Investor Presentation • Oct 28, 2015
Investor Presentation
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October28, 2015
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 standalone 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 thePresentation.
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 Presentationmay 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. Ifyou are in doubt about the contents of this Presentation, you should consult your stockbroker, bank manager, lawyer, accountant or other professional adviser.
This Presentationis subject to Danish law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of the Danish courts.
2 newproducts began shipping
Workstation declined vs. Q3'14
Totalshipments of sealed loop coolers has surpassed 2.5 million since Asetek's inception
| \$ 0.5 m |
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Global OEMagreement with Penguin
First installation. Largest server installation todate
Expecting \$1.0‐1.5M of revenue withinfirst 12months
U.S. government contracts update
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2013
Data center adoption increasing, moving towards further commercializationin 2016
Testing and development may affect timing and realization of technology adoption and sales revenue Tier 1OEM: Progressing towards revenue in 2016, but pace of testing and development must improve
Received Settlement of \$1.9M in July‐October afterPatent Infringement Lawsuit
IP key part of growth platform
Lawsuit concludedinJune 2015
\$1.9M received in July‐October 2015
Positive effect onfuturerevenue
Grossmargin and earnings development
Due to composition of government revenue components
Desktop EBITDA up to 24.9% (20.6%)
Litigation expenses declined by 55%
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Balancesheet composition – Q3 2015
Gross margin expected to be 37% ‐40%
Completion of first Fujitsu order in Q4 2015
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| Figures in USD (000's) | 30 Sept 2015 | 31 Dec 2014 | |
|---|---|---|---|
| ASSETS | Unaudited | ||
| Non-current assets | |||
| Intangible assets | \$ 2,048 |
-S | 2,334 |
| Property and equipment | 810 | 730 | |
| Other assets | 426 | 292 | |
| Total non-current assets | 3,284 | 3,356 | |
| Current assets | |||
| Inventory | 1,590 | 1,102 | |
| Trade receivables and other | 6,609 | 4,186 | |
| Cash and cash equivalents | 12,216 | 4,170 | |
| Total current assets | 20,415 | 9,458 | |
| Total assets | \$ 23,699 \$ |
12,814 | |
| EQUITY AND LIABILITIES | |||
| Equity | |||
| Share capital | \$ 416 5 |
264 | |
| Share premium | 76,496 | 64,451 | |
| Accumulated deficit | (61,069) | (57, 307) | |
| Translation and other reserves | 377 | 14 | |
| Total equity | 16,220 | 7,422 | |
| Non-current liabilities | |||
| Long-term debt | 289 | 309 | |
| Total non-current liabilities | 289 | 309 | |
| Current liabilities | |||
| Short-term debt | 373 | 300 | |
| Accrued liabilities | 542 | 1,255 | |
| Accrued compensation & employee benefits | 992 | 882 | |
| Trade payables | 5,283 | 2,646 | |
| Total current liabilities | 7,190 | 5,083 | |
| Total liabilities | 7,479 | 5,392 | |
| Total equity and liabilities | \$ 23,699 |
s | 12,814 |
| unauaitea | Share | Share | Translation | Other Accumulated | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Figures in USD (000's) | capital | premium | reserves | reserves | deficit | Total | ||||
| Ŝ Equity at January 1, 2015 |
264 | s | 64,451 | s | 26 | s | $(12)$ \$ | $(57, 307)$ \$ | 7,422 | |
| Total comprehensive income - nine months ended Sept 30, 2015 | ||||||||||
| Loss for the period | (3,962) | (3,962) | ||||||||
| Foreign currency translation adjustments | 361 | ۰ | 361 | |||||||
| Total comprehensive income - nine months ended Sept 30, 2015 | $\overline{a}$ | $\sim$ | 361 | ٠ | (3,962) | (3,601) | ||||
| Transactions with owners - nine months ended Sept 30, 2015 | ||||||||||
| Shares issued | 152 | 12,874 | 2 | 13,028 | ||||||
| Less: issuance costs | (829) | (829) | ||||||||
| Share based payment expense | 200 | 200 | ||||||||
| Transactions with owners - nine months ended Sept 30, 2015 | 152 | 12,045 | 2 | 200 | 12,399 | |||||
| Equity at September 30, 2015 S. |
416 | s | 76,496 | s | 387 | s | $(10)$ \$ | (61,069) \$ | 16,220 | |
| Unaudited | ||||||||||
| Ś Equity at January 1, 2014 |
264 | S | 64,357 | s | $(309)$ \$ | (14) S | (49,490) | -S | 14,808 | |
| Total comprehensive income - nine months ended Sept 30, 2014 | ||||||||||
| Loss for the period | (6, 369) | (6, 369) | ||||||||
| Foreign currency translation adjustments | 151 | 151 | ||||||||
| Total comprehensive income - nine months ended Sept 30, 2014 | ÷. | 151 | (6, 369) | (6, 218) | ||||||
| Transactions with owners - nine months ended Sept 30, 2014 | ||||||||||
| Shares issued | 1 | 92 | 2 | 95 | ||||||
| Share based payment expense | ٠ | ٠ | ٠ | $\tilde{\phantom{a}}$ | 805 | 805 | ||||
| Transactions with owners - nine months ended Sept 30, 2014 | 1 | 92 | ٠ | 2 | 805 | 900 | ||||
| \$ Equity at September 30, 2014 |
265 | s | 64.449 | s | $(158)$ \$ | $(12)$ \$ | $(55,054)$ \$ | 9.490 |
| Nine months | |||
|---|---|---|---|
| Figures in USD (000's) | YTD 2015 | YTD 2014 | 2014 |
| Unaudited | Unaudited | ||
| Cash flows from operating activities | |||
| Income (loss) for the period | \$ $(3,962)$ \$ |
$(6,369)$ \$ | (8,757) |
| Depreciation and amortization | 1,669 | 1,361 | 1,771 |
| Finance costs (income) | 48 | 62 | 87 |
| Income tax expense (income) | 28 | 4 | (1, 138) |
| Impairment of intangible assets | 37 | 36 | |
| Cash receipt (payment) for income tax | (5) | (4) | 204 |
| Share based payments expense | 200 | 805 | 940 |
| Changes in trade receivables, inventories, other assets | (3,380) | 588 | 1,264 |
| Changes in trade payables and accrued liabilities | 2,355 | (505) | (230) |
| Net cash used in operating activities | (3,047) | (4,021) | (5,823) |
| Cash flows from investing activities | |||
| Additions to intangible assets | (1, 111) | (1,629) | (1,873) |
| Purchase of property and equipment | (332) | (139) | (172) |
| Net cash used in investing activities | (1, 443) | (1,768) | (2,045) |
| Cash flows from financing activities | |||
| Cash received for leasing of previously purchased equipment | 279 | 279 | |
| Funds drawn (paid) against line of credit | 80 | (5) | (141) |
| Proceeds from issuance of share capital | 13,028 | 95 | 96 |
| Cash paid for fees related to financing | (829) | ||
| Principal and interest payments on finance leases | (53) | (121) | (145) |
| Net cash provided by financing activities | 12,226 | 248 | 89 |
| Effect of exchange rate changes on cash and cash | |||
| equivalents | 310 | 130 | 286 |
| Net changes in cash and cash equivalents | 8,046 | (5, 411) | (7, 493) |
| Cash and cash equivalents at beginning of period | 4,170 | 11,663 | 11,663 |
| Cash and cash equivalents at end of period | \$ 12,216 \$ |
6,252 \$. |
4,170 |
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