Guillemot Corporation

Earnings Release • Sep 23, 2021

Carentoir, September 23, 2021

2021 INTERIM CONSOLIDATED RESULTS

Key items from the Guillemot Corporation Group's financial statements to June 30, 2021 are as follows:

First half (€ millions) January 1 – June 30, 2021	June 30, 2021	June 30, 2020	Change
Thrustmaster gaming accessories	66.8	38.9	+72%
Thrustmaster total	66.8	38.9	+72%
Hercules digital devices	3.5	2.3	+52%
OEM*	0.2	0.3	-33%
Hercules total	3.7	2.6	+42%
Total turnover	70.5	41.5	+70%
Net income from ordinary activities	13.3	3.1	+316%
Net operating income	13.3	3.1	+316%
Net financial income**	-9.3	5.3	-
Corporate income tax	-0.3	-1.1	-73%
Consolidated net income	3.7	7.3	-50%
Earnings per share	€0.24	€0.48	-50%

* Accessories developed for third party companies (Original Equipment Manufacturers).

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

Activity

The Group's turnover grew 70% in the first half of 2021, to €70.5 million. The Group posted second-quarter turnover of €34.7 million, up 23% compared with the second quarter of 2020, when turnover had already doubled relative to the same period in 2019.

This performance confirms buoyant sales of the Group's accessories in the Thrustmaster racing and flight segments, as well as the Hercules DJing segment.

All geographical regions (European Union and United Kingdom, North America and Other) posted growth in the second quarter, and demand remains high.

Results

The gross accounting profit margin came in at 55%, compared with 51.5% in the first half of 2020. The Group stepped up its recruitment efforts over the period, with its global headcount up 11% in the year to date, as well as running sales promotions and marketing campaigns to support business growth. Total costs increased by 38%.

Net operating income came in at €13.3 million, compared with €3.1 million for the six months to June 30, 2020.

The net financial expense of €9.3 million included an €8.8 million unrealized loss linked to the decline in the valuation of the portfolio of Ubisoft Entertainment SA shares. Consolidated net income totaled €3.7 million.

Key balance sheet items

(€m)	June 30, 2021	December 31, 2020
Shareholders' equity	80.2	79.7
Inventories	26.7	20.6
Net debt (excl. AFS securities)*	-15.1	-18.2
Current financial assets (AFS securities portion)	26.2	35.0

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

Group shareholders' equity stood at €80.2 million at June 30, 2021. The Group's net debt is negative at -€15.1 million excluding available-for-sale securities, the fair value of which stood at €26.2 million at June 30, 2021.

Over the first half of 2021, the Group built up a buffer of inventory to mitigate the shortage of electronic components and make provision for business growth. Against this backdrop, the value of net inventories was €26.7 million at June 30, 2021, up 29% from December 31, 2020.

Capitalized research and development costs over the six months to June 30, 2021 totaled €4.9 million, up €0.5 million.

Recent developments

The Group has secured its supply of components and is ramping up production to meet high demand for accessories in the runup to the year's end. Price rises are in the process of being implemented to reflect increased costs for logistics and components. The logistics situation remains tight, with long delivery lead times and volume restrictions, though this is not expected to adversely affect the Group's forecasts. The Group is strengthening its logistical, commercial and trade marketing capabilities in Europe to take full advantage of growth among pan-European operators, particularly in the United Kingdom, Germany and the Benelux countries.

❖ Thrustmaster

o Racing news: the Formula Wheel Add-on Ferrari SF1000 Edition, a gaming replica of the wheel used in the celebrated Ferrari SF1000, was launched in April 2021, featuring the first built-in screen able to display telemetry data from the leading single-seater racing games. The wheel was an immediate hit with the global community, with the launch attracting record audiences to Thrustmaster.

Following the July launch of the brand's flagship T-GT II, at the end of August Thrustmaster disclosed information about its first next-generation hybrid racing wheel designed to master all tracks. The T248, officially licensed for PlayStation®5, PlayStation®4 and PC, will be available in Europe, the Middle East and North America from October 21. Its hybrid belt-and-gear mechanism provides powerful Force Feedback at an affordable price. The Xbox One and Xbox Series X|S version of the T248 will be launched in the fourth quarter of this year. The release of Gran Turismo™ 7, scheduled for March 4, 2022, is expected to boost demand for PlayStation®5 racing wheels.

o Flight news: Thrustmaster continues to expand its joystick range, adding exciting new products including an Airbus bundle — the TCA Captain Pack — to celebrate the success of this range, as well as a new flight yoke for Xbox and PC. The launch of Microsoft Flight Simulator for the Xbox Series X|S also heightened gamers' interest in Thrustmaster's T.Flight Hotas One the only Xbox Series X|S-compatible joystick available when the game was launched.

With joystick sales by value up 100.2% in Europe and 32.2% in the United States in the first half of 2021, Thrustmaster has consolidated its position as the top seller of joysticks by both volume and value in the United States and the top five European countries of France, the United Kingdom, Germany, Spain and Italy (sources — GfK: © GfK 2021. All rights reserved. Europe 5 — NPD: data for the U.S. market only. Racing wheel data excludes Nintendo Switch accessories. © 2021 The NPD Group, Inc. All rights reserved. Proprietary and confidential. Property of NPD and its affiliates. Licensed for use by NPD clients only).

o ESWAP controller news: following its successful launch, the ESWAP X PRO CONTROLLER is already well-established in the gaming community. To promote the ecosystem, Thrustmaster will be launching a number of packs in the second half of this year: the Red Color Pack, LED Crystal Packs (backlit modules) and the ESWAP X S2 NXG MINI-STICK MODULE. The ESWAP family's reputation continues to grow as more and more professional gamers adopt the controller.

❖ Hercules

On September 10, Hercules launched a new area within its DJing website: the Hercules DJ Mix Room. This new service helps DJs improve their sets by allowing them to download royalty-free music so that their sets can be freely shared. Hercules has also created additional services such as customized graphics and emojis in response to recurring demand from DJs keen to liven up their livestreams.

Outlook

The Group is maintaining its forecast of turnover in excess of €150 million, equating to full-year growth of over 25% in 2021, and is now forecasting net income from ordinary activities in excess of €25 million.

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 10 countries (France, Germany, Spain, the UK, the United States, Canada, Italy, Belgium, Romania and China [Shanghai, Shenzhen and Hong Kong]) and distributes its products in more than 140 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, 2021

(All figures in €k)	Jun 30, 2021	Jun 30, 2020
Net turnover	70,462	41,519
Purchases	-39,557	-15,772
External expenses	-11,453	-7,724
Employee expenses	-5,767	-5,167
Taxes and duties	-336	-306
Additions to amortization and depreciation	-1,938	-1,718
Additions to provisions	-1,896	-1,086
Change in inventories	7,683	-4,375
Other income from ordinary activities	252	170
Other expenses from ordinary activities	-4,163	-2,444
Net income from ordinary activities	13,287	3,097
Other operating income	0	0
Other operating expenses	0	0
Net operating income	13,287	3,097
Income from cash and cash equivalents	7	3
Cost of gross financial debt	5 3	8 0
Cost of net financial debt	-46	-77
Other financial income	0	5,400
Other financial expenses	-9,221	0
Corporate income tax	-327	-1,089
Net income before minority interests	3,693	7,331
O/w net income from discontinued operations	0	0
Attributable to minority interests Net income attributable to	0	0
equity holders of the parent	3,693	7,331
Basic earnings per share	€0.24	€0.48
Diluted earnings per share	€0.24	€0.48

ASSETS Net Net Jun 30, 2021 Dec 31, 2020 (All figures in €k) Goodwill on acquisitions 0 0 Intangible assets 16,477 15,425 Property, plant and equipment 4,750 4,499 Financial assets 571 447 Tax assets 272 404 Deferred tax assets 4,702 3,489 Non-current assets 26,772 24,264 Inventories 26,679 20,611 Trade receivables 26,372 28,245 Other receivables 4,811 3,887 Financial assets 26,206 34,995 Current tax assets 139 142 Cash and cash equivalents 23,860 29,024 Current assets 108,067 116,904 Total assets 134,839 141,168 LIABILITIES AND EQUITY Jun 30, 2021 Dec 31, 2020 (All figures in €k) Capital (1) 11,771 11,771 Premiums (1) 10,551 10,551 Reserves and consolidated income (2) 57,374 57,352 Currency translation adjustments 478 35 Group shareholders' equity 80,174 79,709 Minority interests Consolidated shareholders' equity 80,174 79,709 Employee benefit liabilities 1,458 1,383 Borrowings 4,779 6,020 Other liabilities 0 0 Deferred tax liabilities 0 0 Non-current liabilities 6,237 7,403 Trade payables 29,836 31,007 Short-term borrowings 3,992 4,853 Taxes payable 584 3,470 Other liabilities 13,962 14,676 Provisions 54 50 Current liabilities 48,428 54,056 Total liabilities and equity 134,839 141,168

Consolidated balance sheet at June 30, 2021

(1) Of the consolidating parent.

(2) Of which net income for the period of €3,693k.

Consolidated statement of cash flows to June 30, 2021

(All figures in €k)	Jun 30, 2021	Jun 30, 2020
Cash flows from operating activities
Net income from consolidated companies	3,693	7,331
+ Additions to amortization, depreciation and provisions (except on current assets)	2,071	1,762
- Reversals of amortization, depreciation and provisions	-9	0
-/+ Unrealized gains and losses arising from changes in fair value	8,789	-5,247
+/- Expenses and income arising from stock options	0	0
-/+ Capital gains and losses on disposals	-7	0
Change in deferred taxes	-1,213	876
Operating cash flow after cost of net financial debt	13,324	4,722
Cost of net financial debt	46	77
Operating cash flow before cost of net financial debt	13,370	4,799
Currency translation adjustment on gross cash flow from operations	-14	0
Inventories	-6,068	5,618
Trade receivables	1,873	-1,456
Trade payables	-1,171	1,899
Other	-4,815	687
Change in working capital	-10,181	6,748
Net cash flows from operating activities	3,129	11,470
Cash flows from investing activities
Acquisitions of intangible assets	-1,651	-1,195
Acquisitions of property, plant and equipment	-864	-488
Disposals of property, plant and equipment and intangible assets	6	0
Acquisitions of non-current financial assets	0	-2
Disposals of non-current financial assets	13	52
Net cash from acquisitions and disposals of subsidiaries	0	0
Net cash flows from investing activities	-2,496	-1,633
Cash flows from financing activities
Increases in capital and cash injections	0	0
Dividends paid	-3,818	0
Borrowings	679	363
Repayment of shareholders' current accounts	0	0
Repayment of borrowings	-2,560	-1,763
Repayment of IFRS 16 liability and interest	-222	-183
Other cash flows from financing activities	0	0
Total cash flows from financing activities	-5,921	-1,583
Impact of foreign currency translation adjustments	121	-108
Change in cash	-5,167	8,146
Net cash at the beginning of the period	29,013	4,477
Net cash at the end of the period	23,846	12,623