Asetek A/s · OMXCOP:ASTK
Asetek A/s — Q3 2020 Earnings Presentation
33 slides from Asetek A/s's earnings presentation, Oct 23, 2020
Slide 1: Q3 2020
Q3 2020 23 October 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 • Record quarterly revenue of $21.6 million, reflecting growth of 108% over Q3 2019 • Gross margin increased to 47% in Q3 and 49% in the first nine months, from 42% in both prior year periods • Record quarterly EBITDA adjusted of $5.4 million in Q3 2020, compared with $32,000 in Q3 2019 •
Slide 5: Managing COVID-19 and increased demand through robust supply chain and operations
Managing COVID-19 and increased demand through robust supply chain and operations External manufacturing Asetek OEMs/end-users • Limited impact on ability to meet • Continued focus on employee health • Continued positive signals from customer demand to date and safety Gaming and Enthusiast OEMs • Co
Slide 6: 2020 revenue and profit outlook
2020 revenue and profit outlook Annual Group revenue USD thousands Guidance range • Group revenue expected to increase 25% to 30% compared with 2019 ‒ Corresponds to a range of $67.9 - $70.6 million and a record annual revenue YTD revenue 30 Sept • Gross margin expected to increase to ~47% from 42.3
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 and prototyping Sourcing In-house manufacturing Xiamen (China) Quality R&D Order management Sourcing Management Outsourced manufacturing London (UK) Marketing and branding Quality Sales Texas (USA) Order management Silicon Valley (USA
Slide 9: Quarterly revenue development
Quarterly revenue development Quarterly revenue and EBITDA-margin USD thousands 21.629 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 24,8 % 22,1 % 19,1 % 16,9 % 17,3 % 16,3 % 14,9 % 15,7 % 5.000 9,8 % 11,0 % 6,4 % 6,3 % 2,8 % 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 customers1 (YTD) Top 5 customers revenue split 2) 100% • Currently shipping to over 20 OEMs • Top five represent 81% of Gaming and 80% Enthusiast revenue YTD 2020, unchanged from 2019 60% • Ambition to increase
Slide 12: Increased pace of new product releases
Increased pace of new product releases • High product development activities in H2 2020 New Gaming and Enthusiast products started shipping • 9 new products started shipping in Q3 ‒ 4 to a new DIY customer 13 12 ‒ 3 of the new products provide high performance liquid cooling for NVIDIA’s new Ampere
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: Started commercial shipments for the HPE Apollo System server platform in Q3
Started commercial shipments for the HPE Apollo System server platform in Q3 16 Source: Hewlett Packard Enterprise
Slide 17: Increased activity in HPC market
Increased activity in HPC market • 9 Data center orders announced YTD with $5 million in combined value ‒ Three Data center orders announced in Q3 totaling $1.6 million ‒ Two Data center orders announced in Q4 totaling $1.1 million • Increased pipeline of potential projects • Higher activity and sal
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) Q3 2020 Unaudited Q3 2019 Unaudited 9M 2020 Unaudited 9M 2019 Unaudited • Record quarterly revenue reflects a 127% increase in Q3 Revenue Cost of sales $ 21,629 11,562 $ 10,391 6,031 $ 44,900 23,060 $ 38,673 22,388 unit sales volumes YoY Gross profit 10,067 4,
Slide 21: Margin development
Margin development Quarterly Group gross margin development 100% 90% • Q3 2020 group gross margin was 46.5% (42.0%), in line 80% with previously communicated expectations 70% • Nine-month 2020 gross margin was 48.6% (42.1%) 60% 51% 50% 49% 47% • New business model, increased prices for Data center 4
Slide 22: Strong balance sheet supporting long-term growth
Strong balance sheet supporting long-term growth Balance sheet USD thousands as at September 30, 2020 70.000 60.000 Non-current 50.000 assets Current liabilities • Strong cash position and low interest-bearing debt Non-current liabilities • Solid and attractive partner for OEM customers 40.000 Curre
Slide 23: Share buy-back program update
Share buy-back program update • Share buy-back program to offset employee options launched in May ‒ Completed as planned by end-September ‒ Total of 656,629 shares repurchased at an average price of NOK 63.77 per share • At September 30, 2020, there were 26.4 million common shares outstanding includ
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 • Record Group revenue expected for Q4 and FY 2020 driven by strong demand for Gaming and Enthusiast products ‒ Q4 2020 revenue expected in the $23 to $25.7 million range Photo to be included • DIY business model transition and higher Data center prices contributing to increased
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) Q3 2020 Q3 2019 9M 2020 9M 2019 2019 Unaudited Unaudited Unaudited Unaudited Revenue $ 21,629 $ 10,391 $ 44,900 $ 38,673 $ 54,334 Cost of sales 11,562 6,031 23,060 22,388 31,329 Gross profit 10,067 4,360 21,840 16,285 23,005 Research and development 1,453 1,24
Slide 30: Balance sheet
Balance sheet Figures in USD (000's) 30 Sep 2020 31 Dec 2019 Unaudited ASSETS Non-current assets Intangible assets $ 1,927 $ 1,920 Property and equipment 6,130 6,115 Deferred income tax assets 4,454 5,521 Other assets 354 307 Total non-current assets 12,865 13,863 Current assets Inventory 2,206 1,65
Slide 31: Cash flow statement
Cash flow statement Figures in USD (000's) 9M 2020 9M 2019 2019 Unaudited Unaudited Cash flows from operating activities Income for the period $ 3,055 $ 452 $ (628) Depreciation and amortization 2,597 2,917 4,057 Finance income recognized (50) (282) (359) Finance costs recognized 126 124 171 Finance
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 - nine months ended Sept 30, 2020 Income for the period - - - 3,055 3,055 F
Slide 33: The Better Way to Cool
The Be�er Way to Cool www.asetek.com 33