Cherry Se · XETR:C3RY
Cherry — Investor Presentation (September 2021)
30 slides from Cherry's investor presentation, September 2021
Slide 1: Analyst Presentation / Investor Presentation
DRAFT V6 ANALYST PRESENTATION INVESTOR PRESENTATION Investor Presentation – September 2021 Analyst Presentation – 3 May 2021
Slide 2: Today's Presenters
TODAY’S PRESENTERS Rolf Unterberger Bernd Wagner CEO CFO & COO 2
Slide 3: Cherry at a Glance
CHERRY AT A GLANCE 28% 34.4% €130.2m €37.1m Revenue Growth Adj. EBITDA Group Revenue Adj. EBITDA H1 20 vs H1 21 Margin 2020 2020 2020 #1 x8 Global Global Market 219 Trademarks, Founded 1953 German HQ ca. 500 employees(1) Locations(1) Share in Switches 48 Patents(1) Source: Figures for fiscal year en
Slide 4: Introducing Our Business Units
INTRODUCING OUR BUSINESS UNITS GAMING PROFESSIONAL 52.3% of Revenue 47.7% of Revenue GAMING SWITCHES GAMING PERIPHERALS OFFICE & INDUSTRY HEALTHCARE & PERIPHERALS SECURITY PERIPHERALS Revenue Share H1 2021 36,7% 15,6% 29,5% 18,2% Secure telematics Encrypted key MX switch Viola switch Gaming keyboard
Slide 5: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS 1 Established number one global market position for mechanical gaming keyboard switches 2 Innovation and quality leader with a track record of successful new product development 3 Leading brand recognition and pricing power in our core markets 4 Growth driven by multiple se
Slide 6: Why Choose Mechanical Switches?
WHY CHOOSE MECHANICAL SWITCHES? Video gaming enthusiasts favour PC gaming keyboards with mechanical switches “ Mechanical Rubberdome / Membrane As in other sports, specialized high-performance gear, such as gaming keyboards, mice, headsets and performance controllers, allow digital athletes to perfo
Slide 7: Cherry Is the Category Inventor & Leader for Quality Gaming Switches
CHERRY IS THE CATEGORY INVENTOR & LEADER FOR QUALITY GAMING 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 stem 2. Switching Slide
Slide 8: All Cherry Switch Keyboards Are Co-Branded "Cherry Inside" & Sole Sourced
ALL CHERRY SWITCH KEYBOARDS ARE CO-BRANDED “CHERRY INSIDE” & SOLE SOURCED AW410K RGB Mechanical Gaming Keyboard, Alienware Encoder Gaming Keyboard, OMEN ROG Strix Scope RGB Mechanical Keyboard, Asus “CHERRY INSIDE” Distinguishes customer products to achieve premium pricing K70 RGB Mechanical Keyboar
Slide 9: Quality Leadership Drives Premium Price Positioning
QUALITY LEADERSHIP DRIVES PREMIUM PRICE POSITIONING WHY CHOOSE CHERRY SWITCHES? CHERRY SWITCHES DRIVE PREMIUM PRICING FOR CUSTOMERS Company Assessment(1) Price of gaming keyboards (in €)(2) Criteria 250 Approx 70% of keyboards with CHERRY switches are in ~60% of keyboards with the price range of €12
Slide 10: #1 Critical Supplier of Switches for All Blue Chip Names
#1 CRITICAL SUPPLIER OF SWITCHES FOR ALL BLUE CHIP NAMES SELECTED TOP KEYBOARD MANUFACTURERS & MECHANICAL KEY SWITCH SUPPLIER BRANDS Price by category by Premium Laptops >€1,500 Premium GX Series by PRICE OF GAMING KEYBOARD ~€120–€300 By High Romer-G by (white label) ~€80–€120 Niche keyboards Medium
Slide 11: New Products H1/21: The Cherry ULP Switch
NEW PRODUCTS H1/21: THE CHERRY ULP SWITCH:MILESTONE INNOVATION LAUNCHED MARCH 2021 ULTRA LOW PROFILE SWITCH: CONSTRUCTION & INTEGRATION “With this model, the German-based company by Slim & Lightweight (2021) once again achieves a milestone in the development of switches.” - Techpowerup Alienware M15
Slide 12: New Products H1/21: Cherry ULP Switch Market Feedback
NEW PRODUCTS H1/21: THE CHERRY ULP SWITCH MARKET FEEDBACK KEY OPINION LEADER REVIEWS Dave2D: “This is by FAR the best laptop keyboard ever made with mechanical switches” Tom’s Hardware: “Using Cherry MX Ultra Low Profile switches really takes the everyday typing experience to the next level” Linus T
Slide 13: New Products H1/21: Cherry MX 2.0S, HC 2.2 and MC 2.1
NEW PRODUCTS H1/21: THE CHERRY MX 2.0S, HC 2.2 AND MC 2.1. 13
Slide 14: New Products H1/21: Cherry Peripherals Launches
NEW PRODUCTS H1/21: THE CHERRY PERIPHERALS LAUNCHES G80-3000N RGB TKL STREAM KEYBOARD WIRELESS DW 9100 SLIM - launched 24.08.2021 - - launched 17.08.2021 - - launched 28.07.2021 - The original updated: The best STREAM ever as a wireless keyboard. Rechargeable designer desktop with many Classic keys,
Slide 15: New Products H1/21: The Cherry Healthcare Terminal
NEW PRODUCTS H1/21: THE CHERRY HEALTHCARE TERMINAL: EHEALTH TERMINAL ST-1506 For reception counters in ▪ modern card terminal solution for workplaces in the German healthcare sector for telematics infrastructure ▪ Clinics ▪ pharmacies ▪ dentist and doctor offices ▪ approved by gematik and introduced
Slide 16: Well Diversified Blue Chip Customer Base
WELL DIVERSIFIED BLUE CHIP CUSTOMER BASE GAMING PROFESSIONAL GAMING SWITCHES GAMING PERIPHERALS OFFICE & INDUSTRY PERIPHERALS HEALTHCARE & SECURITY PERIPHERALS JoyWay by Source: Company Investor Presentation 16
Slide 17: Booming Gaming Sector Providing Strong Tailwinds
BOOMING GAMING SECTOR PROVIDING STRONG TAILWINDS GAMING SWITCHES GAMING PERIPHERALS IN CHINA(2) Revenue (in €m) Sales (in €m) €52,5m 2.600 CAGR: +14% 2.256 €45,5m €36,2m 2.200 1.999 €29,4m 1.768 €23,7m 1.800 1.555 1.360 1.400 1.180 (1) 1.000 2018 2019 2020 H1 2020 H1 2021 2020E 2021F 2022F 2023F 202
Slide 18: Transformational Developments Driving Healthcare & Security Peripherals Growth
TRANSFORMATIONAL DEVELOPMENTS DRIVING HEALTHCARE & SECURITY PERIPHERALS GROWTH HEALTHCARE & SECURITY PERIPHERALS GROWTH FUELLED BY POWERFUL MEGATRENDS €15,9m Digitalization of €14,6m German Healthcare Systems Healthcare Healthcare Terminal Pin-Pad Cybersecurity €6,7m Threats e. g. Keylogging Secure
Slide 19: Work / Learn from Home as Driver for Office & Industry
WORK / LEARN FROM HOME AS DRIVER FOR OFFICE & INDUSTRY OFFICE & INDUSTRY PERIPHERALS GROWTH FUELLED BY POWERFUL MEGATRENDS €40,8m Work From Home Corded Ergonomic Wireless Desktop Keyboard €23,7m Learn €19,8m From Home Wireless Desktop Targeting () Creators 2020 H1 2020 H1 2021 Ultra Low Profile RGB
Slide 20: Diversified Global Footprint with Highly Automated Production
DIVERSIFIED GLOBAL FOOTPRINT WITH HIGHLY AUTOMATED PRODUCTION 5% CHERRY‘s new HQ CHERRY‘s new HQ Zhuhai CHERRY Peripherals made in 41% 54% Switches made in Electronics H1 2021 CHERRY Europe GmbH Annual Capacity: China Revenue(1) Germany Auerbach 1,100m Switches Zhuhai City Maximum Capacity: Annual O
Slide 21: Accelerating Organic Group Revenue Growth
ACCELERATING ORGANIC GROUP REVENUE GROWTH TRACK RECORD OF DOUBLE DIGIT GROWTH ACCELERATING REVENUE GROWTH Revenue (in €m) Revenue (in €m) +34,4% CAGR: +14% 90 2021 Revenue Outlook 140 €80,3m €130,2m 80 30-40% Organic Growth(1) 120 €114,7m 70 €100,1m €59,8m 100 60 80 50 Mid-Term Revenue Outlook 40 60
Slide 22: Facts & Figures
CHERRY AT A GLANCE AS OF 30TH JUNE 2021 FACTS & 34.4% Revenue growth in 56.9% EBIT adjusted growth EUR 37.9 m Order volume FIGURES H1 2021 v H1 2020 in H1 2021 v H1 2020 already on the books Cherry and the first six months of 2021 at a glance EUR 62.2 m EUR 138 m Active Key Cash and cash Gross proce
Slide 23: Consistent Margin Expansion with Further Positive Development Potential
CONSISTENT MARGIN EXPANSION WITH FURTHER POSITIVE DEVELOPMENT POTENTIAL TRACK RECORD OF MARGIN EXPANSION MARGIN STRUCTURE & EXPECTATIONS Margins (in %) Gross Profit GAMING SWITCHES €€€ +++ 39,0 41.3% HEALTHCARE & €€€ +++ 40,0 37,8 SECURITY €€ ++ 35,3 35,0 PERIPHERALS Adj. EBITDA 30.2% OFFICE & INDUS
Slide 24: Summary of Our Group Strategy
SUMMARY OF OUR GROUP STRATEGY Brand Recognition Retain Innovative Geographic Premium M&A Leadership Expansion Position • New products • Through • Geographic • Complement continued quality expansion: Asia product portfolio • New technology leadership (Japan, Indonesia, • Complement Malaysia) know how
Slide 25: Acquisition Strategy
ACQUISITION STRATEGY STRATEGY ACQUISITION PIPELINE Focus on existing 4 verticals Continues expansion of long list Complementary excellent products close to existing portfolio and Focus18 and Companies deep dive on selected targets markets Increase regional strength First discussions with potential t
Slide 26: Thank You
THANK YOU CHERRY ®
Slide 27: Appendix
APPENDIX Investor Presentation 27
Slide 28: ESG Compliance
ESG COMPLIANCE “ ESG compliance is at the heart of our Company and forms the basis for respectful, reliable, trustful and long-term partnership with our business partners and associates.” Bernd Wagner CFO of Cherry Group ENVIRONMENT SOCIAL GOVERNANCE ▪ Compliance with all relevant local and internat
Slide 29: Disclaimer 1/2
DISCLAIMER 1/2 IMPORTANT NOTICE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA, THE “UNITED STATES”), AUSTRALIA, CANADA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH TH
Slide 30: Disclaimer 2/2
DISCLAIMER 2/2 The information contained in this document does not purport to be comprehensive and has not been subject to any independent audit or review. Certain of the financial information as of and for the fiscal years ended December 31, 2018, 2019 and 2020 has been taken or derived from audite