Slide 1: Q2 2022
Q2 2022 11 August 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: Highlights
Highlights • Q2 revenue of $16.9 million compared with $23.2 million in Q2 2021 • Gross margin of 42%, level with Q2 2021 • Q2 EBITDA adjusted of $1.3 million, compared with $3.2 million in Q2 2021 • First-half 2022 revenue of $30.8 million, and EBITDA adjusted of $0.4 million • SimSports revenue of
Slide 4: Gaming & Enthusiast market experiencing prolonged headwinds
Gaming & Enthusiast market experiencing prolonged headwinds • Continued market challenges delaying a • Lingering effects of the war in Ukraine, COVID-19, supply chain normalization of the business climate disruptions and US tariffs on Chinese exports • Reduced consumer confidence and discretionary s
Slide 5: Optimizing cost base and driving efficiencies
Optimizing cost base and driving efficiencies • Organizational rightsizing implemented ‒ 52 full-time employees laid off over the past year across all regions and businesses ‒ Consolidation of selected functions including closing of London sales office ‒ Annual cost reductions are estimated at $4-5
Slide 6: Long-term potential unchanged
Long-term potential unchanged • Current market challenges are industry-wide and temporary • Gaming interest and long-term drivers remain intact with end-users demanding new equipment and improved experiences within traditional gaming and SimSports • Maintaining focus on product development to be pos
Slide 7: Business overview
Business overview Gaming & Enthusiast Data center SimSports Enthusiasts and Gaming/Performance PCs do-it-yourself (DIY) Liquid cooling for Competitive and Liquid cooling for Immersive equipment for gamers, racing committed gamers and enthusiasts enterprises and automobile enthusiasts 7
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: Gaming & Enthusiast
Gaming & Enthusiast 9
Slide 10: Product release activity affected by current market uncertainties
Product release activity affected by current market uncertainties 15 • Four new products started shipping in Q2 2022 ‒ Two in the DIY market and two in OEM segment ‒ Includes GPU coolers from EVGA and ASUS ROG 12 • Six new products estimated to start shipping in Q3 2022 10 ‒ Customers continue to as
Slide 11: Wide and diversified base of Gaming & Enthusiast OEMs
Wide and diversified base of Gaming & Enthusiast OEMs Top 5 Gaming and Enthusiast customers1 Top 5 customers revenue split 2) 100% • Currently shipping to over 20 OEMs 80% • Top five represented 84% of Gaming and Enthusiast revenue in YTD 2022, vs. 60% 83% for full-year 2021 • Ambition to increase d
Slide 12: Gaming & Enthusiast strategic development
Gaming & 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 Further develop development • Develop and ship products with market leading perfor
Slide 13: SimSports
SimSports 13
Slide 14: Positive market reception for initial SimSports products
Positive market reception for initial SimSports products • $1 million in revenue in Q2 2022 following start of shipments of the high-end Invicta sim racing pedals in late March • High-performance and high-value Forte sim racing started shipping late July • Strong feedback from sim racing reviewers,
Slide 15: Expanding the product program
Expanding the product program • Planned SimSports product launches: ‒ The entry-level La Prima pedals open for pre-order in 2022 ‒ Steering wheels and wheel-bases open for pre-order in 2022 ‒ Racing rig, seats, shifters, hand brakes and other accessories planned in 2023 • Strengthening direct sales
Slide 16: Bridging the gap between real racing and sim racing
Bridging the gap between real racing and sim racing • Formula One racer Kevin Magnussen named brand ambassador to bring the “thrill and authentic feel” of F1 to sim racers everywhere • Sponsorship agreement with GetSpeed Race Team, a top contender in the 24-hour Nürburgring race ‒ Asetek SimSports™
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: EU progressing legislation supporting use of liquid cooling
EU progressing legislation supporting use of liquid cooling for energy efficiency and CO2 reductions • Continued shipments to existing HPC customers • EU progressing energy legislation which requires the reuse of waste heat generated in data centers, favorable to adoption of Asetek technology • The
Slide 20: 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 21: Financials
Financials 21
Slide 22: Revenue and EBIDTA margin reflect market volatility
Revenue and EBIDTA margin reflect market volatility Group revenue and G&E EBITDA margin USD thousands 27.850 25.015 23.185 21.629 18.069 17.103 16.868 15.661 14.147 13.889 13.534 11.179 10.391 35% 35% 34% 31% 9.124 35% 33% 30% EBITDA margin G&E 27% 29% 28% 22% 21% 20% 21% Q1 2019 Q2 2019 Q3 2019 Q4
Slide 23: Income statement
Income statement Figures in USD (000's) Q2 2022 Unaudited Q2 2021 Unaudited 1H 2022 Unaudited 1H 2021 Unaudited 2021 • Q2 and H1 revenue reflect reduced shipments of Revenue Cost of sales $ 16,868 9,730 $ 23,185 13,344 $ 30,757 $ 18,313 48,200 $ 27,628 79,803 46,430 Gaming & Enthusiast products comp
Slide 24: Margin development
Margin development Quarterly Group gross margin development 100% • Q2 2022 gross margin of 42.3% vs. 42.4% in Q2 2021 90% 80% • H1 2022 margin of 40.5% (42.7%) reflects higher component costs, unfavorable exchange rates, higher shipping costs and a 70% change in product mix 60% 50% 42,4% 41,8% 42,3%
Slide 25: Balance sheet
Balance sheet Balance sheet USD thousands at June 30, 2022 80.000 • Recent cash position change primarily reflects reduction 70.000 to accounts payables in Q1 60.000 • Q2 2022 debt draw-down to finance new HQ Current 50.000 Non-current liabilities • Solid and attractive partner for OEM customers ass
Slide 26: Development of new HQ progressing to plan
Development of new HQ progressing to plan • On scheduled for completion in mid-2024 • Limited cost inflation due to locking in deliveries early • Construction financing in place – final financing to be executed post completion • Potential to take in additional tenants following downsizing of own org
Slide 27: Financial strategy
Financial strategy Goal Strategy Development and outlook • Evolve business model to drive competitiveness and profitability Gaming and Enthusiast leadership • Product innovation and branding to strengthen market position Capture growth potential in the • Revenue growth and diversification of revenue
Slide 28: Summary and outlook
Summary and outlook Growth ~15% p.a.1 to $150 million • Challenging market with limited visibility Annual Group revenue USD thousands for second half of 2022 and beyond • Optimizing cost base and driving efficiencies to emerge as a stronger company when market conditions normalize • Focus on expandi
Slide 29: Q&A
Q&A 29
Slide 30: Appendix
Appendix 30
Slide 31: 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 32: 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 33: Income statement
Income statement Figures in USD (000's) Q2 2022 Q2 2021 1H 2022 1H 2021 2021 Unaudited Unaudited Unaudited Unaudited Revenue $ 16,868 $ 23,185 $ 30,757 $ 48,200 $ 79,803 Cost of sales 9,730 13,344 18,313 27,628 46,430 Gross profit 7,138 9,841 12,444 20,572 33,373 Research and development 1,253 1,646
Slide 34: Balance sheet
Balance sheet Figures in USD (000's) 30 June 2022 31 Dec 2021 Unaudited ASSETS Non-current assets Intangible assets $ 11,505 $ 10,938 Property and equipment 17,096 11,732 Deferred income tax assets 5,899 6,293 Other assets 330 362 Total non-current assets 34,830 29,325 Current assets Inventory 5,218
Slide 35: Cash flow statement
Cash flow statement Figures in USD (000's) 1H 2022 1H 2021 FY 2021 Unaudited Unaudited Cash flows from operating activities Income for the period $ (1,317) $ 4,480 1,337 Depreciation and amortization 1,979 1,933 3,750 Gain on sale of property, plant and equipment - - (688) Special items - - 1,713 Fi
Slide 36: Statement of equity
Statement of equity Translation Treasury share Retained Unaudited Figures in USD (000's) Share capital reserves reserves earnings Total Equity at January 1, 2022 $ 442 $ 1,075 $ (11,206) $ 58,077 $ 48,388 Total comprehensive income – six months ended June 30, 2022 Income for the period - - - (1,317)
Slide 37: www.asetek.com
Asetek www.asetek.com