial position of the Company. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Estimates, judgements, and assumptions

The key assumptions and estimates concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described in the relevant notes. Coolblue based its assumptions and estimates on the parameters that were available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to arising market changes or circumstances that are beyond the control of Coolblue. Such changes are reflected in the assumptions when they occur. The specific estimates are described in the relevant notes.

Capitalization of development costs

Coolblue capitalizes development costs when future economic benefits can be determined and when the costs can be reliably determined. The determination of future economic benefits includes estimates based on specific market and customer knowledge and experiences. These development costs are based on the salary and other personnel expenses relating to the developers that worked on a specific development. Coolblue continuously assesses whether the developments (in progress) are technically, commercially, and financially feasible and (will) lead to (future) economic benefits.

4. Capital management

For the purpose of Coolblue's capital management, capital includes issued capital, share premium, and all other equity reserves that are attributable to the equity holders of the parent.

Coolblue's primary objective in terms of managing capital is to maintain a sufficient capital base, to maintain creditor confidence, to sustain future development of the business, and to maintain an optimal capital structure to reduce the cost of capital. Dividends will be paid depending on Coolblue's financial position, thereby taking solvability and expected cash flows into account.

No commitment has been issued to pay out dividends. Exposure to capital risk is limited, as the majority of online sales is paid prior to delivery to the customer. Coolblue's operations are financed by equity and trade creditors.

5. Financial risk management

Risk management related to specific balance sheet accounts is included in the related notes.

Financial instruments

Coolblue Holding B.V. and its subsidiaries have no derivatives or debts. A financial guarantee is given related to external financing of the parent company Mondhoekie B.V. The fair value of this guarantee is minimal as it is considered to be very unlikely that this will lead to an outflow of cash, therefore this results in a very limited risk with respect to financial instruments. Coolblue's finance department manages balances at banks and monitors trade and other payables.

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. This relates to the interest rate risk and the currency risk. Coolblue primarily operates in the Netherlands, Belgium, and Germany. As Coolblue's sales and purchase transactions are primarily in Euros, the foreign currency risk is low. Coolblue has limited financial activities resulting in interest income or expenses. Consequently, the interest rate risk for Coolblue is low.

Liquidity risk

Coolblue manages its liquidity risk through several cash forecast methods. For an aging analysis, please refer to note 21. As Coolblue's working capital is negative, the liquidity risk is considered to be low.

6. Revenues

Sale of goods and (energy) services

Revenue from the sale of goods is recognized at the point in time when control of the asset is transferred to the customer, generally on delivery of the goods, at an amount that reflects the consideration to which Coolblue expects to be entitled in exchange for those goods. The total consideration (significant payment term) is due upon the delivery of the product. The Group considers whether there are other promises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated. Revenue from the sale of (energy) services are recognized as revenue at the time of delivery excluding value added taxes.

Rights of return

The contracts for the sale of goods provide customers with a right to return the goods within a specified period. Coolblue uses the expected value method to estimate the variable consideration given the large number of contracts that have similar characteristics. Coolblue then applies the requirements on constraining estimates of variable consideration in order to determine the amount of variable consideration that can be included in the transaction price and recognized as revenue. A refund liability is recognized for the goods that are expected to be returned (i.e. the amount not included in the transaction price). A right of return asset (and corresponding adjustment to cost of sales) is also recognized for the right to recover the goods from the customer.

Marketing income

Revenue arising from marketing income and related costs are recognized upon the moment that the performance obligation is satisfied. This is done, provided that a contractual agreement has been entered into with enforceable rights and obligations and a transaction price has been determined that is allocated to a distinct good or service (the specific performance obligations) as stated in the contract.

Sales tax

Expenses and assets are recognized net of the amount of sales tax, except:

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

Installation of solar panel and EV charging systems

Coolblue sells and installs solar panel and EV charging systems. Revenue arising from the installation of solar panel and EV charging systems as well as related costs are recognized upon the moment that the performance obligation is satisfied. This is done, provided that a contractual agreement has been entered into with enforceable rights and obligations and a transaction price has been determined that is allocated to the specific performance obligations as stated in the contract.

Coolblue as a lessor

Coolblue is in the business of leasing white goods to customers, which are classified as operating leases. Rental income arising from this is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit or loss due to its operating nature. For more information, please refer to note 14.

7. Cost of sales

Cost of goods sold consist of the net purchase price of products sold and miscellaneous costs of goods sold. The depreciation in the cost of sales is related to assets where Coolblue is the lessor. Coolblue receives various allowances, primarily related to volume, price, and marketing. These allowances are generally deducted from cost of sales, unless there is clear evidence for marketing allowances that they should be classified as revenue resulting from the Company providing a distinct good or service (a specific performance obligation) to the vendor. Coolblue recognizes vendor allowances only where there is evidence of a binding arrangement with the vendor, the amount can be estimated reliably, and receipt is probable.

8. Selling and distribution expenses

Selling and distribution expenses relate to our operational departments such as warehouse, stores, external and internal delivery carriers, and commercial departments such as marketing, purchasing, and category management. The direct sales costs relate to shipping expenses, marketing costs, and payment costs.

9. Administrative expenses

Administrative expenses consist of supportive activities to the operational business activities, such as Finance and Human Resources. The fees listed below relate to the services provided to Coolblue in the financial year and its consolidated group entities by Ernst & Young Accountants LLP, Coolblue's external auditor, as well as by other Dutch and foreign-based EY individual partnerships and legal entities, including their tax services and advisory groups:

10. Total employee benefit expense

During 2021, Coolblue had an average of 3,713 FTE (2020: 3,118 FTE) in the Netherlands. In Belgium, Coolblue had an average of 586 FTE (2020: 453 FTE). In Germany, Coolblue had an average of 36 FTE (2020: 0). A breakdown of FTE per country, per function is given below:

Coolblue's research and IT development concentrates on frontend and backend applications to facilitate the growth of Coolblue. Research and development costs that are not eligible for capitalization have been expensed in the period incurred (2021: € 7.6 million, 2020: € 5.9 million). These costs are included in employee benefit expenses and other employee expenses. An amount of € 14.4 million (2020: € 9.7 million) of employee benefits expenses has been capitalized in intangible fixed assets as development costs.

Pension arrangements

Coolblue B.V. offers 2 separate pension arrangements to employees in the Netherlands. The company facilitates a multi-employer defined benefit plan for employees in the Netherlands (known as the basisplan), in which various employers contribute to the industry pension fund. In accordance with IAS 19R, as the pension union managing the plan is not able to provide Coolblue with sufficient information to enable Coolblue to account for the plan as a defined benefit plan, the company accounts for its multi-employer defined benefit plan as if it were a defined contribution plan.

The coverage of the relevant pension fund in late 2021 was 119% (2020: 111%). The total number of Coolblue participants in this central pension union amounts to less than 1% of total participants. The pension premium to be paid in 2021 equals 24.75% of pensionable salary (maximized on € 58,311) less franchise. 6.075% of the pensionable salary is paid by the employees. As stated in the implementation agreements, Coolblue has no obligation to pay any additional contributions other than higher future premiums.

In the extraordinary event that the pension fund is unable to meet its obligations, participants will receive partial payments from the pension fund.

The second plan is a top-hat plan, purchased at an insurance company. This plan is classified as a defined contribution plan, limiting the employer's legal obligation to the amount it agrees to contribute during the period of employment. As stated in the implementation agreements, Coolblue has no obligation to pay any additional contributions. Under this defined contribution plan, the obligations in respect of the defined contributions are recognized as an expense in the income statement when they fall due. The contribution is based on a percentage of pensionable salary exceeding the base plan, which is partly paid by employees.

The employees of ServiceHouse B.V. participate in a multi-employer defined contribution plan. For the employees of Coolblue België N.V. and Aan Huis N.V. pensions are administered at RSZ 'Rijksdienst voor Sociale Zekerheid', which classifies as a defined contribution plan. These pension fees are recognized as an expense in the income statement when they fall due. For the employees of Coolblue GmbH pensions are administered via different instances (e.g. IKK classic, AOK Rheinland-Pfalz/Saarland), which classifies as a defined contribution plan. These pension fees are recognized as an expense in the income statement when they fall due.

The expected contributions in 2022 for the multi-employer plans accounted for as if they were defined benefit contribution plans is € 18.2 million.

11. Total depreciation, amortization, and impairment

In 2021, no accelerated depreciation has been recognized (2020: € 3,6 million).

12. Finance income and expenses

Interest income mainly relates to interest on the current account receivable from shareholder of € 2.6 million (2020: € 1.9 million) and other interest income. Interest expenses are related to the unwinding of lease liabilities and interest paid on bank debt.

Interest rate sensitivity

The interest rate risk is low since Coolblue only has long-term liabilities because of lease liabilities and the cash at banks is monitored daily to generate the best possible interest rates.

13. Income tax expense

Current income tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from, or paid to, the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries Coolblue operates in and generates taxable income. In the Netherlands in 2021, over the first tier of € 245k (2020: € 200k), 15.0% (2020:16.5%) tax is calculated.

After the first tier there are no changes in tax percentages (25.0% for both 2021 and 2020). In Belgium the applicable tax rate in 2021 was 25% (2020: 25%). In Germany, the applicable tax rate in 2021 was 31.225% (2020: 31.225%). Current income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit or loss.

The major components of income tax expense for the years ended 31 December 2021 and 2020 are:

Reconciliation of tax expense and the accounting profit multiplied by Dutch domestic tax rate for 2020 and 2021:

Fiscal unity

Coolblue Holding B.V. is part of a fiscal unity with Mondhoekie B.V., Coolblue B.V., Coolblue Verwonderdiensten B.V., and Productreizen B.V. with regards to the corporate income tax. As of 17 March 2021, ServiceHouse B.V. and Windcentrale B.V. joined the fiscal unity of Mondhoekie B.V.

14. Property, plant, and equipment

Property, plant, and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such costs include the cost of replacing part of the plant and equipment if the recognition criteria are met. All other repair and maintenance costs are recognized in profit or loss as incurred.

Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets, as follows:

An item of property, plant, or equipment, including leased-out products, is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognized.

The residual values, useful lives, and methods of depreciation of property, plant, and equipment are reviewed at each financial year-end and adjusted prospectively, if appropriate.

Borrowing costs directly attributable to the acquisition, construction, or production of an asset, including leased-out assets, that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Initial expenses directly attributable to a lease contract are capitalized and depreciated over the expected duration of the lease. Direct selling expenses are not capitalized.

Coolblue assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, Coolblue estimates the assets recoverable amount. On 31 December 2021, Coolblue noted no indications for impairment.

Specification of property, plant, and equipment:

In 2021, no accelerated depreciation on property, plant, and equipment has been recognized (2020: € 2.5 million). In 2021, Coolblue has invested € 40.3 million (2020: € 17.0 million) in property, plant, and equipment, mainly related to the mechanization investments in our warehouse in Tilburg, which will further contribute to the operational excellence of Coolblue. Furthermore, Coolblue has made investments in the opening of new stores, of which 6 (5 new stores, 1 relocation) opened in 2021.

Accounting policies - Coolblue as a lessor

Coolblue offers subscriptions to white goods that entitle customers to the use of the product for a minimum duration of one year. Additional services include free delivery, repair and replace service, and a moving service to a new home. After the first year, customers can cancel their subscription with a notice period of one month. These subscriptions are currently classified as operating leases as the risks and rewards incidental to ownership of the product are not substantially transferred to the customer.

Coolblue bears the risk for the repair and replacement of the leased-out products, as determined in the general terms and conditions. To cover this risk, customers are to pay a deposit, which will be settled if the breakdown of a product is due to improper use of the product by the customer.

Leases in which the Group does not substantially transfer all the risks and rewards incidental to ownership of an asset are currently classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit or loss because of its operating nature. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned.

Given that these lease contracts have an unconditional duration of 12 months, all expected lease payments to be received are due within 1 year after year end. The unconditional payments due in 2022 amount to € 1.5 million (2020: € 0.9 million).

15. Right-of-use assets

Set out below are the carrying amounts of right-of-use assets recognized and the movements during the period:

In 2021, no accelerated depreciation on right-of-use assets was recognized (2020: € 705,000). As part of a change in our strategy and market circumstances a reassessment on the lease terms across the Property portfolio took place in 2021, which led to a reduction of € 7.1 million on right-of-use assets and € 6.8 million reduction of the corresponding lease liability (refer to note 25).

Coolblue has lease contracts for various items of housing, plant, machinery, vehicles, and other equipment used in its operations. Leases of property and machinery generally have lease terms between 1 and 10 years, while motor vehicles and other equipment generally have lease terms between 2 and 18 years. Coolblue's obligations under its leases are secured by the lessor's title to the leased assets. Generally, Coolblue is restricted from assigning and subleasing the leased assets and some contracts require Coolblue to maintain certain financial ratios. Coolblue also has certain leases of machinery with lease terms of 12 months or less and leases of office equipment with low value. Coolblue applies the 'short-term lease' and 'lease of low-value assets' recognition exemptions for these leases. Rental lease commitments mature in 2039 at latest.

The group is party to a power offtake agreement whereby the group is entitled and required to buy all the power generated by a number of wind turbines for a certain period of time. This agreement is classified as a lease under IFRS 16 due to i) the requirement to purchase all energy generated by the wind turbines, ii) responsibility over the operations, and iii) involvement in the design at the time of construction.

Coolblue as a lessee

IFRS 16 sets out the principles for the recognition, measurement, presentation, and disclosure of leases. The standard includes 2 recognition exemptions for lessees - leases of 'low-value' assets (e.g. personal computers) and short-term leases (i.e. leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognize a liability to make lease payments (i.e. the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e. the right-of-use asset).

Lessees are required to separately recognize the interest expense on the lease liability and the depreciation expense on the right-of-use asset.

The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Short-term leases and leases of low-value assets

Coolblue applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e. those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value (under € 5k). Lease payments on short-term leases and leases of low-value assets are recognised as expenses on a straight-line basis over the lease term.

Right-of-use assets

Coolblue recognizes right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received.

Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:

Coolblue assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, Coolblue estimates the asset's recoverable amount. On 31 December 2021, Coolblue noted no indications for impairment.

Lease liabilities

At the commencement date of the lease, Coolblue recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognized as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, Coolblue uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g. changes to future payments resulting from a change in an index or rate used to determine such lease payments), or a change in the assessment of an option to purchase the underlying asset. Coolblue's lease liabilities are included in Interest-bearing loans and borrowings.

16. Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. Internally generated intangibles, excluding capitalized development costs, are not capitalized. The related expenditure is reflected in profit or loss in the period in which the expenditure is incurred. The useful lives of intangible assets are assessed as either definite or indefinite.

Intangible assets with definite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a definite useful life are reviewed at least at the end of each reporting period.

Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets with definite lives is recognized in the statement of profit or loss in the expense category that is consistent with the function of the intangible assets.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset. Both are recognized in the statement of profit or loss when the asset is derecognized.

Software and domain names

Certain direct development costs, associated with website and internal-use software, are capitalized. These include external direct costs of services and payroll costs for employees devoting time to the software projects principally related to website development, ERP development, and decision support systems. Development costs are recognized as an intangible asset when the company can demonstrate:

This includes support systems, software coding, system interface design, and installation and testing of the software. These costs are recorded as intangible fixed assets and are generally amortized over a period of 2 to 10 years, beginning when the asset is substantially ready for use. Costs incurred for enhancements that are expected to result in additional features or functionality are capitalized and amortized over the estimated useful life of the enhancements. Costs incurred during the preliminary project stage, as well as maintenance and training costs, are expensed as incurred.

A summary of the policies applied to Coolblue's intangible assets is as follows:

Coolblue assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, Coolblue estimates the asset's recoverable amount. On 31 December 2021, Coolblue noted no indications for impairment.

Impairment testing for cash-generating units containing goodwill

For the purpose of impairment testing, goodwill is allocated to the cash generating units of the Group. This is the lowest level at which goodwill is monitored for internal management purposes within the Group. Impairment reviews of goodwill and intangible assets are undertaken by senior management when impairment triggers are identified. Goodwill impairment review is done at least annually. The goodwill recognised of € 27.9 million is entirely related to our cash-generating unit Home&Go, which relates to the activities of Solar Panels, EV charging systems, and Energy.

The recoverable amount as at 31 December 2021 was determined based on the value-inuse calculation, using cash flow projections based on the financial forecast 2022-2026. Value in-use was determined by discounting the future pre-tax cash flows generated from the continuing use of the cash generating unit using a pre-tax discount rate and was based on the financial forecast 2022-2026.

The main driver for growth in our forecast over 2022-2026 is sales growth and associated economies of scale. The average compound annual growth year over the 5 year period is 16%. Cashflows beyond 2026 are extrapolated using a compound annual growth of 0.3%. These extrapolated growth expectations are retrieved from research by independent external sources and equal to risk free interest rates.

Our pre-tax discount rate is based on credit risk per country, a weighted average cost of capital applicable to the industry, and the applicable tax rate per cash generating unit. A pre-tax WACC discount rate of 14% is utilized in the calculation of the value-in-use.

A sensitivity analysis of a 100 basis points adverse change in key assumptions (lower growth rates or higher discount rates respectively) did not result in a different outcome.

In 2021, no accelerated amortization on purchased software has been recognized (2020: € 0.4 million). The reclassification relates to other non-current assets, disclosed in note 19.

17. Business combinations

On 17 March, 2021, Coolblue Holding B.V. acquired 100% of the share capital / voting rights of ServiceHouse B.V. by payment in cash and through a contingent consideration. With this acquisition, Coolblue is able to develop an integrated solution with respect to energy, solar panels, and charging stations.

The acquisition date is based on the date that control has been transferred to Coolblue Holding B.V. The closing balance per 17 March 2021 is used for the Purchase Price Allocation. The purchase consideration is based on fair market price as agreed between the parties. The opening balance sheet positions are provisional and can be adjusted within 12 months after the date of the acquisition.

Carrying amounts were determined based on IFRS standards applicable as of the date of acquisition. The values of assets, liabilities, and contingent liabilities recognized on acquisition are their fair values. Goodwill is not deductible for tax purposes. The fair value of trade and other receivables does not differ materially from contractual cash flows. The company expects that € 380,000 of trade and other receivables is not collectible. The goodwill on acquisition consists of future potential profits, realization of the expected synergies, and other benefits of combining the activities. These developments are not included in the valuation models due to their uncertainty. The intangible fixed assets consist of Software and Customer Relationships. Acquisition-related costs of € 151,000 have been recognized in the income statement as administrative expenses for the period ended 31 December 2021.

Coolblue Holding B.V. measured the acquired lease liabilities using the present value of the remaining lease payments at the date of acquisition. The right-of-use assets were measured at an amount equal to the lease liabilities.

From the date of acquisition, ServiceHouse B.V. contributed € 41.3 million of revenue and € 1.9 million loss to profit after tax from continuing operations of the Company. If the combination had taken place at the beginning of the year, revenue from continuing operations would have been € 2,346 million and profit after tax from continuing operations would have been € 38.9 million.

Reconciliation of the carrying amount of goodwill at the beginning and end of the reporting period is presented below:

Contingent consideration

As part of the purchase agreement with the previous owners of ServiceHouse B.V., a portion of the consideration was determined to be contingent, based on the performance of the entity.

As at 17 March 2021, the key performance indicators of ServiceHouse B.V. showed that it was highly probable that the target would be achieved due to synergies realized. The fair value of the contingent consideration determined at 17 March 2021 reflects this development. Per 31 December 2021, a total amount of € 2,625,000 is still recognized as a non-current liability on the balance sheet, expected to be paid out on 31 December 2023.

The fair value of the contingent consideration is determined using the discounted cash flow (DCF) method. The contingent consideration is measured at fair value, in which the maximum consideration of € 2,750,000 (discounted to € 2,625,000) was accounted for. Coolblue has recorded the maximum of the range since it is likely the target will be reached.

18. Financial fixed assets

Financial assets

Coolblue's financial assets include loans to employees and other financial fixed assets presented as financial fixed assets.

Coolblue only has financial assets classified as debt instruments at amortized cost, as it gives rights to cash flows that are solely payments of principal and interests (SPPI) on the principal amount outstanding and the objective is to hold the financial assets in order to collect contractual cash flows. The financial assets are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognized in profit or loss, when the rights to receive cash flows from the asset have expired.

Coolblue considers a financial asset in default when contractual payments are 90 days past due. However, in certain cases, Coolblue may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by Coolblue. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

Set out below the movements of loan to employees during the period:

The effective interest rate on the loans receivables to employees is 2.4%-3.2% per year. Coolblue did not settle a pre-fixed redemption schedule with the employees. The maximum duration is 6 years. The collateral on these loans are (certificates from) shares in Coolblue.

19. Other non-current assets

The other non-current assets relate to accrued expenses for implementation costs of Software-as-a-Service solutions which will be recognized over the period the company will use the software. The current portion of the accrued expenses is included in the other receivables and prepayments.

20. Inventories

Inventories are valued at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale. The costs of goods for resale are calculated based on first-in-first-out purchase prices. In these prices, rebates on purchases and costs incurred in bringing each product to its present location and condition are included.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale.

In 2021, an amount of € 1,877 million (2020: € 1,610 million) of inventory value was included in the cost of sales. An amount of € 14.9 million (2020: € 12.1 million) of inventories has been written down during 2021.

21. Trade and other receivables

A receivable is recognized if an amount of consideration that is unconditional is due from the customer (i.e. only the passage of time is required before payment of the consideration is due).

Trade receivables (including invoiced rebates and bonuses receivable from suppliers and manufacturers) are non-interest bearing and are generally on terms of 2 to 90 days. For more information about the receivables from shareholders, refer to note 30. Other receivables and prepayments mainly relate to accrued rebates and bonuses receivable from suppliers and manufacturers and generally on terms within 90 days. As applicable to Coolblue, per IFRS 7.29, fair value disclosures are not required when the carrying amount is a reasonable approximation of the fair value.

Significant accounting judgements, estimates and assumptions & credit risk

Coolblue has no significant concentrations of credit risk. Credit risk is the risk that a counterparty does not meet its contractual obligations, leading to a financial loss. Coolblue is exposed to credit risk from its operating activities, primarily trade receivables and other receivables. The credit risk with respect to trade receivables is limited. Sales to consumers, except from sales of solar panels, are made after a prepayment via iDeal, major credit cards, PayPal, debit cards, or in cash. Business clients have the opportunity to buy on credit. The solvency of these business clients is based on credit checks. Individual credit limits are defined in accordance with this assessment. Outstanding receivables are regularly monitored. Export sales are covered by credit insurance.

An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The maximum exposure to credit risk at the reporting date is the carrying value of each class of the financial assets disclosed. Coolblue does not hold collateral as security. Coolblue evaluates the concentration of risk with respect to trade receivables from business clients as low, as these customers relate to different industries and operate in largely independent markets. Receivables that were past due, relate to a number of specific customers for whom there is no recent history of default. A trade receivable is definitely written off if the debtor has been declared bankrupt.

As a result, management believes there is no further credit risk provision required in excess of the normal individual and collective impairment, based on an aging analysis performed as of 31 December 2020.

The aging analysis of trade receivables is, as follows:

As of 31 December 2021, the Expected Credit Loss of trade receivables amounts to € 1.0 million (2020: € 0.6 million). For the movements in the Expected Credit Loss of receivables, please see the table below.

22. Cash and cash equivalents

Cash in the statement of financial position comprises cash at banks and in hand, which are subject to an insignificant risk of changes in value. Cash is at the free disposal of Coolblue and is stated at amortized cost.

Credit risk

The credit risk with respect to financial assets primarily relates to cash at banks. Cash balances are held with counterparties that have a credit risk rating of at least A-, as rated by an acknowledged rating agency. Moreover, to avoid significant concentration of exposure to particular financial institutions, Coolblue ensures that transactions and businesses are properly spread among different counterparties.

23. Issued capital and reserves

The authorized share capital consists of 19,603 ordinary shares of € 1 each (2020: 19,603 of € 1 each). All shares are issued and fully paid. Share capital and premium did not change in 2020 and 2021.

In 2020 and 2021 no dividend was paid. The legal reserve relates to capitalized development costs.

Appropriation of net result

The result for the year 2021 of € 39.2 million is in accordance with the proposed profit appropriation treated as unappropriated profit in Coolblue's equity. The result for the year 2020 of € 61.1 million is in accordance with the decision of the General Meeting distributed to other reserves.

24. Share-based payments

Participation plan I

Since 2019, Mondhoekie has offered selected employees the possibility to purchase share certificates in Mondhoekie B.V. at fair value. Several other buy-ins have occurred throughout 2020 and 2021. The participants will have the possibility to sell the certificates at 3 predetermined moments, in the years 4, 5 and 6 from the issue date. Coolblue Holding holds no liability towards the participants as the sales of certificates by the participants are settled by the shareholders of the parent Mondhoekie B.V.

The fair value at grant date and future value developments of the share certificates is determined based on a valuation model considering growth in revenue and EBITDA. The grant-date fair value is paid by the participants, as such no expenses are or will be recognised. Coolblue Holding B.V. accounts for Participation plan I as an equity-settled plan, as there is no obligation to settle in cash at Coolblue Holding B.V.

Participation plan II

In January 2021 and July 2021, Coolblue granted parts of share certificates of Mondhoekie B.V. to employees. The grant date fair value was determined at € 3.55 (January 2021) and € 3.94 (July 2021).

The fair value at grant date and future value developments of the share certificates is determined based on a valuation model considering growth in revenue and EBITDA.

The grant-date fair value is recognized as Employee Benefit Expense within the Selling & Distribution or Administrative expenses (allocation based on the function of the employee) and a corresponding entry in equity. The participants will have the possibility to sell the certificates at 3 predetermined moments, in the years 2, 3, and 4 from the issue date. Coolblue Holding holds no liability towards the participants as the sales of certificates by the participants are settled by the shareholders of the parent Mondhoekie B.V. Coolblue Holding accounts for Participation plan II as an equity-settled plan.

25. Lease liability

Set out below are the carrying amounts of lease liabilities (included under interest-bearing loans and borrowings) and the movements during the period:

The table below summarises the maturity profile of Coolblue's lease liabilities based on contractual undiscounted payments:

As at 31 December 2021

As at 31 December 2020

The details of the right-of-use assets are disclosed in note 15. As part of a change in our strategy and market circumstances, a reassessment on the lease terms across the Property portfolio took place in 2021, which led to a reduction of € 7.1 million on the right-of-use asset (refer to note 15) and € 6.8 million reduction of the lease liability.

In 2021 an expense of € 4.8 million (2020: € 1.2 million) relating to short-term leases was recognized in the statement of profit or loss. Coolblue has no low-value leases. Coolblue had total cash outflows for leases of € 21.8 million in 2021 (€17.6 million in 2020).

26. Deferred tax

Movement for the year ended 31 December 2021:

Movement for the year ended 31 December 2020:

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities, and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits, and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available, against which the deductible temporary differences and the carry forward of unused tax credits can be utilized.

The carrying amount of deferred tax assets is reviewed at each reporting date. Afterward, it is reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Coolblue has tax losses of € 8.7 million (2020: € 0), acquired from the business combination with ServiceHouse, that are available indefinitely for offsetting against future taxable profits of the companies in which the losses arose. Deferred tax assets have not been recognised in respect of these losses

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to balance current tax assets against current tax liabilities when the deferred taxes relate to the same taxable entity and the same taxation authority.

The deferred tax provision relates to the tax regime "depreciation at will" and capitalized development costs. The deferred tax provision related to capitalized development cost is recognized against the effective tax rate as it will be settled to. Deferred tax assets and liabilities are classified as non-current assets and liabilities.

27. Other non-current liabilities

The contingent liability is related to the acquisition of ServiceHouse B.V. and is expected to be settled in 2023. Refer to note 17 for more information.

28. Trade and other payables

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, and payables as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. Mondhoekie's financial liabilities include trade and other payables.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss. This category applies to the current portion of the interest-bearing loans and borrowings included in the other current payables.

As applicable to Coolblue, per IFRS 7.29, fair value disclosures are not required when the carrying amount is a reasonable approximation of the fair value.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged, canceled, or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

Terms and conditions of the above financial liabilities:

An amount of € 9.7 million (2020: € 6.1 million) is included in the other current payables related to a performance obligation to customers to deliver products ordered and paid in 2021 and delivered in 2022. In addition, there is a contract liability related to giftcards for an amount of € 8.8 million (2020: € 5.3 million).

The fair value of the trade and other payables, excluding taxes and social securities payable, as at 31 December 2021 and 31 December 2020, is equal to the carrying amount. The trade and other payables are payable as follows:

As at 31 December 2020

29.Commitments and contingencies

Other commitments

The parent company restructured the finance arrangement to € 200 million (2020: € 160 million) with Rabobank for a period of 3 years until 2024. In return, Coolblue has given a pledge on its moveable assets, bank accounts, (intercompany) receivables, and stock. Coolblue Holding B.V., Coolblue B.V., Coolblue Verwonderdiensten B.V., Coolblue België N.V and Coolblue GmbH act as guarantor for the external financing at the parent company. Coolblue agreed to a maximum ratio of 4 for net debt divided by normalized EBITDA. Per 31 December 2021 the net bank debt (Cash and cash equivalents -/ - loans and borrowings) of the parent company is € 7.1 million positive (2020: € 71 million net debt). The ratio amounts to -/ - 0.06, which means that the ratios have been achieved. In the circumstance that Coolblue is unable to comply with the maximum net debt ratio as agreed, the granted finance arrangement is cancelable by Rabobank. Coolblue achieved all criteria of the bank covenants.

Coolblue has credit facilities at ING Bank. The first is for an amount of € 9.0 million for rental and permit purposes, of which € 6.4 million was used on 31 December 2021. The second facility is a revolving credit facility for an amount of € 9.0 million. On 31 December 2021 Coolblue had not used the revolving credit facility. In return for these credit facilities, Coolblue has given a pledge on its funds entrusted to ING bank including deposits and savings. Aan Huis N.V., Coolblue B.V., Coolblue Verwonderdiensten B.V., Coolblue België N.V., and Mondhoekie B.V. act as guarantor for these credit facilities.

Coolblue entered into commitments for purchasing goods from suppliers amounting to € 8.4 million (2020: € 9.9 million). Coolblue has energy and gas purchase commitments of € 53.2 million (31 December 2020: € -) under contracts relating to the years 2022 until 2024. The purchase commitments comprise energy and gas contracts for the Company's own customers with various energy suppliers.

At 31 December 2021, Coolblue had commitments of € 3.4 million (2020: € 7.9 million) relating to investments in tangible fixed assets. Coolblue has lease commitments committed to in 2021 but effective from 2022 of € 5.1 million.

Coolblue is subject to a limited number of claims and investigations. Although the outcome of these disputes and investigations cannot be predicted with any certainty, it is expected that these will not have any significant impact on Coolblue's financial position. No provisions were made as these were not deemed necessary.

30. Related party disclosures

Related parties

Note 2.2 provides information about Coolblue's group structure, including details of the subsidiaries and the holding company. In 2020 and 2021, Coolblue entered into transactions with its subsidiaries in the course of its business. These transactions related to trading and services are eliminated in the consolidated financial statements.

The following table provides the total amount of transactions that have been entered into with the shareholder for the relevant financial year. The transactions are related to interest for an amount of € 2.6 million, non-cash tax settlements of € 15.3 million, and cash balancing and financing transactions for an amount of € 1.1 million (2020: € 1.8 million interest, € (6.9) million non-cash tax settlements, and € 65.6 million cash balancing and financing transactions). Since Coolblue has no shares in affiliated companies, there are no transactions with other unconsolidated related parties.

Compensation of board of directors

Key management personnel are those persons who have authority and responsibility for planning, directing, and controlling the activities of Coolblue directly or indirectly. This includes any directors, whether executive or otherwise, of the entity. Coolblue considers the statutory directors to be key management personnel as defined in IAS 24 - Related parties.

31. Events after the reporting period

No subsequent events which have an important influence on the financial situation and/or the profitability of Coolblue have occurred following the end of the financial year.

After the balance sheet date, Coolblue signed a share purchase agreement for the acquisition of 100% of the shares in Plotwise B.V. and Plotwise IP B.V. With this acquisition, Coolblue is able to further improve its own delivery proposition CoolblueDelivers. The acquisition is likely to be completed in the first 6 months of 2022. The additional required information cannot yet be provided given that the transaction is not yet completed.

After the balance sheet date, Coolblue issued a third round of the employee participation plan (Plan II) for all employees with an employment duration of one year or longer. The total costs of the 82,606 depositary receipts in shares amounts to € 0.7 million, consisting of fair value and related taxes.

Company

Financial Statements

Company income statement For the year ended 31 December 2021

Note 32 to 38 are an integral part of these company financial statements

Company statement of financial position

As at 31 December 2021 (before appropriation of result).

Note 32 to 38 are an integral part of these company financial statements.

Notes to the company financial statements

32. Significant accounting policies

Basis of preparation

The company financial statements have been prepared in accordance with Title 9 of Book 2 of the Dutch Civil Code.

Based on Article 2:362-8 of the Dutch Civil Code, the valuation principles applied are based on International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB), applied in preparation of the consolidated financial statements of Coolblue. Companies are allowed to apply IFRS valuation principles in their financial statements, prepared under Title 9 of Book 2 of the Dutch Civil Code.

Subsidiaries, associates, and joint ventures are accounted for at net assets value, determined on the basis of IFRS, as applied in the Consolidated Financial Statements. Please refer to the Notes to the Consolidated Financial Statements, paragraph 2.2.

In accordance with Article 2:402 of Part 9, of the Dutch Civil Code, Coolblue profit and loss account is presented in abbreviated form.

33. Intangible fixed assets

Refer to note 17 of the consolidated financial statements of Coolblue Holding B.V. regarding the calculation of the goodwill amount.

34. Financial fixed assets

35. Receivable from related parties

The receivables from related parties concern current receivables without scheduled repayment obligation. The interest rate amounts to Euribor plus 1.2%.

36. Equity

According to Article 18 the general meeting shall determine the allocation of accrued profits.

37. Payable to related parties

The payables to related parties concern current liabilities without scheduled repayment obligation. The interest rate amounts to Euribor plus 1.2%.

38. Board remuneration

Board of Directors

Other information

Appropriation of net result according to the Articles of Association

Article 18

1. The general meeting shall determine the allocation of accrued profits.

2. Distributions may be made only insofar as Coolblue's equity exceeds the amount of the paid-in and called-up part of the issued capital, increased by the reserves which must be kept by virtue of the law. Dividends shall be paid after adoption of the annual accounts from which it appears that payment of dividends is permissible.

Independent auditor's report

To: the shareholder of Coolblue Holding B.V.

Report on the audit of the financial statements 2021 included in the annual report

Our opinion

We have audited the financial statements 2021 of Coolblue Holding B.V., based in Rotterdam. The financial statements include the consolidated financial statements and the company financial statements.

In our opinion:

The consolidated financial statements comprise:

The company financial statements comprise::

Basis for our opinion

We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are further described in the "Our responsibilities for the audit of the financial statements" section of our report.

We are independent of Coolblue Holding B.V. in accordance with the Wet toezicht accountantsorganisaties (Wta, Audit firms supervision act), the Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore we have complied with the Verordening gedragsen beroepsregels accountants (VGBA, Dutch Code of Ethics).

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Report on other information included in the annual report

In addition to the financial statements and our auditor's report thereon, the annual report contains other information that consists of:

Based on the following procedures performed, we conclude that the other information:

We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements. By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is substantially less than the scope of those performed in our audit of the financial statements.

Management is responsible for the preparation of the other information, including the management report in accordance with Part 9 of Book 2 of the Dutch Civil Code and other information as required by Part 9 of Book 2 of the Dutch Civil Code.

Description of responsibilities for the financial statements

Responsibilities of management and the supervisory board for the financial statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, management is responsible for such internal control as management determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

As part of the preparation of the financial statements, management is responsible for assessing the company's ability to continue as a going concern. Based on the financial reporting frameworks mentioned, management should prepare the financial statements using the going concern basis of accounting unless management either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so. Management should disclose events and circumstances that may cast significant doubt on the company's ability to continue as a going concern in the financial statements.

The supervisory board is responsible for overseeing the company's financial reporting process.

Our responsibilities for the audit of the financial statements

Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion.

Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud during our audit.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.

We have exercised professional judgment and have maintained professional skepticism throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit included among others:

Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the group audit. In this respect we have determined the nature and extent of the audit procedures to be carried out for group entities. Decisive were the size and/or the risk profile of the group entities or operations. On this basis, we selected group entities for which an audit or review had to be carried out on the complete set of financial information or specific items.

We communicate with the supervisory board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant findings in internal control that we identify during our audit.