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Cherry — Non-Deal Roadshow (April 2022)
35 slides from Cherry's roadshow presentation, Apr 4, 2022
Slide 1: Hauck Aufhäuser Lampe Roadshow
HAUCK AUFHÄUSER LAMPE ROADSHOW April 4/5, 2022
Slide 2: Today's Presenters
TODAY’S PRESENTERS Rolf Unterberger Bernd Wagner - CEO - CFO & COO HAL Roadshow - April 4/5, 2022 2
Slide 3: Cherry at a Glance – Financial Highlights FY 2021
CHERRY AT A GLANCE – FINANCIAL HIGHLIGHTS FY 2021 € 168.5m 29.0% 554 Revenue up 29.4%* EBITDA margin (adj.) up 0.5pp.* Employees up 11.7%* € 7.8m € 43.9m M&A Operating cashflow Net cash € 3.3m revenue contribution of Active Key Global market leader Innovation and quality Brand recognition Blue chip
Slide 4: Global Footprint with Highly Automated Production
GLOBAL FOOTPRINT WITH HIGHLY AUTOMATED PRODUCTION CHERRY/AK Pegnitz 19 FTEs CHERRY‘s new HQ CHERRY Europe GmbH Switches made in Peripherals designed Germany Zhuhai CHERRY Electronics in Germany and made Auerbach in China Zhuhai City >350 FTEs Annual Floor Capacity: 1.1 to 1.3 bn. Switches 86 FTEs An
Slide 5: Long Track Record of Keyboard Manufacturing
LONG TRACK RECORD OF KEYBOARD MANUFACTURING Cherry starts Cherry launches its The new factory and manufacturing first health card corporate HQ building computer keyboards keyboard (G80-1501) in Auerbach, Germany in Germany Cherry is with increased capacity reorganized into 2 is opened The ‚MX‘ key s
Slide 6: Introducing Our Business Areas
INTRODUCING OUR BUSINESS AREAS GAMING PROFESSIONAL 49.1% of Revenue (FY 2021) 50.9% of Revenue (FY 2021) Business Unit Business Unit Business Unit Business Unit Components Gaming Devices Peripherals Digital Health e-health terminal for Encrypted key MX switch Viola switch Gaming keyboard Ergonomic k
Slide 7: Business Area Gaming
BUSINESS AREA GAMING HAL Roadshow - April 4/5, 2022 7
Slide 8: Overview Cherry Keyboard Technologies
OVERVIEW CHERRY KEYBOARD TECHNOLOGIES RUBBERDOME SCISSOR or CHERRY SX MECHANICAL or CHERRY MX, MX LP, MX ULP, VIOLA Reliable Keyboards particularly slim Numerous technical advantages Cheap Improved typing experience Signal speed / Anti-ghosting / Full n-key rollover Quiet Usually eve
Slide 9: Competitive Advantages of Cherry MX Technology
COMPETITIVE ADVANTAGES OF CHERRY MX TECHNOLOGY THE STANDARD ➔ CHERRY MX has set the standard for the industry while competitors mostly just follow MADE IN GERMANY ➔ Low failure rates, efficient manufacturing and industry-leading output 100 MAXIMUM DURABILITY ➔ Due to continuous improvement, CHERRY g
Slide 10: Innovation Leader for Mechanical Switches
INNOVATION LEADER FOR MECHANICAL SWITCHES CHERRY INVENTED THE MECHANICAL GAMING SWITCH IN 1983 AND HAS AN UNPARALLELED 35+ YEARS OF EXPERIENCE 1. Upper Housing 1 is a CAD high precision component made of plastic polymer ensuring precise movement of INNOVATION stem SELFCLEANING 2. Switching Slide / S
Slide 11: The Cherry MX History
THE CHERRY MX HISTORY Innovation & Quality “Made In Germany“ • CHERRY MX BLACK CHERRY MX BROWN CHERRY MX GREY CHERRY MX Green CHERRY MX RGB CHERRY MX Speed Silver CHERRY MV CHERRY MX BLUE CHERRY MX CLEAR CHERRY ML CHERRY MX Red CHERRY MX Silent CHERRY MX Low Profile CHERRY MX ULP 2016 HAL Roadshow -
Slide 12: The Cherry MX History
THE CHERRY MX HISTORY Innovation & Quality “Made In Germany“ • CHERRY MX BLACK CHERRY MX BROWN CHERRY MX GREY CHERRY MX Green CHERRY MX RGB CHERRY MX Speed Silver CHERRY MV First mechanical First mechanical First mechanical First mechanical key switch in RGB key switch Speed key membrane killer 1983
Slide 13: Unique Brand Awareness of Cherry Switches
UNIQUE BRAND AWARENESS OF CHERRY SWITCHES AW410K RGB Mechanical Gaming Keyboard, Alienware/DELL Encoder Gaming Keyboard, OMEN/HP ROG Strix Scope RGB Mechanical Keyboard, ROG/Asus “CHERRY INSIDE” Distinguishes customer products to achieve premium pricing K70 RGB Mechanical Keyboard, Corsair HAL Roads
Slide 14: Cherry ULP-Switch – Innovation That Sets Standards
CHERRY ULP-SWITCH – INNOVATION THAT SETS STANDARDS ULTRA LOW PROFILE SWITCH: CONSTRUCTION & INTEGRATION „Both the sound and feel of these true mechanical keys are superior to almost any laptop keyboard, delivering a satisfying click and tactile feedback.” Matthew Buzzi, PC Mag Australia 3,5mm by KEY
Slide 15: The Award-Winning Series
THE AWARD-WINNING SERIES CHERRY MX 2.0S, HC 2.2 and MC 2.1. Gamers can now combine award-winning and premium products from one brand to create a unified and harmonic appearance. In the tradition of exceptional German engineering, the MC 2.1 mouse, the HC 2.2 headset and the MX 2.0S keyboard from CHE
Slide 16: Business Area Professional
BUSINESS AREA PROFESSIONAL HAL Roadshow - April 4/5, 2022 16
Slide 17: Further Development of the Peripherals Business Unit
FURTHER DEVELOPMENT OF THE PERIPHERALS BUSINESS UNIT PERIPHERALS STRATEGIC ELEMENTS Expansion and diversification of the product portfolio with new wireless keyboards and desktop combinations for specific user & target groups Focused penetration of regional markets, particularly in Europe, Asia and
Slide 18: E-Commerce Strategy
E-COMMERCE STRATEGY Important steps for future growth guided by one of the leading strategy consulting companies for digitalization and e-commerce E-Commerce E-Commerce IT Supply Chain Status Quo Analysis Business Case Distribution Strategy Strategy Strategy STAGED APPROACH TO TARGET MARKETS Phase I
Slide 19: The Future of Cherry Digital Health
THE FUTURE OF CHERRY DIGITAL HEALTH CHERRY DIGITAL HEALTH STRATEGIC ELEMENTS Further vertical and horizontal growth Leveraging quality leadership in the core markets Leveraging synergies by cross-selling via existing Peripherals sales channels Expanding fields of applications, i. e. point-of-sale, i
Slide 20: Well Diversified Blue Chip Customer Base
WELL DIVERSIFIED BLUE CHIP CUSTOMER BASE GAMING PROFESSIONAL Components Gaming Devices Peripherals Digital Health JoyWay by HAL Roadshow - April 4/5, 2022 20
Slide 21: Expected Market Development
EXPECTED MARKET DEVELOPMENT Well positioned to benefit from ongoing secular growth trends GAMING PROFESSIONAL +8.7% CAGR global gaming +5.6% CAGR number of global Globally growing „work-from- 35 to 55% remote work market until 2024 players until 2024 anywhere“ trend in advanced economies Global e-co
Slide 22: Performance FY 2021 Overview
PERFORMANCE FY 2021 OVERVIEW STRONG GROWTH IN SALES AND FY 2021 FY 2020* ∆ IN €M/ AS INDICATED PROFITABILITY DESPITE Revenue 168.5 130.2 29.4% CHALLENGING MARKET ENVIRONMENT IN H2 EBITDA (adj.) 48.9 37.1 31.6% EBITDA margin (adj.) 29.0% 28.5% 0.5 pp. FY 2021 was marked by a well-above market growth
Slide 23: Forecast FY 2022 – Further Outlook
FORECAST FY 2022 – FURTHER OUTLOOK Continuation of profitable growth path despite adverse market conditions FY 2020* FY 2021 FORECAST FY 2022 FURTHER OUTLOOK IN €M/ AS INDICATED Revenue 130.2 168.5 170 – 190 GAMING EBITDA margin (adj.) 28.5% 29.0% 23 to 26% temporary increases in material prices, sh
Slide 24: Key Investment Highlights – Why Invest in Cherry?
KEY INVESTMENT HIGHLIGHTS – WHY INVEST IN CHERRY? Global market leader Innovation and quality leadership Brand recognition Solid financial profile Established market position as global Impressive track record since 1953 in High international brand recognition High profitability and attractive cash m
Slide 25: Appendix
APPENDIX HAL Roadshow - April 4/5, 2022 25
Slide 26: Share Performance / Current Shareholder Structure
SHARE PERFORMANCE / CURRENT SHAREHOLDER STRUCTURE RELATIVE SHARE PERFORMANCE SHAREHOLDER STRUCTURE 120% UBS Bank AG Glenernie Capital Ltd Janus Henderson 3,5% 3,2% 110% 3,2% 100% The Capital Group 5,0% 90% 80% Swedbank Robur Fonder 5,0% 70% 60% DWS Asset Remaining 50% Management free float 5,9% 37,3
Slide 27: Strong Revenue Growth
STRONG REVENUE GROWTH Growing throughout both business areas REVENUE IN €M. REVENUE UP 29.4% IN FY 2021 180 168.5 €m PROFESSIONAL sales up 51.2% to € 85.7m 160 supported by: 140 130.2 €m Successful start of e-commerce business PROFESSIONAL 120 85,7 Successful roll-out of e-Health-Terminals ST-1506 P
Slide 28: Strong Profitability Increase Throughout the Group
STRONG PROFITABILITY INCREASE THROUGHOUT THE GROUP Group profitability increases due to disproportionately high growth of Digital Health business EBITDA (ADJ.) IN €M. 60 EBITDA (ADJ.) UP 31.6% IN FY 2021 48.9 €m 50 PROFESSIONAL EBITDA (adj.) up 102.4% to € 19.6m supported by: 37.1 €m 40 PROFESSIONAL
Slide 29: Expense Ratios in Line with High Profitability Claim
EXPENSE RATIOS IN LINE WITH HIGH PROFITABILITY CLAIM EXPENSE RATIOS IN % OF REVENUE 12% UNDERLYING EXPENSE RATIOS STABLE Marketing and selling expense ratio up 0.8pp. due to 10% 10,6% 10,0% additional sales & marketing staff, 9,2% 8% marketing costs for new product launches and 7,4% 7,2% entering ne
Slide 30: Strong Financial Position as of Dec. 31, 2021
STRONG FINANCIAL POSITION AS OF DEC. 31, 2021 Increase of liquidity and reduction of debt due to IPO - well positioned to finance growth ASSETS [IN €M.] TOTAL ASSETS UP 190% TO 411 MIO. € 450 411 €m Cash and cash equivalents up to € 109.7m mainly due to 400 IPO net proceeds of € 133.3m 350 Liquidity
Slide 31: Strong Financial Position as of Dec. 31, 2021
STRONG FINANCIAL POSITION AS OF DEC. 31, 2021 Increase of equity and reduction of debt EQUITY & LIABILITIES [IN €M.] 450 EQUITY RATIO 71.3% IN FY 2021 411 €m Equity increased to € 293.2m mainly due to 400 Trade payables current debt Addition to the capital reserve of € 113.1 from IPO 350 Non-current
Slide 32: Reconciliation to Alternative Performance Measures (ESMA)
RECONCILIATION TO ALTERNATIVE PERFORMANCE MEASURES (ESMA) FY 2021 was marked by high non-recurrent one-off effects IN € 000 FY 2021 FY 2020* IN € 000 FY 2021 FY 2020* Consolidated profit/loss 9,287 17,537 Adjusted EBIT 33.697 26,849 + Income taxes 4,207 6,750 + Depreciation and amortization 15,188 1
Slide 33: Financial Calendar 2022
FINANCIAL CALENDAR 2022 Date Detail March 31 Publication Annual Financial Report April 4 – 5 US Roadshow (virtual) April 7 MicroCap Days 2022 May 11 Publication Quarterly Financial Report (call-date Q1) May 12 – 13 Stockpicker Summit May 17 BeNeLux Roadshow (virtual) May 23 – 25 Equity Forum June 8
Slide 34: Forward Looking Statements
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
Slide 35: Thank You for Your Attention
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