Cherry AG — Investor Presentation 2024

Sep 23, 2024

CHERRY\$

CHERRY SE

GERMAN CORPORATE CONFERENCE

INVESTOR PRESENTATION

MUNICH, 23 SEPTEMBER 2024

LEGAL DISCLAIMER

This presentation contains forward-looking statements.
These statements are based on the current views, expectations and assumptions of the management of Cherry SE 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 SE 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 SE does not assume any obligation to update any forwardlooking 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 herein 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.

OUR MARKETS

SEGMENTS \& PRODUCTS

Gaming \& Office Peripherals

SEGMENTS \& PRODUCTS

Digital Health \& Solutions

OUR GLOBAL DEVELOPMENT \& PRODUCTION

Cherry SE

Innovation for MX and
ULP product lines as well as development and production of MX2 and ULP switches

Cherry Embedded Solutions / Austria

Development / manufacturing of System-on-Modules (SoM), Single-Board Computers (SBC) and Full-Custom Design Devices (FCD)

Zhuhai Cherry Electronics / China

Development and production of office and gaming hardware

Cherry XTRFY / Sweden

Design and development of gaming devices

TWO-MEMBER EXECUTIVE BOARD

Oliver Kaltner, CEO
Experienced CEO with proven track record in IT, digital, consumer electronics and branded companies, both in large corporations and SMID as well as start-ups.

Dr. Udo Streller, COO
More than 20 years of management experience in operational excellence, including constructing and managing factories, R\&D, product management, and supply chain management procurement.

H1 PERFORMANCE UNDERPINS REVITALIZATION

FINANCING
SECURED

EARLIER START OF CHINESE ASSEMBLY

HEALTHY INVENTORY LEVELS

DH\&S
PLATFORM
OWNERSHIP

ALIGNMENT OF SALES AND CONTROLLING

"MARGIN OVER
VOLUME" LED TO LFL
SEQUENTIAL INCREASE
IN PROFITABILITY

Q2 ADJ. EBITDA MGN. UP 2.3PPT. SEQUENTIALLY

H1 REVENUE
(in EUR m)

• H1 Revenue slightly up y-o-y
• Q2 Revenue up 3.2\% q-o-q, but slightly down $y$-o-y as
• we declined high volume / low margin deals
• Americas started slowly
• Components faced an order delay into Q3
• Q2 Margin at $5.1 \%, \mathrm{l}-\mathrm{f}-\mathrm{l}^{}$ on previous Q2's level and burdened by one-offs of c. EUR $0.8 \mathrm{~m}^{ *}$

H1 ADJ. EBITDA***
(in EUR m; mgn. in \%)

• like-for-like, i.e. without Q2 2023 revaluation effect of EUR 2.8 m , when inflation led to higher valuation of inventory / finished goods ** One-off effects include additional audit costs, the renegotiation of the loan and associated costs of legal advice. *** Rounding errors may occur

COMPONENTS - SET FOR RECOVERY

Back to
competitive pricing

Customers' new

products:

• MX Multipoint KB
• Fightstick MX Multipoint
  

Computex - new
switches:

• Inductive MX Multipoint
• MX Silent Clear
• MX Low Profile 2.0

New volume
customers:

• Keychron (China)
• Geon (SK)
• IKBC (China)
  

GAMING AND OFFICE PERIPHERALS REFOCUSED

Expand Retail

Reach:
New D2C
agreements and
wider distribution

Pricing

Strategy:
Prioritize margin over market share

Core Market Focus:
Prioritize primary markets

Healthy

Inventory:
Maintain optimal stock levels

• Source: GfK, Keying Devices Computer Keyboard No Gaming, EU3 Panelmarket = DE + FR + GB, Q1 2024 Sales Value \%; $\square$ Single Cordless $\square$ Single Corded $\square$ Desktop Cordless $\square$ Desktop Corded

DH\&S AT CORE OF OUR TRANSFORMATION TO A DIGITAL ECO SYSTEM

Benefit from progressing digitisation in healthcare

Building up new asset-light revenue streams

75\% market share in new terminal sales

Q2 strongest quarter ever for our Hygiene \& Security unit

New and replacement business

Robust demand and supply management in place

CHALLENGES

Deteriorating Macro Environment

• German Consumer sentiment suffered severe setback in August: Rising incomes and decreasing inflation led to increased savings as a result of high uncertainty*
• Eurozone August business sentiment lowest in 2024**

Low Predictability of Container Shipping Availability

• Container run ahead of US election
• Red Sea Shipping Turmoil
• Longer transport time from China to Europe
• Shortage of freight capacities
• Elevated container prices

OPPORTUNITIES

• Market potential of new switches
• Additional demand from completely new devices
• Full cost synergies from Chinese assembly
• Additional OEM signings in H2 2024
  
• Focus on core markets and minimize product variations
• Emphasize wireless
• Increase D2C
• Boost operations and presence in Americas
• Higher channel diversification in China
  
• Brand relaunch to increase customer awareness
• Rigid margin, cost, and EBITDA steering via synchronized data
• Stricter receivables and working capital management
• Recurring revenue from new \& asset light offerings
• New terminal customer groups
• ePat from 15 Jan 2025
• Sales synergies Hygiene \& Security

DH\&S DEEP DIVE: NEW SW/CLOUD OFFERINGS

TMS
Terminal Management System for remote device management

SMARTLINK
Virtualized patient authentication service: imminent product approval

TI-M
Messenger: certification and launch planned for Q4

Q3 OUTLOOK

Q3 24 REVENUES AROUND EUR 35 M

Q3 2023

Q3 24 ADJ. EBITDA MGN. 5-6\%

FY 2024 FORECAST

2024 REVENUES
EUR 140-150M

2023

2024 ADJ. EBITDA
MGN. 7-8\%

[^0]
[^0]: * Mid point of forecast range

IR CONTACT

NICOLE SCHILLINGER
SVP INVESTOR RELATIONS

EMAIL: IR@CHERRY.DE
PHONE: +49 96432061848
WEB: HTTPS://IR.CHERRY.DE