Asetek – Q4 2021: Stabilization in Q4 as Expected – Long-term Growth Ambitions Remain Firm

OSLO, Norway, March 4, 2022 /PRNewswire/ —

2021 revenue of $79.8 million (10% growth) and EBITDA adjusted of $7.2 million

• Full-year Gaming & Enthusiast revenue growth of 13% to $72.9 million
• Q4 revenue of $18.1 million compared with record $27.9 million in Q4 2020
• Q4 gross margin of 42% compared with 44% in prior year
• Q4 EBITDA adjusted of $0.7 million, compared with $6.9 million in Q4 2020; operating expense growth reflects continuing investment in SimSports
• Encouraging market debut for SimSports with pre-orders of Invicta Sim Racing Pedals and highly positive reviews, confirming Asetek’s value proposition
• 2022 group revenue growth expected of -5% to +15% from 2021 and operating income is expected to be between –$1 and +$5 million, reflecting a volatile global situation

Asetek reported fourth-quarter revenue of $18.1 million, compared with $27.9 million in the same period of 2020. Revenue for the full year was $79.8 million, representing growth of 10% compared with 2020. The fluctuations from prior year mainly reflect changes in the volume of shipments of Gaming and Enthusiast products.  Shipments were negatively impacted by the global shortage of semiconductor chips, particularly GPUs, that has suppressed demand for Asetek’s coolers.

Gross margin was 42% for both the fourth quarter and full year, compared with 44% and 47% in the respective periods of 2020. The margin decline reflects higher component costs due a weaker U.S. dollar, generally higher component prices due to shortage, increased shipping costs due to global supply chain disruptions, and a change in the mix of product shipments.

“Continued strong demand for our liquid cooling technology enabling more immersive gaming experiences led to record revenue in 2021 despite the negative impact from shut-downs, component shortages and shipping bottlenecks,” said André Sloth Eriksen, CEO and founder of Asetek.

“Business activity improved and stabilized towards the end of the year and our long-term ambition of 15% average annual growth through 2025 stands firm. Near-term uncertainties remain a factor with continued component shortages, logistics challenges, pandemic lockdowns and geo-political tensions. However, we have an overall expectation that component access and global supply chains will normalize during 2022, and we are well positioned to capture growth and value creation driven by Gaming & Enthusiast innovations, our new acclaimed SimSports product line and a refocused Data center business,” Sloth Eriksen continued.

Operating loss was $0.6 million and adjusted EBITDA was positive $0.7 million in the fourth quarter of 2021, compared with operating income of $5.6 million and adjusted EBITDA of $6.9 million in the fourth quarter of 2020. Operating income for the year was $0.8 million and adjusted EBITDA was $7.2 million, compared with operating income of $10.9 million and adjusted EBITDA of $15.6 million in 2020.  Full-year results are consistent with the outlook provided on October 28, 2021.

Operating expense included R&D in the new SimSports line of business of $1.1 million and $3.1 million in the fourth quarter and full year 2021, respectively, compared with zero in the same periods of 2020.  

At December 31, 2021, Asetek had working capital of $20.6 million including $23.3 million of cash and cash equivalents, and long-term debt totaled $1.5 million.

In November, the Company began accepting pre-orders for the first of its SimSports products – Invicta Sim Racing Pedals – which include a throttle, brake pedal and add-on clutch pedal, along with its RaceHub software for quick and easy adjustments and calibration. This initial offering, available in March 2022, will provide competitive SimSports gamers with full immersion and the feeling of a real racecar.

In October, Asetek announced a licensing, marketing and product agreement with Pagani Automobili, the Italian manufacturer of exclusive racing hypercars. Asetek plans to custom design Pagani-licensed and branded SimRacing products.

In the fourth quarter, ten new Gaming & Enthusiast products began shipping, including five to two new customers. In October, the Company announced that Asetek technology is incorporated in the first AIO liquid cooling solutions from global gaming leader Razer. The Company also announced in the quarter that SAPPHIRE Technology is offering its new NITRO+ AIO CPU coolers powered by Asetek liquid cooling technology.

Management has communicated a target that revenue will increase by an average of approximately 15% per annum over the next five years. In some years growth may exceed the average, in other years it may be lower. 

Considering the volatile global situation, revenue growth for 2022 is expected to be in the range of -5% to +15% compared with 2021, considering assumptions such as shortages of semiconductor chips, shipping cost and capacity variances, pandemic lockdowns, general geo-political tensions as well as an overall expectation that the business climate will normalize over the course of the year. Operating income is projected to be between –$1 and +$5 million in 2022, reflecting the above uncertainties.

Conference call and webcast today, Friday, 4 March at 8:30 AM CET:

CEO André Sloth Eriksen and CFO Peter Dam Madsen will present the Company’s results at 8:30 CET and invites investors, analysts and media to join the presentation. The presentation is expected to last up to one hour, including Q&A, and can be followed via live webcast or conference call.

Webcast – audio and slide presentation:

Please join the results webcast via the following link: https://streams.eventcdn.net/asetek/2021q4  

Conference call – audio only:

Please dial in 5-10 minutes prior using the phone numbers and confirmation code below:

Material:

The fourth quarter report and presentation, together with the annual report for 2021, will be available online at www.asetek.com and www.newsweb.no, as well as through news agencies.

A recorded version of the presentation will be made available at www.asetek.com approximately two hours after the presentation has concluded.

Q&A:

The conference call lines will be opened for participants to ask question at the end of the presentation. Questions can also be submitted through the online webcast during the presentation.

For questions or further information, please contact:

CEO and Founder André S. Eriksen, +45 2125 7076, email: [email protected]

CFO Peter Dam Madsen, +45 2080 7200, email: [email protected]

About Asetek:

Asetek (ASTK.OL), a global leader in mechatronic innovation, is a Danish garage-to-stock-exchange success story. Founded in 2000, Asetek established its innovative position as the leading OEM developer and producer of the all-in-one liquid cooler for all major PC & Enthusiast gaming brands. In 2013, Asetek went public while expanding into energy-efficient and environmentally friendly cooling solutions for data centers. In 2021, Asetek introduced its line of products for next level immersive SimSports gaming experiences. Asetek is headquartered in Denmark and has operations in China, Taiwan and the United States.

This information is subject to the disclosure requirements pursuant to Section 5-12 of the Norwegian Securities Trading Act.

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