EQS-News: tonies achieves revenue growth of 37% in FY 2022 with profitability hitting the upper end of guidance range significant growth and positive adjusted EBITDA margin expected for 2023

tonies achieves revenue growth of 37% in FY 2022 with profitability hitting the upper end of guidance range significant growth and positive adjusted EBITDA margin expected for 2023

• Group revenue increased by +37% YoY to EUR 258 million (FY 2021: EUR 188 million) driven by international expansion, exceeding FY 2022 guidance of EUR 250 million
• US revenue more than tripled to EUR 66 million (FY 2021: EUR 20 million) driven by successful retail penetration, exceeding FY 2022 guidance of EUR 52 million
• Adjusted EBITDA margin of -2.4% at the upper end of updated FY 2022 guidance range of -5% to -2% (FY 2021: -8.1%) despite challenging macroeconomic environment
• Guidance for FY 2023: group revenue of EUR 354 million, US revenue of EUR 116 million and a positive adjusted EBITDA margin
• Strong start to the year with revenue growth in the first quarter of 2023 above the expected full-year growth rate of around 37%

LUXEMBOURG, 13 April 2023 // tonies SE ("tonies"), a leading international digital audio platform for children with the award-winning Toniebox, has released its audited financial statements for the full-year 2022, ended on 31 December 2022. tonies exceeded its revenue guidance for the group and the US and recorded an adjusted EBITDA margin at the upper end of its updated guidance range.

Marcus Stahl, Co-Founder and Co-CEO, says: "Once again, we have delivered on our promises in 2022, a year marked by multiple external challenges. It makes me especially proud that tonies not only exceeded the revenue guidance, but also hit the upper end of the updated profitability guidance. This demonstrates the resilience of our business model, even in difficult macroeconomic times, thanks to the amazing work and dedication of our entire team and to the continued high demand for our fantastic products. We will also successfully drive our international expansion in 2023, achieve revenue of EUR 354 million and become profitable on an adjusted EBITDA basis. We entered the year stronger than before and we have already seen a very promising first quarter with revenue growth above the expected full-year 2023 growth rate of 37%.

Patric Faßbender, Co-Founder and Co-CEO, adds: 2022 has been an exceptional year for us, celebrating some major highlights that will help us to further grow in 2023. Especially the successful launch of Sleepy Friends, our first own license brand, was crucial for our mission to focus more on in-house productions and self-developed licenses. It is great to see that Sleepy Friends Tonies already have the highest average weekly playtime in DACH. We also saw some fantastic partnerships such as a joint Holiday campaign with Disney, a collaboration with #1 mindfulness App Calm to support childrens mental health, and the expansion of partnerships as we brought our long-term partnership with Steiff and the Soft Cuddled Tonies to the US.

Group revenue in full-year 2022 went up by +37.4% YoY to EUR 258.3 million (FY 2021: EUR 188.0 million) with substantial revenue growth in the important fourth quarter of +47.0% YoY to EUR 120.1 million (Q4 2021: EUR 81.7 million).

All regions recorded positive growth in 2022. The US market continued its rapid growth trajectory and saw revenues more than tripling compared to FY 2021 with a revenue increase of +223.2% YoY to EUR 65.6 million. The total number of point of sales (including seasonal listings) increased significantly fueled by stronger retail adoption with key retail partners such as Target and Best Buy. At the end of 2022, Tonieboxes and Tonies were available in around 4,200 stores across the US compared to around 2,000 at the end of 2021.

In the profitable DACH region, revenue increased by +4.6% YoY to EUR 158.3 million. After a temporary slowdown in the third quarter of 2022, revenue developed positively in the fourth quarter with growth of around +5% YoY. By the end of the year 2022, tonies had around 7,000 retail point of sales (including seasonal listings) in DACH compared to around 6,300 at the end of the prior year. tonies is a highly established brand in the DACH market with a high and stable aided brand awareness of around 77% within the parents target audience. As a result, tonies is present in every second German household with kids in the target group.

In Rest of World, revenue more than doubled with a growth rate of +110.6% YoY to EUR 34.4 million particularly driven by very strong growth in the UK. tonies further increased its presence in Europe via its European webshop, which ships to 16 different countries in Europe and also took its first step into the Asian-Pacific market with a successful launch in Hong Kong.

Overall, the regional share of revenues outside the DACH region rose materially from 19% in 2021 to 39% in 2022, demonstrating that tonies is fully on track with its international expansion.

From a product category perspective, Tonieboxes revenue was up by +52.5% YoY to EUR 87.3 million. Almost half of the Tonieboxes were sold outside of the DACH region. This clearly underlines the international revenue and margin potential as around 20 Tonies figurines per Toniebox are sold on average in the first 4.5 years.

Revenue of Tonies figurines increased by +28.8% YoY to EUR 159.1 million driven by both licensed third-party Tonies including Paw Patrol, Frozen and Peppa Pig as well as Tonies with in-house produced content and own design such as Playtime Songs and tonies first own license brand Sleepy Friends. In 2022, further great licenses were added to the portfolio, including the global launch of PJ Masks and Cocomelon for the US and the UK.

In Accessories & Digital, revenue grew by +65.8% YoY to EUR 11.9 million driven by headphones, carriers, shelves and chargers. tonies also significantly expanded its audio library offering. With the audio library, tonies includes a digital platform that provides consumers with more content from their favorite series, while also offering lots of exclusive content. In 2022, tonies increased the paid content offering by almost 50% to over 3,000 titles. The free content offering more than doubled compared to 2021 to around 600 titles.

Adjusted EBITDA margin improved sharply from -8.1% of revenue in 2021 (EUR -15.2 million) to -2.4% of revenue in 2022 (EUR -6.1 million), despite continued investment in international growth. While gross margin was largely flat at 54.2% (FY 2021: 54.1%), despite higher prices for raw materials and inbound logistics, the increase of the adjusted EBITDA margin was attributable to an improved contribution profit (i.e. revenue after all revenue-related costs), underlining tonies ability to further improve its unit economics. Contribution margin rose substantially from 21.3% in 2021 to 27.4% in 2022 driven by lower licensing costs (including non-recurring effects) and efficient fulfilment.

Free cash flow was at EUR -87.9 million in 2022 (2021: EUR -35.4 million). This was mainly driven by significantly higher net working capital as result of inventory investments to further accelerate the ongoing US expansion. As a results, cash flow from operating activities was at EUR -74.4 million (2021: EUR -26.4 million). Furthermore, in line with tonies strategy, cash flow from investing activities, including investments in manufacturing tools for Tonies figurines, own content production and software, was at EUR -13.6 million and thus higher than in the previous year (2021: EUR -8.9 million).

Guidance for full-year 2023

tonies forecast is based on the assumption that there will be no further material deterioration of consumer sentiment in 2023 and that Covid-19 will not lead to far-reaching closures of production in industry and retail.

Taking these factors into account, we expect tonies to generate group revenue of EUR 354 million in 2023, corresponding to a year-over-year growth of around 37%. This substantial further increase is expected to be driven primarily by continued international expansion. In particular, the further rollout of tonies in the US where revenue is expected to rise from EUR 66 million in 2022 to EUR 116 million in 2023, based on the assumed EUR/USD exchange rate of 1.08 USD. This means that the US will contribute the majority of the expected revenue growth for the group.

In addition to further increasing the already very strong presence on the profitable DACH market, we will continue to invest heavily into our growth, especially in the US, but also in other active markets such as the UK and France. At the same time, we will expand our European webshop to further countries.

We expect adjusted EBITDA margin to further increase and turn positive in 2023 based on continued improvement in our contribution margin driven by a higher gross margin and operating leverage on our cost base.

tonies SE will hold a presentation on its FY 2022 results today, Thursday, 13 April at 11 am CET. All details can be found under https://ir.tonies.com/financial-calendar/.

All publication documents are available on tonies Investor Relations Website under https://ir.tonies.com/publications/.

Figures at a glance

Revenue

Adjusted P&L

About tonies

tonies is the creator and publisher of tonies®, the innovative and award-winning audio system for children aged three and up. Consisting of the Toniebox and the matching audio figurines - called Tonies - the system makes audio content touchable and enables a completely new kind of listening experience: audio play. Launched in 2016 in Germany, Austria, and Switzerland, tonies® is available on three continents and offers a portfolio of over 700 Tonies. tonies employs over 400 people and has been listed on the Frankfurt stock exchange through tonies SE since 2021.

Investor Relations Contact

Manuel Bösing

Head of Investor Relations

Phone: +4915157846012

Mail: ir@tonies.com

This document contains forward-looking statements

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Disclaimer

By their nature, forward-looking statements involve several risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties and assumptions could adversely affect the outcome and financial effects of the plans and events described in this document. These forward-looking statements speak only as of the date of this announcement. Except as required by any applicable mandatory law or regulation, the tonies SE expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this document to reflect any change in the tonies SE's expectations with regard thereto or any change in events, conditions, or circumstances on which any such forward-looking statements are based. Neither tonies SE nor any other person accepts any responsibility for the accuracy of the opinions expressed in this document or the underlying assumptions.