Cherry AG — Investor Presentation 2025

Feb 27, 2025

CHERRY ENTER EXCELLENCE

Q4/FY 2024

PRELIMINARY
FINANCIAL RESULTS

MUNICH, 27 FEBRUARY 2025

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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 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 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.

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OVERVIEW
CEO OLIVER KALTNER

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CHERRY ENTER EXCELLENCE
OVERVIEW
4

IN Q4 WE MISSED OUR OWN EXPECTATIONS

• Volume switches: Increasing pressure on competitiveness
• Americas below expectations
• Peripherals pricing prioritized over sell-in quotas
• Lackluster corporates and consumer spending

• DH&S with >30% FY growth as budgeted

• FY sales at EUR110m, below EUR120m forecast

• FY adj. EBITDA margin -2% vs. c. 3% forecast
• Highlight: EUR 7.8m FCF in the 4th quarter

Cherry SE Q4/FY 2024 Preliminary Numbers # 27 February 2025

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CHERRY ENTER EXCELLENCE

OVERVIEW

5

NEW ORGANIZATIONAL STRUCTURE

SIGNIFICANT CHANGES SINCE 1 JANUARY 2025

• Complete reorganization within Europe
• Centralized product management, sales, and marketing for Components and Peripherals
• Components integrated into COO led product management and development unit
• European distribution network realigned with "Distribution & Fulfillment" strategy

• DH&S to remain separate

• CHERRY Peripherals the one-stop-shop for marketing & sales of Office, Gaming, Hygiene, and Security finished goods

• From 1 Feb Alex Hecker (ex Sonos, ex MS, ex Sony) in charge of Global Sales and Marketing Peripherals
• New Partner Program

SPECIFIC ACTION POINTS

• New contracts negotiated with partners, valid from 2025
• Dry up grey market in DACH region
• Stock rotations to support sell-through and sell-out
• Development of "product allocation by partner" model
• >50% higher street prices on affected products

Cherry SE Q4/FY 2024 Preliminary Numbers # 27 February 2025

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CHERRY ENTER EXCELLENCE
OVERVIEW
6

FROM A HIGH-COST SWITCH PRODUCER TO AN INTEGRATED PERIPHERALS PLAYER

Volume driven

Switches at the core

Margin destroying distribution agreements

Price erosion on grey market

Too many legal entities

Restructuring years

Switch assembly to China

New margin and price model for Peripherals

SW/Cloud business models in DH&S

Integration and streamlining of group structure

25 ft

Margin driven

Switches integrated into product management

New partner program effective January 25

Combined sales and marketing for Office, Gaming, Hygiene, and Security Peripherals

Cherry SE Q4/FY 2024 Preliminary Numbers # 27 February 2025

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Q4/FY 2024 FINANCIALS
EVP FINANCE & IT VOLKER CHRIST

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CHERRY ENTER EXCELLENCE

Q4/FY 2024 FINANCIALS

Q4 REVENUE HIT TRANSLATED INTO NEGATIVE ADJ. EBITDA MARGIN

FY REVENUE
(IN EUR M)

• FY 24 revenue at EUR 110.0m, 13% below 23's EUR 126.5m
• Q4 24 revenue at EUR 25.8m, 32% below 23's EUR 37.9m
• Resulting Q4 EUR 6.4m gross profit hit led to impaired fixed cost coverage
• FY 24 adj. EBITDA at EUR -2.2m
• Q4 24 adj. EBITDA at EUR -1.5m, up qoq, down yoy.

FY ADJ. EBITDA
(IN EUR M; MGN. IN %)

Rounding errors may occur

Cherry SE Q4/FY 2024 Preliminary Numbers # 27 February 2025

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CHERRY ENTER EXCELLENCE
Q4/FY 2024 FINANCIALS

Q4 REVENUE AND ADJ. EBITDA SPLIT

REVENUE SPLIT (IN EUR M)

ADJ. EBITDA SPLIT (IN EUR M)

Rounding errors may occur
Cherry SE Q4/FY 2024 Preliminary Numbers # 27 February 2025

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CHERRY ENTER EXCELLENCE

Q4/FY 2024 FINANCIALS

2024 SHOWED GOOD OPEX CONTROL

R&D, SALES & MARKETING, ADMIN COSTS (in EUR m)

• for better comparability before impairment

Cherry SE Q4/FY 2024 Preliminary Numbers # 27 February 2025

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CHERRY ENTER EXCELLENCE

Q4/FY 2024 FINANCIALS

STRONG Q4 TWC REDUCTION LIFTED FREE CASH FLOW BY EUR 5M YOY

TRADE WORKING CAPITAL* (in EUR m)

FREE CASH FLOW (in EUR m)

• Inventories + Trade Receivables ./. Trade Payables

Cherry SE Q4/FY 2024 Preliminary Numbers # 27 February 2025

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DIVISIONAL UPDATE

COO DR. UDO STRELLER

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CHERRY ENTER EXCELLENCE
COMPONENTS
13

COMPONENTS: TOUGH ENVIRONMENT

Disappointing 2024

• Sales below own expectations
• Adj. EBITDA only break-even

Competitive Environment

• Switch volume business dominated by China
• Ever-shorter product cycles

End Markets

• Notebook end market still lackluster, thus limiting ULP momentum, leading to order push-outs

Chinese Assembly since H2 24

• MX2 assembly for partner products shifted to China
• Consequent reduction of unit costs
• Adjusted size of organization

Product Pipeline I

• MX3 timely in preparation and to be launched mid 2025
• Successful re-entry into community switch field with MX Purple, next MX Northern Light & MX Blossom

Product Pipeline II

• Additionally, there are new Cherry analog switches in development
• ... and to be launched in the course of 2025, too

Cherry SE Q4/FY 2024 Preliminary Numbers # 27 February 2025

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CHERRY ENTER EXCELLENCE
PERIPHERALS
14

PERIPHERALS TURNAROUND ON TRACK

Roll-out: New Partner Model

• Q4 increase in street prices
• New integrated Sales and Marketing approach
• Ongoing SKU reduction

Retail Activation

• CHERRY displays in 170 MediaMarkt outlets since 1st February
• MediaMarkt online listing for CHERRY XTRFY

Portfolio Optimization

• Ongoing complexity reduction of product portfolio
• SKU reduction by -50% targeted

E-Commerce

• Dec 24: strong sell-out
• Strong growth in Gaming mice
• 2024: Amazon up > 20% yoy
• Certified by Alibaba

CHERRY Americas

• Establishment of adequate partner network should finally reactivate US momentum
• With > 40% yoy growth in Jan, Office traction starts to materialize

CHERRY APAC

• 2024 targets achieved
• Distribution diversified
• New Shanghai office
• Deepseek to be integrated into AI mice

Cherry SE Q4/FY 2024 Preliminary Numbers # 27 February 2025

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CHERRY ENTER EXCELLENCE

DIGITAL HEALTH & SOLUTIONS

15

DH&S – GROWTH DRIVER AND STABLE PILLAR

Strong Growth in 2024

• > +30% yoy
• Strong momentum in terminals
• Pleasing development in hygiene and security

Terminal Management System

• Remote management and administration of card terminals
• 2025s: scaling TMS sales via partners

E-health Terminals

• 80% market share in new terminals sales
• Q1 25 rather back end loaded due to strong Nov & Dec 24

SmartLink

• Provider certification now expected for end of Q1
• Production start and transactional sales expected for H1

Hygiene Keyboards

• Establishment of adequate partner network should finally reactivate US momentum
• Strong hygiene requirements in Europe and the US

TI-Messenger

• Provider certification targeted for Q1
• Launch in model region Würzburg

Cherry SE Q4/FY 2024 Preliminary Numbers # 27 February 2025

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OUTLOOK
CEO OLIVER KALTNER

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CHERRY ENTER EXCELLENCE

OUTLOOK – MACRO ENVIRONMENT

GERMANY CLEARLY THE GROWTH LAGGARD

GERMAN REAL GDP GROWTH 2013 - 2024 (in %)

* Source: Destatis, 15 January 2025

GDP GROWTH ASSUMPTIONS 2025e (in %)*

* Sources: Berenberg Economics Research, Forecasts at a Glance, 13 January 2025; DIHK

Cherry SE Q4/FY 2024 Preliminary Numbers # 27 February 2025

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CHERRY ENTER EXCELLENCE

OUTLOOK – MACRO ENVIRONMENT

18

HIGHER UNCERTAINTY LEADS TO LOWER CONSUMER CONFIDENCE IN GERMANY

NEWS COVERAGE ABOUT POLICY-RELATED ECONOMIC UNCERTAINTY (Jan 2001 = 100)

CONSUMER CONFIDENCE GERMANY NOT RECOVERING (Mar 24 – Feb 25)

Sources: GfK; www.policyuncertainty.com

Cherry SE Q4/FY 2024 Preliminary Numbers # 27 February 2025

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CHERRY ENTER EXCELLENCE
OUTLOOK – IMPACT OF TRUMP ADMINISTRATION'S TARIFFS
19

IMPACT OF NEW US TARIFFS

TOTAL PRODUCTS SHIPPED (schematic)

MADE IN CHINA PRODUCTS SHIPPED TO THE USA (schematic)

Impact:

• 10% (additional) tariffs on all products Made in China that are being shipped to the USA
• So far already 25% imposed on mice, now 35% on mice
• Additional c. USD 1m impact possible 2025 based on current assumptions
• Possible price adjustments

Cherry SE Q4/FY 2024 Preliminary Numbers # 27 February 2025

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CHERRY ENTER EXCELLENCE

PRIORITIES BY BU

20

PRIORITIES 2025 BY BUSINESS UNIT

PERIPHERALS

CHERRY Europe

• Revenue and margin growth
• Master distribution model
• Product allocation policy

CHERRY Americas

• Revenue and margin growth
• Expand peripherals sales
• New partner network

DH&S

• Strong benefit from connecting new healthcare professionals to TI
• Beginning refresh cycle for existing users in the German healthcare system

CHERRY Americas

• TI Messenger: strong push from ePa
• Terminal Management System: extra demand from additional professions
• SmartLink provider approval expected for mid Q1 25

COMPONENTS

• Pursue stringent portfolio strategy in the analog switch segment

COMPONENTS

• In H2 complete portfolio covered and positioned more broadly

Cherry SE Q4/FY 2024 Preliminary Numbers # 27 February 2025

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CHERRY ENTER EXCELLENCE
PERIPHERALS OUTLOOK
21

GAMING AND OFFICE LAUNCHES AT CES

CHERRY XTRFY MX 8.3 TKL Wireless

CHERRY XTRFY MX 10.1 Wireless

CHERRY XTRFY H3 Wireless Headset

KW 550 MX LP

CHERRY KW 300 MX/KW 300W MX

High Speed Gaming Mousepads

Cherry SE Q4/FY 2024 Preliminary Numbers # 27 February 2025

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CHERRY ENTER EXCELLENCE
COST CUTTING
22

EUR 3.5M COST CUTTING PROGRAM ON TRACK

| C. EUR 3.5 M
SAVED FROM
SEP TO DEC
2024 | MARKETING | SERVICES |
| --- | --- | --- |
| IT PROJECTS | HR WORKSHOPS | HIRING FREEZE |

Cherry SE Q4/FY 2024 Preliminary Numbers # 27 February 2025

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CHERRY ENTER EXCELLENCE
FORECAST DRIVERS
23

FY 2025 FORECAST DRIVERS

OPPORTUNITIES	CHALLENGES
Peripherals pricing uplift after grey market dry up	Ongoing subdued consumer spending due to
[geolpolitical uncertainties
Positive margin impact of new partner programs	Negative margin impact of US
administration’s new tariff regime
DH&S new professions and replacement demand	Extremely high certification requirements
for SmartLink
New German government’s initiatives	Capital Allocation
US specific product portfolio; Hygiene
peripherals push; sales force expansion
Strong cash and cost control

Cherry SE 04/FY 2024 Preliminary Numbers # 27 February 2025

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IR CONTACT

NICOLE SCHILLINGER
SVP INVESTOR RELATIONS

EMAIL: IR@CHERRY.DE
PHONE: +49 9643 2061 848
WEB: HTTPS://IR.CHERRY.DE

CHERRY
ENTER EXCELLENCE