Investor Presentation • Apr 22, 2020
Investor Presentation
Open in ViewerOpens in native device viewer
22 April 2020
Share buy-back program launched to offset employee option grants
Prioritizing employee health and safety
• Group functions are fully operational
\$0.6 million of Q1 orders were delayed to Q2 due to extended Chinese New Year holiday and plant closures
Situation improving with China slowly reopening and full production capacity is expected in late Q2 2020
Some "ripple effects" due to decreased availability of components from geographies outside China
HQ, sales, in-house manufacturing and R&D are fully operational
As at 31 March 2020
‒ Increased uncertainty due to COVID-19
Group outlook for 2020 maintained
Gaming and Enthusiast 95% of sales Data center ~5% of sales
Strategic position: Large and long-term growing markets | Supplying global brands | Market leading solutions
IP platform: Applications | Technology | Systems | Products | Patents | High-volume manufacturing | World wide hub infrastructure
**The composition and relative revenue share of Asetek's top 5 customers will vary between periods
"When we envisioned creating our next generation of CPU coolers, not only did we want to create the highest performing AIOs, we wanted to give gamers and enthusiasts a unique level of personalization and creativity (..)
We worked hand-in-glove with Asetek to define and develop our new Z-3 series and refreshed X-3 series, incorporating Asetek's latest technology in what we believe are revolutionary new CPU coolers. The result is an amazing performance, quieter operation, and a beautiful AIO with limitless options for customization."
Jim Carlton, Vice President of Products at NZXT
| Goal | Levers | Development and outlook |
|---|---|---|
| R&D and product development | Focus on delivery of core liquid cooling solutions • • Ramp-up of development to bring meaningful innovations to market • Products which deliver best performance, quality and reliability |
|
| Continue to dominate the gaming and enthusiast liquid cooling market |
Branding and marketing | • Co-branding agreements in place with seven OEMs • Connecting directly with gamers and enthusiasts via CoolNation forum • Positioning to monetize Asetek brand |
| Widening OEM customer base | • Currently over 20 OEM customers • Reducing single-customer dependency |
| Figures in USD (000's) | Q1 2020 | Q1 2019 |
|---|---|---|
| Unaudited | Unaudited | |
| Revenue | \$ 9,124 |
\$ 11,179 |
| Cost of sales | 4,626 | 6,410 |
| Gross profit | 4,498 | 4,769 |
| Research and development | 1,167 | 1,255 |
| Selling, general and administrative | 4,252 | 4,540 |
| Total operating expenses | 5,419 | 5,795 |
| Operating income | (921) | (1,026) |
| Foreign exchange (loss) gain | 212 | 164 |
| Finance income (costs) | 9 | 48 |
| Total financial income (expenses) | 221 | 212 |
| Income before tax | (700) | (814) |
| Income tax (expense) benefit | - | (7) |
| Income for the period | (700) | (821) |
| Other comprehensive income items that may be reclassified to profit or loss in subsequent periods: |
||
| Foreign currency translation adjustments | (399) | (330) |
| Total comprehensive income | \$ (1,099) |
\$ (1,151) |
| Income per share (in USD): | ||
| Basic | \$ (0.03) |
\$ (0.03) |
| Diluted | \$ (0.03) |
\$ (0.03) |
| Priorities | Value drivers | |
|---|---|---|
| Gaming and Enthusiast leadership |
Evolve business model to drive competitiveness and profitability • • Product innovation and rebranding to strengthen market position • Revenue growth and diversification of revenue streams • Margin protection and optimization |
|
| Continued profitable growth and solid financial platform |
Maintaining Data center market position |
• Ensuring efficient data center operations • OEM and end-user adoption |
| Cost base optimization | Targeted IP and R&D investments • • Manufacturing Sales and marketing efficiency • |
|
| Cash flow improvement | • Cash conversion • Continued balance sheet optimization |
Our AIO coolers can be found in the latest high-end gaming PCs and are sought-after by enthusiasts for their reliable operation, ease-of-use and pervasive cooling. They are also used in some of the fastest computers in the world to enable advances that drive our everyday lives.
Gamers know they can count on us. We're gamers too, who love to squeeze every bit of performance from our systems. AIO coolers powered by Asetek enable GPU or CPU overclocking to ensure you get the most out of your high-end gaming PC.
We know that top-shelf performance is a must when building your own monster rig. That's why
Founder and CEO André S. Eriksen
BSEE and MSEE from Colorado State University and an Executive MBA from Insead School of Business
20+ years of consulting and financial sector experience covering business development, M&A, investor relations and operational optimization
| Figures in USD (000's) | Q1 2020 | Q1 2019 | 2019 |
|---|---|---|---|
| Unaudited | Unaudited | ||
| Revenue | \$ 9,124 |
\$ 11,179 |
\$ 54,334 |
| Cost of sales | 4,626 | 6,410 | 31,329 |
| Gross profit | 4,498 | 4,769 | 23,005 |
| Research and development | 1,167 | 1,255 | 4,889 |
| Selling, general and administrative | 4,252 | 4,540 | 17,821 |
| Other expense (income) | - | - | (753) |
| Total operating expenses | 5,419 | 5,795 | 21,957 |
| Operating income | (921) | (1,026) | 1,048 |
| Foreign exchange (loss) gain | 212 | 164 | 218 |
| Finance income (costs) | 9 | 48 | 188 |
| Total financial income (expenses) | 221 | 212 | 406 |
| Income before tax | (700) | (814) | 1,454 |
| Income tax (expense) benefit | - | (7) | (2,082) |
| Income for the period | (700) | (821) | (628) |
| Other comprehensive income items that may be reclassified to profit or loss in subsequent periods: |
|||
| Foreign currency translation adjustments | (399) | (330) | (444) |
| Total comprehensive income | \$ (1,099) |
\$ (1,151) |
\$ (1,072) |
| Income per share (in USD): | |||
| Basic | \$ (0.03) |
\$ (0.03) |
\$ (0.02) |
| Diluted | \$ (0.03) |
\$ (0.03) |
\$ (0.02) |
| Figures in USD (000's) | 31 Mar 2020 | 31 Dec 2019 |
|---|---|---|
| ASSETS | Unaudited | |
| Non-current assets | ||
| Intangible assets | \$ 1,928 |
\$ 1,920 |
| Property and equipment | 5,592 | 6,115 |
| Deferred income tax assets | 5,409 | 5,521 |
| Other assets | 301 | 307 |
| Total non-current assets | 13,230 | 13,863 |
| Current assets | ||
| Inventory | 1,386 | 1,657 |
| Trade receivables and other | 7,596 | 14,080 |
| Cash and cash equivalents | 26,159 | 24,505 |
| Total current assets | 35,141 | 40,242 |
| Total assets | \$ 48,371 |
\$ 54,105 |
| EQUITY AND LIABILITIES | ||
| Equity | ||
| Share capital | \$ 423 |
\$ 423 |
| Retained earnings | 37,718 | 38,197 |
| Translation and other reserves | (14) | 388 |
| Total equity | 38,127 | 39,008 |
| Non-current liabilities | ||
| Long-term debt | 2,511 | 2,774 |
| Total non-current liabilities | 2,511 | 2,774 |
| Current liabilities | ||
| Short-term debt | 1,519 | 1,518 |
| Accrued liabilities | 982 | 1,022 |
| Accrued compensation & employee benefits | 1,143 | 1,526 |
| Trade payables | 4,089 | 8,257 |
| Total current liabilities | 7,733 | 12,323 |
| Total liabilities | 10,244 | 15,097 |
| Total equity and liabilities | \$ 48,371 |
\$ 54,105 |
| Figures in USD (000's) | Q1 2020 | Q1 2019 | 2019 |
|---|---|---|---|
| Unaudited | Unaudited | ||
| Cash flows from operating activities | |||
| Income for the period | \$ (700) |
\$ (821) |
\$ (628) |
| Depreciation and amortization | 873 | 1,023 | 4,057 |
| Finance income recognized | (49) | (92) | (359) |
| Finance costs recognized | 40 | 44 | 171 |
| Finance income, cash received | 49 | 92 | 359 |
| Finance costs, cash paid | (21) | (21) | (84) |
| Income tax expense | - | 7 | 2,082 |
| Cash receipt (payment) for income tax | - | - | (172) |
| Share based payments expense | 221 | 317 | 1,056 |
| Changes in trade receivables, inventories, other assets | 6,490 | 5,244 | 2,234 |
| Changes in trade payables and accrued liabilities | (4,425) | (2,198) | 154 |
| Net cash provided by (used in) operating activities | 2,478 | 3,595 | 8,870 |
| Cash flows from investing activities | |||
| Additions to intangible assets | (357) | (360) | (1,441) |
| Purchase of property and equipment | (109) | (420) | (713) |
| Net cash used in investing activities | (466) | (780) | (2,154) |
| Cash flows from financing activities | |||
| Funds drawn (paid) against line of credit | (4) | 33 | 22 |
| Proceeds from issuance of share capital | - | 25 | 64 |
| Principal payments on capitalized leases | (226) | (165) | (734) |
| Net cash provided by (used in) financing activities | (230) | (107) | (648) |
| (128) | (56) | (190) | |
| Effect of exchange rate changes on cash and cash equivalents | |||
| Net changes in cash and cash equivalents | 1,654 | 2,652 | 5,878 |
| Cash and cash equivalents at beginning of period | 24,505 | 18,627 | 18,627 |
| Cash and cash equivalents at end of period | \$ 26,159 |
\$ 21,279 |
\$ 24,505 |
| Supplemental disclosures - | |||
| Property and equipment acquired under leases | \$ - |
\$ 119 |
\$ 413 |
| TM | |
|---|---|
| Figures in USD (000's) | Share capital |
Translation reserves |
Other reserves |
Retained earnings |
Total |
|---|---|---|---|---|---|
| Equity at January 1, 2020 | \$ 423 \$ |
392 \$ | (4) | \$ 38,197 \$ 39,008 | |
| Total comprehensive income - quarter ended March 31, 2020 |
|||||
| Income for the period | - | - | - | (700) | (700) |
| Foreign currency translation adjustments | - | (399) | - | - | (399) |
| Total comprehensive income - quarter ended March 31, 2020 |
- | (399) | - | (700) | (1,099) |
| Transactions with owners - quarter ended March 31, 2020 |
|||||
| Share activity | - | - | (3) | - | (3) |
| Share based payment expense | - | - | - | 221 | 221 |
| Transactions with owners - quarter ended March 31, 2020 |
- | - | (3) | 221 | 218 |
| Equity at March 31, 2020 | \$ 423 \$ |
(7) | \$ (7) |
\$ 37,718 \$ 38,127 |
| Equity at January 1, 2019 | \$ 422 \$ |
836 \$ | (4) | \$ 37,704 \$ 38,958 | |
|---|---|---|---|---|---|
| Total comprehensive income - quarter ended March 31, 2019 |
|||||
| Income for the period | - | - | - | (821) | (821) |
| Foreign currency translation adjustments | - | (330) | - | - | (330) |
| Total comprehensive income - quarter ended March 31, 2019 |
- | (330) | - | (821) | (1,151) |
| Transactions with owners - quarter ended March 31, 2019 |
|||||
| Shares issued | - | - | - | 26 | 26 |
| Share based payment expense | - | - | - | 318 | 318 |
| Transactions with owners - quarter ended March 31, 2019 |
- | - | - | 344 | 344 |
| Equity at March 31, 2019 | \$ 422 \$ |
506 \$ | (4) | \$ 37,227 \$ 38,151 |
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 forwardlooking 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.
www.asetek.com
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.