Guillemot Corporation

Annual Report • Mar 27, 2024

Carentoir, March 27, 2024

2023 ANNUAL RESULTS

Guillemot Corporation's financial statements (audited financial statements approved by the Board of Directors at its meeting held March 26, 2024, pending the statutory auditors' certification report) may be summarized as follows:

(€m) January 1 – December 31, 2023	Dec. 31, 2023	Dec. 31, 2022	Change
Turnover	119.1	188.0	-37%
Thrustmaster	104.9	175.5	-40%
Hercules	14.2	12.5	+14%
Net income from ordinary activities	2.5	34.2	-93%
Net operating income	2.5	34.2	-93%
Net financial income*	-1.4	-6.7	-
Corporate income tax	-0.1	-7.2	-
Consolidated net income	1.0	20.4	-95%
Basic earnings per share	€0.06	€1.33	-95%

* Net financial income includes the cost of net financial debt as well as other financial income and expenses.

The Group generated full-year 2023 turnover of €119.1 million, down 37% year-on-year, with sales down 40% at Thrustmaster but up 14% at Hercules. Following the audit of the financial statements and a reassessment of the variable consideration offered to customers, this figure has been revised down from the €120.6 million initially reported on January 26, 2024.

Turnover in the fourth quarter of 2023 was down 24% to €35.6 million amid a downturn in European accessory markets.

The Group's customers held high levels of inventory in 2023, due to a mismatch between expected strong sales and a market downturn. The Group stepped up its promotional activities over the course of the year to lower its customers' inventories, which are now well balanced.

The Group generated net income from ordinary activities of €2.5 million and consolidated net income of €1 million after taking into account an unrealized financial loss of €1.5 million on the Group's portfolio of Ubisoft Entertainment shares.

The accounting gross profit margin came out at 49% for 2023, down 5 percentage points year-on-year in an inflationary and highly-competitive environment. By the fourth quarter of 2023, the Group was able to restore accounting gross profit margin levels higher than those for the fourth quarter of 2022.

The Group increased its investment in research and development to €9.0 million in 2023, equating to 7.5% of consolidated turnover. At the same time, total expenses fell 18%.

The net financial expense of €1.4 million included a €1.5 million revaluation loss on current financial assets (available-for-sale securities) consisting of 443,874 Ubisoft Entertainment shares.

Consolidated net income for the year totaled €1 million. At its meeting held March 26, 2024, the Board of Directors of Guillemot Corporation S.A. did not propose the payment of any dividend.

Balance sheet items

(€m)	Dec. 31, 2023	Dec. 31, 2022
Shareholders' equity	101.8	104.4
Inventories	45.7	57.2
Net debt*	-16.7	-21.3
Current financial assets (AFS securities)	10.3	11.7

* Available-for-sale (AFS) securities are not taken into account when calculating net debt.

Group shareholders' equity stood at €101.8 million at December 31, 2023. Net debt at December 31, 2023 was negative at -€16.7 million, with the Group having positive net cash of €25.7 million and debt of €9.1 million. Net cash flows from operating activities were positive at €5.5 million, while working capital requirements increased by €1.9 million over the year.

Strategic assessment and development priorities

In 2024, the Group will focus its efforts on:

• Continuing to invest in research and development, in order to ensure that its products are significantly differentiated from and offer substantially higher added value than competitors' products;
• Expanding its product ranges in its traditional segments and deploying its latest offerings in farming for Thrustmaster and streaming for Hercules;
• Stepping up and expanding its sales strategy in the Asia-Pacific region and the Middle East, to tap into the growth potential offered by these areas;
• Synchronizing its commercial campaigns with new game releases scheduled for the second half of the year, so as to maximize sales;
• Optimizing performance through the use of artificial intelligence-based tools.

2024 outlook

The Group will leverage the growing momentum in sales of recently-launched accessories, and is preparing to launch major new Thrustmaster products in the second half of 2024.

For fiscal year 2024, the Group expects to return to growth and deliver a net operating profit.

Guillemot Corporation is a designer and manufacturer of interactive entertainment hardware and accessories. The Group offers a diversified range of products under the Hercules and Thrustmaster brand names. Active in this market since 1984, the Guillemot Corporation Group is currently present in 11 countries (France, Germany, Spain, the UK, the United States, Canada, Italy, Belgium, Romania, the Netherlands and China [Shanghai, Shenzhen and Hong Kong]) and distributes its products in more than 150 countries worldwide. The Group's mission is to offer high-performance, ergonomic products which maximize the enjoyment of digital interactive entertainment for end users. Contact: Guillemot Financial Information — Telephone: +33 (0) 2 99 08 08 80 — www.guillemot.com

APPENDICES

(All figures in €k)

(€k)	Dec. 31, 2023	Dec. 31, 2022
Net turnover	119,132	188,047
Purchases	-51,534	-105,064
Change in inventories	-9,581	18,553
External expenses	-24,263	-31,931
Employee expenses	-16,269	-14,421
Taxes and duties	-542	-806
Additions to amortization and depreciation	-6,493	-5,444
Additions to provisions	-1,865	-2,206
Other income from ordinary activities	246	289
Other expenses from ordinary activities	-6,310	-12,774
Net income from ordinary activities	2,521	34,243
Other operating income	0	0
Other operating expenses	0	0
Net operating income	2,521	34,243
Income from cash and cash equivalents	629	135
Cost of gross financial debt	-94	100
Cost of net financial debt	535	35
Other financial income	0	706
Other financial expenses	-1,979	-7,397
Corporate income tax	-113	-7,235
Net income before minority interests	964	20,352
O/w net income from discontinued operations	0	0
Attributable to minority interests	0	0
Net income attributable to equity holders of the parent	964	20,352
Basic earnings per share	€0.06	€1.35
Diluted earnings per share	€0.06	€1.34

Consolidated income statement at December 31, 2023

Consolidated balance sheet at December 31, 2023

(€k)	Dec. 31, 2023	Dec. 31, 2022
Goodwill on acquisitions	0	0
Intangible assets	23,739	23,276
Property, plant and equipment	8,592	8,184
Financial assets	593	668
Tax assets	543	495
Deferred tax assets	4,634	4,267
Non-current assets	38,101	36,890
Inventories	45,725	57,203
Trade receivables	36,057	34,743
Other receivables	3,620	4,079
Financial assets	10,258	11,723
Current tax assets	4,215	318
Cash and cash equivalents	25,728	35,245
Current assets	125,603	143,311
Total assets	163,704	180,201
LIABILITIES AND EQUITY
(€k)	Dec. 31, 2023	Dec. 31, 2022
Capital (1)	11,617	11,771
Premiums (1)	8,076	10,551
Reserves and consolidated income (2)	81,881	81,645
Currency translation adjustments	210
Group shareholders' equity
		438
	101,784	104,405
Minority interests	0	0
Consolidated shareholders' equity	101,784	104,405
Employee benefit liabilities	1,709	1,586
Borrowings	4,821	8,345
Other liabilities Deferred tax liabilities	0 15	0 14
Non-current liabilities	6,545	9,945
Trade payables	25,442	38,887
Short-term borrowings	4,251	5,636
Taxes payable	815	2,437
Other liabilities	24,832	18,734
Provisions Current liabilities	35 55,375	157 65,851

Total liabilities and equity 163,704 180,201

(1) Of the consolidating parent company

(2) Of which net income for the period: €964k

Consolidated statement of cash flows at December 31, 2023

(€k)	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities
Net income from consolidated companies	964	20,352
+ Additions to amortization, depreciation and provisions (except on current assets)	6,788	5,803
- Reversals of amortization, depreciation and provisions	-1,947	-117
-/+ Unrealized gains and losses arising from changes in fair value	1,465	7,395
+/- Expenses and income arising from stock options	511	550
-/+ Capital gains and losses on disposals	73	1
Change in deferred taxes	-366	1,057
Operating cash flow after cost of net financial debt	7,488	35,041
Cost of net financial debt	-535	-35
Operating cash flow before cost of net financial debt	6,953	35,006
Currency translation adjustment on gross cash flow from operations	0	-295
Inventories	11,478	-16,278
Trade receivables	-1,313	25,129
Trade payables	-13,444	818
Other	1,338	-11,612
Change in working capital requirements	-1,942	-1,943
Net cash flows from operating activities	5,546	32,803
Cash flows from investing activities
Acquisitions of intangible assets	-4,690	-4,974
Acquisitions of property, plant and equipment	-1,905	-2,961
Disposals of property, plant and equipment and intangible assets	7	19
Acquisitions of non-current financial assets	-128	-205
Disposals of non-current financial assets	202	13
Net cash from acquisitions and disposals of subsidiaries	0	0
Net cash flows from investing activities	-6,514	-8,108
Cash flows from financing activities
Increases in capital and cash injections	0	0
Buybacks of treasury shares	0	-2,629
Dividends paid	-3,761	-3,813
Borrowings	0	10,098
Repayment of shareholders' current accounts	0	0
Repayment of borrowings	-4,795	-4,578
Impact of IFRS 16 adoption	431	-631
Other cash flows from financing activities	-138	57
Total cash flows from financing activities	-8,263	-1,496
Impact of foreign currency translation adjustments	-266	20
Change in cash	-9,497	23,219
Net cash at the beginning of the period	35,225	12,006
Net cash at the end of the period	25,728	35,225