Guillemot Corporation

Earnings Release • Sep 28, 2023

Carentoir, September 28, 2023

2023 CONSOLIDATED INTERIM RESULTS

Key items from the Guillemot Corporation Group's financial statements to June 30, 2023 are as follows:

First half 2023 (€m) January 1 – June 30, 2023	June 30, 2023	June 30, 2022
Turnover	48.1	98.1
Net income from ordinary activities	-3.9	25.0
Net operating income	-3.9	25.0
Net financial income*	-0.1	-0.9
Corporate income tax	1.2	-6.0
Consolidated net income	-2.9	18.1
Earnings per share	-€0.19	€1.18

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

Business activity and results

In the first half of 2023, the Group generated turnover of €48.1 million, down 51%.

This very substantial slowdown in the Group's sales was mainly the result of high levels of inventory in distribution networks and at wholesalers and retailers, delaying restocking.

Throughout the first half, the Group strongly supported sales by its customers to end consumers through a highly proactive promotional policy amid a market downturn.

The situation is improving, with distributor inventory steadily decreasing and second-quarter sales up 21% quarter on quarter.

As a result of the sharp decline in sales over the first half of the year, the Group posted a net operating loss of €3.9 million for the six months to June 30, 2023, compared with net operating income of €25.0 million for the six months to June 30, 2022.

The gross accounting profit margin came in at 45%, compared with 58% in the first half of 2022, impacted by high customer trade marketing costs and an adverse euro/dollar exchange rate.

Total costs were down 20% and the Group's workforce remained stable over the period.

The net financial expense of €0.1 million included a €0.2 million unrealized loss linked to the decline in the valuation of the portfolio of Ubisoft Entertainment S.A. shares. The Group posted a consolidated net loss of €2.9 million.

Key balance sheet items

(€m)	June 30, 2023	Dec. 31, 2022
Shareholders' equity	98.0	104.4
Inventories	50.2	57.2
Net debt (excl. AFS securities)*	-11.5	-21.3
Current financial assets (AFS securities portion)	11.5	11.7

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

Shareholders' equity stood at €98.0 million at June 30, 2023. The Group's net debt was negative at -€11.5 million excluding available-for-sale securities, the fair value of which stood at €11.5 million at June 30, 2023.

At June 30, 2023 the value of net inventory totaled €50.2 million, 12% lower than at December 31, 2022 as a result of the Group gradually readjusting its inventory in line with sales. Working capital increased by €1.1 million over the first half of the year.

Net capitalized research and development costs over the six months to June 30, 2023 totaled €9.9 million, up €1.6 million.

A solid lineup and strong momentum in new products

Thanks to strong team dynamics and investment in research and development over the past three years, the Group is able to offer a solid lineup of new products for the final part of the year, including the following:

Racing

• TH8S Shifter Add-On gear stick (released in July)
• Two new racing wheel rims for the T818 Direct Drive base and other bases in the range

Flight

• Viper TQS Mission Pack (commercially available since September 23)

Farming (a new segment for Thrustmaster in 2023)

• SimTask Steering Kit (available as of October 25)
• SimTask FarmStick (available in November)

DJing

• DJControl Inpulse T7 controller (available since September 12)
• DJControl Inpulse 200 MK2 controller (released June 20)
• DJControl Learning Kit (launch scheduled for September 29)

Other ranges and new products will be announced in the fourth quarter and will help drive the Group's future growth.

Strengthening of distribution networks

The Group has:

• extended its direct shipping agreements with major e-commerce operators to include Asia, and is more efficiently addressing consumer demands;
• expanded its product listings across all U.S. retail channels.

Outlook

The Group believes that the current and forthcoming crop of racing games will revitalize its markets in the fourth quarter and prompt its customers to finish updating their inventory.

However, inventory levels will continue to affect Group billings in the second half of the year.

Against this backdrop, the Group has revised its sales outlook range to €120–140 million and is forecasting a net operating profit for fiscal year 2023.

Together with the expansion of the Group's distribution networks, the high potential offered by new Hercules and Thrustmaster products means that the outlook is positive for a return to significant growth in 2024.

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)

Consolidated statement of net income to June 30, 2023

(€k)	Jun 30, 2023	Jun 30, 2022
Net turnover	48,111	98,143
Purchases	-19,996	-51,532
External expenses	-10,960	-14,682
Employee expenses	-8,360	-6,973
Taxes and duties	-299	-473
Additions to amortization and depreciation	-2,978	-2,562
Additions to provisions	-901	-790
Change in inventories	-6,256	10,407
Other income from ordinary activities	146	102
Other expenses from ordinary activities	-2,359	-6,626
Net income from ordinary activities	-3,852	25,014
Other operating income	0	0
Other operating expenses	0	0
Net operating income	-3,852	25,014
Income from cash and cash equivalents	319	17
Cost of gross financial debt	-53	-43
Cost of net financial debt	266	-26
Other financial income	0	0
Other financial expenses	-380	-900
Corporate income tax	1,050	-6,020
Net income before minority interests	-2,916	18,068
O/w net income from discontinued operations	0	0
Attributable to minority interests	0	0
Net income attributable to equity holders of the parent	-2,916	18,068
Basic earnings per share	-€0.19	€1.18
Diluted earnings per share	-€0.19	€1.17

Consolidated balance sheet at June 30, 2023

(€k) Goodwill on acquisitions 0 0 Intangible assets 24,079 23,276 Property, plant and equipment 8,505 8,184 Financial assets 617 668 Tax assets 351 495 Deferred tax assets 5,403 4,267 Non-current assets 38,955 36,890 Inventories 50,183 57,203 Trade receivables 25,527 34,743 Other receivables 4,562 4,079 Financial assets 11,488 11,723 Current tax assets 3,011 318 Cash and cash equivalents 22,453 35,245 Current assets 117,224 143,311 Total assets 156,179 180,201 LIABILITIES AND EQUITY Jun 30, 2023 Dec 31, 2022 (€k) Capital (1) 11,617 11,771 Premiums (1) 8,077 10,551 Reserves and consolidated income (2) 77,810 81,645 Currency translation adjustments 521 438 Group shareholders' equity 98,025 104,405 Minority interests Consolidated shareholders' equity 98,025 104,405 Employee benefit liabilities 1,683 1,586 Borrowings 6,691 8,345 Other liabilities 0 0 Deferred tax liabilities 15 14 Non-current liabilities 8,389 9,945 Trade payables 28,933 38,887 Short-term borrowings 4,235 5,636 Taxes payable 599 2,437 Other liabilities 15,967 18,734 Provisions 31 157 Current liabilities 49,765 65,851 Total liabilities and equity 156,179 180,201	ASSETS	Net	Net
		Jun 30, 2023	Dec 31, 2022

(1) Of the consolidating parent

(2) Of which net loss for the period: €2,916k

Consolidated statement of cash flows to June 30, 2023

(€k)	Jun 30, 2023	Jun 30, 2022
Cash flows from operating activities
Net income from consolidated companies	-2,916	18,068
+ Additions to amortization, depreciation and provisions (except on current assets)	3,195	397
- Reversals of amortization, depreciation and provisions	-1,399	-24
-/+ Unrealized gains and losses arising from changes in fair value	235	519
+/- Expenses and income arising from stock options	265	325
-/+ Capital gains and losses on disposals	66	0
Change in deferred taxes	-1,135	2,066
Operating cash flow after cost of net financial debt	-1,689	21,351
Cost of net financial debt	-266	26
Operating cash flow before cost of net financial debt	-1,955	21,377
Currency translation adjustment on gross cash flow from operations	0	131
Inventories	7,020	-10,068
Trade receivables	9,216	21,574
Trade payables	-9,953	3,096
Other	-7,341	-2,479
Change in working capital	-1,058	12,123
Net cash flows from operating activities	-2,747	33,605
Cash flows from investing activities
Acquisitions of intangible assets	-2,738	-2,320
Acquisitions of property, plant and equipment	-817	-1,327
Disposals of property, plant and equipment and intangible assets	0	19
Acquisitions of non-current financial assets	-122	-150
Disposals of non-current financial assets	173	8
Net cash from acquisitions and disposals of subsidiaries	0	0
Net cash flows from investing activities	-3,504	-3,770
Cash flows from financing activities
Increases in capital and cash injections	0	0
Dividends paid	-3,761	-3,813
Borrowings	0	0
Repayment of borrowings	-3,148	-2,463
Impact of IFRS 16 adoption	436	-274
Other cash flows from financing activities	-108	0
Total cash flows from financing activities	-6,581	-6,550
Impact of foreign currency translation adjustments	51	147
Change in cash	-12,781	23,432
Net cash at the beginning of the period	35,225	12,006
Net cash at the end of the period	22,444	35,438