Slide 1: Q2 2020
Q2 2020 12 August 2020
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: The global leader in liquid cooling solutions
The global leader in liquid cooling solutions for gaming and enthusiast PCs, data centers and servers The Be�er Way to Cool
Slide 4: Highlights
Highlights • Q2 revenue of $14.1m compared with $17.1m in Q2 2019 • Gross margin increased to 51% in Q2 and first half, from 42% in both prior year periods • Q2 EBITDA adjusted of $3.1m, compared with $3.3m in Q2 2019 which included a $0.8m a favorable patent litigation settlement • First-half reven
Slide 5: Managing COVID-19 impact through robust supply chain and operations
Managing COVID-19 impact through robust supply chain and operations External manufacturing Asetek OEMs/end-users • Limited impact on ability to meet • Continued focus on employee health • Increasingly positive signals from customer demand to date and safety Gaming and Enthusiast OEMs • Delayed Q1 or
Slide 6: Revenue and profit outlook raised on strong demand for Gaming and Enthusiast products
Revenue and profit outlook raised on strong demand for Gaming and Enthusiast products Annual Group revenue USD thousands • Group revenue expected to increase 5% to 15% compared Guidance with 2019 range ‒ Previous guidance was for a 5% to 10% decline YoY • Consistent strong and rising demand ‒ Workin
Slide 7: Business overview
Business overview Gaming and Enthusiast Data center Enthusiasts and do-it-yourself (DIY) Gaming/Performance PCs Data center OEMs1 7 1) Selected OEM customers
Slide 8: Global platform with integrated value chain
Global platform with integrated value chain Aalborg (Denmark) R&D Sourcing In-house manufacturing Xiamen (China) Quality R&D Order management Sourcing London (UK) Management Outsourced manufacturing Quality Sales Texas (USA) Order management Silicon Valley (USA) Management Sales and marketing Taipei
Slide 9: Quarterly revenue development
Quarterly revenue development Quarterly revenue and EBITDA-margin USD thousands 20.000 19.535 17.652 17.924 17.405 17.103 16.505 15.661 15.000 13.868 14.147 11.471 11.147 11.179 10.391 10.000 9.124 22,1% 19,1% 16,9% 17,3% 16,3% 5.000 14,9% 15,7% 9,8% 11,0% 6,4% 6,3% 2,8% 1,9% 0,3% 0 Q1 17 Q2 17 Q3 1
Slide 10: Gaming and Enthusiast
Gaming and Enthusiast 10
Slide 11: Widening and diversifying base of Gaming and Enthusiast OEMs
Widening and diversifying base of Gaming and Enthusiast OEMs Top 5 Gaming and Enthusiast customers 1) Top 5 customers revenue split 2) 100% • Currently shipping to over 20 OEMs • Top five represent 79% of Gaming and 80% Enthusiast revenue YTD 2020, down from 81% in 2019 60% • Diversification increas
Slide 12: Delivering on innovation with industry's first slot-in PCIe radiator card
Delivering on innovation with industry’s first slot- in PCIe radiator card • Introducing the new Rad Card GPU Cooler to provide liquid cooling for GPU’s in space constrained PC cases ‒ Included in Dell-Alienware’s new Aurora R11 PC ‒ The Asetek Rad Card GPU Cooler fits into PCs motherboard’s PCIe sl
Slide 13: Building a Gaming and Enthusiast brand
Building a Gaming and Enthusiast brand • Putting forward the Asetek brand without compromising the customers’ market position • Dual-branding and brand-behind-the- brand strategies • Introducing new and high-end products to support brand positioning and deliver on commitment to innovation • Engaging
Slide 14: Gaming and Enthusiast strategic development
Gaming and Enthusiast strategic development Goal Levers Development and outlook • Focus on delivery of core liquid cooling solutions R&D and product development • Ramp-up of development to bring meaningful innovations to market • Products which deliver best performance, quality and reliability Conti
Slide 15: Data center
Data center 15
Slide 16: Delivering next-generation HPC and AI cooling solutions
Delivering next-generation HPC and AI cooling solutions • Asetek solution incorporated in an upgrade to HPE Apollo Systems server platform ‒ High-performing and density-optimized systems • Project on track with pre-production shipments to commence in August for a first product ‒ Ramp of commercial s
Slide 17: Increased activity in HPC market
Increased activity in HPC market • Shipped $0.8 million InRackCDU™ liquid cooling order to new high-density HPC cluster in North America ‒ Largest order to date from this OEM (announced in April) • Additional Data Center orders announced in Q2 ‒ $0.3 million from existing server OEM with expected co
Slide 18: Data center strategic development
Data center strategic development Goal Strategy Outlook • Influence the influencers Global sustainability agenda strengthens rationale for Asetek’s data Maintain • center solution position and • Increase end-user adoption create a with existing and new OEMs • Market adoption of liquid cooling remain
Slide 19: Financials
Financials 19
Slide 20: Income statement
Income statement Figures in USD (000’s)555 Q2 2020 Q2 2019 Unaudited Unaudited 1H 2020 1H 2019 Unaudited Unaudited 2019 • Q2 revenue reflects decline in unit sales volumes Revenue Cost of sales $ 14 147 $ 17 103 6 872 9 947 $ 23 271 $ 28 282 11 498 16 357 $ 54 334 31 329 and a slight decrease in Gam
Slide 21: Margin development
Margin development Quarterly Group gross margin development 100% 90% • Q2 2020 group gross margin was 51.4% (41.8%) 80% • First-half 2020 gross margin was 50.6% (42.2%) 70% 60% • New business model, increased Data center prices, 51% 50% 49% stronger U.S. dollar, product mix, and ongoing cost 43% 42%
Slide 22: Strong balance sheet supporting long-term growth
Strong balance sheet supporting long-term growth Balance sheet USD thousands as at June 30, 2020 60.000 50.000 Non-current Current liabilities assets • Strong cash position and low interest-bearing debt 40.000 Non-current liabilities • Solid and attractive partner for OEM customers 30.000 Current as
Slide 23: Update on share buy-back program and warrants related share sales
Update on share buy-back program and warrants related share sales • Share buy-back program to offset employee options launched in May ‒ Targeting the repurchase of up to 1 million shares at a value of up to $4.5 million ‒ To be completed by September 2020 • On August 11, 2020, there were 25.8 millio
Slide 24: Financial priorities
Financial priorities Priorities Value drivers • 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 • Margin protection and optimiza
Slide 25: Summary and outlook
Summary and outlook • Strong demand for Gaming and Enthusiast products driving expected Group revenue growth in 2020 • DIY business model transition and higher Photo to be included Data center prices contributing to increased gross margin and pre-tax profit • Substantial pipeline of new Gaming and E
Slide 26: Appendix
Appendix
Slide 27: Management
Management Founder and CEO CFO COO VP Global Operations André S. Eriksen Peter Dam Madsen John Hamill Csaba Vesei • Long-term entrepreneur and founder of Asetek • Previous positions include International • 30+ years of high tech industry sales, sales • 14+ years with IBM in numerous leadership • Pre
Slide 28: Board of Directors
Board of Directors Chairman Vice Chairman Director Jukka Pertola Chris Christopher Maria Hjorth • 20+ years of management experience in ICT, energy, • 40+ years of leadership, management and tech industry • 20+ years of consulting and financial sector experience industry, infrastructure and healthca
Slide 29: Income statement
Income statement Figures in USD (000's) Q2 2020 Q2 2019 1H 2020 1H 2019 2019 Unaudited Unaudited Unaudited Unaudited Revenue $ 14,147 $ 17,103 $ 23,271 $ 28,282 $ 54,334 Cost of sales 6,872 9,947 11,498 16,357 31,329 Gross profit 7,275 7,156 11,773 11,925 23,005 Research and development 1,339 1,200
Slide 30: Balance sheet
Balance sheet Figures in USD (000's) 30 Jun 2020 31 Dec 2019 Unaudited ASSETS Non-current assets Intangible assets $ 1,933 $ 1,920 Property and equipment 5,382 6,115 Deferred income tax assets 5,230 5,521 Other assets 336 307 Total non-current assets 12,881 13,863 Current assets Inventory 1,656 1,65
Slide 31: Cash flow statement
Cash flow statement Figures in USD (000's) 1H 2020 1H 2019 2019 Unaudited Unaudited Cash flows from operating activities Income for the period $ 615 $ 926 $ (628) Depreciation and amortization 1,721 1,946 4,057 Finance income recognized (49) (187) (359) Finance costs recognized 78 83 171 Finance inc
Slide 32: Statement of equity
Statement of equity Unaudited Treasury Share Translation share Retained Figures in USD (000's) capital reserves reserves earnings Total Equity at January 1, 2020 $ 423 $ 392 $ (4) $ 38,197 $ 39,008 Total comprehensive income - six months ended June 30, 2020 Income for the period - - - 615 615 Foreig
Slide 33: The Better Way to Cool
The Be�er Way to Cool www.asetek.com 33