Asetek A/S

Investor Presentation • Feb 25, 2015

Fourth Quarter 2014

Published February 25, 2015

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Web Presentation

Presentation by:

Investor.relations@asetek.com

• I. Highlights
• II. Operations
• III. Financials
• IV. Summary and outlook

Highlights

• Q4 revenues of USD 4.6M (6.1) and FY revenues USD 20.8m (20.7)
• Revenues expected to pick up in Q1 and Q2 2015
• Important IPR lawsuits settled
• U.S. District Court unanimously ruled in favor of Asetek against CMI USA, Inc in Q4 2014
• Patent case with CoolIT Systems Inc. ("CoolIT") settled in Q1 2015
• Acquired two additional U.S. patents
• California Energy Commission selected Asetek for a \$3.5M data center project
• Fujitsu OEM agreement key milestone, confirms data center strategy potential
• Fujitsu, the 4th largest server vendor globally, to Incorporate Asetek Liquid Cooling
• Fujitsu plans to launch the first products based on RackCDU™ in Q2 2015
• Raised NOK100M to strengthen financial growth platform and partner capacity
• Strengthening data center business development infrastructure to accelerate further OEM adoption

• Building stronger balance sheet to support partnering with additional Tier 1 OEMs

• I. Highlights

• II. Operations
• III. Financials
• IV. Summary and outlook

Successful IP protection strengthens market

Settlement of three IPR lawsuits since Dec 2014

• Will eliminate risk and reduce legal cost going forward
• U.S. District Court unanimously ruled in favor of Asetek against CMI USA, Inc in Q4 2014
• Patent case with CoolIT Systems Inc. ("CoolIT") settled in Q1 2015
• Won one lawsuit with damages of USD ~0.5M, injunction or royalty pending
• Damages awards in process
• One case pending

position

• Fended off competition
• Regained market share

Asetek Selected for USD 3.5M Project for Two Major California Data Centers

• Asetek selected by the California Energy Commission (CEC) to \$3.5M project
• RackCDU D2C™ (Direct-to-Chip) liquid-cooling to be installed in two super computing data centers
• Project include installation of RackCDU in ~90 racks of servers
• RackCDU D2C liquid cooling added to servers from multiple OEMs
• Project start-date expected July 1, 2015, 24 months duration, hardware to be installed in month 6 and month 13

"The Energy Commission's electricity innovation investments follow an energy innovation pipeline program design, funding applied research and development, technology demonstration and deployment, and market facilitation to create new energy solutions, foster regional innovation, and bring clean energy ideas to the marketplace."

Project validates the value of Asetek's direct-to-chip liquid cooling for high performance and high utilization data centers

Server OEM agreement a game changer for Asetek…

OEM agreement validates data center strategy pursued since 2012

• Asetek is a supplier to Original Equipment Manufacturers (OEMs) who sell servers to end customers
• Asetek positioned as data center OEM supplier since 2012
• The Fujitsu design-win is the first design win with a global top 5 server OEM, the second agreement in total
• Asetek products will be sold under Fujitsu's brand and channel

Asetek's technology to be incorporated in Fujitsu's High Performance Computing product line

Asetek RackCDU D2C™

• Liquid Cooling Fujitsu to incorporate RackCDU liquid cooling in its High Performance Computing product line
• Fujitsu will rollout RackCDU globally as part of the agreement
• Asetek expects first Fujitsu product launch based on RackCDU in Q2 2015

Data center strategy pursued since 2012…

	Education		Testing and development	Product launch and sales revenue		Volume ramping
	2012	2013		2014	2015	2016
Tier 1 OEM
Tier 1 OEM
Tier 1 OEM

Testing and development may affect timing and realization of technology adoption and sales

• I. Highlights
• II. Operations
• III. Financials
• IV. Summary and outlook

Income Statement – segment breakdown

(000's) USD		Q4 2014		Q4 2013
	Group	Desktop	Data center	Group	Desktop	Data center
Revenue	4 563	4 401	162	6 112	5 509	603
Gross Margin	39.9 %	40 8%	14 8%	41.9 %	45 5%	9 1%
Other operating expenses	3 017	1 363	1 654	3 030		1 830
adjusted EBITDA	(1 198)	432	(1 630)	( 468)		(1 775)
Depreciations	410	122	288	553	315	238
Share based compensation	98	44	54	401	172	229
E B I T	(1 706)	266	(1 972)	(1 422)	820	(2 242)
EBIT Margin	-37.4 %	6 0%	N/A	-23.3 %		N/A
HQ Litigation expenses ,	1 523			424
Share based HQ compensation ,	37			85
Other HQ ,	238			422
Headquarters costs	1 798			931
, total EBIT	(3 504)			(2 353)
 Desktop revenues down compared to record quarter Q4 2013  Significant new order shifted to Q1 2015  HP removed liquid cooling on its most recent high performance workstation line - Dell adopting instead  Data center revenue decline explained by fluctuations in timing of equipment delivery to the U.S. Department of Defense

• Desktop revenues down compared to record quarter Q4 2013
• Significant new order shifted to Q1 2015
• HP removed liquid cooling on its most recent high performance workstation line Dell adopting instead
• Data center revenue decline explained by fluctuations in timing of equipment delivery to the

Balance sheet

(000's)	Q4	Q3	Q4
USD	2014	2014	2013
Total non-current assets	3 356	3 525	3 249
Inventories	1	1	1
	102	124	074
Receivables	4	4	4
	186	023	997
Cash and equivalents	4 170	6 252	11 663
Total current assets	9 458	11 399	17 734
Total	12	14	20
assets	814	924	983
Total	422	9	14
equity	7	490	808
Total liabilities non-current	309	340	475
Total liabilities current	083 5	094 5	700 5
Total	5	5	6
liabilities	392	434	175
Total and liabilities equity	12 814	14 924	20 983

10,000 12,000 14,000 Balance sheet composition – Q4 2014

• Inventory turns: ~11 times per year

• Trade receivables DSO: ~52 days at Q4 2014

• I. Highlights

• II. Operations
• III. Financials
• IV. Summary and outlook

Raising capital to strengthen financial growth platform and partner capacity

Summary and outlook

• Important IPR lawsuits settled
• Eliminating risks and reducing legal costs going forward
• Fujitsu OEM agreement key milestone
• Confirms data center strategy potential
• Raised capital to strengthen financial growth platform and partner capacity

• NOK 100M at NOK10 per share

• Revenues expected to pick up

• Expect Q1 2015 desktop revenue above Q4 2014, Q2 2015 upwards of 40% higher than the average revenue levels achieved recent quarters
• Over time, Asetek anticipates significant data center revenue growth to be derived from RackCDU sales on Fujitsu platforms

University of Tromsø, Norway with Asetek RackCDU

Appendix

Income statement

(000's) Figures in USD	Q4 2014	Q4 2013	2014	2013
	Unaudited	Unaudited	Unaudited
Revenue	\$ 4 563	\$ 6 112	\$ 20 847	\$ 20 729
of sales Cost	2 749	3 687	12 137	12 680
profit Gross	1 814	2 425	8 710	8 049
Research and development	880	1 341	3 556	4 492
Selling , general and administrative	4 302	3 393	14 664	11 236
exchange loss (gain) Foreign	136	4 4	298	8 0
Total operating expenses	5 318	4 778	18 518	15 808
Operating income	(3 504)	(2 353)	(9 808)	(7 759)
Finance income	1	-	2	1 865
Finance costs	(27)	(23)	(89)	(830)
Total financial income (expenses)	(26)	(23)	(87)	1 035
before Income tax	(3 530)	(2 376)	(9 895)	(6 724)
(expense) benefit Income tax	1 142	443	1 138	443
for the period Income	(2 388)	(1 933)	(8 757)	(6 281)
Other comprehensive that may be reclassified income items
profit or loss subsequent periods: in to
currency translation adjustments Foreign	184	2 9	335	5 2
Total comprehensive income	\$ (2 204)	\$ (1 904)	\$ (8 422)	\$ (6 229)
(in USD): per share Income
Basic	\$ (0 17)	\$ (0 14)	\$ (0 62)	\$ (0 46)
Diluted	\$ (0 17)	\$ (0 14)	\$ (0 62)	\$ (0 46)

Balance Sheet

(000's) Figures in USD	31 Dec 2014	31 Dec 2013
ASSETS	Unaudited
Non-current assets
Intangible assets	\$ 2 334	\$ 1 823
Property and equipment	730	1 096
Other assets	292	330
Total non-current assets	3 356	3 249
Current assets
Inventory Trade receivables and other	1 102	1 074
Cash and cash	4 186 4 170	4 997 11 663
equivalents Total current assets	9 458	17 734
Total assets	\$ 12 814	\$ 20 983
EQUITY LIABILITIES AND
Equity
Share capital	\$ 264	\$ 264
Share premium	64 451	64 357
Accumulated deficit	(57 307)	(49 490)
Translation and other reserves	1 4	(323)
Total equity	7 422	14 808
liabilities Non-current
Long-term debt	309	243
Other long-term liabilities	-	232
Total non-current liabilities	309	475
liabilities Current
Short-term debt	300	420
Accrued liabilities	255 1	802
Accrued compensation & employee benefits	882	995
Trade payables	2 646	3 483
Total current liabilities	5 083	5 700
Total liabilities	392 5	6 175
Total equity and liabilities	\$ 12 814	\$ 20 983

Cash Flow

USD (000's) Figures in	2014	2013
	Unaudited
Cash flows from operating activities
Income (loss) for the period	\$ \$ (8 757)	(6 281)
and Depreciation amortization	1 771	2 030
costs (income) Finance	8 7	(1 035)
Income tax expense (income)	(1 138)	(443)
Impairment of intangible assets	3 6	6 2
Cash (payment) for receipt income tax	204	222
Share based payments expense	940	593
Changes trade receivables, other in inventories, assets	1 264	(1 109)
Changes in trade payables and accrued liabilities	(230)	1 406
Net cash used in operating activities	(5 823)	(4 555)
Cash flows from investing activities
Additions to intangible assets	(1 873)	(2 128)
Addition to other assets	-	(314)
Purchase of property and equipment	(172)	(631)
Net cash used in investing activities	(2 045)	(3 073)
Cash flows from financing activities
Cash received for leasing of previously purchased equipment	248	-
Long-term deposit received from sub-lessee	-	234
Cash payments on long-term debt	-	(3 621)
Funds drawn (paid) line of credit against	(141)	5 7
Cash payments for interest on debt	-	(461)
Proceeds from of share capital issuance	9 6	25 099
Cash paid for fees related to IPO	-	(3 405)
Principal and payments on finance leases interest	(151)	(42)
Net cash provided by financing activities	5 2	17 861
Effect of exchange rate changes on cash and cash
equivalents	323	182
Net changes cash and cash equivalents in	(7 493)	10 415
Cash and cash equivalents at beginning of period	11 663	1 248
Cash and cash equivalents at end of period	\$ \$ 4 170	11 663
Supplemental disclosure - non-cash transactions Property and acquired on finance leases equipment	\$ \$	321
	-