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Asetek A/S

Investor Presentation • Sep 22, 2015

6301_iss_2015-09-22_21a6f7a6-2a74-48e2-8578-839b15f5141f.pdf

Investor Presentation

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DNBTMT Opportunity Conference 2015

September 22, 2015 Oslo, Norway

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 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.

Asetek highlights

Expecting Q3'15 revenues of approx \$10m

Desktop Data center

  • Expecting revenues of approx \$10m in Q3'15
  • As communicated in the Q2 report, mainly drivenby desktop segment

  • Full and final Q3 2015 financial report announcedOctober 28th, 2015

  • I. Highlights

  • II. Market
  • III. Asetek
  • IV. Outlook andsummary

Increasing liquid cooling momentum

Asetek targets two markets

Energy and cost savings

  • Up to 80% reduction in cooling energy consumption
  • Up to 30% reduction in total data center energy consumption
  • Enables reuse of waste heat fromservers
  • Density increase

Higher Performance and predictable throughput

Mega drivers behind increasing demand

Sources: DatacenterDynamics 2012 Global Census, BP, U.S. Energy Information Agency, Uptime Institute

  • I. Highlights
  • II. Market
  • III. Asetek
  • IV. Outlook andsummary

Integrated and scalable business based on proven technology and unique IP

Unique IP demonstrated in Q2'15, strenghtens competitiveness and growth platform

  • Asetek's sizable portfolio of IP rights including patents provides competitive advantages and barriers to entry for competitors
  • Pending patent and utility model applications worldwide
  • Recently issued patents include EU patent with 2003 priority in 12 countries andChina patent
  • Additional applications under preparation
  • In June 2015, the U.S. District Court of Northern California determined that competitor CoolIT Systems shall pay damages to Asetek totaling \$1.9m
  • Asetek expects to receive the full settlement within six months of the courtruling
  • Will recognize the payments in the financial statements when received
  • Receivedan initial payment of \$0.5m in July
  • Won over CMI USA in the U.S. District Court of Northern California in December 2014
  • Awaiting the Court to award final damages and injunction/royalties

Q2'15 record quarter for the desktop segment

  • Asetek's desktop revenue increased 59% vs. Q2 2014
  • Significant demand in the DIY market compared with modest demand inthe second quarter 2014
  • Second quarter revenues in the Gaming/ Performance Desktop PC market remainedlevel with the same period of last year.
  • Revenues inthe Workstation market declined
  • Multiple new products ready for launch in Q3
  • Began shipping one new DIY product
  • Shipment of multiple new desktop products planned for in Q3

Corsair advancedliquid cooling delivered by Asetek

Asetek has been building liquid cooling market demandsince 2012, results emerging…

…OEM Fujitsu data center revenues started, order substantiates milestonepartnership with Fujitsu

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Receivedfirst production order in Q2'15 under the OEM purchase agreement with Fujitsu

  • Agreement announced in February 24th, PO announced July 1st
  • RackCDU Direct‐to‐Chip™ data center liquid cooling system
  • Approx 40 racks, including >5000 pumps and loops for CPU, GPU and memory
  • Value> \$0.5m translated into initial Q2 revenues of \$0.2m revenue
  • Thelargest single order Asetek has received so far on its RackCDU products
  • The official launch of FUJITSU Cool‐safe® products based on RackCDU is scheduled for Q3
  • Fujitsu won an award on its PRIMERGY servers with Asetek's liquid cooling
  • Key benefits: Reduced data center OpEx and CapEx, immediate to 1 year payback typical, 2.5x‐5x increases in server density
  • Order substantiates milestone partnership with Fujitsu
  • Further validates strategy of cooling data centers through global OEMs

Additional contracts signed, chosen by Wall Streetsupplier CIARA in Q2, regional OEM in Q3

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U.S. government contracts part of increasing data center adoption

Department of Defense (ESTCP) contract

California Energy Commissioncontract

  • Total contract amount \$2.4m
  • \$0.2m invoiced in 2015
  • \$1.8m invoiced from inception in 2013 through June 2015
  • Stage‐2 installations expected to commence in H1 2016
  • Total contract amount \$3.6m
  • Recently signed
  • First product delivery and invoicing expected late 2015
  • Potential positive impact from recent California Title‐24 datacenter energy efficiency legislation
  • New datacenters over 70 kWIT heat load, and...
  • Existing datacenters adding more than 175 kW IT heat load...
  • Must implement cooling technology that reduces daily operating costs and carbon footprint

Sandia

www.asetek.com

16

Q2'15 gross margin and earnings recap

  • Group gross margin decreased to 27.4% in (40.9%) due to product/customer mix changes and one‐off‐charge.
  • Group gross margin pre one‐off‐charge would be 37.2%, whichis higher than Q1 2015
  • Data center gross margin up to above 40%
  • However tooearly to predict stable level

Margin development

  • Desktop EBITDA down to 10%
  • Desktop continues at double digit %‐contribution
  • One‐time cost consumed10 %‐points in Q2 2015
  • Datacenter EBITDA

www.asetek.com

Constant consumption in data center

13

Q2'15 balance sheet recap

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  • Inventory turns: ~15 times per year
  • Slight improvement over Q1 2015
  • Trade receivables DSO: ~45 days at Q2 2015
  • Constant despite significant growth in activty
  • Trade payables DPO: ~70 days at Q2 2015
  • Lower thanQ1 2015 due to vendor composition

Balancesheet composition – Q2 2015

25,000

www.asetek.com

(above calculations exclude one‐time charge)

18

  • I. Highlights
  • II. Market
  • III. Asetek
  • IV. Outlook andsummary

Q2'15 outlook reiterated and firmed‐up

Asetek desktop segment expectations:

  • Significant desktop growth in Q3, translating into approx. \$10m group Q3'15 revenues
  • Launch of six newDIY products in Q3
  • Desktop margins to return up to recent levels

Asetek datacenter segment expectations:

  • Completion of first Fujitsu order in H2 2015
  • Commencement on California Energy Commission \$3.5m project with initial shipments and revenues late 2015
  • Significant revenue growth in 2016
Asetek sealed all‐in‐one liquid coolers

RackCDU D2C™ Liquid Cooling Direct‐to‐Chip, Hot Water Liquid Cooling for Data Centers

Summary

Growing market for liquid cooling driven by performance and efficiency needs

Asetek theworld‐leading provider of computer liquid cooling solutions

Proprietary and patented technology, >2m units deployed

Growing and profitable desktop computer business main revenue driver as of today

5

6

2

1

3

4

Expanding data centers business with OEM portfolio key addition of Fujitsu in Q2'15

Delivered record group revenues in Q2'15, expecting further growth in H2'15 and 2016

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