Cherry SE publishes forecast for the financial year and first quarter of 2024; quarterly reporting better aligned with capital market requirements

Munich, February 27th, 2024 – Cherry SE [ISIN: DE000A3CRRN9] today published its revenue and earnings forecast for the current financial year and the first quarter.

For 2024, the Management Board continues to assume that the implementation of the previously announced restructuring, cost-cutting and transformation measures will lead to an improvement in the company's financial situation. Against this background, the Management Board expects Cherry SE's consolidated Group sales to be in the range of around EUR 140 to 150 million (preliminary sales 2023: EUR 126 million) and the adjusted EBITDA margin to be in the range of 7 to 8% (preliminary adjusted EBITDA margin 2023: 2%). This implies an increase of between 11% and 19% compared to preliminary sales and between 5 and 6 percentage points compared to the preliminary adjusted EBITDA margin of the previous year. The mid points of both forecast ranges are above the current analyst consensus of EUR 135 million in sales and 6.7% in the adjusted EBITDA margin.

According to its initial estimates, Cherry SE is likely to generate revenues of around EUR 29 million in the first quarter of the current year, roughly on a par with the previous year. Based on this sales figure, the company expects the adjusted EBITDA margin to reach break-even and thus a profitability level that is significantly above the corresponding figure for the same quarter of the previous year of -4.6%.

The Management Board remains committed to the medium-term target of an adjusted EBITDA margin of at least 20%. The recovering momentum in sales driven by innovation and market relevance as well as the noticeable effects of comprehensive cost management should enable the company to reach this profitability target within the next two to four years. Even after the successful restructuring of the Components business, the Cherry Group will continue to be subject to strict cost and cash management. In order to further optimise the management of the business, reporting will also be shifted to product-oriented segmentation. In future, the KPIs revenue and adjusted EBITDA margin will be reported for the three business divisions COMPONENTS, GAMING & OFFICE PERIPHERALS and DIGITAL HEALTH & SOLUTIONS.

Oliver Kaltner, CEO of Cherry SE, explains: "As part of the 2023 annual general meeting, we made a transparency promise to shareholders. In the meantime, enormous management efforts were necessary to finally give the company a stable foundation in all business processes. We see 2024 as a year of revitalisation for Cherry SE. In the COMPONENTS division, we will return to sales growth through market-oriented technology and relevant price points for the MX2 and ULP switch generations. A recovery in the utilisation of our production capacities will also support our return to profitability. In our largest segment, GAMING & OFFICE PERIPHERALS, we will further consolidate our sales approach in the core European countries. In addition, we will gradually expand our office and gaming activities in the USA, Canada, and China. We will secure our profitability through multi-level distribution partnerships. We expect the DIGITAL HEALTH & SOLUTIONS segment to receive a strong boost from e-prescriptions, which according to Gematik have already been redeemed more than 52 million times, as well as from the electronic patient file, which is to be made available from 1 January 2025. In addition, demand for hygiene-related products in the medical sector continues unabated. Our comprehensive hardware, software and cloud offering not only puts us in a position to continue addressing the market, but above all to actively shape it."

On top of this, the Cherry Group is working on significantly improving its cash performance. The centre of attention here is on active working capital management, which focuses on reducing inventories and optimizing trade receivables. The company intends to utilize part of the improved liquidity to invest in strategic and innovative projects.

"We are also targeting an optimized calendar for our capital market reporting starting in 2024, which more closely meets the comprehensible requirements of the capital market," adds Oliver Kaltner.

In future, quarterly statements will be published in the course of the month following the reporting period. The process optimization initiated in the Finance division at the end of 2023 makes this step possible. As a result, the company is bringing forward the publication period by up to three weeks compared to previous practice. Under the leadership of interim CFO Volker Christ, the company aims to further increase the confidence in the information contained in the annual report and at the same time enable as many capital market stakeholder as possible to participate in the accompanying investor webcast. For this reason, the dates for the publication of the 2023 Annual Report and the announcement on the first quarter of 2024 have been set for the same date, April 25, 2024. The Management Board will report extensively on the financial statements for the first quarter of 2024 on that day.

Disclaimer

This publication 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 by such statements. Actual results, performance or events may differ materially from those described herein as a result of factors affecting Cherry SE, such as changes in general economic conditions and the competitive environment, capital market risks, foreign exchange rate fluctuations and competition from other companies, as well as changes in international and national laws and regulations, particularly with respect to tax laws and regulations. Cherry SE assumes no obligation to update forward-looking statements.

This publication contains supplementary financial measures (not specifically identified in relevant accounting frameworks) that are, or may be, so-called alternative performance measures. For purposes of evaluating Cherry's financial condition and results of operations, these supplemental financial measures should not be considered in isolation or as an alternative to the financial measures presented in the consolidated financial statements and determined in accordance with relevant accounting frameworks. Other companies that present or report alternative performance measures with a similar title may calculate them differently. Explanations of financial ratios used can be found in Cherry SE's Annual Reports, which are available at https://ir.cherry.de/.

About Cherry

Cherry SE [ISIN: DE000A3CRRN9] is a globally operating manufacturer of high-end mechanical keyboard switches and computer input devices such as keyboards, mice, and headsets for applications in the worlds of gaming, e-sports, office and hybrid workplaces, industry, and healthcare. Since it was founded in 1953, Cherry has been synonymous with innovative, high-quality products developed specifically to meet the various needs of its customers.

Cherry has its operational headquarters in Auerbach in Germany's Upper Palatinate region and employs in production facilities in Auerbach, Zhuhai (China), and Vienna (Austria) as well as in various sales offices in Auerbach (Germany), Pegnitz (Germany) Munich (Germany), Landskrona (Sweden), Paris (France), Kenosha (USA), Taipei (Taiwan), and Hong Kong (China).

For more information: https://ir.cherry.de

IR Contact

Cherry SE

Nicole Schillinger

Investor Relations

P: Rosental 7, c/o Mindspace, 80331 Munich/Germany

T: +49 (0) 9643 2061 848

E: [email protected]