Slide 1: Q3 2021
Q3 2021 28 October 2021
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: Highlights
Highlights • Nine-month revenue of $61.7 million (+37%) and EBITDA adjusted of $6.5 million • Q3 revenue of $13.5 million compared with $21.6 million in Q3 2020; Q3 gross margin of 39% compared with 47% in prior year • Q3 EBITDA adjusted of negative $1.4 million, compared with $5.4 million in Q3 202
Slide 4: Status update Gaming and Enthusiast market
Status update Gaming and Enthusiast market 22 September 28 October Outlook • 2021 expectations updated due to • Revenue trending towards lower • Long-term ambition of 15% increased uncertainty related to end of expectations range average revenue growth sales and costs for the remainder maintained Im
Slide 5: Strong G&E market fundamentals curbed by short-term challenges
Strong G&E market fundamentals curbed by short-term challenges Gaming and Enthusiast revenue by month • Growing gaming community investing in more immersive $12,000,000 experiences enabled by high-end PCs with liquid cooling ‒ Reflected in increased production, more new products and widening custome
Slide 6: EBITDA margin set to recover with revenue stabilizing and HPC exit
EBIDTA margin set to recover with revenue stabilizing and HPC exit Revenue and EBITDA margin USD thousands 27,850 25,015 23,185 21,629 Low-end of revenue 19,536 guidance 17,405 17,103 16,505 15,661 13,868 14,147 13,534 11,179 35% 10,391 35% 35% 32% 33% 34% 35% 30% 31% 30% 9,124 33% 27% 30% 30% EBITD
Slide 7: Global platform with integrated value chain supports growth and expansion
Global platform with integrated value chain supports growth and expansion 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 London (UK) Order management Bra
Slide 8: Growing offering for more immersive gaming experiences and sustainable data centers
Growing offering for more immersive gaming experiences and sustainable data centers Gaming and Enthusiast Data center Enthusiasts and Gaming/Performance SimSports do-it-yourself (DIY) PCs Competitive and committed gamers and enthusiasts Enterprise 8
Slide 9: Gaming and Enthusiast
Gaming and Enthusiast 9
Slide 10: High level of product releases reflect customers' confidence in long-term demand growth
High level of product releases reflect customers’ confidence in long-term demand growth 19 15 • 15 new products started shipping in Q3 2021 13 ‒ One new customer 12 • 19 new products estimated to start shipping in Q4 2021 9 ‒ Including to 3 new customers 7 • Continuous investments in product develop
Slide 11: Strengthening a wide and diversified base of Gaming and Enthusiast OEMs
Strengthening a wide and diversified base of Gaming and Enthusiast OEMs Top 5 Gaming and Enthusiast customers1 Top 5 customers revenue split 2) • Currently shipping to over 20 OEMs 100 % • Top five represented 85% of Gaming 80 % and Enthusiast revenue in YTD 2021, vs. 81% for full-year 2020 60 % • T
Slide 12: Powering first liquid cooling solutions from global gaming leader
Powering first liquid cooling solutions from global gaming leader • Razer’s first AIO liquid coolers, the Razer Hanbo series, launched on October 21 based on Asetek technology ‒ Enabling advanced CPU overclocking capability, RGB lighting, and virtually silent operation to gamers, tech enthusiasts an
Slide 13: Gaming and Enthusiast strategic development
Gaming and Enthusiast strategic development Goal Strategy Development and outlook • Focus on delivery of core liquid cooling solutions • Ramp-up of development to bring meaningful innovations to market • R&D and product • Products which deliver best performance, quality and reliability Further devel
Slide 14: SimSports
? se SimSports cK 14 Asetek
Slide 15: Product roll-out progressing to plan
Product roll-out progressing to plan • The Asetek Invicta premium performance SimRacing pedals were unveiled in September and featured at the ADAC SimRacing 2021 Expo in Germany ‒ Available for order in Q4 with delivery next year • Development of steering wheels and wheelbase on track ‒ Tailor-made
Slide 16: Teaming up with leading hypercar brand Pagani to deliver exclusive racing experiences
Teaming up with leading hypercar brand Pagani to deliver exclusive racing experiences • Licensing, marketing and product agreement for a number of upcoming Asetek sim racing products ‒ Custom-design of limited editions of Pagani-licensed products based on technology used in the Pagani Huayra R ‒ Pag
Slide 17: 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 18: Data center
Data center 18
Slide 19: Data center revenue and margin development reflect sub-scale nature of HPC market
Data center revenue and margin development reflect sub-scale nature of HPC market Revenue and EBITDA margin 3,776 USD thousands 3,281 1,709 1,590 1,544 1,467 1,248 1,301 1,075 1,002 839 660 707 535 462 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1
Slide 20: Sharpened focus on long-term general data center market potential
Sharpened focus on long-term general data center market potential • Exiting HPC segment due to limited revenue potential and “Hot water from Google may be wasted (..) The planned Google data substantial drain of resources required to stay competitive center could provide heating to 350,000 apartment
Slide 21: EU supports use of liquid cooling to cut data center CO2 emissions
EU supports use of liquid cooling to cut data center CO2 emissions and enable circular economy • The EU Commission’s July 2021 Energy Efficiency Directive proposal requires the reuse of waste heat generated in data centers • EU seeks to neutralize CO2 emissions and preserve and reuse precious resour
Slide 22: Update data center strategic development
Update data center strategic development Goal Strategy Development and Outlook • Influence the influencers • Global sustainability agenda strengthens rationale for Asetek’s data Maintain and support adoption of center solution over times Data center latest EU proposals into • Positive impact from di
Slide 23: Financials
Financials 23
Slide 24: Income statement
Income statement Figures in USD (000's) Q3 2021 Unaudited Q3 2020 Unaudited YTD 2021 Unaudited YTD 2020 Unaudited 2020 • Q3 revenue reflects reduced shipments of Gaming and Revenue Cost of sales $ 13,534 8,283 $ 21,629 11,562 $ 61,734 35,911 $ 44,900 $ 23,060 72,750 38,556 Enthusiast products compar
Slide 25: Margin development
Margin development Quarterly Group gross margin development 100% • Gross margin of 38.8% vs. third quarter of 46.5% in 2020, 90% with decrease reflecting 80% ‒ Higher shipping costs (~4 %-points), a stronger CNY vs USD 70% (~3 %-points), component pricing and changes to mix of product shipments 60%
Slide 26: Strong balance sheet supporting long-term growth
Strong balance sheet supporting long-term growth Balance sheet USD thousands as at June 30, 2021 80,000 • Strong cash position and low interest-bearing debt 70,000 • Solid and attractive partner for OEM customers Current 60,000 Non-current liabilities • Flexibility to develop and defend IP assets No
Slide 27: Revenue outlook
Revenue outlook Annual Group revenue USD thousands Guidance range • 2021 group revenue expected to increase 10% to 20% compared with 2020 ‒ Current outlook trending towards lower end of the range YTD revenue • Gross margin normalizing to between 40% and 45% vs. 47% in 2020 • Operating income of $0 t
Slide 28: Financial strategy
Financial strategy Goal Strategy Development and outlook • Evolve business model to drive competitiveness and profitability Gaming and Enthusiast leadership • Product innovation and rebranding to strengthen market position • Revenue growth and diversification of revenue streams Capture growth potent
Slide 29: Summary and outlook: On track to deliver on 2025 revenue ambition
Summary and outlook: On track to deliver on 2025 revenue ambition Growth ~15% p.a.1 to $150 million • Record Group revenue expected despite Annual Group revenue USD thousands impact of COVID-19 measures, supply chain disruptions and chip shortages • Strong underlying demand for Gaming and Enthusiast
Slide 30: Q&A
Q&A 30
Slide 31: Appendix
Appendix 31
Slide 32: 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 • Previous positions include International • 30+ years of high tech industry sales, sales • 20+ years in operations management roles, Asetek Cont
Slide 33: Board of Directors
Board of Directors Chairman Vice Chairman Jukka Pertola Erik Damsgaard • 20+ years of management experience in ICT, energy, • Experienced Managing Director from the electrical and industry, infrastructure and healthcare sectors electronic manufacturing industry • 10+ years of international experienc
Slide 34: Income statement
Income statement Figures in USD (000's) Q3 2021 Q3 2020 YTD 2021 YTD 2020 2020 Unaudited Unaudited Unaudited Unaudited Revenue $ 13,534 $ 21,629 $ 61,734 $ 44,900 $ 72,750 Cost of sales 8,283 11,562 35,911 23,060 38,556 Gross profit 5,251 10,067 25,823 21,840 34,194 Research and development 1,789 1,
Slide 35: Balance sheet
Balance sheet Figures in USD (000's) 30 Sept 2021 31 Dec 2020 Unaudited ASSETS Non-current assets Intangible assets $ 10,760 $ 3,217 Property and equipment 10,071 7,049 Deferred income tax assets 6,253 6,421 Other assets 344 605 Total non-current assets 27,428 17,292 Current assets Inventory 5,077 2
Slide 36: Cash flow statement
Cash flow statement Figures in USD (000's) YTD 2021 YTD 2020 2020 Unaudited Unaudited Cash flows from operating activities Income for the period $ 1,491 $ 3,055 $ 9,195 Depreciation and amortization 2,663 2,597 3,754 Gain on sale of property, plant and equipment (714) - Special items 1,713 - (51) Fi
Slide 37: Statement of equity
Statement of equity Unaudited Translation Treasury share Retained Figures in USD (000's) Share capital reserves reserves earnings Total Equity at January 1, 2021 $ 433 $ 2,784 $ (6,373) $ 50,681 $ 47,525 Total comprehensive income - nine months ended Sept 30, 2021 Income for the period - - - 1,491 1
Slide 38: www.asetek.com
Asetek www.asetek.com