Asetek A/S

Quarterly Report • May 22, 2023

Q1 2023

22 May 2023

Disclaimer

This presentation contains forward-looking statements concerning As k'sfinancial condition, results of operations and business. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of fu u xp c i ns b s d n m n g m n 's cu n xp c i ns nd ssump i ns nd inv v kn wn nd unkn wn isks nd uncertainties that could cause actual results, performance, or events to differ materially from those expressed or implied in these statements.

Forward-looking statements include, among other things, statements concerning As k's potential exposure to market risks and statements xp ssing m n g m n 's xp c i ns, b i fs, s im s, f c s s, p j c i ns nd ssump i ns. A numb f f c s ffect As k'sfuture operations and could cause As k'sresults to differ materially from those expressed in the forward-looking statements included in this document, include (without limitation):(a) changes in demand for As k's products; (b) currency and interest rate fluctuations; (c) customer concentration and industry competition; (d) legislative, fiscal, and regulatory developments, including changes in tax or accounting policies; (e) ability to enforce patents; (f) product development risks; (g) customer credit risks; and (h) supply of components.

All forward-looking statements contained in this document are expressly qualified by the cautionary statements contained or referenced to in this disclaimer. Undue reliance should not be placed on forward-looking statements. Additional factors that may affect future results are contained in the risk management section in As k's most recent annual report (available at https://ir.asetek.com/) and these factors also should be considered. Each forward-looking statement speaks only as of the date of this document. Asetek does not undertake any obligation to publicly update or revise any forward-looking statement as a result of new information or future events other than as required by Danish law. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this document.

Q1 Highlights

• First-quarter revenue of \$14.8 million, up 6% from \$13.9 million in Q1 2022
• Gross margin increased to 44%, compared with 38% in Q1 2022
• Q1 EBITDA adjusted of \$2.8 million compared with EBITDA loss of \$0.9 million in Q1 2022
• SimSports revenue of \$1.3 million in the quarter, reflecting shipments of eight new products
• 23 new liquid coolers began shipping in Q1
• Quarterly OPEX reduced 25% YoY due to organizational rightsizing and reduced IP litigation efforts
• Successful listing on Nasdaq Copenhagen on 17 May after completing rights issue raising gross proceeds of \$20 million
• Full-year 2023 outlook maintained revenue growth expected in the range of 5% to 15% compared with 2022, with operating income projected between \$2 to \$4 million

Increased activity amid continued market challenges

2023 developments Company actions Market backdrop

• Good interest and positive feedback for Liquid cooling and SimSports products
• Signs of liquid cooling market improving with increased order activity and reinstatement and execution of product launch plans
• Recent forecasts indicates that inventory situation is normalizing for some liquid cooling OEM customers
• Executing SimSports product roll-out plan

• Shipments of new sim racing products well underway against order backlog established during Q4/Q1

• Continued product development and launch of new/more products

• Focus on efficiencies, supply chain capacity and capabilities
• Strengthened balance sheet with rights issue completed in May

• Start of shipments from Malaysia in Q2 2023 in cooperation with existing contract manufacturers

• War in Ukraine, supply chain issues, inflation and interest rates

• Reduced discretionary consumer spending affecting end-user demand liquid cooling and SimSports products
• Limited visibility with high volatility in OEM forecasts

Listed on Nasdaq Copenhagen following completion of rights issue

• Asetek shares admitted to trading on May 17
• Following execution of fully underwritten rights issue raising NOK 214 million (~\$20 million) in gross proceeds
  • ‒ Strengthening the balance sheet and liquidity position
  • ‒ ~71.17 million new shares issued
  • ‒ Subscriptions received for 99.3% of new shares offered
• Third company to join the Danish main list to date in 2023
  • ‒ Initially trading in the form of share entitlements due to the dual listing
  • ‒ Shareholders wishing to trade their shares on Nasdaq Copenhagen must transfer their shares the Danish registry
• Delisting process from Euronext Oslo Børs initiated
• The Company encourages shareholders to move shares from Oslo to Copenhagen. FAQ available at ir.asetek.com

Leading offering for gamers and enthusiasts

Global platform with integrated value chain supports long-term growth

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

10 million units shipped | ~127 mp s | FY'22 v nu f USD 51 mi i n | Lis d n Os Stock Exchange

Liquid cooling

Increased product release activity into 2023

• 23 new liquid cooling products started shipping in Q1 2023
  • ‒ Four featuring As k's 8 th generation liquid coolers with the most advanced technology developed to date
  • ‒ Improved cooling, less power consumption and quieter operation
• 16 new products estimated to start shipping in Q2 2023
  • ‒ Including a new range of products designed to service demand for regional OEM, also known as System Integrators (SIs), and the first SKUs for a new customer
• Investing in product development and branding to expand reach with key customers based on the core tenants of performance, quality and reliability

No. of liquid cooling products started shipping

Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23E

Wide Liquid cooling OEM base

• Currently shipping to over 20 OEMs
• Top five represented 92% of Liquid Cooling revenue YTD 2023, vs. 85% in FY 2022
• Ambition to increase diversification over time
• One new significant customer to launch initial products in Q3 2023

Top 5 customers revenue split Top 5 liquid cooling customers¹ 2)

Robust cash generating liquid cooling business

EBITDA - Liquid cooling for gamers and enthusiasts

USD thousands

0

1000

2000

3000

4000

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6000

7000

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9000

Liquid cooling strategic development

Goal	Strategy	Development and outlook
Further develop leadership in the gaming and enthusiast liquid cooling market	• R&D and product development • Growing existing customers • Widening OEM customer base • Branding and marketing	• Focus on delivery of core liquid cooling solutions • Ramp-up of development to bring meaningful innovations to market • Develop and ship products with market leading performance, quality and reliability • Currently over 20 OEM customers • Focus on reducing single-customer dependency • Co-branding agreements in place with several OEMs • Connecting directly with gamers and enthusiasts via social media and online communities, such as Discord

Expanding sim racing product program

• Eight new products started shipping in Q1 2023
  • ‒ Forte Formula wheel
  • ‒ Invicta™ and Forte™ direct drive wheelbases
  • ‒ Invicta™ and Forte™ S-series pedals
  • ‒ La Prima wheel, wheelbase and pedal-set bundle
  • ‒ La Prima wheel and wheelbase bundle
  • ‒ La Prima pedals
• Three new products set to start shipping in Q2 2023
  • ‒ Industry-first third-party steering-wheel quick release
  • ‒ Co-branded products with internationally recognized racing driver
  • ‒ Design win with a major US retailer
• Q1 2023 revenue of \$1.3 million
  • ‒ Current backlog in excess of \$1 million
  • ‒ Gross margins reflect early stage of scale up

SimSportsstrategic development

Goal	Strategy	Development and Outlook
Becoming a next-level immersive gaming experiences provider	• Leverage core mechatronics capabilities and global supply chain • Develop product offering based on acquired IP and technology • Establish a thriving growth segment in a fragmented market	• Initial product development phase completed with the availability of basic eco-systems (wheel, wheelbase and pedals) at each price tier • Market and channel strategies in place and subject to ongoing review and refinement • Focus on further innovation and product development to augment eco-systems and drive growth • Supported by brand platform and reputation for performance, quality, reliability and immersive experiences

Financials

Group revenue and liquid cooling EBITDA margin

USD thousands

Income statement

Figures in USD (000's)	Q1 2023	Q1 2022	2022
	Unaudited	Unaudited
Revenue	14,760	13,889	50,650
Cost of sales	8,268	8,583	29,885
Gross profit	6,492	5,306	20,765
Research and development	1,662	1,080	5,163
Selling, general and administrative	3,764	6,168	20,884
Other expense (income)	-	-	119
Total operating expenses	5,426	7,248	26,166
Operating income	1,066	(1,942)	(5,401)
Foreign exchange (loss) gain	(385)	130	(344)
Finance income (costs)	68	(45)	(133)
Total financial income (expenses)	(317)	85	(477)
Income before tax	749	(1,857)	(5,878)
Income tax (expense) benefit	(167)	(134)	1,553
Income for the period	582	(1,991)	(4,325)
Other comprehensive income items that may be reclassified
to profit or loss in subsequent periods:
Foreign currency translation adjustments	377	(433)	(1,971)
Total comprehensive income	959	(2,424)	(6,296)
Income per share (in USD):
Basic	0.02	(0.08)	(0.17)
Diluted	0.02	(0.08)	(0.17)

The financial tables for Q1 2023 are available in the Interactive Analyst Center athttps://ir.asetek.com/overview/default.aspx

• Q1 revenue reflects increased sales of Liquid cooling and SimSports products compared to previous year
  • ‒ Sales of 223,000 sealed loops in Q1 2023 vs. 232,000 shipped in Q1 2022
  • ‒ Cooling unit ASP increased to \$60 (\$53) due to shift in product mix towards higher performance products
  • ‒ SimSports revenues of \$1.3 million (\$0.2) split between three product groups
• Shipments of gaming products remained impacted by inventory de-stocking and softer end-user demand
• Operating expenses reduced 25% compared to Q1 2022
  • ‒ Reduced staff
  • ‒ Reduced litigation activity

Positive margin development

Quarterly Group gross margin development

• Q1 2023 gross margin of 44.0% vs. 38.2% in Q1 2022
  • ‒ Increase due to richer product mix, increased sales prices, reduced input costs and beneficial exchange rate movements
  • ‒ SimSports gross margins still impacted by ramp-up efforts
  • ‒ USD/CNY exchange rates is a significant impactor of gross margins

Balance sheet

Balance sheet

USD thousands at March 31, 2023

• USD 5.3 million cash position as at end-Q1 2023
• Investments in product development and HQ
• Continued debt draw-down to finance new HQ
• Rights issue completed in May with gross proceeds of ~\$20 million

Financial strategy

Summary and outlook

• Good end-user interest in Asetek liquid cooling and sim racing products
• Continued signs of stabilization in the liquid cooling market with high customer activity
• Visibility into Q3, Q4 and beyond remains low
• Focus on scaling of SimSports business in terms of products and end-user connection points
• Rights issue completed, providing liquidity to complete HQ construction
• Optimized cost base and continuous focus on efficiencies as a stronger and more scalable company
• Full-year 2023 revenue growth expected in the range of 5% to 15% and operating income in between \$2 and \$4 million
• Long-term average growth expectation of approximately 15% per annum when markets normalize maintained

Q&A

Appendix

Management

• Long-term entrepreneur and founder of Asetek

• Previously employed at Danfoss in their management trainee program
• Holds an engineering degree from Aalborg University
• Several MBA level executive management programs from Right, Stanford, MIT and Wharton

• Previous positions include International Controller (DK) and Chief Financial Officer (US) at Martin Professional, Inc.
• Also served as CFO of Dantax Radioindustri A/S listed on the Copenhagen Stock Exchange
• MBA from Fort Lauderdale Metropolitan University

COO John Hamill

• 30+ years of high tech industry sales, sales management and marketing experience
• Previously held position as VP of Global Sales at nVidia and AMD
• Has managed global sales teams
• BSc in Electronics and Electrical Engineering from the University of Glasgow in Scotland

VP Global Operations Henrik Gertz

• 20+ years in operations management roles, where he managed fulfilment, logistics, manufacturing planning, procurement, and supply chain functions
• He became a machine fitter at ABB and then studied and earned his Production Technologist degree, and a Diploma in Management

VP Global Sales

Jamie Jamieson

• 10 years+ global liquid cooling sales and management experience
• Prior to becoming VP, he was Senior Director of Sales at Asetek, and has held business development positions at CIARA and CoolIT Systems.
• Studied Sociology and Eastern Religious Studies at the University of Calgary in Canada

VP Global R&D Thomas Ditlev

• 15+ years of experience with Vestas and Grundfos he has an intimate background in sophisticated pumping and cooling systems designed for global markets
• M.Sc.EE degree from Aalborg University as well as an EMBA in Business Psychology from Business Institute in Aalborg

Director Branding and Outbound Marketing Solveig Malvik

• Extensive international experience within branding, marketing, communication and business development
• Holds an M.A. in Modern Middle Eastern Studies, Public Policy and Governance from A.U. of Beirut and a Masters in Political Science and Public Administration from the University of Bergen

Director, Global Product Management

• 15+ years experience in defining and executing winning product strategies across industries
• Various senior product management and product marketing roles within the Solar, Building Construction and Semiconductor industries
• Holds a B.S. in Chemical Engineering and a B.S. in Material Science both from the University of California, Berkeley as well as an MBA from the University of California, Davis

Board of Directors

Chairman René Svendsen-Tune

• 30+ years of management and executive experience in technology sectors ranging from mobile network technology to consumer products
• 10+ years of global experience in board positions at private and public companies combined with years of strategic, operational and financial responsibilities
• Global perspective and experience rooted in Nordic leadership mindset and style

Vice Chairman Erik Damsgaard

• Experienced Managing Director from the electrical and electronic manufacturing industry
• 20 years as leader at OJ Industries in the HVAC and Floor heating industry. He is also Chairman of Danish service and distributor company Masentia A/S and Masentia Holding AB
• Holds M.Sc. in Electronics and a diploma in Business Economics, both from Aarhus University. Has graduated an Executive Management Program at INSEAD

Director Jukka Pertola

• 20+ years of management experience in ICT, energy, industry, infrastructure and healthcare sectors
• 10+ years of international experience in board positions at private and public companies and organizations
• Solid technological background in telecommunications, IT, digitalization and electrical engineering
• Experience in R&D funding and technology transfer projects

Director

Maria Hjorth

• 20+ years of consulting and financial sector experience covering business development, M&A, investor relations and operational optimization
• Professional board member
• MSc and BSc in Economics from University of Copenhagen and a MSc in Business Psychology from University of Westminster in London

Director

Maja Frølunde Sand-Grimnitz

• Experienced marketing leadership and business growth professional
• Expertise in growing brands and businesses through strategy, process development and implementation
• Experience from Sport & Entertainment, tech, FMCG and finance
• Currently a Director, Brand Management & Global Gaming Marketing at EPOS Group

Balance sheet summary

Figures in USD (000's)		31 Mar 2023		31 Dec 2022
ASSETS		Unaudited
Total non-current assets			55,570		50,799
Total current assets			30,488		27,816
Total assets		\$	86,058	\$	78,615
EQUITY AND LIABILITIES
Total equity			43,802		42,748
Total non-current liabilities			1,558		1,739
Total current liabilities			40,698		34,128
Total equity and liabilities		\$	86,058	\$	78,615

Cash flow summary

	Three months ended
Figures in USD (000's)	31-Mar-23	31-Mar-22
	Unaudited	Unaudited
Net cash provided by (used in) operating activities	(3,354)	(7,763)
Net cash used in investing activities	(6,329)	(3,736)
Net cash provided by (used in) financing activities	7,172	1,019
Effect of exchange rate changes on cash and cash equivalents	432	(184)
Net changes in cash and cash equivalents	(2,079)	(10,664)
Cash and cash equivalents at beginning of period	7,411	23,296
Cash and cash equivalents at end of period	\$ 5,332 \$	12,632

Statement of equity, summary

Unaudited
Figures in USD (000's)		Three months ended
		31-Mar-23	31-Mar-22
Equity at January 1	\$	42,748 \$	48,388
Total comprehensive income for the period
Income for the period		582	(1,991)
Foreign currency translation adjustments		377	(433)
Total comprehensive income for the period		959	(2,424)
Transactions with owners during the period
Shares issued for options exercised		-	36
Share based payment expense		95	142
Transactions with owners during the period		95	178
Equity at end of period	\$	43,802 \$	46,142

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