Asetek (ASTK) Investor Update summary

Company overview and business segments

• Operates two main segments: liquid cooling for gaming PCs (primarily OEM, B2B2C) and SimSports (B2C and B2B2C, branded sim racing equipment).

• Over 11 million liquid cooling units sold, with revenue for 2024 expected between $42–44 million and a target adjusted EBITDA margin of 25%+.

• SimSports business focuses on direct-to-consumer and retail channels, emphasizing brand building and modular, upgradable products.

• Recently secured an Xbox license, opening access to a larger market segment, with plans to expand to PlayStation.

• Both segments share resources, engineering, and management, leveraging synergies and overlapping customer bases.

Market trends and strategic positioning

• Liquid cooling remains focused on premium and mid-level markets, adapting to shifts in consumer spending and OEM demand.

• SimSports is expanding from premium to mid-level segments, offering modular products compatible with other brands to lower entry barriers.

• Gaming simulation market is growing, driven by new game titles and consumer willingness to invest in high-quality equipment.

• SimSports aims to reach $50 million in midterm revenue, targeting both niche enthusiasts and broader leisure gamers.

• Plans to leverage established brand in sim racing to enter adjacent simulation categories like farming and trucking.

Financial performance and guidance

• Delivered 6% annual revenue CAGR and 12% average EBITDA over the past eight years, with recent volatility due to market conditions.

• 2024 guidance: revenue of $52–55 million (down ~30% YoY), adjusted EBITDA margin of 1–4%.

• Medium-term ambitions: $50 million revenue for both liquid cooling and SimSports, with liquid cooling EBITDA margin at 25%+ and SimSports aiming for positive single-digit margin.

• Recent cash flow turned negative in 2024 after prior strong performance, prompting the current rights issue to fund SimSports growth and working capital.