Asetek A/s · OMXCOP:ASTK
Asetek A/s — Q1 2020 Earnings Presentation
32 slides from Asetek A/s's earnings presentation, Apr 22, 2020
Slide 1: Q1 2020
Q1 2020 22 April 2020
Slide 2: Highlights
Highlights • Q1 revenue of $9.1 million, a decrease of 18% from Q1 2019 • Gross margin increased to 49% from 43% in Q1 2019, driven by higher Data center prices, business model transition and a stronger U.S. dollar • Q1 EBITDA adjusted of $0.2 million compared to $0.3 million in Q1 2019 • Cash posit
Slide 3: Ensuring business continuity amid COVID-19
Ensuring business continuity amid COVID-19 Asetek footprint Aalborg (Denmark) R&D and Engineering In-house manufacturing Quality Xiamen (China) Management Engineering Outsourced manufacturing Quality Texas (USA) Silicon Valley (USA) Sales and marketing Sales and marketing Taipei (Taiwan) Sales • Pri
Slide 4: Robust supply chain and operations
Robust supply chain and operations External manufacturing Asetek OEMs/end-users • Limited impact on ability to meet • HQ, sales, in-house manufacturing and • Positive signals from Gaming and customer demand to date R&D are fully operational Enthusiast OEMs • $0.6 million of Q1 orders were delayed •
Slide 5: Strong financial position and flexibility going forward
Strong financial position and flexibility going forward As at 31 March 2020 2019 full-year cost composition As % of revenue • Strong cash position Cash position • High equity ratio and low interest- USD 26.2 million bearing debt 57,7% • No capacity adjustments or other 100% opex reductions required
Slide 6: 2020 to date meeting expectations even with COVID-19 impact
2020 to date meeting expectations even with COVID-19 impact • Impact to date due to supply constraints, not demand • Group outlook for 2020 maintained ‒ Special components affected, however not critical ‒ Revenue expectation of a decline of 5% to 10% from 2019 ‒ Considering current macroeconomic dev
Slide 7: Business overview
Business overview Gaming and Enthusiast 95% of sales Data center ~5% of sales Enthusiasts and do-it-yourself (DIY) Gaming/Performance PCs Data center Strategic position: Large and long-term growing markets | Supplying global brands | Market leading solutions IP platform: Applications | Technology |
Slide 8: Q1 reflects high market volatility
Q1 reflects high market volatility Quarterly data center revenue and OEM additions USD thousands 19.535 20.000 17.652 17.924 17.405 17.103 16.505 15.661 15.000 13.868 11.471 11.147 11.179 10.391 10.000 9.124 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
Slide 9: Gaming and Enthusiast
Gaming and Enthusiast 9
Slide 10: Developing OEM customer base
Developing OEM customer base Status Top 5 Gaming and Enthusiast customers* Top 5 customers revenue split** • Currently shipping to over 20 OEMs 100% • Top five represent 81% of Gaming & Enthusiast revenue in 2019, a 80% decrease from 85% in 2018 • Diversification increasing with time 60% • Continuou
Slide 11: Unveiling the most advanced desktop liquid cooling technology to date
Unveiling the most advanced desktop liquid cooling technology to date “When we envisioned creating our next generation of CPU coolers, not only did we want to create the highest performing AIOs, we wanted to give gamers and enthusiasts a unique level of personalization and creativity (..) We worked
Slide 12: Building a gaming and enthusiast brand
Building a gaming and enthusiast brand • We put our brand forward without compromising our customers’ brand • Dual-branding and brand-behind-the- brand strategies • Introducing new and high-end products to live the brand and go back to our roots 12
Slide 13: 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 14: Data center
• In February, Asetek began delivering waste heat from its in-house data center to Aalborg’s municipal district heating network, demonstrating the viability of Asetek’s technology in enabling power savings and Data center reducing CO2 emissions • Global sustainability agenda strengthens rationale fo
Slide 15: Increased activity in HPC market
Increased activity in HPC market • Preparations for release of global server OEM’s product platform with Asetek’s Direct to Chip (D2C) liquid cooling announced in January progressing as planned • $600k-$800k order announced April 21 for Q2 delivery ‒ The largest order to date from existing HPC OEM p
Slide 16: Financials
Financials 16
Slide 17: Quarterly income statement
Quarterly income statement Figures in USD (000's) Q1 2020 Unaudited Q1 2019 Unaudited • Average Gaming and Enthusiast ASP decreased slightly due Revenue Cost of sales $ 9,124 4,626 $ 11,179 6,410 to business model transition ($56.6 vs. $57.7) Gross profit 4,498 4,769 Research and development 1,167 1
Slide 18: Margin development
Margin development Quarterly Group gross margin development • Q1 2020 group gross margin was 49.3% (42.7%) 60% • The improvement reflects higher gross margins across 50% 49% all product lines, especially on Data Center products 43% 42% 42% 43% • Gaming and Enthusiast margin reflects business model 4
Slide 19: Balance sheet and share buy-back program
Balance sheet and share buy-back program Balance sheet composition USD thousands 60.000 • Strong cash position and low interest-bearing debt • Lean balance sheet enables growth and financial 50.000 Non-current liabilities flexibility Non-current Current liabilities 40.000 assets • Share buy-back pro
Slide 20: Financial priorities
Financial priorities Priorities Value drivers • Evolve business model to drive competitiveness and profitability Gaming and Enthusiast • Product innovation and rebranding to strengthen market position leadership • Revenue growth and diversification of revenue streams • Margin protection and optimiza
Slide 21: Summary and outlook
Summary and outlook Annual Group revenue USD thousands 67.314 58.194 54.334 50.921 • 2020 group revenue expectation maintained 35.982 • Higher Data center prices and G&E OEM business model transition support increased gross margins 20.729 20.847 18.681 • Asetek expects a positive income before tax i
Slide 22: Q&A
Q&A @ Asetek
Slide 23: For more than 20 years, thermal solutions from Asetek have been cooling processors
For more than 20 years, thermal solutions from Asetek have been cooling processors around the globe… Our AIO coolers can be found in the latest high-end gaming PCs and are sought-after by enthusiasts for their reliable operation, ease-of-use and pervasive cooling. They are also used in some of the f
Slide 24: Asetek will be an end-user centric brand
Asetek will be an end-user centric brand Enthusiasts We know that top-shelf performance is a must when building your own monster rig. That’s why Hardcore gamers we continue to innovate and push the envelope of what’s possible. Gamers know they can count on us. We’re gamers too, who love to squeeze e
Slide 25: 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 26: 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 • 20+ years of consulting and financial sector experience industry, infrastructure and healthcare sector
Slide 27: Income statement
Income statement Figures in USD (000's) Q1 2020 Q1 2019 2019 Unaudited Unaudited Revenue $ 9,124 $ 11,179 $ 54,334 Cost of sales 4,626 6,410 31,329 Gross profit 4,498 4,769 23,005 Research and development 1,167 1,255 4,889 Selling, general and administrative 4,252 4,540 17,821 Other expense (income)
Slide 28: Balance sheet
Balance sheet Figures in USD (000's) 31 Mar 2020 31 Dec 2019 ASSETS Unaudited Non-current assets Intangible assets $ 1,928 $ 1,920 Property and equipment 5,592 6,115 Deferred income tax assets 5,409 5,521 Other assets 301 307 Total non-current assets 13,230 13,863 Current assets Inventory 1,386 1,65
Slide 29: Cash flow statement
Cash flow statement Figures in USD (000's) Q1 2020 Q1 2019 2019 Unaudited Unaudited Cash flows from operating activities Income for the period $ (700) $ (821) $ (628) Depreciation and amortization 873 1,023 4,057 Finance income recognized (49) (92) (359) Finance costs recognized 40 44 171 Finance in
Slide 30: Statement of equity
Statement of equity Share Translation Other 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 - quarter ended March 31, 2020 Income for the period - - - (700) (700) Foreign currency transl
Slide 31: Disclaimer
Disclaimer This presentation and its enclosures and appendices (jointly referred to as the “Presentation”) has been produced by Asetek A/S (the “Company”) and has been furnished to a limited audience (the “Recipient[s]”)on a confidential basis in connection with a potential securities issue by the C
Slide 32: www.asetek.com
32 ™ www.asetek.com