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Asetek A/S

Investor Presentation Apr 25, 2018

6301_rns_2018-04-25_f76e34f1-5228-40e4-9eba-0b2108dbbd3c.pdf

Investor Presentation

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Q1 2018 and Capital Markets Update

25 April 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.

This presentation may contain certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words "believes", expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", "will", "should", "may", "continue" and similar expressions. Forward-looking statements include statements regarding: objectives, goals, strategies, outlook and growth prospects; future plans, events or performance and potential for future growth; liquidity, capital resources and capital expenditures; profit; margin, return on capital, cost or dividend targets; economic outlook and industry trends; developments of the Company's markets; the impact of regulatory initiatives; and the strength of the Company's competitors. The forward-looking statements contained in this presentation, including assumptions, opinions and views of the Company, are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in the Company's records and other data available from third party sources. Although the Company believes that these assumptions were reasonable when made, the statements provided in this presentation are solely opinions and forecasts which are uncertain and subject to risks, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. A multitude of factors can cause actual results to differ significantly from any anticipated development expressed or implied in this document. No representation is made that any of these forward-looking statements or forecasts will come to pass or that any forecast result will be achieved and you are cautioned not to place any undue reliance on any forward-looking statement. he distribution of this Presentation and the offering, subscription, purchase or sale of securities issued by the Company in certain jurisdictions is restricted by law. Persons into whose possession this Presentation may come are required by the Company to inform themselves about and to comply with all applicable laws and regulations in force in any jurisdiction in or from which it invests or receives or possesses this Presentation and must obtain any consent, approval or permission required under the laws and regulations in force in such jurisdiction, and the Company shall not have any responsibility or liability for these obligations. In particular, neither this presentation nor any copy of it may be taken or transmitted or distributed, directly or indirectly, into Australia, Canada, Hong Kong, Japan, Switzerland, United Kingdom or the United States unless pursuant to available exemptions from registration requirements.

In relation to the United States and U.S. persons, this Presentation is strictly confidential and is being furnished solely in reliance on applicable exemptions from the registration requirements under the U.S. Securities Act of 1933, as amended. The shares of the Company have not and will not be registered under the U.S. Securities Act or any state securities laws, and may not be offered or sold within the United States, or to or for the account or benefit of U.S. persons, unless an exemption from the registration requirements of the U.S. Securities Act is available. Accordingly, any offer or sale of shares in the Company will only be offered or sold (i) within the United States, or to or for the account or benefit of U.S. persons, only to qualified institutional buyers ("QIBs") in private placement transactions not involving a public offering and (ii) outside the United States in offshore transactions in accordance with Regulation S. Any purchaser of shares in the United States, or to or for the account of U.S. persons, will be deemed to have made certain representations and acknowledgements, including without limitation that the purchaser is a QIB. This Presentation and its contents are confidential and its distribution (which term shall include any form of communication) is restricted pursuant to section 21 (restrictions on financial promotion) of the Financial Services and Markets Act 2000 (as amended). In relation to the United Kingdom, this Presentation is only directed at, and may only be distributed to, persons who fall within the meaning of article 19 (investment professionals) and 49 (high net worth companies, unincorporated associations, etc.) of the Financial Services and Markets Act 2000 (financial promotion) Order 2001 (as amended) or who are persons to whom the document may otherwise lawfully be distributed. This Presentation may only be distributed in circumstances which do not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995 (as amended).

The contents of this Presentation shall not be construed as legal, business or tax advice. Each reader of this Presentation should consult its own legal, business or tax advisor as to legal, business or tax advice. If you are in doubt about the contents of this Presentation, you should consult your stockbroker, bank manager, lawyer, accountant or other professional adviser.

This Presentation is subject to Danish law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of the Danish courts.

11:00 Welcome
11:05 – Liquid cooling makes sense in a data driven world
11:30 CEO André Sloth Eriksen
11:30 – Our markets and business segments
12:15 COO John Hamill
Break Refreshments and product demo
12:30 – Creating value through profitable growth
13:00 CFO Peter Dam Madsen
13:00 – Sum-up
13:15 CEO André Sloth Eriksen
13:15 - Q&A, mingling and food

Agenda

Liquid cooling makes sense in a data driven world CEO André S. Eriksen

A data-driven world puts new demands on computers and servers

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

What we do

Asetek snapshot

Our two business segments

  • Record Q1 revenue of USD 13.9 million, up 21%
  • Driven by high-end desktop cooling demand
  • Q1 2018 EBITDA adjusted of USD 0.9 million
  • Reflecting currency effects, costs and growth investments
  • Surpassed total of 5 million sealed loop coolers shipped since inception
  • Announcement with Intel Product Collaboration and Systems Division (PCSD)
  • Initial forecasts for sealed loops has not met Asetek's expectations (run-rate volume business)
  • RackCDU business showing up in pipeline, but will take time (bid-based business)

Recent highlights

Group revenue USD thousands

Hardware commercialization is a long-term business

20 000
15 000
10 000
5 000
0

Quarterly revenue development since commercialization USD thousands

Liquid cooling offers a strong value proposition to data center and PC owners

12

Performance and cost efficiency

Desktop

  • Up to 10% performance increase
  • Up to 5x higher density
  • 50% lower cooling costs

  • Reliable CPU and GPU performance

  • Low noise and overclocking
  • Customization

13

VIDEO:

https://www.youtube.com/watch?time\_continue=1&v=tSNY9X\_8ySc

Energy savings and environmental impact

  • Develop strong ties to global and regional OEMs and channel partners
  • Partnerships with hardware and infrastructure providers
  • Leveraging relationships across both desktop and data center segments

Asetek's go-to-market strategy

OEM adoption timeline

Building partnerships and global reach

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Data center

~ 5.1 million liquid cooling units deployed in the field

Asetek liquid cooling units deployed in the field Cumulative total number of million units

Revenue development

Desktop Data center

Quarterly revenue Q1 2014 - Q1 2018 USD thousands

Strategic position

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

Profitable growth

Our markets and business segments COO John Hamill

  • Exponential growth in amount of data which must be processed and stored
  • Ever increasing requirements for data transfer and processing speeds
  • New data driven applications
  • Gaming and VR push the boundaries for desktop system capabilities

Key macro trends

Our desktop business

DESKTOP SEGMENT

Do-It-Yourself PC enthusiasts / gamers 76% sales

OEM Gaming Desktop PCs 24% sales

Shipped more than 1 million desktop units in 2017 Shipped 245,000 desktop units in Q1 2018

Untapped desktop market potential

DESKTOP SEGMENT

Estimated less than 10% penetration in high-end gaming and
DIY enthusiast desktop segment
High-end
2017 high-end gaming population, assumed one system unit each 22 million DIY and gaming
Notebook market share 25%-30% PC segment
Desktop high-end gaming population 12.5 -
15.4 million
~5 million units
Replacement cycle 3 to 3.5 years ASP > \$1,800
High-end desktop gaming PC potential per year (Minimum PC ASP USD 1,800) ~ 5 million units
Mid-range desktop gaming PC potential per year (PC ASP 1,000 –
1,800)
> 5 million units
Estimated Total Available Market (units per year) +10 million
Asetek
average sealed loop ASP in 2017
USD 52.5 per unit Mainstream
Estimated TAM for Asetek's
Desktop business
>USD 525 million
gaming PC
segment >5
>10% market
million units penetration
High-end gaming PC equipment market expect to grow by a
CAGR of 7.5%* to USD 17 billion by 2020
ASP \$1,000-1,800 1 million units
Total 2017 Asetek unit shipments in 2017

Key market drivers

DESKTOP SEGMENT

Source: PWC Entertainment & Media Outlook 2017-2021, Jon Peddie Research

New technologies and rapidly growing segments

4K resolution and ultra-highdefinition (UHD)

USD 150 million 2016

USD 750 million 2020e

Source: Jon Peddie Research

eSports Total high -end eSports PC gaming hardware market USD million

Customer overview

DESKTOP SEGMENT

Top five desktop customers

  • Continued focus on widening base of providers offering Asetek liquid cooling
  • Reducing dependency on one single customer

+27 additional desktop customers

Revenue split among top 5 desktop customers

Desktop strategy and outlook

Continue to dominate the desktop liquid cooling market

DESKTOP SEGMENT

  • The Asetek liquid cooling-technology value proposition resonates best in the HPC (high performance computing) segment of the data center market
  • Demand is increasing as new applications are introduced that require servers with HPC capabilities
  • HPC capabilities are needed across various data center market sub-segments

Data center introduction

DATA CENTER SEGMENT

67.1

2017 global data center market and HPC segment (Estimated value USD billion based on server shipments)

Source: IDC Worldwide Server Forecast 2017, Hyperion Research 2018

HPC market characterized by steady growth

2017 HPC market geographical split (Revenues USD billion)

DATA CENTER SEGMENT

Total available market to Asetek- HPC segment

DATA CENTER SEGMENT

~980

Assuming 72 processors nodes per rack and USD 15,000 ASP per RackCDU Numbers are rounded off

  • Vast untapped market potential
  • Estimated TAM for the HPC segment of ~USD 790 million
  • Asetek reported USD 5 million in Data center revenue in 2017, <1% implied market share

Estimated HPC segment TAM USD million

Delivering on data center strategy by adding six new OEMs

DATA CENTER SEGMENT

Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18

Quarterly data center revenue USD thousands

Intel collaboration on liquid cooling for servers and data centers DATA CENTER SEGMENT

*) Includes Asetek's ServerLSL and RackCDU D2C technologies

Starting point

  • Partnership with Intel Product Collaboration and Systems Division (PCSD)
  • Hot water liquid cooling for servers and datacenters based on Asetek's* sealed loop and D2C technologies
  • Focused on liquid cooling of density-optimized Intel® Compute Models supporting high-performance Intel® Xeon® Scalable processors

Status

  • Initial focus on sealed loop solutions, with launch of first product series in March 2018
  • Current forecasts and orders suggest that volume will not meet previous expectations, which where substantial
  • Shift of focus to D2C solutions for OEM- and systemintegrator customers of Intel PCSD
  • Widened reach for Asetek in the HPC segment which is in line with data center strategy of increasing number of OEMs
  • Several HPC projects related to Intel currently being discussed, including opportunities with new OEMs
  • Still to early to provide any estimate of D2C impact

  • Based on orders and forecasts received to date, it appears that the sealed loop market is not materializing as expected

  • The OEM section of the forecast is dominated by opportunities within the pipeline sponsored by Fujitsu, Penguin, Intel customers and others
  • Experience and techniques allows the distillation of the data center pipeline into an outlook, although it is difficult to predict accurately
  • Current outlook includes only known opportunities. Additional projects are likely to emerge
  • Most likely outcome is a flat revenue development year over year

Changes to data center guidance

Data center outlook breakdown

DATA CENTER 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
HPC segment

Increase end-user adoption with existing OEMs

Explore potential opportunities to grow beyond the

Outlook

Data center revenue expectation revised to flat development, from a growth of 50% to 75%

DATA CENTER SEGMENT

Creating value through profitable growth CFO Peter Dam Madsen

Ensuring value creation

  • Revenue growth
  • Diversification of revenue streams
  • Margin protection and optimization
  • Customer adoption
  • Operations and margin stabilization
  • Targeted IP and R&D investments
  • Manufacturing
  • Sales and marketing efficiency
  • Cash conversion
  • Continued balance sheet optimization

FINANCIALS

Revenue and EBITDA

FINANCIALS

Quarterly revenue 2014 - Q1 2018 USD thousands

Revenue development

  • Q1'18 group revenue of USD 13.9m driven by high-end cooling demand
  • Y-o-Y Quarterly growth of 21%
  • Record Q1 revenue
  • Q1'18 desktop revenue USD 13.2m
  • Driven by an increase in DIY product sales
  • Compares with USD 11.1m in Q1'17 and USD 16.4m in Q4'17
  • Q1'18 data center revenue of USD 0.7m
  • The revenue in Q1 2018 did not meet Company expectations
  • Compares with USD 0.4m in Q1'17 and USD 1.5m in Q4'17

FINANCIALS

Group revenue USD thousands

Gross margin development

  • Full year group gross margin decreased to 36.0% (38.8%)
  • Q1'18 desktop gross margin decreased to 36.7% (38.6%)
  • Impacted by currency exchange headwind
  • Recovery seen in Q1'18 due to sales price increases and richer product mix
  • Q1'18 data center gross margin decreased to 15.5% (36.7%)
  • Impacted by manufacturing inefficiencies due to low volumes

FINANCIALS

Group gross margin Desktop gross margin Data center gross margin

Gross margin development

Currency exchange rates

FINANCIALS

  • 2017: 6% increase in the Chinese Yuan (CNY) vs. USD
  • Explains cost price increases for desktop COGS in 2017
  • Most of desktop COGS is denominated in CNY
  • 2018: Seems stabilized at 3% higher level

  • 12% increase in the Danish krone (DKK) vs the USD

  • Partial explanation for 2017 increase in overheads
  • About 80% of overheads are denominated in DKK
  • 2018: Seems stabilized at 3% higher level

CNY vs. USD – 2016 and 2017/'18 DKK vs. USD – 2016 and 2017/'18

Earnings development

  • Desktop EBITDA-margin level around 30%
  • Slowly increasing overhead levels throughout timeframe

  • Q1 2018 Group EBITDA reflecting higher activity, but also increased costs as a result of exchange rates.

  • Desktop EBITDA margin of 30.5% (30.6%)
  • Data center EBITDA of USD (2.3) million

FINANCIALS

Group EBITDA development USD thousands

Desktop revenue and EBITDA margin all overheads

Increased overhead costs

  • Significant negative impact from increased CNY and DKK vs. USD exchange rates
  • Increased EBITDA in Desktop despite FOREX headwind
  • Data Center overheads driven by higher R&D activity leading up to launch of new partner
  • Increase in depreciation following investments in project development, manufacturing equipment, ERP and facilities
  • Share based compensation costs increased to USD 0.4 million in Q1 2018 mainly driven by warrants granted and higher share price

Income statement FINANCIALS

Q1 2018 Q1 2017
USD (000's) Group Desktop Data center Group Desktop Data center
Revenue 13 868 13 208 660 11 471 11 054 417
Gross Margin 35.7 % 36.7% 15.5% 38.5% 38.6% 36.7%
Other operating expenses 3 215 827 2 388 2 831 878 1 953
EBITDA adjusted 1 740 4 026 (2 286) 1 584 3 384 (1 800)
EBITDA Margin 12.6 % 30.5% N/A 10.0% 30.6% N/A
Depreciations 848 458 390 388 162 226
Share based compensation 300 74 226 48 16 32
EBIT 592 3 494 (2 902) 1 148 3 206 (2 058)
EBIT Margin 4.3 % 26.5% N/A 10.0% 29.0% N/A
HQ, Litigation expenses, net 325 549
HQ, Share based compensation 113 24
HQ, Other 536 296
Headquarters costs 974 869
EBIT, total (382) 279

Cash generation and usage

* HQ incl. Litigation contains various cash based elements of residual character. Corporate tax income is also included here. 42

FINANCIALS

Cash conversion

  • Inventory turns: ~21 times per year (2017 full year)
  • 17 times when measured in Q1'18 (Q1'17: 25)
  • Trade receivables DSO: ~80 days (2017 full year)
  • 61 days when measured in Q1 2018 (Q1'17: 67)
  • Trade payables DPO: ~98 days (2017 full year)
  • 68 days when measured in Q1 2018 (Q1'17: 52)
  • Cash conversion in 4 days (2017 full year)
  • 11 days when measured in Q1 2018 (Q1'17: 29)
USD (000's) Q1 2018 Q4 2017 Q1 2017
Plant, property and equipment 4 3 5 9 3856 1924
Development projects 2 771 2 7 5 4 2043
Deferred tax asset 8 3 8 6 7 778 4763
Other assets 736 794 675
Total non-current assets 16 25 2 15 182 9407
Inventories 1775 2 3 1 6 1 111
Receivables 10 460 13 2 8 0 9 2 7 2
Cash and equivalents 17 732 18 3 98 16 184
Total current assets 29 967 33 994 26 5 67
Total assets 46 219 49 176 35 974
Total equity 34 172 33 394 28 784
Total non-current liabilities 733 816 361
Total current liabilities 11 3 14 14 9 66 6829
Total liabilities 12047 15782 7 190
Total equity and liabilities 46 219 49 176 35 974

FINANCIALS

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

FY 2018 financial outlook FINANCIALS

  • Desktop segment: Expecting revenue growth between 10 20%
  • Data center segment: Revenue expectation revised to flat
  • DT: Stable at current, slightly increasing levels
  • DC: To increase with scale
  • R&D at \$3-5m
  • Headcount constant
  • Stable overheads
  • Capex at \$2-3m
  • Maintain strong balance sheet and a healthy cash balance long-term cash conversion cycle 'soft target' at 0 (zero) days
  • Share appreciation
  • Share buy-back program under consideration
ash

Sum -up CEO André S. Eriksen

Platform for growth and value creation

Large and growing markets

Supplying global brands

Market leading solutions

Strong IP

Profitable growth

  • Growing business driven by a rapidly developing gaming market
  • Market leader
  • Significant untapped potential

  • Low short- to medium term visibility

  • Reach widened as Intel collaboration opens access to additional OEMs
  • Committed to developing data center business

Appendix

Largest shareholders as of 18 April 2018

Name Holding Percentage Country Account Type
ARBEJDSMARKEDETS TIL 2,429,022 9.5% DNK ORDINARY
UBS SWITZERLAND AG 1,752,835 6.8% CHE NOMINEE
CLEARSTREAM BANKING 1,662,909 6.5% LUX NOMINEE
DANSKE BANK A/S 1,656,631 6.5% DNK NOMINEE
SUNSTONE TECHNOLOGY 1,586,341 6.2% DNK ORDINARY
HSBC BANK PLC 1,267,579 5.0% GBR NOMINEE
NORDEA BANK AB 1,163,006 4.5% DNK NOMINEE
KLP AKSJENORGE 977,671 3.8% NOR ORDINARY
RBC INVESTOR SERVICE 887,500 3.4% LUX NOMINEE
THE BANK OF NEW YORK (1) 718,074 2.8% DNK NOMINEE
KOMMUNAL 707,670 2.8% NOR ORDINARY
NORDNET BANK AB 658,205 2.5% SWE NOMINEE
LANNEBO EUROPA SMÅBO 588,535 2.3% SWE ORDINARY
EUROCLEAR BANK S.A./ 519,025 2.0% BEL NOMINEE
THE BANK OF NEW YORK 437,261 1.7% BEL NOMINEE
J.P. MORGAN CHASE 422,972 1.6% GBR NOMINEE
DANSKE BANK A/S (1) 409,200 1.6% DNK NOMINEE
DZ PRIVATBANK S.A. 0 336,500 1.3% LUX NOMINEE
DANSKE BANK A/S (2) 330,574 1.3% DNK NOMINEE
STATE STREET BANK & 316,554 1.2% USA NOMINEE
Total Top 20 18,828,064 73.3%
Other Shareholders 6,513,652 25.4%
ASETEK Treasury Shares 330,524 1.3%
Total share capital 25,672,240 100.0%

Board of Directors

  • 40+ years of leadership, manage-ment and tech industry experience
  • Most recent Senior VP and GM at HP for an \$18B portfolio consisting of blades based client systems, workstations and desktop PCs
  • BSEE and MSEE from Colorado State University and an Executive MBA from Insead School of Business

Chris Christopher Director, BoD

  • 20+ years of international management and tech industry experience
  • Most of career at HP, where he served in a variety of leadership roles
  • Former VP and GM for HP's Americas Consumer Products
  • Holds an MSc in Management from Purdue University

Sam Szteinbaum Chairman, BoD

  • 25 years of international operational and business management experience from the mobile telecoms industry.
  • Analysis and implementation of investment and international marketing, market positioning and communication strategies. Prior to Sunstone, Jørgen's career in Nokia spanned 13 years and six years with Motorola
  • Jørgen holds an engineering degree in computer science from the Engineering College of Copenhagen.
  • Mr. Smidt is currently a partner in Sunstone Technology Ventures Fund I,

Jorgen Smidt Director, BoD

  • 36 year career of growth and accomplishment at Intermec Technologies, Hewlett-Packard and General Electric Co. where he held leadership roles in sales and marketing
  • Brings a wealth of strategic and hands-on experience in global sales, marketing, customer engagement, channel, and enterprise management
  • BS degree in Electrical Engineering from Villanova University

Jim McDonnell Director, BoD

Management team

  • Previous positions include International Controller (DK) and Chief Financial Officer (US) at Martin Professional, Inc.
  • Also served as CFO of Dantax Radioindustri A/S listed on the Copenhagen Stock Exchange
  • MBA from Fort Lauderdale Metropolitan University

Peter Dam Madsen

CFO

  • Long-term entrepreneur and founder of Asetek
  • Previously employed at Danfoss in their management trainee program
  • Holds an engineering degree from Aalborg University
  • Several MBA level executive management programs from Right, Stanford, MIT and Wharton

André S. Eriksen CEO & Founder

  • 14+ years with IBM in numerous leadership roles, where he managed fulfillment, logistics, manufacturing planning, procurement, and supply chain functions
  • MBA from Buckinghamshire Chilterns University, as well as a BSc in Information Technology from the College of Dunaujvaros

Csaba Vesei

VP Global Operations

  • John Hamill
  • 30+ years of high tech industry sales, sales management and marketing experience
  • Previously held position as VP of Global Sales at nVidia and AMD
  • Has managed global sales teams
  • BSc in Electronics and Electrical Engineering from the University of Glasgow in Scotland

  • 15+ years of experience with Vestas and Grundfos he has an intimate background in sophisticated pumping and cooling systems designed for global markets

  • M.Sc.EE degree from Aalborg University as well as an EMBA in Business Psychology from Business Institute in Aalborg

Thomas Ditlev VP Engineering

  • 15 years+ experience leading global teams and managing global accounts in the high-tech industry
  • Prior to joining Asetek, Dipak held senior sales and product marketing roles at AMD
  • B.A. (Honors) in Marketing from De Montfort University, Leicester in the U.K

Dipak Rao

VP Global Sales and Marketing

Income statement

Q1 2018 2017
Unaudited Unaudited
13,868 \$ 58,194
8,913 37,225
4,955 4,415 20,969
1,122 883 4,220
4,215 3,253 14,905
$\overline{\phantom{a}}$ $\overline{\phantom{a}}$ (913)
5,337 18,212
(382) 279 2,757
(570) (1,239)
(10) (19)
(580) (1,258)
(962) 160 1,499
$\overline{\phantom{a}}$ 2,976
(962) 151 4,475
1,253
$(45)$ \$ 145 Ś
5,728
$(0.04)$ \$ 0.18
$(0.04)$ \$ 0.17
917 Q1 2017
$11,471$ \$
7,056
4,136
(110)
(9)
(119)
(9)
(6)
0.01
$0.01$ \$

Balance sheet

Figures in USD (000's) 31 Mar 2018 31 Dec 2017
ASSETS
Non-current assets
\$
Intangible assets
2,771 - \$ 2,754
Property and equipment 4,359 3,856
Deferred income tax assets 8,386 7,778
Other assets 736 794
Total non-current assets 16,252 15,182
Current assets
Inventory 1,775 2,316
Trade receivables and other 10,460 13,280
Cash and cash equivalents 17,732 18,398
Total current assets 29,967 33,994
\$
Total assets
46,219 Ŝ. 49,176
EQUITY AND LIABILITIES
Equity
\$
Share capital
$421 \pm 5$ 419
Retained earnings 31,834 31,976
Translation and other reserves 1,917 999
Total equity 34,172 33,394
Non-current liabilities
Long-term debt 733 816
Total non-current liabilities 733 816
Current liabilities
Short-term debt 1,097 1,051
Accrued liabilities 2,245 2,432
Accrued compensation & employee benefits 1,219 1,335
Trade payables 6,753 10,148
Total current liabilities 11,314 14,966
Total liabilities 12,047 15,782
Total equity and liabilities 46,219 \$ 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 - quarter ended March 31, 2018
Income for the period - - - (962) (962)
Foreign currency translation adjustments - 917 - - 917
Total comprehensive income - quarter ended March 31, 2018 - 917 - (962) (45)
Transactions with owners - quarter ended March 31, 2018
Shares issued 2 - 1 407 410
Share based payment expense - - - 413 413
Transactions with owners - quarter ended March 31, 2018 2 - 1 820 823
Equity at March 31, 2018 \$
421
\$ 1 922 \$
(5)
\$
31 834 \$
34 172
Equity at January 1, 2017 \$
417
\$
(248)
\$
(9)
\$
28 130
\$
28 290
Total comprehensive income - quarter ended March 31, 2017
Income for the period - - - 151 151
Foreign currency translation adjustments - (6) - - (6)
Total comprehensive income - quarter ended March 31, 2017 - (6) - 151 145
Transactions with owners - quarter ended March 31, 2017
Shares issued - - 3 274 277
Share based payment expense - - - 72 72
Transactions with owners - quarter ended March 31, 2017 - - 3 346 349
Equity at March 31, 2017 \$
417
\$
(254)
\$
(6)
\$
28 627
\$
28 784

KPI development

  • Three-year average revenue growth of 40%
  • Blended gross margin at 37% for FY 2017
  • EBITDA margin 30% for FY 2017
  • Net working capital (excl. cash) ~1% of revenues

  • Value based pricing strategy based on significant TCO/ROI

  • Gross margin at ~24%. Efficiency benefits to be harvested as revenue ramps up and revenues shift towards commercial sales rather than government grants
  • EBITDA margin projected at 20-30% when reaching critical mass
  • *Current R&D and SG&A spending of \$10m
  • Net negative cash flow before breaking even to be funded by profits from desktop business

  • Gross margin at ~29%. Efficiency benefits to be harvested as revenue ramps up and revenues shift towards commercial sales rather than government grants

  • EBITDA margin projected at 20-30% when reaching critical mass
  • *Current R&D and SG&A spending of \$7-8m
  • Net negative cash flow before breaking even to be funded by profits from desktop business

*) Of which approximately 10-15% is capitalized and amortized over typically 36 months

Data

Center

Historical development

Liquid cooling units deployed in the field

Number of thousand units

Liquid cooling units deployed in the field

Number of thousand units

Data center installations

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