Cherry SE with substantial progress in the repositioning of the business in the first quarter 2023

Cherry SE with substantial progress in the repositioning of the business in the first quarter 2023


Cherry SE / Key word(s): Interim Report
Cherry SE with substantial progress in the repositioning of the business in the first quarter 2023

15.05.2023 / 07:30 CET/CEST
The issuer is solely responsible for the content of this announcement.

Cherry SE with substantial progress in the repositioning of the business in the first quarter 2023

Group revenue of EUR 28.7 million (Q1/2022: EUR 33.0 million) above internal planning in challenging market environment
Gaming Devices revenues up 20.6% to EUR 6.6 million (Q1/2022: EUR 5.5 million)
Peripherals revenue up 13.8% to EUR 15.7 million (Q1/2022: EUR 13.8 million)
(Adjusted) Group EBITDA margin at -4.6% burdened by currently low business level in Components and Digital Health business units and market development costs for e-Commerce and internationalization (Q1/2022: 13.4%)
Outlook for the current fiscal year confirmed: growth of Group revenue to EUR 135 - 165 million and profitability in the range of 10 to 14 % (adjusted) EBITDA margin


Munich, May 15, 2023 – Cherry SE [ISIN: DE000A3CRRN9] today published its interim report for the first quarter of 2023 and confirmed its guidance for the current fiscal year.

“This is my first quarter as CEO of Cherry and despite internal challenges and the ongoing tough market conditions I remain fully convinced of the substance and potential of the company,” said Oliver Kaltner, CEO of Cherry SE, commenting on Cherry’s business performance. “At Cherry SE, we want to be even more focused and better at our planning and workflow processes to convert the view from the market into growth in the market. Operational excellence will be more important than ever to return Cherry to a profitable growth path.”

“For the current fiscal year, we confirm our outlook with Group revenue to be within the range of EUR 135 and 165 million,” adds Mathias Dähn, CFO of Cherry SE. “Taking into account the measures already implemented and planned, such as the targeted build-up of high-end inventories for the further internationalization of the Gaming Devices and Peripherals business, we expect an (adjusted) EBITDA margin of between 10% and 14% this year.”

In line with expectations, the first quarter 2023 continued to be characterized by unfavorable geopolitical and macroeconomic conditions. These economic conditions were already fully anticipated in the Cherry Group’s management forecasts, which also form the basis for the outlook for the 2023 fiscal year.

In the three-month period under report, Cherry generated Group revenue totaling EUR 28.7 million and negative adjusted EBITDA amounting to EUR -1.3 million. Main reasons for the negative adjusted EBITDA are lower quarterly revenues, negative margin effects due to the lower percentage of switches in the portfolio, increased material and logistics costs, and demand-related underutilization of production capacity.

The PROFESSIONAL business area’s share of total revenue decreased to 62.7% (Q1/2022: 63.9%), while the GAMING business area’s share increased correspondingly to 37.3% (Q1/2022: 36.1%).

The GAMING business area continued to face challenging market conditions in the first quarter of the current fiscal year. At EUR 10.7 million, revenue was below the previous year’s figure of EUR 11.9 million. The main reason for the decline was the continuing sluggish sale of switches in the Components business unit, which generated revenue of EUR 4.1 million, thus exceeding internal targets but falling 35.9% short of the previous year’s level (Q1/2022: EUR 6.4 million). Both well-known keyboard brands (OEMs) and contract manufacturers continue to have high inventories of keyboards and switches, which have therefore increasingly carried out inventory clearing and sales campaigns. The Gaming Devices business unit performed far more positively, despite the challenging market conditions. Revenue amounted to EUR 6.6 million, 20.0% up on the previous year (Q1/2022: EUR 5.5 million). New strategic partnerships and collaborations with leading games manufacturers have enabled Cherry to significantly extend the reach of its Gaming Devices and enter new markets. As a result, the Group was able to perceptibly grow its market share compared to the previous year. Cherry will therefore continue to build further strong relationships with gaming communities and influencers going forward.

With the acquisition of the Swedish e-sports specialist Xtrfy, Cherry expects, among other things, improved access to the gaming and e-sports community. The two associated companies "Xtrfy Gaming AB" and "Built on Experience AB" based in Landskrona, Sweden, were consolidated for the first time in the first quarter and are therefore fully included in the reported figures. Cherry and Xtrfy are bundling their competencies in the gaming devices business area with immediate effect, which is made clear with the new joint brand presence under CHERRY XTRFY.

With the “Gaming Goes Global” project, which was still in the implementation phase in the first quarter of the current fiscal year, the Gaming Devices business is to be successively expanded across the other sales regions of the Cherry Group as of the second quarter 2023. This means that the business, which was previously heavily focused on the Asian economic region, will now be rolled out to some 30 markets. The move to a new distributor in China, which was completed in the first quarter 2023, has now additionally set the course for an improved level of market penetration in China.

Adjusted EBITDA for the GAMING business area in the first quarter of the current fiscal year amounted to EUR 0.1 million (Q1/2022: EUR 0.9 million). The adjusted EBITDA margin came in at 0.7% compared to 7.4% one year earlier.

In the first quarter of the current fiscal year, the PROFESSIONAL business area generated revenue totaling EUR 18.0 million and therefore 14.7% below the corresponding figure recorded one year earlier (Q1/2022: EUR 21.1 million), with performance differing significantly from one business unit to the next. The market for office peripherals stabilized somewhat in the first quarter of the current fiscal year. Revenue generated by the Peripherals business unit was better than expected as a result of rigorous sales management and operational improvements, rising by EUR 1.9 million (+13.8%) to EUR 15.7 million year on year (Q1/2022: EUR 13.8 million).

With its new microphones, the Cherry Group has opened up a new product segment, offering customers a wide range of potential applications, such as in gaming as well as the production of podcasts and other digital content. The products are being well received by the market and have already been included in a number of product comparison tests. During the three-month period under report, work also continued on systematically implementing the e-commerce strategy, which had a positive impact on revenue. In particular, business generated via Amazon performed well.

The Digital Health business unit, on the other hand, which also took over the Security Devices business from the Peripherals business unit at the beginning of the year, continued to suffer during the first quarter from the current reluctance of potential customers to purchase the e-health terminal. At EUR 2.3 million, revenue recorded for the Digital Health business unit was well down on the level recorded one year earlier (Q1/2022: EUR 7.2 million).

Despite the product’s competitive market position, sales of the e-health terminal are currently sluggish. The underlying reasons for the low uptake are politically induced delays in the telematics infrastructure regarding the implementation of new, specialized applications such as the e-prescription and the electronic patient record. According to the German Federal Minister of Health, the latter is to be implemented on a mandatory basis for all patients in Germany as of the end of 2024. This fact would also drive sales of the e-health pin pad, which passed all the required certifications in the three-month period under report and will thus be available from the second quarter 2023. Delays in implementing new, specialized applications are expected to gradually dissipate in the second half of the year.

Adjusted EBITDA for the PROFESSIONAL business area in the first quarter of the current fiscal year finished at negative EUR -1.4 million (Q1/2022: EUR +3.5 million). The adjusted EBITDA margin came in at -7.8% compared to +16.7% one year earlier.

Total assets decreased by EUR 12.1 million to EUR 367.0 million in the first quarter of the current fiscal year (December 31, 2022: EUR 379.1 million). Cash at bank went down by EUR 26.9 million to EUR 65.9 million (December 31, 2022: EUR 92.8 million). Some of the liquid funds were used to additionally build up inventories, which increased by EUR 9.9 million to EUR 74.9 million compared to the level recorded at the end of 2022 (December 31, 2022: EUR 65.0 million). In addition, trade payables were increasingly serviced, resulting in a EUR 5.2 million decrease to EUR 25.7 million (December 31, 2022: EUR 30.9 million). Trade receivables, on the other hand, remained almost unchanged at EUR 16.4 million compared to the amount reported in the previous year’s consolidated financial statements (December 31, 2022: EUR 16.3 million). This was primarily due to a higher proportion of outstanding receivables with prolonged payment terms, e.g. in conjunction with the e-commerce business conducted via Amazon. Furthermore, the first part of the purchase price for Xtrfy, which is to be paid in cash in accordance with the acquisition agreement (EUR 3.9 million), was disbursed to the former owners. Primarily due to the Group net loss amounting to EUR -5.3 million, equity as disclosed in the statement of financial position decreased to EUR 246.4 million (December 31, 2022: EUR 251.8 million).

Net cash outflows from operating activities in the first quarter 2023 amounted to EUR -17.8 million, a deterioration of EUR -15.1 million compared to the first quarter of the previous year (Q1/2022: EUR -2.7 million). The main reasons were the EUR -5.1 million reduction in the net result reported for the period, a EUR -3.1 million increase in assets, primarily relating to higher inventories, as well as a greater reduction in trade payables and other liabilities totaling EUR -5.6 million.

Net cash outflows from investing activities amounted to EUR -8.2 million, up by EUR -6.2 million compared to the previous year. The main reason for the increase was the payment of the first tranche of the purchase price for the acquisition of Xtrfy amounting to EUR 3.9 million, which was paid in cash, and the transfer of 234,138 treasury shares at a market value of around EUR 1.8 million at the time of the transaction. At EUR -1.2 million, net cash outflows from financing activities were slightly higher than one year earlier (Q1/2022: EUR -1.0 million). The issue of Cherry SE’s treasury shares as part of the acquisition of Xtrfy (EUR +1.8 million) as a purchase price component had a positive impact. Conversely, there was a cash outflow for the acquisition of treasury shares due to the continuation of the 2022 share buyback program (EUR -1.2 million) and the repayment of a bank loan relating to the newly consolidated companies (EUR -0.7 million).

As of March 31, 2023, cash and cash equivalents amounted to EUR 65.9 million (March 31, 2022: EUR 104.2 million). The change during the first quarter of the current fiscal year amounted to EUR -26.9 million (Q1/2022: EUR -5.5 million).

In the Combined Management Report 2022, the Management Board provided a detailed explanation of the assumptions and longer-term trends underlying its forecast for the 2023 fiscal year. Against this backdrop, the Management Board regards the current fiscal year as one of transition and consolidation in which adjustments will be made to suit changing framework conditions and the newly evolved corporate strategy.

The year 2023 is likely to remain challenging. However, as Cherry surpassed its own expectations in the first quarter, the Management Board confirms its forecast for the current fiscal year, as notified on March 30, 2023, with revenue in the region of EUR 135 to 165 million and an adjusted positive EBITDA margin of 10-14%.

The long-term underlying growth trends in e-sports and gaming, hybrid office workplaces, and the digitization of the German healthcare system continue to be positive factors for Cherry and represent strong growth drivers for our business in the medium term.

The Cherry Group as a whole aims to return to an adjusted EBITDA margin of over 20% in the medium term.




The interim report for the first quarter 2023, together with the unaudited condensed consolidated financial statements of Cherry SE as of March 31, 2023, are available on the Cherry website at


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 over 500 people in production facilities in Auerbach, Zhuhai (China), and Vienna (Austria) as well as in various sales offices in Auerbach, Pegnitz, Munich, Landskrona (Sweden), Paris, Kenosha (USA), Taipei, and Hong Kong.

More information is available online at:


Dr. Kai Holtmann

Investor Relations

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

Postal address: Cherrystrasse 2, 91275 Auerbach, Germany

T +49 (0)175-1971503

F +49 (0)9643 20 61-900


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1632257  15.05.2023 CET/CEST