Asetek A/S : Download presentation from investor call September 22, 2021

Update to Full Year 2021 Guidance

Investor conference call | September 22, 2021

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Disclaimer

This presentation contains forward-looking statements concerning Asetek's financial 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 future expectations that are based on management's current expectations and assumptions and involve known and unknown risks and 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 Asetek's potential exposure to market risks and statements expressing management's expectations, beliefs, estimates, forecasts, projections and assumptions. A number of factors that affect Asetek's future operations and could cause Asetek's results to differ materially from those expressed in the forward-looking statements included in this document, include (without limitation):(a) changes in demand for Asetek'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 Asetek'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.

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August 12, 2021: Q2 report revenue outlook

• "2021 group revenue expected to increase 20% to 30% compared with 2020
• • Equals annual revenue in the range of $87 - $95 million
  • Pipeline is record high and beyond guiding
  • Customers are getting nervous by increasing shipping rates, component shortage in the channel etc. moving and pushing orders around
  • We maintain our guidance in this situation. Very low visibility so best assumption
• Gross margin expected to normalize from 47% in 2020
• • Gross margin of 43% in H1 2021, compared to 51% in H1 2020
  • Long-termmargin target remains at >40%
• Operating income of $8 to $12 million, compared to $11 million in 2020
• • Adjusted from previous $11 to $16 million
• Uncertainty related to COVID-19 situation and shortage of semiconductor chips"

Annual Group revenue		Guidance
USD thousands		range

YTD revenue

		72.750
		67.314
	58.194	54.334
50.921
	48.200

35.982

18.681 20.729 20.847

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

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September 22, 2021: Update to FY'21 Guidance

• Triggered by the effects of new and ongoing Covid-19shut-downs in China disrupting Asetek's operations and supply chain
• • Shut-downin the Tongan District in China, hindering sub-suppliers' deliveries of components
  • Challenging Covid-19 situation in Xiamen, hindering deliveries of components to Asetek's contract manufacturers and consequently their shipments to Asetek
• Update also reflects:
• • Wider supply chain challenges with continued increased component cost and shortages (primarily with customers) and increasing logistics costs affecting both Asetek and the company's customers and partners, leading to increased uncertainty related to sales and costs for the remainder of the year
  • Expected datacenter revenue not materializing, dragging down margins and profits (relatively fixed cost base)
  • Non-recurringcosts related to a sharpening of Asetek's Data center segment to improve profitability
• Based on the current situation and outlook, Asetek's updated full year 2021 expectations are:
• • Group revenue growth of 10-20% compared with 2020
  • Operating income between $0-2 million compared with $11 million in 2020
• The reduced operating income expectation is explained by:
• • Reduced sales due to China lock-downs and general negative Covid-19 ripple effects
  • Increased shipping and component costs
  • Non-recurringcosts of $2.5 million (write off of IP/inventory/equipment) associated with the sharpening of the Data center segment by exiting the HPC niche

Sharpening Data center strategy to improve

profitability

Current situation

• Coinciding with the Covid-19 effects in China and the wider supply chain challenges, Asetek has decided to sharpen its Data center business segment and exit the High Performing Computing (HPC) niche
• Rising complexity and demands in HPC for architecture driven by more powerful GPUs and DIMMs
• • Increasing investment needs
  • Increased customer engineering support
  • Low revenue expectations for the next 24-36 months
  • Burn rate would accelerate beyond current levels
• Rationale behind the decision was to protect Asetek's future profitability from:
• • increasing HPC losses
  • lacking revenue from the HPC area
  • upcoming milestone with an external HPC partner involving binding commitments

Goal maintained

Maintain

Data center position

and create a sustainable and profitable business over time

Short-term tactics and new strategy

• Exit HPC
• • Reduction in staffing with layoff of 15-18 FTEs (primarily R&D and operations)
  • Non-recurringcosts of $2.5 million related to shut down of HPC area
  • Improve profitability going forward and avoid increased losses
• Continue influencing the influencers and support adoption of latest EU proposals into legislation for climate gains from reusing waste heat on the way towards carbon neutrality
• Once legislation is adopted, capitalize on the company's liquid cooling technology and long-term investments in the Data center business segment

Long-term outlook

maintained

• Global sustainability agenda strengthens rationale for Asetek's data center solution over times
• Positive impact from direct engagement with the EU with current "Green Deal" proposals favoring liquid cooling
• Market adoption of liquid cooling will remain slow until adoption of the proposed Green Deal legislation has been decided
• Prepared and positioned for a potential shift in demand driven by adoption of the proposed legislation

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