Asetek A/S

Good day and welcome to the ACETEC third quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. For those on the webcast, please submit your questions online. For those on the phones, to join the queue and ask a question, simply press star followed by the number one on your telephone keypad. To withdraw your question, press the star one again. For operator assistance throughout the call, please press star zero. And finally, I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome Peter Madsen, CFO to begin the conference. Peter, over to you.

Thanks, Paulie. Welcome all to this ACSEC Q3 2024 earnings call. It is the 7th of November today. Our board, they met last night and confirmed this morning their resolution to approve this earnings update that we sent out earlier today. I'm Peter Madsen. I'm the CFO. I'm in the room here with André Slot Eriksen, who's our CEO. Good morning. Good morning. And with that, I think we should get started. You heard the instructions from the operator on how to submit your questions.

i think we're all good to go we skip over the disclaimer and then we go to the financial highlight slide thanks um so jumping right into it um the sim sports business is uh essentially growing as we have hoped for and as we have planned for this year liquid cooling revenue remains impacted by the yeah the rapidly changed market dynamics that we have seen this year Our Q3 gross margins came in lower than normal, mainly due to a one-off supply chain quality issue. Our net income for the quarter is impacted by a non-cash write-down and I would say an unexpected US tax cost. As you have probably seen already, we are seeking to strengthen the financial position of the company through a rights issue. expectantly this year or early next year. We are maintaining the revenue expectation that we laid out earlier in the year. So just a short headline from SimSport. As announced, we have now signed an Xbox partnership agreement allowing us to enter the console market. I'll get back to that. We have closed a couple of distribution agreements that will come to effect revenue-wise in this quarter, so Q4. I have appointed a new VP, Brandon Digital. It should be no surprise that it's a former board member that has stepped out of the board and into the management team instead. As I just said, we are maintaining our revenue projections for the year. We expect growth to continue into the next year and beyond, supported by an attractive product range, our great customer service, and of course also, and not the least, our branding. Investments are obviously required going forward to capitalize on the big opportunity that we believe we have in front of us right now. In terms of the liquid cooling at this point in time, it should be no surprise that we have early in the year faced an unexpected and very rapid situation or demand, a decrease in demand this year. And of course, that has resulted in a lower than expected cash flow. The segment as a whole is still expected to remain profitable for now and for the future. But nevertheless, much lower than we had expected. We already have and we already reported that we've taken measures to increase the profitability and also strengthen the position longer term. And also here we have appointed a new management team member, Henrik, as our new VP of sales. And he will be here in Denmark reporting directly to me. And the target, of course, the target is, of course, revenue. But the more strategic targets is to have an even closer dialogue with our key customers at the same time as we, of course, building on our brand. Also here we expect to maintain our previous guidance.