Financial · July 27, 2020

24.5% Sales Increase in Q1 Despite a Strong Comparison Basis

Published by Nacon

Summary

Nacon achieved a significant 24.5% increase in sales during the first quarter of the 2020/21 fiscal year, reaching €38.0 million compared to €30.5 million in the previous year. This growth was primarily driven by a surge in the accessories segment and the acceleration of digital game sales, effectively offsetting a decline in new game revenue caused by a high comparison basis from the prior year. The reporting period covers April 1 to June 30, 2020, a timeframe characterized by global lockdown measures that influenced consumer behavior toward digital entertainment. The accessories division emerged as a primary growth engine, with sales rising 134.9% to €22.5 million. This performance was bolstered by the acquisition of the RIG premium headset brand and the establishment of a United States subsidiary, allowing the company to capitalize on a thriving market for controllers and audio equipment. Conversely, game sales fell 27.4% to €14.5 million due to fewer major releases; however, back-catalogue sales surged by 340% to €10.8 million. Digital distribution became the dominant channel for software, accounting for 80.7% of total game turnover during the quarter. Looking forward, the company maintains its financial targets for the full 2020/21 fiscal year, projecting sales between €140 million and €150 million with an 18% current operating income rate. Growth is expected to continue through the release of titles such as WRC 9 and Tennis World Tour 2, alongside a new partnership with Microsoft for next-generation console controllers. Long-term strategic goals for the 2022/23 fiscal year remain fixed at sales between €180 million and €200 million, supported by a global distribution network spanning 100 countries and a workforce of approximately 510 employees.

From the report

Press release Lesquin, 27 July 2020 18:00 hrs 24.5% SALES INCREASE IN Q1 DESPITE A STRONG COMPARISON BASIS ROBUST GROWTH OF GAMING ACCESSORIES : +134.9% STRONGER DIGITAL SALES : 80.7% OF GAME SALES SURGE OF BACK CATALOGUE : +340% CONFIRMATION OF FINANCIAL TARGETS FOR FY 2020/21 IFRS – M€ Sales 2020/2021 2019 /2020 Change 1st Quarter 38. 0 30. 5 + 24. 5% Games 14. 5 20. 0 - 27. 4% Accessories 22. 5 9.6 + 134. 9% Others(1) 0.9 0.9 + 1 .1 % Non audited data (1) Mobile and Audio sales. Success of the RIG premium headset range and solid performance of digital gaming sales In the first quarter of the 2020/21 fiscal year (April 1 to June 30, 2020), Nacon's sales were up by 24.5%, driven by the success of premium headsets which contributed to a sales upturn in Accessories and by the acceleration of digital sales of Games. GAMES Due to a strong comparison basis resulting from the release of several major titles at the beginning of the previous fiscal year, Games were down at 14.5 M€ (compared to 20.0 M€ for Q1 2019/20). Thanks to the acceleration of digital sales during the lockdown period, Nacon was able to offset the reduction in the number of new game releases with a 340% surge in back catalogue sales to 10.8 M€, an amount already equivalent to back catalogue sales for the entire 2019/20 fiscal year. Digital sales accounted for 80.7% of Games turnover. The releases of Hunting Simulator® 2 and Pro Cycling Manager/Tour de France® 2020 over the period under review fulfilled expectations. ACCESSORIES

10.8 M€, an amount already equivalent to back catalogue sales for the entire 2019/20 fiscal year. Digital sales accounted for 80.7% of Games turnover. The releases of Hunting Simulator® 2 and Pro Cycling Manager/Tour de France® 2020 over the period under review fulfilled expectations. ACCESSORIES Accessory sales were supported by a thriving market. With a reinforced range of accessories (Controllers, Headsets, etc.) Nacon was fully capable of meeting consumer expectations. In particular, the headset segment grew strongly thanks to the success of the RIG premium brand acquired in March 2020 and the opening of a subsidiary in the United States.

Outlook The 2nd quarter of FY 2020/21 should confirm the upward trend in Nacon's activity. - the expected releases of 2 new games (WRC®9 and Tennis World Tour®2) will contribute to the growth of Games sales and digital sales should maintain their momentum; - gaming accessories should confirm their growth potential thanks to restocking from customers (RIGs and controllers) generating a large order backlog. Prospects for the second half are equally promising: - the momentum of digital sales and the releases of new games (Monster Truck Championship™, Warhammer Chaosbane® on PS5TM , Handball 21TM,Werewolf: the Apocalypse® - EarthbloodTM , Rogue LordsTM and Vampire: The MasqueradeTM - Swansong) are expected to make a positive contribution to the Group's sales growth; - the new partnership with Microsoft will also enable Nacon to launch a range of controllers compatible with their new console over this period. For the full 2020/21 fiscal year, the Group is confident in its ability to meet its annual financial targets. Therefore Nacon confirms that it will achieve sales of between €140 and €150 million and a 18% Current Operating Income(2) rate. The Group also reiterates the financial targets of its Nacon 2023 plan, with sales for the 2022/23 fiscal year ranging between 180 M€ and 200 M€ and a Current Operating Income(2) rate in excess of 20%. (2) Current Operating Margin = Current Operating Income rate = Current Operating Income as a percentage of sales. Next publication: Sales for 2nd quarter of FY 2020/2021 : 26 October 2020 Press release after close of the Paris stock exchange ABOUT NACON

come(2) rate in excess of 20%. (2) Current Operating Margin = Current Operating Income rate = Current Operating Income as a percentage of sales. Next publication: Sales for 2nd quarter of FY 2020/2021 : 26 October 2020 Press release after close of the Paris stock exchange ABOUT NACON 2019-20 ANNUAL SALES NACON is a company of the BIGBEN Group founded in 2019 to optimize its know-how through strong 129.4M€ synergies in the video game market. By bringing together its 8 development studios, the publishing of AA video games, the design and distribution of premium gaming devices, NACON focuses 20 years of expertise at the service of players. This new unified business unit strengthens NACON's position in the market, HEADCOUNT enables it to innovate by creating new unique competitive advantages. Close to510 employees Company listed on Euronext Paris, compartment B INTERNATIONAL ISIN: FR0013482791; Reuters: NACON.PA; Bloomberg: NACON:FP 16 subsidiaries and a distribution network across 100 countries PRESS CONTACT https://corporate.nacongaming.com/ Cap Value–Gilles [email protected]+33 1 80 81 50 01

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