Slide 1: Q3 2022
Q3 2022 3 November 2022
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements concerning Asetek’s financial condition, results of operations and business. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of
Slide 3: Q3 Highlights
Q3 Highlights • Third-quarter revenue of $10.4 million compared with $13.5 million in Q3 2021 • Gross margin of 42% compared with 39% in Q3 2021 • Q3 EBITDA adjusted of negative $0.6 million improved from negative $1.4 million in Q3 2021 • Nine-month revenue of $41.2 million and EBITDA adjusted of n
Slide 4: Headwinds persist in gaming markets
Headwinds persist in gaming markets Macro situation Impact on industry and Asetek Company actions • Continued market challenges delaying a • Reduced end-user demand for gaming • Maintaining focus on product normalization of the business climate products affect both Liquid cooling and development and
Slide 5: Cost reductions materializing
Cost reductions materializing Development in quarterly OPEX run-rate • Q3 2022 OPEX reduced 27% (excluding one-offs) YoY due $1,000 to organizational rightsizing and favorable exchange rates ‒ Lay offs and consolidation of selected functions -27% ‒ Favorable exchange rates contributed with about 10%
Slide 6: Positioning to capture long-term potential
Positioning to capture long-term potential • High interest and positive end-user feedback for Liquid cooling and SimSports products ‒ End-users demand new equipment and improved experiences within traditional gaming and SimSports • Near-term business climate remains challenging ‒ Current market chal
Slide 7: Leading offering for gamers and enthusiasts
Leading offering for gamers and enthusiasts Liquid cooling1 SimSports Data center Enthusiasts and Gaming/Performance PCs do-it-yourself (DIY) Liquid cooling for Competitive and Immersive equipment for gamers, racing Liquid cooling for committed gamers and enthusiasts and automobile enthusiasts enter
Slide 8: Global platform with integrated value chain supports long-term growth
Global platform with integrated value chain supports long-term growth Aalborg (Denmark) Product management Xiamen (China) R&D and prototyping Product management Sourcing R&D In-house manufacturing Sourcing Quality Outsourced manufacturing Order management Quality Branding and outbound marketing Orde
Slide 9: Liquid cooling
Liquid cooling 9
Slide 10: Product development and release activity affected by current market uncertainties
Product development and release activity affected by current market uncertainties • 9 new products started shipping in Q3 2022 No. of liquid cooling products started shipping ‒ 4 including Asetek’s 8th generation liquid coolers with the most 15 advanced technology developed to date ‒ Improved coolin
Slide 11: Wide Liquid cooling OEM base
Wide Liquid cooling OEM base Top 5 liquid cooling customers1 Top 5 customers revenue split 2) 100% • Currently shipping to over 20 OEMs • Top five represented 85% of Liquid 80% Cooling revenue in YTD 2022, vs. 83% for full-year 2021 60% • Ambition to increase diversification 40% over time 20% 0% FY
Slide 12: Liquid cooling for gamers and enthusiasts cash generating over time
Liquid cooling for gamers and enthusiasts cash generating over time EBITDA - Liquid cooling USD thousands 9000 8.406 8000 Accumulated EBITDA: 7.589 $77.7 million 7.266 7.059 7000 Q3 2018 – Q3 2022 6000 5.390 5.432 5.141 5.000 5000 4.528 4.233 3.945 4000 3000 2.839 2.602 2.373 2.098 2.121 2000 1.707
Slide 13: Liquid cooling strategic development
Liquid cooling strategic development Goal Strategy Development and outlook • Focus on delivery of core liquid cooling solutions • R&D and product • Ramp-up of development to bring meaningful innovations to market Further develop development • Develop and ship products with market leading performance
Slide 14: SimSports
SimSports 14
Slide 15: Strong interest confirms long-term market potential
Strong interest confirms long-term market potential • Continued positive feedback and interest from sim racing reviewers, influencers and end-users ‒ $0.5 million SimSport revenue in Q3 2022 ‒ Reflects challenging macro situation with low discretionary spending and supply chain challenges • Supply c
Slide 16: Expanding sim racing product program
Expanding sim racing product program • Two new SimSports products began shipping in Q3 2022 ‒ The high-performance Forte™ Throttle and Brake Pedal ‒ The limited edition Pagani Huayra R Pedals • At least 5 new products and families expected to be ready for pre- order in Q4 2022 (shipping Q4 2022 or Q
Slide 17: Targeting a superior offering in a growing market
Targeting a superior offering in a growing market • Asetek positioning in the high end of the market Assetto Corsa user development ‒ Targeting competitive and committed gamers, and racing and automobile enthusiasts Average concurrent active users2 10.000 ‒ Plan to offer bundles with wheel, wheelbas
Slide 18: SimSports strategic development
SimSports strategic development Goal Strategy Development and Outlook • Leverage core mechatronics capabilities • Initial focus on innovation and product development Becoming a and global supply chain • Product development on plan based on own software and next-level implementation of acquired IP •
Slide 19: Financials
Financials 19
Slide 20: Revenue and EBIDTA margin reflect market volatility
Revenue and EBIDTA margin reflect market volatility Group revenue and liquid cooling EBITDA margin USD thousands 27.850 25.015 23.185 21.629 18.069 16.868 15.661 14.147 13.889 13.534 10.391 35% 35% 10.435 34% 9.124 35% 33% 30% EBITDA margin 29% 28% 24% Liquid cooling 22% 21% 19% 21% Q3 2019 Q4 2019
Slide 21: Income statement
Income statement Figures in USD (000's) Q3 2022 Unaudited Q3 2021 Unaudited YTD 2022 Unaudited YTD 2021 Unaudited 2021 • Q3 and YTD revenue reflect reduced shipments of Revenue Cost of sales 10,435 6,004 13,534 8,283 41,192 24,317 61,734 35,911 79,803 46,430 liquid cooling products compared to same
Slide 22: Margin development
Margin development Quarterly Group gross margin development 100% • Q3 2022 gross margin of 42.5% vs. 38.8% in Q3 2021 90% ‒ Improvement reflects a stronger U.S. dollar, a change in the mix 80% of product shipments, and lower costs associated with global 70% shipping and logistics 60% • YTD 2022 marg
Slide 23: Balance sheet
Balance sheet Balance sheet USD thousands at September 30, 2022 80.000 • Stable cash position at end Q3 70.000 • Continued debt draw-down to finance new HQ 60.000 Current • Solid and attractive partner for OEM customers liabilities 50.000 Non-current assets • Flexibility to develop and defend IP Non
Slide 24: Development of new development center and HQ progressing to plan
Development of new development center and HQ progressing to plan • On schedule for completion in mid-2024 • Limited cost inflation due to locking in deliveries early • Working on finalizing funding for development period and structuring the long-term post-delivery financing • Potential to take in ad
Slide 25: Financial strategy
Financial strategy Goal Strategy Development and outlook • Evolve business model to drive competitiveness and profitability Liquid cooling leadership • Product innovation and branding to strengthen market position Establish SimSports as a thriving • Revenue growth and diversification of revenue stre
Slide 26: Summary and outlook
Summary and outlook • Challenging market with limited visibility for 2023 • Optimizing cost base and driving efficiencies to emerge as a stronger company when market conditions normalize • Focus on expanding SimSports offering with more products in 2022 and 2023 • High end-user interest in Asetek li
Slide 27: Q&A
Q&A 27
Slide 28: Appendix
Appendix 28
Slide 29: Management
Management Founder and CEO CFO COO VP Global Operations André S. Eriksen Peter Dam Madsen John Hamill Henrik Gertz • Long-term entrepreneur and founder of Asetek • Previous positions include International • 30+ years of high tech industry sales, sales • 20+ years in operations management roles, • Pr
Slide 30: Board of Directors
Board of Directors Chairman Vice Chairman Director Jukka Pertola Erik Damsgaard Jørgen Smidt • 20+ years of management experience in ICT, energy, • Experienced Managing Director from the electrical and • 25+ years of international operational and business industry, infrastructure and healthcare sect
Slide 31: Income statement, summary
Income statement, summary 31
Slide 32: Balance sheet, summary
Balance sheet, summary Asetek Figures in USD (000's) ‘30 Sept 202231 Dec2024 “ASSETS, Unaudited Total non-current assets 38.227 29.325 Total current assets, 28.865 46.029 Total assets S 67.092 _§ 75.354 EQUITY AND LIABILITIES Total equity 42.988 48.388 Total non-current liabilities 772 1540 Total cu
Slide 33: Cash flow statement, summary
Cash flow statement, summary 33
Slide 34: Statement of equity, summary
Statement of equity, summary 34
Slide 35: www.asetek.com
Asetek www.asetek.com