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Cherry AG
Investor Presentation • May 11, 2022
730_ip_2022-05-11_96f203a6-73c1-4fd3-974a-9cde23981fa1.pdf
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Q1 2022 INVESTOR PRESENTATION
May 11, 2022
TODAY'S PRESENTERS
Rolf Unterberger - CEO
Bernd Wagner - CFO
CHERRY AT A GLANCE – FINANCIAL HIGHLIGHTS Q1 2022
CHERRY GAMING – LATEST DEVELOPMENTS
NEW SWITCHES / SWITCH VERSIONS
- ULP tactile switch launch will be published end of Q2
- New switch featuring a customizable functionality allowing for a competitive advantage and a completely new gaming experience available for marketing in Q3
COMPACT GAMING KEYBOARDS
Market launch of multi-platform 60% low latency wireless keyboards in late Q2 and Q3 (MX-LP2.1 Compact Wireless & MX-LP 6.1 Compact Wireless)
CHERRY ADVANCED WIRELESS TECHNOLOGY - KEY FEATURES
- Safe, stable and fast (1ms) connection, as if it would be corded but wireless!
- 3-5 connection options: Low-Latency Mode (LLM),3x Bluetooth channels, USB-Cable
CHERRY PROFESSIONAL – LATEST DEVELOPMENTS
E-COMMERCE – CURRENT STATUS
E-commerce Europe setup is ongoing and on track. Focus is now on the digital sales market in the USA as a further expansion potential for our growing online sales business
NEW PRODUCTS AND MARKET TRENDS
- Hybrid working trend is fueling consumer electronics demand
- KW X ULP Wireless Mechanical Keyboard with its distinctive design and extra flat profile will be launched in H2
DIGITAL HEALTH – CURRENT AFFAIRS
- Strong focus on cooperation with gematic and The Federal Ministry of Health
- The "Telematics Infrastructure 2.0" is currently being designed and new software- and service-based revenue streams with the next generation of telematics infrastructure are expected as of 2025
PERFORMANCE Q1 2022 OVERVIEW
CHALLENGING MARKET ENVIRONMENT CONTINUES IN Q1
- Underlying growth drivers remain fully intact despite COVID-19 pandemic, war in Ukraine, and lockdowns in China
- Revenue growth of 18.6% compared with Q1 2020
| IN €M/ AS INDICATED |
Q1 2022 | Q1 2021* | ∆ |
|---|---|---|---|
| Revenue | 33.0 | 37.7 | 12 6% - |
| Gross profit | 9.8 | 15.5 | -36.6% |
| Gross profit margin |
29.9% | 41.1% | -11.2pp. |
| EBITDA (adj.) | 4.4 | 11.0 | -59.8% |
| EBITDA margin (adj.) |
13.4% | 29.0% | -15.6pp. |
| EBITDA | 3.9 | 10.1 | -61.1% |
| EBITDA margin | 11.9% | 26.8% | -14.9pp. |
| EBIT (adj.) | 0.5 | 7.5 | -93.5% |
| EBIT margin (adj.) |
1.5% | 20.0% | -18.5pp. |
| EBIT | 0.0 | 6.7 | -99.8% |
| EBIT margin | 0.0% | 17.7% | -17.7pp. |
REVENUE GROWTH BURDENED BY CURRENT HEADWINDS
Mixed revenue momentum in business areas
Various lockdowns in China and Hong Kong PROFESSIONAL 14,6 PROFESSIONAL 18,9 PROFESSIONAL 21,1 GAMING 14,2 GAMING 18,8 GAMING 11,9 0 5 10 15 20 25 30 35 40 45 50 Q1 2020* Q1 2021* Q1 2022 € 33.0m € 37.7m € 27.8m
REVENUE IN €M.
- PROFESSIONAL sales up 11.8% to € 21.1m supported by:
- Successful roll-out of e-Health-Terminals ST-1506
- Successful continuation of e-commerce business in Q1 2022
- GAMING sales down by 36.8% to € 11.9m influenced by:
- Lower demand for switches due to flat end customer demand for gaming keyboards/higher demand for smaller keyboards with a reduced number of keys
-
Customer-related delays in launching new products
DOUBLE-DIGIT GROUP PROFITABILITY SUSTAINED
Reduced fixed cost coverage in GAMING business area burdens operating profitability
EBITDA MARGINS (ADJ.)
13.4% EBITDA MARGIN (ADJ.) IN Q1 2022
- 16.7% EBITDA margin (adj.) in PROFESSIONAL business influenced by:
- Increased prices for raw materials
- Expansion of marketing activities
- 7.4% EBITDA margin (adj.) in GAMING business influenced by:
- Reduced fixed cost coverage in view of revenue decrease
STRONG FINANCIAL POSITION AS OF MAR. 31, 2022
450
Well positioned to finance growth
ASSETS [IN €M.]
EQUITY & LIABILITIES [IN €M.]
FORECAST FY 2022 CONFIRMED – FURTHER OUTLOOK
Continuation of profitable growth path despite adverse market conditions
| IN €M/ AS INDICATED |
Q1 2021* | Q1 2022 | FORECAST FY 2022 |
|---|---|---|---|
| Revenue | 37.7 | 33.0 | 170 190 – |
| EBITDA margin (adj.) |
29.0% | 13.4% | 23 26% to |
| BUSINESS AREA | REVENUE | EBITDA MARGIN (ADJ.) | |
| GAMING | Mid single digit growth | Slight decrease | |
| PROFESSIONAL | Low double digit growth | Slight decrease (impacted by accelerated |
FURTHER OUTLOOK
GAMING
temporary increases in material prices, shipping costs, and non-recurring marketing expenses for expansion in the Asia-Pacific region. Revenue decrease due to extensive lockdowns in China
PROFESSIONAL
Accelerated investments in new products, software, manpower and marketing spends to drive future growth in the ecommerce business in EU and USA as well as the expansion into Asia Pacific
Beyond 2022
Continue double-digit growth and expand adjusted EBITDA margin
SHARE PERFORMANCE / CURRENT SHAREHOLDER STRUCTURE
RELATIVE SHARE PERFORMANCE
SHAREHOLDER STRUCTURE
RECONCILIATION TO ALTERNATIVE PERFORMANCE MEASURES (ESMA)
| IN € MILLION | Q1 2022 | Q1 2021* |
|---|---|---|
| Consolidated profit/loss | -0.253 | 2.356 |
| + Income taxes | 0.200 | 0.699 |
| + Financial result |
0.468 | 3.627 |
| EBIT | 0.014 | 6.682 |
| +/- Staff expenses (incl. share-based expenses) / (income) |
- | 0.151 |
| + Expenses in connection with capital market transactions |
- | 0.145 |
| + Expenses in connection with M&A transactions |
- | 0.422 |
| + Expenses in connection with natural disaster and pandemic |
- | - |
| + Other one-off cost | 0.472 | 0.128 |
| Total operating result adjustments |
0 472 |
0 846 |
| Adjusted EBIT | 0.486 | 7.528 |
| IN € 000 | Q1 2022 | Q1 2021* |
|---|---|---|
| Adjusted EBIT | 0.486 | 7.528 |
| + Depreciation and amortization | 3.918 | 3.424 |
| Adjusted EBITDA | 4.405 | 10.952 |
| EBIT | 0.014 | 6.682 |
| + Depreciation and amortization | 3.918 | 3.424 |
| EBITDA | 3.933 | 10.106 |
CHERRY VIRTUAL AGM ON JUNE 8, 2022, AT 10:00 A.M. (CEST)
AGENDA HIGHLIGHTS
- Resolution on the approval of the Compensation Report for the 2021 financial year
- Resolutions on the approval of the compensation systems for the members of the Management Board and the Supervisory Board
- Resolution on the approval of the conclusion of a profit and loss transfer agreement between Cherry AG and Cherry Digital Health GmbH
- Resolution on the conversion of the Company into a European company (Societas Europaea, SE)
- Resolution on the election of the members of the first Supervisory Board of Cherry SE
- Resolution on the creation of new Authorised Capital 2022
DEADLINES
- May 18: Record date
- June 1: Last filing date
- June 6: Last day for questions under section 1 of the COVID-19 Act
INVESTORPORTAL AND DOCUMENTS
- Registered shareholders have the opportunity to follow the Annual General Meeting live via video streaming on the InvestorPortal
- The invitation and other documents for the Annual General Meeting can be found here:https://ir.cherry.de/home/annual-general-meeting/
FINANCIAL CALENDAR 2022
| Date | Event |
|---|---|
| May 11 | Interim Financial Statement Q1 2022 |
| May 12 – 13 |
HAIB - Stockpicker Summit |
| May 17 | ABN AMRO – ODDO BHF – BeNeLux Roadshow (virtual) |
| May 23 – 25 |
Equity Forum |
| June 8 | Annual General Meeting (virtual) |
| August 11 | Half-year Financial Report 2022 |
| September 5 – 6 |
Equity Forum |
| September 19 | Berenberg - German Corporate Flagship Conference |
| November 15 | Interim Financial Statement Q3/9M 2022 |
| November 16 | Münchner Kapitalmarkt Konferenz |
| November 28 - 30 |
Eigenkapitalforum |
KEY INVESTMENT HIGHLIGHTS – WHY INVEST IN CHERRY?
FORWARD LOOKING STATEMENTS
Disclaimer
This presentation contains forward-looking statements. These statements are based on the current views, expectations and assumptions of the management of Cherry AG and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those described herein due to factors affecting Cherry AG such as, among other things, changes in the general economic and competitive environment, capital market risks, currency exchange rate fluctuations and competition from other companies, and changes in international and national laws and regulations, in particular with respect to tax laws and regulations. Cherry AG does not assume any obligation to update any forward-looking statements.
The information contained in this presentation is for background purposes only and does not purport to be full or complete. No reliance may be placed, for any purpose, on the information contained in this announcement or its accuracy or completeness. The information in this presentation is subject to change.
Market & Industry Data
This presentation also contains estimates and other statistical data made by independent parties and by the Company relating to the Company's industry, the Company's business and the market for the Company's products and its future growth. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. In addition, projections, assumptions, and estimates of the Company's future performance and the future performance of the market for its products are necessarily subject to a high degree of uncertainty and risk.
General remark
Figures may not add up due to rounding.
THANK YOU FOR YOUR ATTENTION
Cherry AG Dr. Kai Holtmann │ Head of Investor Relations
Einsteinstrasse 174 │ Bogenhausen 81677 München, Deutschland
E-Mail [email protected] Tel. +49 175 1971503 Fax +49 9643 20 61 900 Internet www.cherry.de
