Cherry AG — Investor Presentation 2022

Nov 28, 2022

EIGENKAPITALFORUM

November 28, 2022

INTRODUCTION OF OUR BUSINESS AREAS

CHERRY BRAND, CUSTOMER SATISFACTION, AND PRODUCTS

In 2022, CHERRY received further awards and nominations for outstanding innovation, design, quality and sustainability. These include the IF Design Award 2022 for the MX 10.0N RGB mechanical MX Low Profile Keyboard and the Red Dot Design Award 2022 for the legendary G80-3000S TKL RGB mechanical keyboard, as well as the German Innovation Award 2022 in Gold for the patented MX Ultra Low Profile switches. In addition, CHERRY received the Plus X Awards "Best Brand of the Year 2022" in the keyboard category and "Best Customer Satisfaction 2022", based on a nationwide survey. Certifications such as the highest German sustainability certificate "Blauer Engel" for our peripherals supplement the brand image.

LONG TRACK RECORD OF KEYBOARD MANUFACTURING

GLOBAL FOOTPRINT WITH HIGHLY AUTOMATED PRODUCTION

CHERRY AT A GLANCE – FINANCIAL HIGHLIGHTS 9M 2022

* Basis: Unaudited condensed consolidated interim financial statements of Cherry AcquiCo GmbH (now Cherry AG)

OVERVIEW CHERRY KEYBOARD TECHNOLOGIES

Innovation & Quality "Made by CHERRY"

RUBBERDOME

• Reliable
• Cheap
• Quiet

SCISSOR or CHERRY SX

• Keyboards particularly slim
• Improved typing experience
• Usually even a bit more quiet

MECHANICAL or CHERRY MX, MX LP, MX ULP, MV (VIOLA)

• Numerous technical advantages
• Signal speed / Anti-ghosting / Full n-key rollover
• Long service life of up to 100m. Actuations
• High degree of switch individualization

QUALITY LEADER FOR MECHANICAL SWITCHES

CHERRY invented the mechanical Gaming switch in 1983

1. Upper Housing

is a CAD high precision component made of plastic polymer ensuring precise movement of stem

2. Switching Slide / Stem

is a CAD high-precision component made of plastic polymer creating the pre travel and keystroke feel between the upper housing and coil spring

3. Gold Crosspoint Contact

is at the heart of every CHERRY MX key switch providing incredible reliability and durability through gold's self-cleaning and corrosion-resistant characteristics

4. Precision Coil Spring

High-density molecular structure, made of metal alloy defines pressure characteristics and operating force for each switch type

5. Housing Base

made of plastic polymer and glass fibre provides dual-functionality with inner base for switch mechanism and outer base for mounting on keyboard

INNOVATION LEADER FOR MECHANICAL SWITCHES

Innovation milestones of Cherry MX technology

The exclusive and patented switch design includes the feature set of CHERRY MX switches that has been proven for decades, which ensures maximum precision and perfect function even in the ultrathin design. This is primarily due to the highly precise and extremely reliable gold crosspoint contact system as well as the special choice of materials such as stainless steel or hightemperature resistant polymer plastic, which are essential for the market-leading specifications

of this switch.

CUSTOMER / PRODUCT LINE-UP FOR NEW CHERRY ULP-SWITCHES

CORSAIR's thinnest high-performance keyboard ever most recent addition to ULP customer base

CURRENT BUSINESS SITUATION AND MARKET ENVIRONMENT

PROFESSIONAL

Managing future growth in challenging environment

MARKETS AND ECONOMIC ENVIRONMENT

• Macroeconomic headwinds (high inflation rates, high inventory levels at customers and distributors, supply chain disruptions, US-Dollar remains strong, Ukraine war continues)
• Decline in consumer electronics spending in main markets

MAIN HIGHLIGHTS IN 9M/2022

• Continued investments into new product development and several new product launches in Q3
• Expansion of sales channels with distributors (B-2-B) and eCommerce (B-2-C)
• Well-balanced OPEX management to benefit from next cyclical upswing and a larger embedded base

LONG-TERM SECULAR MARKET TRENDS IN GAMING, HYBRID WORKPLACES AND DIGITIZATION OF GERMANY HEALTHCARE REMAIN POSITIVE

MOST RECENT PRODUCT LAUNCHES BY EXAMPLE

CHERRY KW 9100 SLIM – rechargeable design keyboard, offering firstclass workmanship and innovative functions

CHERRY MX LP 6.1 Compact Wireless – professional performance when gaming or at work in a compact keyboard "to go" with matching cover

E-COMMERCE STRATEGY

Important steps for future growth via e-commerce

Eigenkapitalforum - November 28, 2022 11

CHERRY PROFESSIONAL – LATEST DEVELOPMENTS

Further expansion of high-end wireless peripherals and sales footprint

PERIPHERALS

• Portfolio expansion with focus on wireless technology, such as
  • KW 9100 Slim rechargeable design keyboard, offering first-class workmanship and innovative functions (incl. AES-128 encryption)
  • GENTIX BT multi-device-function mouse for up to three end devices and perfect ergonomics, complementing famous GENTIX product line
• Further products under development for professional workers, streamers and creators' needs
• Significant expansion of eCommerce sales channels

DIGITAL HEALTH

• Sustain market share of > 50% in new eHealth terminal sales
• Capitalize on continued strong market demand, driven by
  • roll-out of additional applications
  • deployment to new user groups
  • synergies with connector replacement efforts
• Solidify product innovation leadership position with intro of PIN pad and new terminal release in Q1'23

GENTIX BT Bluetooth® mouse with multi-device function

CHERRY GAMING – LATEST DEVELOPMENTS

Further strengthening innovation and quality leadership in the gaming community

COMPONENTS

• Introduction of CHERRY MX Ergo Clear derivative switch, available in various versions
• Market launch of CHERRY MX ULP switch (tactile version) for use in premium keyboard segment with Corsair K100 AIR Wireless
• Development of new analogue switch technology with customizable functionalities available for marketing, allowing for a completely new gaming experience

GAMING DEVICES

• Portfolio expansion with new CHERRY Advanced Wireless Technology, creating an upgrade cycle (e. g. MX3.0S, MX8.2S, MX2.0S)
• New gaming devices with smaller form factors to meet current market trend (e. g. "60%-keyboard" versions MX LP2.1 and MX LP6.1)

The CHERRY MX Ergo Clear, a derivative dedicated to the DIYcommunity, features a particularly tactile switching characteristic without an audible click and a light actuation force.

The CHERRY MX LP 6.1 Compact Wireless features a compact 68-key layout and is equipped with the new NORDIC chipset, delivering a fast, accurate, and precise response.

PROFESSIONAL BUSINESS SHARE CONTINUES TO GROW 9M/2022

Peripherals growth based on expansion of sales channels in B-2-B and B-2-C (eCommerce)

FINANCIAL PERFORMANCE OF BUSINESS AREAS

Short term effects of cyclical downturn and changes in product mix on revenue and profitability

* Basis: Unaudited condensed consolidated interim financial statements of Cherry AcquiCo GmbH (now Cherry AG).

PROFITABILITY OF BUSINESS AREAS BURDENED IN SHORT TERM

13.9% GROUP EBITDA MARGIN (ADJ.) IN 9M 2022

• 15.6% PROFESSIONAL EBITDA margin (adj.) influenced by:
  • eCommerce expansion
  • Increased prices for raw materials (incl. FX effects)
• 10.8% GAMING EBITDA margin (adj.) influenced by:
  • Lower capacity utilization
• Disruptions in global supply chains
• Current trend towards smaller gaming keyboards
• Reduction of personnel capacities in Auerbach supports profitability in GAMING business area going forward

Administration expenses

Cost reduction mainly based on IPO-related one-off costs in 2021

Marketing & selling expenses support peripherals growth

Administration Marketing and Selling Research and Development

Research and Development

• Expansion and innovation of product portfolio continued to create future high-running products
• Higher personnel costs and depreciation of capitalized R&D expenses from previous periods

Marketing and Selling expenses

• Further implementation costs of e-Commerce strategy (marketing, consulting and personnel costs)
• Higher personnel expenses for onboarding new sales staff

Reclassification of MDF to revenue deductions EUR –1.2m

CURRENT FORECAST FOR 2022 UPDATED – FURTHER OUTLOOK

Original forecast updated as of July 18, 2022, and as of Nov. 7, 2022

IN €M/ AS INDICATED	FY 2021	FORECAST FY 2022
		AS OF MAR. 31	AS OF JUL. 18	AS OF NOV. 7
Revenue	168.5	170 190 –	150 170 -	130 140 –
EBITDA margin (adj.)	29.0%	23 26% to	14 19% to	13 15% to

CURRENT FORECAST BASED ON:

• Accelerating global slowdown in economic growth
• Rising inflation as a result of the Ukraine war
• Ongoing supply chain disruptions as a result of the lockdowns in China
• High inventory levels at customers and distributors
• Decline in demand for certain mechanical keyboard switches

FURTHER OUTLOOK

GAMING

Strong decline in revenue (previously: slight increase)

PROFESSIONAL

8-10% revenue growth (previously low double digit range growth)

Profitability impacted by:

• Shift in product mix within the Group
• Lower capacity utilization
• General price increases for COGS
• Start-up and implementation costs for eCommerce

RELATIVE SHARE PERFORMANCE & CURRENT SHAREHOLDER STRUCTURE

* Information is based on voting rights notifications pursuant to Art. 40, Para. 1 of the German Securities Trading Act (WpHG). ** Based on internal investor reporting to Cherry, not subject to disclosure. *** Includes 3.2% held directly and indirectly by the members of the Management Board.

CHERRY SHARE BUY BACK 2022

OVERVIEW

• The Management Board has resolved on June 9, 2022, with the consent of the Supervisory Board, to launch a share buyback program using the AGM authorization of June 23, 2021.
• Within the framework of the Share Buyback Program 2022, up to a total of 2,000,000 shares (corresponding to up to 8.2 % of the existing share capital of the Company) may be repurchased
• from June 13, 2022, to June 30, 2023,
• at a total purchase price (excluding incidental acquisition costs) of a maximum of EUR 25.0 million
• up to a price cap of EUR 14.00 per share.

STATUS AS OF SEPTEMBER 30, 20222

Date	No. of shares purchased	Average price (in €)	Purchased volume (in €)
SUBTOTAL Q2	215,318	9.0457	1,947,711.29
SUBTOTAL Q3	434,894	7.5458	3,281,642.40
Cumulated	650,212	8.0425	5,229,353.70

NO. OF SHARES REPURCHASED

FINANCIAL CALENDAR 2023

DATE	EVENT
January 5/6	ODDO Forum
February 8	Hamburger Investorentag
March 30	Annual report / consolidated financial statements FY 2022
May 15	Interim report for Q1 2023
May 15	Equity Forum
May 17	Annual General Meeting
August 14	Half-year report 2023
September	Equity Forum
November 15	Interim report for Q3/9M 2023
November 16	Münchner Kapitalmarkt Konferenz

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 Tel. kai.holtmann@cherry.de +49 175 1971503 Fax +49 9643 20 61 900 Internet www.cherry.de