Asetek A/S

Investor Presentation • Sep 19, 2018

Second quarter 2018

15 August 2018

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 Company. The content of this Presentation is not to be construed as legal, business, investment or tax advice, and has not been reviewed by any regulatory authority. Each Recipient should consult with its own legal, business, investment and tax adviser as to legal, business, investment and tax advice. The information cannot stand alone but must be seen in conjunction with the oral presentation and are expressed only as of the date hereof.

The Presentation may include certain statements, estimates and projections with respect to the business of the Company and its anticipated performance, the market and the competitors. However, no representations or warranties, expressed or implied, are made by the Company, its advisors or any of their respective group companies or such person's officers or employees as to the accuracy or completeness of the information contained herein and such statements or estimates, no reliance should be placed on any information, including projections, estimates, targets and opinions contained herein, and no liability whatsoever is accepted by the Company as to any errors, omissions or misstatements contained herein. The information contained herein is subject to change, completion, or amendment without notice and the Company does not assume any obligation to update or correct the information included in this Presentation. Neither the delivery of this presentation nor any further discussions by the Company or any if its advisors with any of the Recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date of the Presentation.

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ASETEK in brief

Business Provider of liquid cooling solutions for data centers, servers and PCs

• Listed on Oslo Børs OSE4520 Technology Hardware & Equipment
• Sales Q2'18 USD 19.5 million / H1'18 USD 33.4 million
• Market cap USD ~275 million / NOK ~2.2* billion

Operating profit Desktop PC segment Q2'18 USD 5.9 million / H1'18 USD 9.9 million Data center segment Q2'18 USD (2.1) million / H1'18 USD (4.3) million

* 1 USD = NOK 8.35 (14 AUG. '18)

Asetek specializes in liquid cooling solutions for data centers, servers and PCs

What we do

Asetek snapshot

5

Growing adoption of Asetek liquid cooling

Asetek liquid cooling units shipped

• Record quarterly revenue of USD 19.5 million, up 75% vs. Q2'17
• Driven by high-end desktop cooling demand
• Q2 revenue growth reflecting increased DIY sales
• Q2 data center revenue fuelled by OEM shipments
• ASUS selects Asetek's newest generation design for its first liquid coolers
• 2018 desktop revenue growth expectation of between 15% to 25%

Highlights

Group revenue USD thousands

Our two business segments

Desktop do-it-yourself (DIY) driving revenue

DESKTOP SEGMENT

Quarterly desktop revenue

D I Y Gaming/Performance DT

Our desktop business

DESKTOP SEGMENT

Do-It-Yourself PC enthusiasts / gamers 81% sales

OEM Gaming Desktop PCs 19% sales

Shipped 319,000 desktop units in Q2 2018

ASUS selects Asetek's newest generation design for its first liquid coolers

• ASUS, a premium brand for gaming systems, is expanding its Republic of Gamers (ROG) ecosystem utilizing Asetek's solutions
• ASUS first all-in-one liquid coolers, ROG Ryujin and Ryuo
• Based on Asetek's latest generation 6 liquid cooling solution

Desktop market update

• Strong Q2 2018 for the desktop segment driven by product launches from Corsair as well as unusually high demand for certain existing products
• When CPU and GPU suppliers experience challenges bringing new products to market, PC Enthusiasts, Gamers and eSports Professionals tend to postpone upgrading their PCs leading to a slowdown in the market which in turn creates revenue variability

DESKTOP SEGMENT

Desktop outlook

• Expect Q3 2018 revenue in the DIY market to approximate the level achieved in Q3 2017
• Expect Gaming/Performance Desktop PC market to increase from the levels achieved in Q3 2017
• As one major GPU launch has experienced delays, Asetek's full-year revenue growth may shift towards the lower-end of the guided desktop range

Desktop revenue drivers

DATA CENTER SEGMENT

Quarterly data center revenue USD thousands

Announced May 4, 2018

Follow up order from Penguin Computing

• Order for Asetek RackCDU D2CT (Direct-to-Chip) liquid cooling solution and D2C coolers and loops for further build-out of an undisclosed U.S. Department of Energy High Performance Computing (HPC) installation
• Order value: USD 230,000
• Delivery: To be completed in Q3 2018

New HPC orders from established data center OEMs

DATA CENTER SEGMENT

Undisclosed U.S. Department of Energy High Performance Computing (HPC) installation

Hardware commercialization is a long-term business

20.000
15.000
10.000
5.000
0

Quarterly revenue development since commercialization USD thousands

Revenue development

• Q2'18 group revenue of USD 19.5m driven by increased shipments in the do-it-yourself (DIY) market
• Y-o-Y Quarterly growth of 75%
• Record quarterly revenue
• Q2'18 desktop revenue USD 18.3m
• Driven by an increase in DIY product sales
• Compares with USD 10.1m in Q2'17 and USD 13.2m in Q1'18
• Q2'18 data center revenue of USD 1.2m
• Fueled by OEM shipments
• Compares with USD 1.0m in Q2'17 and USD 0.7m in Q1'18

FINANCIALS

Group revenue USD thousands

Gross margin and earnings development

FINANCIALS

• Q2'18 group gross margin increased to 35.8% (35.0%)
• Q2'18 desktop gross margin decreased to 36.6% (37.0%)
• Impacted by exchange rate headwind during 2017
• Sales price increases implemented early 2018
• Q2'18 data center gross margin increased to 23.2% (15.0%)

• Reflecting growth in shipments to OEMs

• Q2 2018 Group EBITDA of 19.6% (10.4%) reflecting very strong desktop activity

• Desktop EBITDA margin of 32.2% (27.5%)
• Data center EBITDA of USD (2.1) million

Gross margin development

Income statement

• Strong revenue growth
• Gross margins on par with recent past experience
• Operating expenses on level with recent quarters
• Increased depreciations. Impacted by two larger projects
• Total EBIT-margin 8.5% (-0.2%)

18

FINANCIALS

USD (000's)	Group	Q2 2018 Desktop	Data center	Group	Q2 2017 Desktop	Data center
Revenue	19 536	18 288	1 248	11 147	10 147	1 000
Gross Margin	35.8%	36.6%	23.2%	35.0%	37.0%	15.0%
Other operating expenses	3 163	813	2 350	2 748	960	1 788
EBITDA adjusted	3 828	5 889	(2 061)	1 156	2 794	(1 638)
Depreciations	993	367	626	631	296	335
Share based compensation	169	42	127	330	111	219
E B I T	2 666	5 480	(2 814)	195	2 387	(2 192)
EBIT Margin	13.6%	30.0%	N/A	1.7%	23.5%	N/A
HQ, Litigation expenses	344			448
HQ, Settlement received	-			(651)
HQ, Share based compensation	78			161
HQ, Other	580			267
Headquarters costs	1 002			225
EBIT, total	1 664			(30)

Cash flow statement

FINANCIALS

USD (000's)	Q2 2018	Q1 2018	Q4 2017	Q3 2017	Q2 2017
Income (loss) for the period	2 143	(962)	3 573	1 376	(625)
Depreciation, amortization and impairment	993	848	704	712	631
Finance cost (income) and taxes	271	10	(3 040)	22	10
Share based compensation	247	413	482	552	491
Changes in current assets other than cash	(5 520)	3 412	(878)	(2 584)	(198)
Changes in payables and accrued liabilities	2 379	(4 004)	731	2 387	2 576
Net cash provided (used) in operating activities	513	(283)	1 572	2 465	2 885
Additions to intangible assets and other assets	(313)	(482)	(613)	(748)	(674)
Purchase of property and equipment & other assets	(464)	(749)	(600)	(410)	(637)
Net cash used in investing activities	(777)	(1 231)	(1 213)	(1 158)	(1 311)
Proceeds from debt issuance, other LT liabilities
Cash flows on credit lines/debt/lease	(63)	(91)	291	(268)	286
Issuance of capital / conv debt / dividend	289	410	(262)	45	(2 281)
Net cash provided (used) by financing activities	226	319	29	(223)	(1 995)
Effect of exchange rate changes on cash	(806)	529	271	401	491
Net changes in cash and cash equivalents	(844)	(666)	659	1 485	70
Cash and cash equivalents at beginning of period	17 732	18 398	17 739	16 254	16 184
Cash and cash equivalents at end of period	16 888	17 732	18 398	17 739	16 254

Balance sheet

• Strong cash position
• Low interest bearing debt
• Lean balance sheet enabling growth and financial flexibility

FINANCIALS

Non-current Balance sheet composition USD thousands

Desktop strategy and outlook

DESKTOP SEGMENT

Data center strategy and outlook

Goal	Strategy
	Increase end-user adoption with existing OEMs Add new OEMs
Create a meaningful and profitable business	Exploit established leadership within HPC
	segment

Increase end-user adoption with existing OEMs

Explore potential opportunities to grow beyond the HPC

Outlook

Data center revenue expected to be on level with 2017

DATA CENTER SEGMENT

• Record quarterly revenue of USD 19.5 million, up 75% vs. Q2'17
• Growth driven by high-end desktop cooling demand
• ASUS selects Asetek's newest generation design for its first liquid coolers
• Strong long-term market outlook

Summary

24

Appendix

Largest shareholders as of 14 August 2018

Name	Holding	Percentage	Country Account Type
ARBEJDSMARKEDETS TIL	2,654,768	10.3%	DNK ORDINARY
CLEARSTREAM BANKING	1,787,310	6.9%	LUX NOMINEE
UBS SWITZERLAND AG	1,627,347	6.2%	CHE NOMINEE
SUNSTONE TECHNOLOGY	1,586,341	6.2%	DNK ORDINARY
DANSKE BANK A/S	1,471,845	5.7%	DNK NOMINEE
HSBC BANK PLC	1,267,579	4.9%	GBR NOMINEE
NORDEA BANK AB	1,117,760	4.3%	DNK NOMINEE
KLP AKSJENORGE	977,671	3.8%	NOR ORDINARY
RBC INVESTOR SERVICE	845,256	3.3%	LUX NOMINEE
DZ PRIVATBANK S.A. 0	836,300	3.2%	LUX NOMINEE
KOMMUNAL	768,200	3.0%	NOR ORDINARY
THE BANK OF NEW YORK (1)	676,490	2.6%	DNK NOMINEE
LANNEBO EUROPA SMÅBO	588,535	2.3%	SWE ORDINARY
NORDNET BANK AB	559,374	2.3%	SWE NOMINEE
THE BANK OF NEW YORK	480,506	1.9%	BEL NOMINEE
J.P. MORGAN CHASE	418,872	1.6%	GBR NOMINEE
EUROCLEAR BANK S.A./	409,206	1.6%	BEL NOMINEE
STATE STREET BANK AN	364,500	1.4%	USA NOMINEE
STATE STREET BANK &	306,242	1.2%	USA NOMINEE
BANQUE DE LUXEMBOURG	299,000	1.2%	LUX NOMINEE
Total Top 20	19,043,102	73.9%
Other Shareholders	6,459,618	25.1%
ASETEK Treasury Shares	248,681	$1.0\%$
Total share capital	25,751,401	100.0%

Income statement

Figures in USD (000's)	Q2 2018	Q2 2017	1H 2018	1H 2017	2017
	Unaudited	Unaudited	Unaudited	Unaudited
Revenue	\$ 19 536	\$ 11 147	\$ 33 404	\$ 22 618	\$ 58 194
Cost of sales	12 545	7 243	21 458	14 299	37 225
Gross profit	6 991	3 904	11 946	8 319	20 969
Research and development	1 437	1 007	2 559	1 890	4 220
Selling, general and administrative	3 890	3 578	8 105	6 831	14 905
Other expense (income)	-	(651)	-	(651)	(913)
Total operating expenses	5 327	3 934	10 664	8 070	18 212
Operating income	1 664	(30)	1 282	249	2 757
Foreign exchange (loss) gain	764	(562)	194	(672)	(1 239)
Finance income (costs)	53	(3)	43	(12)	(19)
Total financial income (expenses)	817	(565)	237	(684)	(1 258)
Income before tax	2 481	(595)	1 519	(435)	1 499
Income tax (expense) benefit	(338)	(30)	(338)	(39)	2 976
Income for the period	2 143	(625)	1 181	(474)	4 475
Other comprehensive income items that may be reclassified
to profit or loss in subsequent periods:
Foreign currency translation adjustments	(1 088)	733	(171)	727	1 253
Total comprehensive income	\$ 1 055	\$ 108	\$ 1 010	\$ 253	\$ 5 728
Income per share (in USD):
Basic	\$ 0.08	\$ (0.02)	\$ 0.05	\$ (0.02)	\$ 0.18
Diluted	\$ 0.08	\$ (0.02)	\$ 0.04	\$ (0.02)	\$ 0.17

Balance sheet

Figures in USD (000's)	30 June 2018	31 Dec 2017
ASSETS	Unaudited
Non-current assets
Intangible assets	\$ 2 495 \$	2 754
Property and equipment	4 156	3 856
Deferred income tax assets	7 635	7 778
Other assets	314	794
Total non-current assets	14 600	15 182
Current assets
Inventory	3 016	2 316
Trade receivables and other	15 150	13 280
Cash and cash equivalents	16 888	18 398
Total current assets	35 054	33 994
Total assets	\$ 49 654 \$	49 176
EQUITY AND LIABILITIES
Equity
Share capital	\$ 422 \$	419
Retained earnings	34 510	31 976
Translation and other reserves	830	999
Total equity	35 762	33 394
Non-current liabilities
Long-term debt	644	816
Total non-current liabilities	644	816
Current liabilities
Short-term debt	1 016	1 051
Accrued liabilities	1 745	2 432
Accrued compensation & employee benefits	1 304	1 335
Trade payables	9 183	10 148
	13 248	14 966
Total current liabilities
Total liabilities	13 892	15 782
Total equity and liabilities	\$ 49 654 \$	49 176

Equity

	Other	Retained
	reserves	earnings	Total

Unaudited
	Share		Translation	Other	Retained
Figures in USD (000's)	capital		reserves	reserves	earnings	Total
Equity at January 1, 2018	\$ 419		\$ 1 005 \$	(6) \$	31 976	\$ 33 394
Total comprehensive income - six months ended June 30, 2018
Income for the period	-		-	-	1 181	1 181
Foreign currency translation adjustments	-		(171)	-	-	(171)
Total comprehensive income - six months ended June 30, 2018	-		(171)	-	1 181	1 010
Transactions with owners - six months ended June 30, 2018
Shares issued		3	-	2	693	698
Share based payment expense	-		-	-	660	660
Transactions with owners - six months ended June 30, 2018		3	-	2	1 353	1 358
Equity at June 30, 2018	\$ 422		\$ 834 \$	(4) \$	34 510	\$ 35 762

Equity at January 1, 2017	\$ 417 \$	(248) \$	(9) \$	28 130 \$	28 290
Total comprehensive income - six months ended June 30, 2017
Income for the period	-	-	-	(474)	(474)
Foreign currency translation adjustments	-	727	-	-	727
Total comprehensive income - six months ended June 30, 2017	-	727	-	(474)	253
Transactions with owners - six months ended June 30, 2017
Shares issued	1	-	3	440	444
Share based payment expense	-	-	-	563	563
Dividends	-	-	-	(2 907)	(2 907)
Transactions with owners - six months ended June 30, 2017	1	-	3	(1 904)	(1 900)
Equity at June 30, 2017	\$ 418 \$	479 \$	(6) \$	25 752 \$	26 643

Strategic position

Large and growing markets Supplying global brands Market leading solutions Strong IP

Profitable growth