Asetek A/s · OMXCOP:ASTK
Asetek A/s — Q2 2021 Earnings Presentation
41 slides from Asetek A/s's earnings presentation, Aug 12, 2021
Slide 1: Q2 2021
Q2 2021 12 August 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: The global leader in liquid cooling solutions
The global leader in liquid cooling solutions for gaming and enthusiast PCs, data centers and servers… Hardware …founded on innovation and Software Mechanics extensive mechatronics capabilities 3
Slide 4: Highlights
Highlights • Record Q2 revenue of $23.2 million reflecting growth of 64% over Q2 2020 • Q2 EBITDA adjusted of $3.2 million, compared with $3.1 million in Q2 2020 • First-half revenue grew 107% to $48.2 million, and EBITDA adjusted increased 140% to $7.9 million • SimSports R&D investment of $0.7 mil
Slide 5: Ensuring robust supply chain and stable operations
Ensuring robust supply chain and stable operations External manufacturing Asetek OEMs/end-users • Accelerated digitalization and demand • High activity related to R&D, sourcing • Shortage of graphic cards impacting for tech products leading to global and quality Gaming and Enthusiast demand, shortag
Slide 6: Revenue outlook maintained
Revenue outlook maintained • 2021 group revenue expected to increase 20% to 30% compared with 2020 ‒ Equals annual revenue in the range of $87 - $95 million Annual Group revenue Guidance USD thousands range ‒ Pipeline is record high and beyond guiding ‒ Customers are getting nervous by increasing sh
Slide 7: Detailing margin expectations
Detailing margin expectations External actions and events Margin impact Expected P&L impact • Cost prices impacted by high FX rates (~2% higher CNY/USD compared with Q2/2020) Gross Margin • Component price increases in spot markets as Asetek 2 %-point margin decline prioritizes the ability to server
Slide 8: 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 9: Our leading and innovative revenue generating business segments
Our leading and innovative revenue generating business segments Gaming and Enthusiast Data center Enthusiasts and do-it-yourself (DIY) Gaming/Performance PCs Data center OEMs1 9 1) Selected OEMs
Slide 10: Quarterly revenue development
Quarterly revenue development Quarterly revenue and EBITDA margin1 USD thousands 27.850 25.015 23.185 21.629 19.535 17.405 17.103 16.505 15.661 13.868 14.147 11.179 10.391 25% 25% 9.124 22% 19% 19% 17% 16% 15% 16% 14% 6% 3% 2% 0% Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 202
Slide 11: Gaming and Enthusiast
Gaming and Enthusiast 11
Slide 12: Continued strong G&E demand, margins reflecting growing SimSports investments
Continued strong G&E demand, margins reflecting growing SimSports investments Revenue and EBITDA margin1 USD thousands 24.074 21.734 21.718 20.085 18.288 16.104 16.568 15.430 15.199 13.208 12.438 10.472 9.552 33% 35% 34% 35% 35% 30% 32% 31% 8.122 30% 30% 27% 27% 22% 21% Q1 2018 Q2 2018 Q3 2018 Q4 20
Slide 13: High level of product release activity
High level of product release activity 19 • Seven new products started shipping in Q2 2021 ‒ Six to DIY customers and one to an OEM customer • 19 new products estimated to start shipping in Q3 2021 13 • Further investment in product development and branding 12 to expand reach with key customers ‒ Br
Slide 14: Wide and diversified base of Gaming and Enthusiast OEMs
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 86% of Gaming 80% and Enthusiast revenue in H1 2021, vs. 81% for full-year 2020 60% • The largest OEMs have
Slide 15: Continuous innovation focused on immersive gaming experiences
Continuous innovation focused on immersive gaming experiences • Asetek liquid cooling technology powering several ASUS coolers introduced in Q2 2021 ‒ Second-generation line of ROG Ryujin CPU coolers ‒ Line of ROG Strix LC II ARGB high performance CPU coolers ‒ NVIDIA GeForce RTX 3080 Ti graphics ca
Slide 16: 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 17: SimSports
SimSports 17
Slide 18: Developing leading product offering for fast-growing SimSports gaming market
Developing leading product offering for fast- growing SimSports gaming market • Transforming into mainstream gaming and entertainment ‒ Opportunity identified in Asetek eSports Academy and racing engagement ‒ Highly complementary to established mechatronics capabilities • Gamers demanding innovative
Slide 19: Strong strategic fit with Gaming and Enthusiasts segment
Strong strategic fit with Gaming and Enthusiasts segment Gaming and Enthusiast Data center Enthusiasts and Gaming/Performance SimSports do-it-yourself (DIY) PCs Competitive and committed gamers and enthusiasts Enterprise 19
Slide 20: SimSports product roll-out progressing on plan
SimSports product roll-out progressing on plan “Huge respect to Asetek, for their ambitions with Asetek SimSport. We share many of the same visions - so we look forward to Asetek • Product development progressing to plan with expected developing the world's best Simracing equipment. We are testing l
Slide 21: SimSports strategic development
SimSports strategic development Goal Strategy Development and Outlook • Leverage core mechatronics capabilities Becoming a and global supply chain • Initial focus on innovation and product development next-level • Finalize market and channel strategies, including direct sales, online • Develop produ
Slide 22: Data center
Data center 22
Slide 23: Data center activity remains volatile
Data center activity remains volatile Revenue and EBITDA margin 3.776 USD thousands 3.281 1.709 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 2021 Q2 2021 -3% -6% -12% -30% -41% -63% -107% -1
Slide 24: Low market visibility
Low market visibility Data center order intake USD thousands 4.373 • Signed near $1.9 million of new Data center orders in Q2 2021 ‒ One announced contract and several smaller orders ‒ OEM ordering pattern remains “lumpy” with signs of increased order volumes but less revenue per order 2.248 2.154 1
Slide 25: 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 26: Data center strategic development
Data center strategic development Goal Strategy Development and Outlook • Influence the influencers and support adoption of • Global sustainability agenda strengthens rationale for Asetek’s data Maintain center solution latest EU proposals into position and • Positive impact from direct engagement w
Slide 27: Financials
The Be er ay to Coo Financials 27
Slide 28: Income statement
Income statement Figures in USD (000's) Q2 2021 Unaudited Q2 2020 Unaudited 1H 2021 Unaudited 1H 2020 Unaudited 2020 • Record Q2 and first-half 2021 revenue on increased Revenue Cost of sales $ 23,185 13,344 $ 14,147 6,872 $ 48,200 27,628 $ 23,271 $ 11,498 72,750 38,556 shipments of Gaming and Enthu
Slide 29: Margin development
Margin development Quarterly Group gross margin development 100% • Normalized gross margin of 42.4% vs. a record 51.4% in Q2 90% 2020 80% ‒ Decrease reflects • change in the mix of product shipments 70% • ~2-3%-points from Data Center contributing extraordinarily high in early 2020 60% • increases i
Slide 30: 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 Current • Solid and attractive partner for OEM customers Non-current liabilities 60.000 • Flexibility to develop and defend IP assets No
Slide 31: 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 Maintaining Data cent
Slide 32: Summary and outlook
Summary and outlook Growth Annual Group revenue ~15% p.a.1 USD thousands to $150 • Record Group revenue expected for FY million 2021 • Driven by strong demand for Gaming and Enthusiast products Guidance range 72.750 • Continued near-term low visibility for Data Center activity, long-term potential s
Slide 33: Q&A
Q&A 33
Slide 34: Appendix
Appendix 34
Slide 35: 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 36: 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 37: Income statement
Income statement Figures in USD (000's) Q2 2021 Q2 2020 1H 2021 1H 2020 2020 Unaudited Unaudited Unaudited Unaudited Revenue $ 23,185 $ 14,147 $ 48,200 $ 23,271 $ 72,750 Cost of sales 13,344 6,872 27,628 11,498 38,556 Gross profit 9,841 7,275 20,572 11,773 34,194 Research and development 1,646 1,339
Slide 38: Balance sheet
Balance sheet Figures in USD (000's) 30 Jun 2021 31 Dec 2020 Unaudited ASSETS Non-current assets Intangible assets $ 11,277 $ 3,217 Property and equipment 10,079 7,049 Deferred income tax assets 5,383 6,421 Other assets 353 605 Total non-current assets 27,092 17,292 Current assets Inventory 2,708 2,
Slide 39: Cash flow statement
Cash flow statement Figures in USD (000's) 1H 2021 1H 2020 2020 Unaudited Unaudited Cash flows from operating activities Income for the period $ 4,480 $ 615 $ 9,195 Depreciation and amortization 1,933 1,721 3,754 Finance income recognized (1) (49) (51) Finance costs recognized 99 78 192 Finance inco
Slide 40: 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 - six months ended June 30, 2021 Income for the period - - - 4,480 4,
Slide 41: www.asetek.com
Asetek www.asetek.com