Asetek A/S — Earnings Release 2014

Aug 13, 2014

SecondQuarter 2014

13 August, San Jose, USA

WebPresentation

Investor.relations@asetek.com

Agenda

I. Financialreview

• II. Operational review
• III. Summary and outlook
• IV. Q&A Session

Earnings development

Desktop revenue and EBITDA margin Group EBITDA development

USD(000's)

USD(000's)

IncomeStatement – segment breakdown

( 's ) S 0 0 0 U D		Q 2 2 0 1 4		Q 2 2 0 1 3
						Da ta
	Gr ou p	k De to s p	Da ta te ce n r	Gr ou p	k De to s p	te ce n r
Re ve nu e	5 4 0 5	4 8 3 0	5 7 5	5 3 3 5	5 3 3 5	‐
Gr M in os s ar g	4 1. 3 %	4 1. 7 %	3 7. 9 %	3 8. 4 %	3 8. 4 %	/ N A
he in O t t o r p er a g ex p en se s	2 8 1 0	1 2 7 6	1 5 3 4	2 9 1 4	9 3 4	1 9 8 0
d d E B I T D A j te a us	( ) 5 7 8	7 3 8	( ) 1 3 1 6	( ) 8 6 7	1 1 1 3	( ) 1 9 8 0
ia io De t p re ns c	0 3 4	2 1 5	2 5 1	3 6 5	3 2 9	2 7
ha ba d io S t re se co m p en sa n	2 2 1	9 7	1 2 4	3 4	1 3	2 1
by E B I T, t se g m en	( ) 1 2 0 2	4 8 9	( ) 1 6 9 1	( ) 1 2 6 3	7 6 8	( ) 2 0 3 1
in E B I T M ar g	% ‐2 2. 2	% 1 0. 1	/ N A	% ‐2 3. 7	% 1 4. 4	/ N A
H Q, L i ig io t t a n ex p en se s	9 2 7			3 8 9
ha ba d H Q, S io t re se co m p en sa n	5 1			6
he H Q, O t r	2 5 4			2 2 8
l E B I T, to ta	( ) 2 4 3 4			( ) 1 8 8 0

• Revenues drivenby increased shipments of data center products
• Margin improvement reflects business model change, cost savings and proactive product mix management

Cash FlowStatement

( ) 's U S D 0 0 0	Q 2 2 0 1 4	Q 1 2 0 1 4	Q 4 2 0 1 3	Q 3 2 0 1 3	Q 2 2 0 1 3
h d in in iv i ie Ne t t t t c as us e op er a g ac s	( ) 6 1 1	( ) 1 8 2 2	( ) 1 3 9 3	( ) 1 2 3 6	( ) 8 2 2
h d in in in iv i ie Ne t t t t c as us e ve s g ac s	( ) 6 2 4	( ) 6 6 5	( ) 8 6 0	( ) 1 2 4 1	( ) 4 6 6
h de d ( d ) by f Ne i in in iv i ie t t t c as p ro v us e an c g ac s	( ) 1 6 5	2 8 8	1 0 7	3 9 8	( ) 3 0 7 7
f fe f e ha ha h E t te c o xc ng e ra c ng es on ca s	6 0	( ) 9 3	6 4 5	2 8 7	( ) 9 0 4
ha h d h le Ne in iv t ts c ng es ca s an ca s eq u a n	( ) 1 3 3 1	( ) 2 2 9 2	( ) 1 6 1 8	( ) 1 7 9 2	( ) 4 8 5 5
h d h le be f p d Ca iva in in io ts t s an ca s eq u n a g n g o er	9 3 7 1	1 1 6 6 3	1 3 2 8 1	1 5 0 7 4	1 9 9 2 9
h d h le d f p d Ca iv io ts t e s an ca s eq u a n a n o er	8 0 4 0	9 3 7 1	1 1 6 6 3	1 3 2 8 1	1 5 0 7 4

• Growing the datacenter business through marketing and development, and defending intellectualproperty continues to fuel the usage of cash.
• \$8.0 million of cash on hand as of June 30, 2014.

Balancesheet

( ) S 0 0 0 's U D	Q 2 2 0 1 4	Q 2 0 1 1 4	Q 2 0 3 4 1	Q 3 2 0 3 1	Q 2 2 0 3 1
l To ta t ts n on ‐c ur re n a ss e	3 6 7 9	3 4 8 0	3 2 4 9	2 6 5 1	1 9 4 3
Inv ie to en r s	1 3 0 8	1 1 6 5	1 0 7 4	9 6 3	9 3 8
b le Re iva ce s	3 9 3 2	4 9 3 3	4 9 9 7	3 4 5 5	3 6 1 6
h d le Ca iva ts s an eq u n	8 0 4 0	9 3 7 1	1 1 6 6 3	1 3 2 8 1	1 5 0 7 3
l To ta t ts c ur re n a ss e	1 3 2 8 0	1 5 4 6 9	1 7 7 3 4	1 7 6 9 9	1 9 6 2 7
l To ta ts a ss e	1 6 9 9 5	1 8 9 4 9	2 0 9 8 3	2 0 3 0 5	2 1 0 5 7
l i To ta ty e q u	1 1 2 1 9	1 3 3 3 8	1 4 8 0 8	1 9 9 5 7	1 6 3 7 7
l l b l ia i i ie To ta t t n on ‐c ur re n s	3 9 1	4 1 5	4 7 5	2 2 8	4
l l b l ia i i ie To ta t t c ur re n s	3 4 9 5	1 9 6 5	0 0 5 7	4 1 4 3	3 9 2 9
l l b l ia i i ie To ta t s	0 5 7 4	6 5 1 1	6 1 7 5	3 4 7 1	3 9 3 3
l i d l ia b i l i ie To ta ty t e q an s u	1 6 9 5 9	1 8 9 4 9	2 0 9 8 3	2 0 3 5 0	2 1 5 7 0

• Inventory turns: ~11 times per year liabilities
• Trade receivables DSO: ~57days at Q2 2014

Agenda

I. Financialreview

II. Operational review

• III. Summary and outlook
• IV. Q&A Session

Desktop

Operational highlights

• Desktop revenues declined 9% from Q2 2013
• As expected due to normal variances in the DIY market and changes in business model on certain products
• Margins increased by more than three percentage points
• Proactive management of product mix and cost savings achieved with certain suppliers as well as businessmodel change
• Workstation and Gaming/Performance Desktop PCbusiness remained fairly level with Q2 2013
• AMD introduced and shipped newest and fastest graphics card, the AMD Radeon R9 295X2 withAsetek liquid cooling
• New strategic design win in the Workstation marketduring the quarter
• Three newproducts released by NZXT in Q2.

www.asetek.com

split Q2

Revenue

Datacenter

Operational highlights

• Received and shipped the largest single order to date for RackCDU™
• Total valueof \$350,000
• U.S. Federal Government National Laboratory will be one of the world's largest liquid cooling installations
• Patent on RackCDU™ granted by U.S. Patent andTrademark Office
• Continued progress on the contract for the U.S. Department of Defense at the RedstoneArsenal data center
• University of Tromsø presented at ISC '14 tothe public about their positive results
• IDC and Cray released white paper on RackCDUliquid cooling
• Mississippi State University and Cray did webinar onpositive RackCDU results

Agenda

• I. Financialreview
• II. Operational review
• III. Summary and outlook
• IV. Q&A Session

Summary and outlook

• DIY market slightly down in Q2 compared to Q2 2013.
• Gaming/Performance Desktop PC and Workstation markets werestable
• Q2 and 1st half showed continued strength in gross margins
• Revenue decrease and margin increase partially linkedand caused by business model changes
• Third quarter revenues expected to be in line withQ2, an increase over Q3 2013
• Gross margin expected to continue at 1st half levels
• Two new Asetek products expected to be releasedin the DIY market in Q3 2014
• New design win in the Workstation segment expected to start shipping 2n^d half

Desktop Datacenter

• The largest order to date was fulfilled within ^a very short lead time and proved Asetek's volume manufacturing capability for data center products
• Design‐in efforts continue with multiple OEMs andSystem Integrators
• Modular data center development project with major OEM
• Project with major chip manufacturer to develop cooling solution for ^a next‐generation platform
• Continued progress on Redstone Arsenal Network Enterprise Center for U.S. Department ofDefense

Q&A

Investor.relations@asetek.com

Appendix

Incomestatement

( ) ig in S 0 0 0 's F U D ur es		Q 2 2 0 1 4	Q 2 2 0 3 1	2 0 H 1 1 4	2 0 3 H 1 1	2 0 3 1
		d ite d Un au	d ite d Un au	d ite d Un au	d ite d Un au
Re ve nu e	\$	0 5, 4 5	\$ 3 3 5, 5	\$ 0, 8 0 1 5	\$ 0, 2 6 0 1	\$ 2 0, 2 9 7
f s les Co t s o a		3, 9 2 1	3, 3 3 5	6, 3 8 4	6, 3 8 2	2, 6 8 0 1
f i Gr t os p s ro		2, 2 1 3	2, 0 0 0	4, 4 5 7	3, 8 7 8	8, 0 4 9
h d de lo Re nt se ar c an ve p me		8 9 5	1, 2 3 4	1, 6 8 1	2, 2 3 0	4, 4 9 2
l l l a Se in d dm in is ive tra t g, g en er a n a		3, 4 0 7	2, 6 6 6	6, 9 6 0	0 3 6 5,	1 1, 2 3 6
( ) ig ha lo in Fo re n ex c ng e ss g a		2 1	( ) 2 0	( ) 8	( ) 9	8 0
l ing To ta t o p er a ex p en se s		4, 6 4 7	3, 8 8 0	8, 6 3 3	7, 2 5 7	1 5, 8 0 8
Op ing inc t er a om e		( ) 2, 4 3 4	( ) 1, 8 8 0	( ) 4, 1 6 7	( ) 3, 3 9 7	( ) 9 7, 7 5
F in in an ce co me		1	4 3	1	1, 5 9 3	1, 8 6 5
F in ts an ce c os		( ) 2 1	( ) 5 4 9	( ) 4 2	( ) 7 8 1	( ) 8 3 0
l f l ( ) To ina ia inc ta nc om e ex p en se s		( ) 2 0	( ) 5 0 6	( ) 4 1	8 1 2	1, 0 3 5
be fo Inc ta om e re x		( ) 2, 4 5 4	( ) 2, 3 8 6	( ) 4, 2 1 7	( ) 2, 5 6 7	( ) 6, 7 2 4
( ) be f In it ta co me ex p en se ne x		‐	‐	( ) 4	‐	4 4 3
fo he io d Inc t om e r p er		( ) 2, 4 5 4	( ) 2, 3 8 6	( ) 2 2 4, 1	( ) 2, 6 5 7	( ) 6, 2 8 1
he he ha be Ot ive inc ite t t m c r om p re ns om e ms ay re	las f i c s	d ie
f los bs ds it in io to nt p ro or s su eq ue p er :
la ig io d j Fo tra t tm ts re n cu rre nc y ns n a us en		6 0	6 8	( ) 2 7	( ) 6 4	2 5
l he To ive inc ta c om p re ns om e	\$	( ) 2, 3 9 4	\$ ( ) 2, 3 1 8	\$ ( ) 4, 2 4 8	\$ ( ) 2, 6 3 1	\$ ( ) 6, 2 2 9
ha ( ) Inc in U S D om e p er s re :
Ba ic s	\$	( ) 0. 1 7	\$ ( ) 0. 1 7	\$ ( ) 0. 3 0	\$ ( ) 0. 1 9	\$ ( ) 0. 4 6
lu d D i te	\$	( ) 0. 1 7	\$ ( ) 0. 1 7	\$ ( ) 0. 3 0	\$ ( ) 0. 1 9	\$ ( ) 0. 4 6

BalanceSheet

Fig in ( 's ) US D 00 0 ur es	30 Ju 20 14 n	31 Ma 20 14 r	31 De 20 13 c
AS SE TS	dit ed Un au	dit ed Un au
No t ts n‐c urr en sse
a b le Int i ts an as se	\$ 2, 42 3	\$ 2, 13 8	\$ 1, 82 3
g Pr d e ipm ert t n en	92 9	1, 01 2	1, 09 6
op y a qu he Ot ets a r ss	32 7	33 0	33 0
l To ta nt ts n on ‐cu rre a sse	3, 67 9	3, 48 0	3, 24 9
Cu nt ts rre a sse
Inv to en ry	1, 30 8	1, 16 5	1, 07 4
de eiv b les d he Tr t a r ec a an o r	3, 93 2	4, 93 3	4, 99 7
h d c h e len Ca iva ts s a n as qu	8, 04 0	9, 37 1	11 66 3 ,
l To ta nt ts c ur re a sse	13 28 0 ,	15 46 9 ,	17 73 4 ,
l To ta ts a sse	\$ 16 95 9 ,	\$ 18 94 9 ,	\$ 20 98 3 ,
EQ ES UIT Y AN D LIA BIL ITI
Eq uit y
ha l S ita re c ap	\$ 26 5	\$ 26 4	\$ 26 4
ha S ium re p rem	64 41 3 ,	64 41 1 ,	64 35 7 ,
lat d de fic Ac it cu mu e	( ) 53 11 0 ,	( ) 50 92 8 ,	( ) 49 49 0 ,
lat ion d o he Tr t an s a n r r es erv es	( ) 34 9	( ) 40 9	( ) 32 3
l To ity ta e qu	11 21 9 ,	13 33 8 ,	14 80 8 ,
lia bi liti No t n‐c urr en es
de bt Lo ‐te ng rm	39 1	41 5	24 3
he lon lia bi lit Ot ies ter r g‐ m	‐	‐	23 2
l lia b i lit ies To ta nt n on ‐cu rre	39 1	41 5	47 5
lia bi liti Cu nt rre es
ho de bt S rt‐ ter m	34 8	48 1	42 0
d lia bi lit Ac ies cr ue	1, 54 0	1, 00 4	80 2
fit Ac d ion & loy be at cr ue c om pe ns em p ee ne s	88 9	78 5	99 5
de b les Tr a p ay a	2, 57 2	2, 92 6	3, 48 3
l lia b lit To i ies ta nt c ur re	5, 34 9	5, 19 6	5, 70 0
l lia b i lit ies To ta	5, 74 0	5, 61 1	6, 17 5
l d lia b lit To ity i ies ta e qu an	\$ 16 95 9	\$ 18 94 9	\$ 20 98 3
	,	,	,

CashFlow

( 's ) F ig in U SD 0 0 0 ur es	H1 20 14	H1 20 13	20 13
	Un dit ed au	Un dit ed au
h f low fro ing iv it ies Ca at act s s m op er
( los ) fo he d Inc io r t om e s p er	\$ ( ) 4, 22 1	\$ ( ) 2, 5 67	\$ ( ) 6, 28 1
iat io d a iza io De rt t p rec n a n mo n	8 16	9 04	2, 0 3 0
( ) F ina inc ts nc c e os om e	21	( ) 8 12	( ) 1, 0 35
( ) inc Inc t om e ax ex p en se om e	4	‐	( ) 3 44
f b le Im irm int i t o ts p a en an g as se	3 6	‐	6 2
(p ) Ca h ip fo inc t nt e t s rec e ay me r om ax	( ) 4	‐	22 2
ha ba d S nts re se p ay me ex p en se	6 0 1	77	5 9 3
ha in de iva b les inv ies he C tra to t ets ng es rec e en r , o r a ss ,	8 0 1	44 8	( ) 1, 10 9
ha de b les d a d l b l C in ia i it ies tra ng es p ay a an cc ru e	( ) 48 7	24	1, 40 6
h d in ing iv it ies Ne t at act c as u se op er	( ) 2, 43 3	( ) 1, 9 26	( ) 4, 55 5
h f low fro inv ing iv it ies Ca t act s s m es
d d b le A it io int i t ts ns o an as se g	( ) 1, 20 7	( ) 77 3	( ) 2, 12 8
d d it io he A t t ets n o o r a ss	‐	‐	( ) 3 14
ha f p d e Pu ip ert nt rc se o ro p an q me y u	( ) 8 2	( ) 19 9	( ) 6 3 1
h d in inv ing iv it ies Ne t t act c as u se es	( ) 1, 28 9	( ) 97 2	( ) 3, 07 3
h f low fro f ina ing iv it ies Ca act s s m nc
h d fo lea f p ly ha d e Ca ive ing io ip nt s rec e r s o rev us p ur c se q u me	24 8	‐	‐
de it ive d fro b‐ les Lo ‐te ng rm p os rec e m su se e	‐	‐	23 4
h lo de bt Ca nts ‐te s p ay me on ng rm	‐	( ) 3, 6 21	( ) 3, 6 21
ds dr (p i d ) a ins l ine f c d it Fu t n aw n a g a o re	( ) 10 4	( ) 6 3	57
h fo de bt Ca int nts t o s p ay me r er es n	‐	( ) 46 1	( ) 46 1
ds fro f s ha l Pr iss ita oc ee m ua nc e o re ca p	5 8	24 8 35 ,	25 0 9 9 ,
h d fo fee lat d t Ca i IPO s p a r s r e e o	‐	( ) 3, 3 94	( ) 3, 40 5
l a d f lea Pr inc ip int ina t p nts a n er es ay me on nc e se s	( ) 70	( ) 3	( ) 42
h de d by f Ne i ina ing iv it ies t act as p ro nc c v	13 2	17 29 3 ,	17 8 6 1 ,
f fec f e ha ha h a h E d c t at o xc ng e r e c ng es on ca s n as len iva ts eq u	( ) 3 3	( ) 57 0	18 2
ha in h a d c h e iva len Ne t ts c ng es ca s n as q u	( ) 3, 6 23	13 8 25 ,	10 41 5 ,
h h e len be f p Ca d c iva in ing io d ts at s a n as q u g n o er	11 6 6 3 ,	1, 24 8	1, 24 8
h d c h e iva len d o f p io d Ca ts at s a n as q u en er	\$ 8, 04 0	\$ 15 07 3 ,	\$ 11 6 6 3 ,