XXXXX ANNUAL REPORT 2023 / Page 1
ANNUAL REPORT 2024
XXXXX ANNUAL REPORT 2023 / Page 2
Asetek is a developer and manufacturer of high-quality gaming
hardware. Founded in 2000, Asetek established its innovative
position as the leading OEM developer and producer of the all-
in-one liquid cooler for major PC & Enthusiast gaming brands.
In 2021, Asetek introduced its line of products for next level
immersive SimSports gaming experiences. Asetek is headquar-
tered in Denmark and has operations in China and Malaysia with
a total of 114 employees. In 2024 Asetek recorded revenue of
$52.5 million.
Asetek A/S
Visiting address: Skjoldet 20
DK-9230 Svenstrup J
Denmark
Email: investor.relations@asetek.com
www.asetek.com
CVR number: 3488 0522
Annual report for the financial year 1 January to 31 December 2024. This annual report is approved by the Board of Directors as of March 7, 2025. The Board will submit this report for approval at
the Annual General Meeting on April 28, 2025. This annual report contains prospective information based on Asetek’s current expectations. This information is by nature uncertain and associated
with risk. Even if company management considers expectations based on such prospective information to be reasonable, no guarantee can be given that these expectations will prove to be cor-
rect. Consequently, actual future results may vary significantly compared with what is set out in the prospective information, for reasons including changed conditions in respect of the economy,
market and competition, changes in legal requirements and other political measures, exchange rate variations and other factors. Read more about the risks in the chapter on ‘Risk management’
on pages 30–33 and in note 3 on page 46 ‘Risk management and debt’ in the financial statements.
XXXXX ANNUAL REPORT 2023 / Page 3
CONTENT
Asetek in brief 4 Consolidated statement of comprehensive income 36
Comments from CEO 7 Consolidated statement of changes in equity 38
Asetek as an investment 9 Consolidated cash flow statement 39
Strategic framework 10 Notes 40
Business model 11 Comprehensive income statement, parent company 63
Business segments 13 Balance sheet, parent company 64
Liquid cooling 14 Statement of changes in equity, parent company 65
SimSports 16 Statement of cash flows, parent company 66
Share and shareholders 19 Notes, parent company 67
Management report 23 Management statement 72
Corporate governance 25 Independent auditor’s reports 73
Risk management 30 Definitions of ratios and metrics 79
Corporate social responsibility 33
Five year summary 34
ASETEK IN BRIEF ANNUAL REPORT 2024 / Page 4
FOUNDED ON INNOVATION. DRIVEN BY EXCELLENCE
Asetek has been an innovative force in the global liquid cooling manufacturing industry for more than Why we do it
has operations in China and Taiwan with a total of 114 employees. The Asetek share is listed on Nasdaq performance, design and longer product lifecycles. Our product development centers around our customers’
Copenhagen. In 2024 the company recorded revenue of 52.5 million USD. needs and reflect an innovative engineering approach combined with superior performance. The Asetek
brand name has become synonymous with high product quality in all categories, which is confirmed by great
Who we are reviews and feedback from gamers and hardware enthusiasts around the world. We are in business to push
We are a high-tech company with a long history in mechatronic innovation, focusing on gaming hardware. limits and redefine what’s possible.
Since our foundation we have disrupted the PC cooling market, setting new standards for performance and
efficiency. In 2021, we continued to leverage our extensive capabilities with software, hardware and mechanics
“
and entered into the world of sim racing as Asetek SimSports. We are a diverse and agile organization located
close to some key electronic manufacturing hubs in South-East Asia. Asetek is a high-tech company
with a long history in mechatronic
What we do innovation, focusing on gaming
Asetek is a developer and manufacturer of high-quality gaming hardware. Since 2000, we design, manufac- hardware
ture, and sell high-quality liquid cooling solutions to most major PC and Enthusiast gaming brands. In 2021,
we introduced our line of products for next-level immersive SimSports gaming experiences, offering every
sim racer in the world the possibility to push limits and redefine what’s possible.
Revenue per year, $ million Owner type distribution
$52.5 $21.9
Fund company 15.5%
Pension & Insurance 13.2%
Investment & PE 1.6%
of revenue invested
Treasury Shares 1.3% in research and
million Unknown owner type 34.3% million development in 2024
Revenue per quarter, $ million
Foreign ownership
ASETEK IN BRIEF ANNUAL REPORT 2024 / Page 5
KEY CONCEPTS FOR UNDERSTANDING ASETEK
CUSTOMERS – a global customer base INNOVATION – we are a high-tech company
We design, manufacture, and sell high-performance Asetek is a developer and manufacturer of
gaming hardware that delivers next-level immersive high-quality gaming hardware. Our journey began
gaming experiences. Our products power some almost 25 years ago when we disrupted the PC cool-
of the world’s leading PC and enthusiast gaming ing market with our groundbreaking all-in-one liquid
brands, including three of the five largest PC man- cooler, setting new standards for performance and
ufacturers. Since 2021, we have been pushing the efficiency. In 2021, we continued to leverage our
boundaries of sim racing, offering every sim racer extensive capabilities with software, hardware and
the opportunity to redefine what’s possible with our mechanics and entered into the world of sim racing
cutting-edge SimSports product lines. as Asetek SimSports. Our goal is to transform the
sim racing scene, pushing limits and redefining
REACH – well-balanced and global what’s possible.
We have a longstanding local presence in some key
electronic manufacturing hubs in South-East Asia HISTORY – founded on innovation
and our headquarter is in Aalborg, north Jutland, Our history is rooted in innovation that solved a
Denmark. We have a global platform with a solid key challenge of performance limitations caused by
supply chain creating long-term value for all stake- computer processors running hot. This innovation is
holders. the foundation that took Asetek to a world-leading
market position within liquid cooling. Since 2021 we
PEOPLE – an international organization are on a mission to become market-leader in the
We believe that a diverse workforce and an inclusive rapidly growing market for sim hardware.
workplace is a prerequisite for staying competitive,
now and in the future. Our highly skilled employees
are all sharing the common purpose of challenging
industry standards driven by innovation and opera-
tional excellence.
Revenue per year, $ million Owner type distribution
Fund company 15.5%
KEY MILESTONES AND EVENTS 2024
Pension & Insurance 13.2%
Investment & PE 1.6%
Treasury Shares 1.3%
Unknown owner type 34.3%
Despite strong growth in the SimSports segment, In March, Asetek’s share was delisted from the Oslo In September, the new headquarters and R&D
the relatively larger
Revenue per year,Liquid Cooling segment
$ million Revenue per quarter,
Owner type$distribution
million
Stock Exchange and has since been listed exclusively center in Svenstrup, near Aalborg, were completed.
experienced declining revenue in 2024. During the on Nasdaq Copenhagen.
Private Individuals 20.7% Foreign ownership
year, Asetek
Stock Exchange and is now solely listed on Nasdaq
Copenhagen. The year concluded with a decision New Liquid Cooling products
Pension & Insurance 13.2%
of a capital increase, enabling continued expan- launched during 2024Investment & PE 1.6% Foreign ownership 42.5%
sion in the SimSports segment. Treasury Shares 1.3% Danish ownership 54.5%
Unknown owner type 34.3% Norwegian ownership 3.0% New SimSports products
Q1 Q2 Q3 Q4
In October, Asetek entered into launched during 2024
a license agreement with Xbox.
Adjusted EBITDA per quarter, $ million
Revenue per quarter, $ million The Designed for Xbox license In October, Asetek appointed Maja Sand-Grimnitz
agreement enables Asetek to as VP Brand and Digital and Henrik Lindskou-Mour-
market with existing
Volume and future
per market ening the company’s commercial focus within its
sim racing products, making leadership team.
Foreign ownership 42.5% Aquis 0.7%
Danish ownership 54.5% the company’s acclaimedCboe simGlobal Markets
-0.5
In December, it was announced that 219,925,366
Q1 Q2 Q3 Norwegian ownership 3.0% racing products availableEuronext
Q4 to 43.6% new shares were subscribed for in the rights issue
Q1 Q2 Q3 Q4 ITG 0.2%
millions of gamers worldwide. LSE Group 1.8% at a subscription price of DKK 0.40 per share, corre-
Nasdaq 42.1% sponding to gross proceeds of DKK 88 million.
Adjusted EBITDA per quarter, $ million Sigma-X 0.04%
Aquis 0.7%
-0.5
Cboe Global Markets 11.6%
Q1 Q2 Q3 Q4 Euronext 43.6%
ITG 0.2%
LSE Group 1.8%
Nasdaq 42.1%
Sigma-X 0.04%
COMMENTS FROM CEO ANNUAL REPORT 2024 / Page 7
A TURNAROUND YEAR
Looking back, 2024 was a year of significant change – challenging at times, but ultimately neces-
sary to strengthen our foundation for the future. We took decisive steps to secure the long-term
growth and development of our business.
Just a few weeks into the new year, Asetek celebrat-
ed its 25-year anniversary. It is remarkable to think
“We took decisive
that an idea conceived in a university dorm room steps to secure the
and a prototype built in a garage has led to where long-term growth and
we are today. Summing it all up, it comes down
to continuous innovation and a team of talented, development of our
dedicated individuals working together to deliver business.”
products that make a difference by enabling better
gaming experiences.
While Asetek have delivered material growth
and value creation since inception, the past 25 Platform for profitable growth
years have included both ups and downs. There is In late 2024, Asetek executed a rights issue to en-
no denying that 2024 also was a mixed bag, with sure the continued SimSports scale-up as cash flow
an unexpected and rapid contraction in our Liquid from the profitable Liquid Cooling business fell short
Cooling segment, but also strong growth for the of expectations. While we did not raise the full tar-
SimSports business. get amount, the new liquidity provides flexibility to
Against the challenging Liquid Cooling backdrop, adjust and optimize investments. We are confident
management and the board took decisive actions in our ability to grow the sim racing business. Asking We recognize that increased global geopolitical ten- Liquid cooling – transition, then
to cut costs, strengthen commercial management shareholders for capital after a challenging year was sions are creating uncertainties regarding new tariffs profitable growth
and ultimately raise capital to maintain a strong far from ideal, and trust shown by both existing and and potential global supply chain disturbances. We For Liquid Cooling, our largest segment, we have
foundation for delivering future value creation new shareholders is highly appreciated. are monitoring the situation and are prepared to always emphasized the challenges of predicting
through our market leading liquid cooling and sim During the year, we also reduced our workforce, address any future challenges with a combination of revenue. In 2024, this was especially evident as we
racing products. primarily in Denmark, and closed the U.S. operation. measures. faced a rapid and unexpected decrease in revenue.
Following the turnaround measures, 2025 will It is always sad to part ways with colleagues, some In September 2024, the new headquarters This was due to a combination of high customer in-
likely be a transitional year before growth resumes of whom have been with us for many years. Howev- and R&D center was completed after a four-year ventories and two of our largest customers moving
in earnest in 2026. This is supported by ongoing er, the cost-savings were necessary to create a more process. With a new base of operations, stronger to dual sourcing to strengthen their supply chains.
customer dialogues and our plan to expand the ad- efficient organization and structure. The U.S. closure balance sheet and leaner organization, we have While this is a logical step – just as we maintain dual
dressable markets across both business segments, also reflects that a local presence has become less established a strong platform from which to execute sourcing in our own supply chain – it nonetheless
including the launch of a high-quality sim racing relevant as our customers’ key decision-makers now our long-term growth strategy. has a significant short-term negative impact.
product line for the console-based mass market. primarily based in Asia.
COMMENTS FROM CEO ANNUAL REPORT 2024 / Page 8
However, there were also positive developments. is expected to remain largely at the same level as Next for us, is the completion and launch of a prod- 25 years of innovation – with more to come
When excluding the two above-mentioned custom- in 2024. The business will remain profitable, as it uct line targeting the mass gaming market, followed We are confident that Asetek is going into 2025
ers, all our other customers grew year-over-year. has been for many years. Asetek has a track record by Asetek products with Xbox support. Both are set with a stronger foundation, and we have, over time,
Also, at the end of 2024, Asetek secured a new of quickly adapting to changing market conditions to launch in the second half of 2025, significantly delivered strong growth and built a sizeable global
customer – one of the world’s largest PC manu- and will do so again this time. We are the technol- expanding the addressable market and are expected business. We also know that it does not always
facturers – which also required a second source, ogy leader with a strong position in the premium to drive strong revenue growth in the coming years. move in straight line.
this time to our benefit. Out of the five biggest PC segment, and as long as we continue to innovate, Having the best products is not enough. Beyond As result of our innovation drive and focus on ex-
manufacturers globally, three are now using Asetek Asetek’s products and services will continue to be in delivering on the product roadmap, our focus in cellence, far more than 10 million end users world-
Liquid Cooling products. demand by both new and existing customers. 2025 will be on attracting top talent to strengthen wide have bought and used our products which we
In 2024, Asetek introduced the strategy of com- sales channels as well as building up the SimSports have conceptualized, designed, manufactured and
plementing our high-end products with a value-ori- SimSports – expanding our sim racing brand. A strategic priority is to ensure our products sold. Our innovative products, both in liquid cooling
ented offering to expand our addressable liquid universe are readily available in all relevant channels, wheth- and sim racing, have won several global awards.
cooling market. This initiative will gradually gain For our SimSports business, 2024 was another er it is our own web shop, resellers or on platforms With that in mind, I would like to extend a spe-
traction from 2026. Furthermore, we are enhancing positive year with multiple product launches and like Amazon. cial thank you to all my colleagues, our customers,
the commercial capabilities of the organization, ap- strong revenue growth. In less than three years, As we stated in December, we expect EBITDA our shareholders, our partners and suppliers. It has
plying a sharper commercial focus in all aspects of Asetek has become a premium player in the growing improvement compared to 2024, but we do not been a challenging year, but we now look forward
decision-making and integrating even deeper with sim racing market, going from zero to $10 million of anticipate the SimSports segment reaching profit- with confidence to the next 25 years.
our customers. As part of this, in 2024, the com- annual revenue. We now offer several product lines ability in 2025. This is according to plan as Asetek
mercial expertise within the executive management designed as an open ecosystem, which have re- purposefully move in the right direction by optimiz- André S. Eriksen,
team was strengthened. ceived highly positive feedback from end-users and ing SimSports investments and creating a strong Founder and CEO
We have a clear plan for resuming growth in reviewers. Additionally, during the year, we entered platform for a growing profitable business.
Liquid Cooling from 2026, as communicated in into an agreement with Xbox to launch products
connection with the rights issue. For 2025, revenue with console support.
ASETEK AS AN INVESTMENT ANNUAL REPORT 2024 / Page 9
FIVE REASONS TO INVEST IN ASETEK
Asetek is well positioned to capitalize on the its competitive strengths
through innovation, operational excellence and a leading position as a
premium supplier of high-quality gaming hardware.
Large and growing addressable market Leveraging a leading premium Strong innovation capability supporting Profitable Liquid Cooling business Strong SimSports growth potential
segment position future growth provides a foundation for SimSports
growth strategy
Asetek is strategically positioned in the Asetek has a leading position in the Continuous product development is Asetek invented the all-in-one liquid In 2024, revenue in the SimSports
expanding gaming market. The rising premium segment of the gaming hard- crucial for maintaining and strength- cooler and has been solving thermal segment increased by 24% compared
interest in gaming is driving the liquid ware market. Since 2000, we design, ening competitiveness in an industry challenges for 25 years. Our business with 2023. Growth in 2024 was mainly
cooling market, as high-performance manufacture, and sell high-quality liquid that is characterized by competition segment Liquid Cooling has over the driven by a combination of multiple
PC hardware demands efficient cooling cooling solutions to most major PC and and technological progress. Asetek is last 10 years generated total revenues new products and a strong increase in
solutions. Simultaneously, the growing Enthusiast gaming brands. In 2021, renowned for being an innovative, high- exceeding $540 million with an average new end-users and resellers globally.
demand for high-performance gaming Asetek expanded its business into the tech and entrepreneurial company that adjusted EBITDA margin of 29%. The Gaming simulation is a rapidly expand-
setups is boosting the simulation hard- rapidly growing SimSports market for provides products with very high quality. profitable Liquid Cooling operation ing segment of the gaming hardware
ware market, as consumers seek more racing simulator gear. Asetek has earned At Asetek, product development centers provides a financial foundation for market, and the demand for gaming
realistic and competitive gameplay. The a leading position in the premium seg- around customers’ needs and reflects the growth strategy of the SimSports simulation is linked to the growth of the
demand for liquid cooling solutions is ment of both the Liquid Cooling as well an innovative engineering approach business. The strategic fit and synergies overall hardware accessories market. For
to a large extent linked to the growth of as SimSports market. The leading market combined with superior performance. between the two segments are visible the coming three years, this market is
the overall PC gaming hardware market position combined with our strong brand The company has two R&D centers – one and will act as a driver for future value projected to show an annual growth rate
(which, however, includes gaming lap- name and high-quality products can be in Denmark and one in China. In 2024, creation. of approximately 13.7%, reaching USD
tops, which do not need liquid cooling). leveraged into increasing the address- Asetek spent 15.8% of total revenue, 115.3 billion by 2027. 1
The overall PC gaming hardware market able market. This is accomplished by or USD 8.3 million on R&D, securing
is expected to show an annual growth targeting the Liquid Cooling mid-market continued competitiveness trough future 1 S tatista (2024), Gaming Hardware, Gaming Acces-
sories – Worldwide
rate of approximately 5.2%, reaching segment and launching a new SimSports launches of world-class products.
$69.0 billion by 2027. 1 product line with strong value offering
towards entry-level end-users, including
Laptops – Worldwide/
OUR STRATEGIC FRAMEWORK ANNUAL REPORT 2024 / Page 10
ASETEK?S APPROACH TO VALUE CREATION
Asetek’s strategy is based on operational excellence, innovative product development, superior customer
service and expansion of the addressable market. In that way we will secure long-term sustainable organic
growth. The goal is to be the leading brand in the markets in which we operate.
The strategic framework at Asetek consists of core Strategic focus areas
values, goals, strategic focus areas and operational Asetek will continue to do what we are best at STRATEGIC FRAMEWORK AT ASETEK
priorities. By adhering to our strategic framework, – developing and launching high-quality gaming
Asetek secures a strong platform for long-term hardware products as well as continue to develop
sustainable growth. our customer service. At the same time, we plan to
expand our addressable market and increase our CORE VALUES GOALS STRATEGIC FOCUS AREAS OPERATIONAL PRIORITIES
Core values marketing and brand building efforts. Additionally,
The core values at Asetek – innovation and excel- we will expand the number of SimSports resellers
Liquid Cooling
lence – are rooted in our DNA and have been our and sales channels and compete for new OEM Liq- Medium-term Strengthen Asetek’s
Innovation Broadening addressable
guidelines from the start. Asetek was founded 25 uid Cooling customers. All of these actions will drive growth ambition market position
market
years ago with the intention of solving problems for organic growth going forward.
our customers. Since then, we believe staying close SimSports
to our customers’ problems also means being closer Operational priorities Operational excellence Short-term financial goals Establish new sales channels Introducing new
produts
to the solution. Asetek is a well-established brand name in the pre-
mium market segment. We are guided by a strong
Goals belief that there are very good opportunities for Customer centricity Sustainability goals
Strengthening our
Looking ahead, Asetek has set both a medium-term growth by leveraging our current market position brand name
growth ambition and short term financial goals. and strong brand name.
Asetek has also committed to set sustainability In the short to medium term, our operational
goals, which provides a pathway to reduce emis- priorities are to focus on expanding our potential
sions in the future. At group level, the ambition is market and revenues both within our Liquid cooling
to achieve annual revenue exceeding $50 million business unit as well as within SimSports. This will
in both our Liquid Cooling and SimSports segments be accomplished by new product launches and by
by the end of the medium-term period. Our market updating the existing product range, targeting the
in the Liquid Cooling segment is characterized by low-end of the premium market. Doing this, we will
low visibility and volatile market dynamics meaning strengthen Asetek’s market position in all product
that the growth between different years can vary categories and market segments we focus on.
substantially. That is why we also publish annual
financial goals expressed as our guidance.
OUR BUSINESS MODEL EXPLAINED ANNUAL REPORT 2024 / Page 11
A GLOBAL PLATFORM SUPPORTING GROWTH
Asetek’s leading position is based mainly on the competitive strength that originates
from the company’s operational excellence in offering high-quality gaming hardware
products. During 25 years, Asetek has built up a wealth of experience that is unique
among companies in our industry and is recognized for premium quality.
Innovation and product development having contractual relationship with tier-1 contract
Product development is and always has been the manufacturers.
main focus for Asetek. Since its inception, the com- A quality team is divided in two groups: one in
pany has successfully launched innovative products Denmark and one in Xiamen. Their main focus is to
with high quality. Asetek’s R&D team and technolo- conduct ongoing inspections to ensure control over
gy lab are based in Aalborg, Denmark. These teams all aspects of quality and compliance with a growing
are responsible for innovation, concept and design number of regulated parameters.
of our products and also manage collaboration with
Asetek’s global customer base to define require- Logistics and sales
ments and develop cutting edge technology. We Finished products are primarily delivered directly
continuously try to keep our R&D teams close to the to customer hubs in China, with smaller quantities
customers, which encourages faster, more respon- shipped directly to Europe and USA. Logistics are
sive and effective feedback for improvements to our often outsourced, and except our own webshop for
existing product range as well as new developments. SimSports products, our partners handle deliveries
The Aalborg team works closely with the R&D team to end-users themselves.
in Xiamen, China, to identify the optimal sources for Liquid coolers are sold through two channels.
the necessary components to fulfill specific custom- The main sales channel is a white-label approach,
er requirements. meaning products are sold as a standalone product
to partners who are in turn selling it under their la-
Sourcing and production bel. Asetek’s liquid coolers are also sold to partners
Asetek’s manufacturing and logistics teams in using it as a component to build a complete PC,
Xiamen, China and Malaysia, evaluates and sources which is then sold to end-users. SimSports products
components and suppliers for the finished product to are sold either directly to end-users through our
be assembled, allowing us greater control over prod- webshop or via resellers, who distribute them both
uct quality. Our cooling solutions are assembled by online and in physical stores.
the Company’s principal contract manufacturer based
in Xiamen and Malaysia and since 2023, a likewise
contract manufacturer has been producing many
of our SimSports products in Xiamen and Malaysia.
Asetek’s business model concentrates primarily on
OUR BUSINESS MODEL EXPLAINED ANNUAL REPORT 2024 / Page 12
Marketing and customer service quence, our marketing efforts mainly focus on we know that they happily share their experience
The sales, marketing and product management leveraging this position and building the Asetek and trust in us. Our dedicated marketing and sales
teams, based principally in Denmark and Taiwan, SimSports brand name. The overall marketing strat- teams are responsible for providing customer ser-
oversee customer relationships to facilitate commu- egy will benefit both SimSports sales channels – cur- vice and support, making it easier to establish closer
nication and development, ensuring that the devel- rently done through online reviews using influencers relations to them. In the end, it is our customers that
oped product meets or exceeds customer demands. and strategic partnerships as well as presence on can tell us how we can provide a premium customer-?
Considering our history and DNA, Asetek is tradeshows and other key events. centric experience.
in many ways synonymous with innovative and Delighted customers are our best ambassadors, and
high-quality liquid cooling solutions. As a conse-
Xiamen
• Product management
• R&D
• Sourcing
Aalborg
•O utsourced manufacturing
• E-commerce • Quality
• Product management • Order management
• R&D and prototyping
• Sourcing
• In-house manufacturing
• Quality
• Order management Taipei
• Branding and outbound
marketing • Sales
• Finance • Product management
• Management
Malaysia
•O utsourced
manufacturing
• Quality
Asetek offices Asetek representation OEM HQ SimSports resellers
A LEADING GAMING HARDWARE OFFERING ANNUAL REPORT 2024 / Page 13
LIQUID COOLING AND SIMSPORTS –
AN ATTRACTIVE COMBINATION
Our Liquid Cooling business has over the last 10 years generated total revenues exceeding USD 540
million with an average annual adjusted EBITDA margin of 29%. This profitable business unit provides
a financial foundation for the growth strategy of our other key business unit, SimSports.
The profitable Liquid Cooling busniss enables us to Clear and attractive synergies Liquid cooling and SimSports sales channels
execute on the growth opportunities in SimSports. Asetek fosters collaboration and integration between
It also offers a strong strategic fit, enabling synergies the Liquid Cooling segment and SimSports segment
between the two business segments and driving to drive synergies and enhance overall performance.
future value creation. Essentially, three key areas have been identified
where clear synergies create long-term value.
White-label and own webshop 1) Asetek benefits from the flexibility and expertise
main sales channels of its engineering teams, who frequently work
Liquid coolers are sold through two channels. The across both segments. This cross-functional
main sales channel is a white-label approach, where approach enables Asetek to efficiently develop LIQUID ASETEK
OEM partners purchase and resell as standalone high-quality Liquid cooling and SimSports COOLING SIMSPORTS
products under their own label. We also sell liquid products, accelerating innovation and product
coolers to partners who incorporate them as a key development.
component to build a complete PC, which is then 2) By sharing sourcing and manufacturing resources
sold to end-users. across both segments, Asetek is able to
Our Simsports products are sold via a selec- streamline operations, enhancing cost efficiency
tive distribution network with our primary sales and product quality. Direct-to-consumer (DtC) B2B2C
White-label
channels being our own webshop where products 3) By leveraging cross-selling opportunities, Asetek OEM partners • Own webshop • Resellers
approach to partners
can introduce SimSports Products to existing •Amazon US • Distributors
are sold globally, directly to end-users (DtC), and
resellers (B2B2C) offering our products to end-users Liquid Cooling customers, and vice versa,
through online stores and select physical stores. expanding the customer base and increasing
Products are also sold via select distribution part- market reach. Synergies include the potential
ners operating specific geographies. to increase sales in the liquid cooler segment
End-users End-users
through new sales channels opened by SimSports,
as well as bundle SimSports products with liquid
coolers to resellers.
LIQUID COOLING ANNUAL REPORT 2024 / Page 14
MARKET LEADER WITHIN PREMIUM
LIQUID COOLING SOLUTIONS
Asetek invented the all-in-one liquid cooler and has been solving thermal challenges ever since.
Since the beginning, liquid coolers from Asetek have delivered high performance while providing
superior reliability.
Asetek is one of the global leaders in premium liquid which can significantly improve the performance of
cooling solutions for computer hardware enthusi- the computer. However, it also generates additional
Why is liquid cooling better
asts and gamers. Asetek’s Gaming and Enthusiast heat, making an effective cooling system essential.
than air cooling? LIQUID COOLING
products are all-in-one coolers that provide reliable, Components like CPUs, GPUs, memory modules,
maintenance-free liquid cooling to gaming and chipsets and hard drives are particularly vulnerable
Air cooling systems use a fan and heat sink to REVENUE 2024
$42.8
move heat away from the CPU. A liquid cool-
high-performance PC customers as well as eSports to overheating, which can lead to temporary mal-
ing system uses a water pump and radiator
athletes to enjoy top-tier performance from their functions or permanent failure.
to move heat away from the CPU. The main
equipment. Liquid cooling systems, which use a closed loop
advantages of liquid cooling compared
The two most common cooling methods to of fluid to transfer heat away from the CPU, can ef-
to air cooling are: million
cool computer hardware are air cooling and liquid fectively dissipate this heat and allow for sustained
cooling. Air cooling is the most widespread, though overclocking without the risk of overheating or
it typically offers lower performance. Liquid cooling, damaging the hardware.
heat from components than air cooling
on the other hand, provides superior cooling effi-
ciency, especially for high-performance hardware,
up or other air flow obstructions
but it tends to be more expensive than air cooling.
Beyond functionality, liquid coolers have evolved What is liquid cooling?
into branding and design tools, incorporating Liquid cooling is a system used to lower the
fans used for air cooling ANNUAL ADJUSTED EBITDA
features like LED lighting and customisable displays, temperature of a computer or other elec- MARGIN, LAST 10 YEARS
appealing to enthusiasts and gamers who value tronic device by circulating a coolant through
aesthetics as part of their setup. its internal components. The coolant, which
One of the key factors in the performance of a is usually water or a water-based solution,
gaming computer is the cooling system, which helps absorbs heat from the PC and carries it away,
prevent overheating and maintain optimal perfor- keeping the PC cooler than if it were relying
mance. Liquid cooling systems have gained popular- on air cooling alone.
ity among gamers due to their ability to effectively
dissipate heat and allow for overclocking of the CPU.
Overclocking refers to the process of increasing the
clock speed of the CPU beyond its factory-set limits,
LIQUID COOLING ANNUAL REPORT 2024 / Page 15
MATURE MARKET WITH STABLE GROWTH
The liquid cooling market is relatively mature and stable, extending to the broader computer
hardware ecosystem, where both manufacturers and consumers benefit from the reliability
and consistent performance of the current technology. As a result, the risk of sudden techno-
logical shifts affecting the market is low.
Historically, the competitive landscape has been In response, Asetek is expanding its LIquid Cooling
divided between low-end, low-quality players product range to include products for the mid-range
and high-end, premium brands. Consumers who market, aiming to capture a broader consumer base
preferred premium products did not typically in an increasingly competitive environment. This shift
consider low-end alternatives, resulting in limited positions Asetek to meet the evolving needs of both
competition within the high-end segment. Demand premium and mid-market consumers.
for high-quality products has been solid, and the The long-term growth prospects are solid and
competitive environment has remained stable. demand for high-performance hardware like liquid
cooling solutions is fuelled by the increasing global
Changing market dynamics demand for gaming-related products, advance-
Based on market observations and customer dialogue ments in gaming technology, and the rise of com-
in 2024, it has become evident that the market dy- petitive gaming (eSports). Another factor expected
namics have shifted. The quality of lower-end market to contribute to the demand for liquid cooling
products has been more sought after as consumer solutions is PC upgrade cycles. The advancement of
preferences have shifted towards more affordable chip technology, including the introduction of new
gaming PCs, which in turn increases the demand for CPUs and GPUs, often occurs in cycles and creates
somewhat cheaper liquid cooling options. As a result, a demand for PC upgrades. As such, the demand
end-users are now prioritising value in the mid-end for liquid cooling solutions is to a large extent linked
segment over paying premium prices for high-end to the growth of the overall PC gaming hardware
models. This shift has made cost-effectiveness and market (which, however, includes gaming laptops,
value become critical success factors. which do not need liquid cooling). The overall PC
gaming hardware market is expected to show an
annual growth rate of approximately 5.2%, reaching
USD 69.0 billion by 2027. 1
SIMSPORTS ANNUAL REPORT 2024 / Page 16
ASETEK SIMSPORTS – PRODUCTS FOR EVERY
TYPE OF SIM RACER
IIn 2021, Asetek introduced its first sim racing products. Since then, over the past three years, Asetek
SimSports has established itself in the market with three fully launched product lines, reaching an annual
revenue of $10 million in 2024 and showing strong potential for continued growth in both revenue and
profits.
From the start in 2021, Asetek has positioned the user experience. Invicta is our premium product
SimSports product offering in the high-end of the line, offering an immersive and authentic sim racing
market, targeting competitive and committed gam- experience.
ers as well as racing and automobile enthusiasts. Asetek’s product strategy is to expand its offering
Asetek’s mission is to make high-quality sim racing to cover multiple price ranges, including introducing
products available for everyone, which is why we mid-segment console products, reaching a broader
have three different product lines in the premi- segment of the sim-racing market. The competitive
um segment, giving end-users the opportunity to landscape for simracing is characterised by brands
assemble the preferred sim racing setup. that often look and claim the same. As part of its
The La Prima product line is suited for end-users en- marketing, Asetek is focusing on its combination of
tering the high-end simracing space seeking to take having a real racing background and a strong legacy
their racing to the next level, offering the possibility in gaming, which differentiates it from competitors
to upgrade and adjust to fit all needs. The Forte by providing authenticity, driving technological inno-
product Line is the mid-tier offering, for end-users vation, enhancing brand credibility, and leveraging
that want to maintain high quality in build and cross-industry synergies. Through this approach,
design combined with sublime performance and Asetek aims to establish itself as a key player in the
market, leveraging its expertise in both realms to
offer a more integrated and authentic simracing
broader audience. In the past three years, the trend active users (MAUs) over the past twelve months
experience.
in the major racing gaming segment has generally from May 2023 to April 2024, reflecting strong
SIMSPORTS Strong growth opportunity
shown growth in monthly active users, and the mar- community commitment.2
REVENUE 2024 ket has further generated spikes in the segment’s
The gaming simulation market is a growing industry.
performance when new gaming titles are released.1
Increased interest in racing
$9.6
The market is driven by the increasing demand for The gaming simulation market encompasses The significant growth in demand for simracing
high-quality, immersive gaming experiences that major racing games like Gran Turismo, F1, BeamNG. solutions is also driven by the increasing popularity
allow gamers to feel as though they are participating drive and Forza Motorsport. Looking at the top 25 of real-life motorsports. Events like Formula 1 have
million in real-life events, and the improvements in graphics major racing games, the market boasts 60.4 million expanded into a mass market audience, further fue-
and processing power have enhanced the realism lifetime players as of April 2024, with a robust led by the influence of media such as Netflix series
and immersion of simulation games, attracting a engagement and an average of 5.3 million monthly and the release of new racing titles.
(excluding China and India) and lifetime players are measured across PS4, PS5, Xbox One, Xbox Series, and Steam.
SIMSPORTS ANNUAL REPORT 2024 / Page 17
HIGH QUALITY SIM RACING GEAR
Asetek offers pedals, wheelbases, and steering
wheels across three product lines, each offering the
user distinct categories of hardware with varying
Pedals Wheelbase Steering wheel
features, authenticity, and price.
Invicta is the premium product line, offering
an immersive and authentic sim racing experience.
The Forte product Line is a high-quality mid-tier
offering, for end-users that want to maintain high
quality in build and design combined with sublime
performance and user experience.
The La Prima product line is suited for end-users en-
tering the high-end simracing space seeking to take
their racing to the next level, offering the possibility
to upgrade and adjust to fit all needs.
SIMSPORTS ANNUAL REPORT 2024 / Page 18
THIS IS SIMULATION RACING
What is sim racing? Learn all sim racing terms
Simulator games enable players to experi- There are a lot of technical terms in sim rac-
ence situations and scenarios in great details ing, and motorsports in general. At Asetek’s
and recreate real-world situations. Sim racing webpage, you will find a glossary where you
(simulation racing) is basically motorsport in are introduced to the most important racing
a virtual environment. This means that sim terms, in order to better understand both sim
racers are driving virtual cars on comput- racing and motorsports.
er-generated tracks. The sim racing games
https://www.asetek.com/blogs/glossa-
are designed to mimic the feeling of driving
ry-sim-racing-and-motorsports-terms/
a real car as closely as possible, and the
racing is done using specialized software and
hardware. The hardware sim racers use plays
a crucial role to enhance the realism and
overall driving experience.
PC Rig and seat Pedals Wheelbase Steering wheel Displays Accessories
A high-performance Provides a solid and Allow for precise A direct drive motor Operate the car using but- Provides an immer- Button boxes and
PC operates the sim- stable platform for all and realistic braking, delivers strong and re- tons, switches, and rotary sive and realistic field other accessories
ulation software and the devices – wheel- acceleration and clutch alistic force feedback, controls while receiving of view enhance realism and
interfaces with all the base, pedals, display – control allowing the driver to visual feedback through immersion, offering
simulator’s devices as well as the driver feel the road and the LEDs and a screen. Easily additional functional-
car’s behavior swappable with a Quick ity and customization
Release (QR) connection options
ASETEK SHARE AND INVESTOR RELATIONS ANNUAL REPORT 2024 / Page 19
PRIMARY LISTING ON NASDAQ COPENHAGEN
AND COMPLETED RIGHTS ISSUE
In 2024, Asetek’s shares were delisted from the Oslo Stock Exchange (Oslo B?rs) and primarily listed on
Nasdaq Copenhagen. At the end of the year, a rights issue with preferential rights for existing sharehold-
ers was initiated, which was completed on January 6, 2025. The rights issue raised gross proceeds of DKK
Primary listing on Nasdaq Copenhagen Share price development and turnover and executive management held a total of 3.2 reports and meetings with analysts, investors and
Since the company’s IPO on February 11, 2013, The Asetek share trades under the symbol ASTK on percent of the capital and votes. Other members of the media at various events, seminars, one-on-one
the Asetek share had been listed on the Oslo Nasdaq Copenhagen and the share’s ISIN code is management held an additional 0.83 percent of the meetings and during visits to Asetek offices. Inter-
Stock Exchange. On May 17, 2023, the share was DK0060477263 (Technology: Computer Hardware), capital and votes. The total number of shareholders ested parties can download presentation materials
dual-listed on Nasdaq and Asetek announced segment Small Cap. At the close of 2024, Asetek’s in Asetek was 7,240 at January 6, 2025. and listen to audio recordings from presentations of
the intention to delist its shares from Oslo Stock share price was DKK 0.479. This is equivalent to quarterly reports on Asetek’s website.
Exchange. In December 2023, an extraordinary a market capitalization of DKK 47.1 million. The Concentration Capital Financial information regarding Asetek is avail-
general meeting approved the de-listing of Asetek’s highest price quoted during the financial year of (Jan 6, 2025) Shares and votes able to download from https://ir.asetek.com/over-
shares, followed by an approval from Oslo Stock 2024 was DKK 3.68 (March 1) and the lowest price The 10 largest view/default.aspx. This includes financial reports,
Exchange in the same month. As a result of both was DKK 0.45 (December 27). In 2024, the total owners 144,176,879 45.31% press releases and other presentations. The compa-
approvals, Asetek’s shares were de-listed from the turnover of Asetek shares traded on all marketplac- The 20 largest ny’s press releases are distributed via Cision and are
Oslo Stock Exchange effective March 26, 2024, and es amounted to 131.2 million shares, correspond- owners 165,351,405 51.99% also available on the company’s website.
have since had a primary listing solely on Nasdaq ing to 133 percent of the total number of shares at The 30 largest
Copenhagen. December 31, 2024. owners 177,318,367 55.72% Financial calendar 2025
April 28, 2025 Q1 2025 financial report
Rights issue Share capital Share repurschases
April 28, 2025 Annual General Meeting
On November 7, 2024, Asetek announced its After registration of the share capital increase In 2024, no shares were repurchased. As of
intention to carry out a rights issue with preemptive following the rights issue, the share capital in Asetek December 31, 2024, Asetek holds a total of August 19, 2025 Q2 2025 financial report
rights for existing shareholders. The purpose was to amounted to DKK 31,823,925.80 divided into 1,256,115 treasury shares. November 04, 2025 Q3 2025 financial report
increase financial flexibility and enable continued 318,239,258 shares with a nominal value of DKK
March 16, 2026 Q4 and annual 2025
investments in the SimSports segment to capitalize 0.10. All shares are of the same class and the same Investor Relations (IR) at Asetek financial report
on future growth opportunities. Each shareholder share of capital and earnings. Each share entitles Aseteks’ goal is that the company should be valued
could subscribe for three new shares for every the holder to one vote at the General Meeting and on the basis of relevant, correct and current
share they held on the record date, at a price of DKK each shareholder is entitled to vote for all shares information. This involves a clear financial commu- Shareholder contact
January 6, 2025, and raised gross proceeds of DKK contact with various stakeholders in the financial Mobile: +45 2566 6869
After the rights issue was registered on January 6, of Asetek have a clear ambition to keep an ongoing
percent of the capital and votes. Board members takes place through presentations of quarterly
ASETEK SHARE AND SHAREHOLDERS ANNUAL REPORT 2024 / Page 20
Shareholding distribution Revenue per year, $ million Owner type distribution
Holding size Shares Capital and votes
Fund and insurance companies 17.9%
State pension fund 13.4%
Revenue per quarter, $ million 16.8%
Unknown holding size 33,714,247 10.6% Denmark 85.2%
Total 318,239,258 100.0% Other countries 7.2%
United Kingdom 3.0%
Source: Q4 Inc. Data as of January 6, 2025 Sweden 2.6%
Germany 1.1%
Q1 Q2 Q3 Q4
Switzerland 0.9%
Adjusted EBITDA per quarter, $ million
Source: Q4 Inc. Data as of January 6, 2025
Share price development 2024 0,4
DKK 0.0 Volume per market
Oslo Stock Exchange 3.2%
London Stock Exchange 0.1%
Source: Q4 Inc. Data as of January 6, 2025
Jan 24 Feb24 Mar24 Apr24 May24 Jun24 Jul24 Aug24 Sep24 Oct24 Nov24 Dec24
Source: Q4 Inc.
XXXXX ANNUAL REPORT 2024 / Page 22
MANAGEMENT REPORT
Management report 23
Corporate Governance 25
Risk management 30
Corporate Social Responsibility 33
Five year summary 34
MANAGEMENT REPORT ASETEK Annual report 2024 / Page 23
MANAGEMENT REPORT
PERFORMANCE IN 2024 ucts. Average Selling Prices (ASP) for liquid coolers in associated with investment in the SimSports busi- plus depreciation of $5.4 million, plus share-based
Profit and loss Gross margin was 41.8% in 2024 compared with Personnel expense increased 2% in 2024 com- non-cash impairment charge of $13.8 million.
Total revenue for 2024 was $52.5 million, represent- 45.5% in 2023. The change reflects a change in pared with 2023. Legal cost incurred associated Foreign currency transactions in 2024 resulted
ing a decrease of 31% from 2023 ($76.3 million). product mix and the recent price sensitivity in the with intellectual property settlements, defense of in a $1.4 million gain ($1.0 million loss in 2023).
Sealed loop cooling unit shipments for 2024 totaled gaming hardware market. In 2024, total operating existing IP and securing new IP was $0.2 million, Income tax expense was $5.7 million in 2024,
Revenue and unit shipment changes reflect fewer million in 2023. Operating expense in 2024 included associated with warrants and options issued to million to deferred tax assets related to uncertainty
shipments of liquid cooling products which were a required non-cash impairment charge of $13.8 employees was $0.3 million in 2024 ($0.5 million regarding their future recoverability. Income tax
negatively impacted by a decrease in the macro million as a consequence of an assessed impairment in 2023). expense was $2.5 million in 2023. Income tax ex-
level market for gaming hardware and a shift toward within the cash generating units. Excluding this one- Adjusted EBITDA was $0.3 million in 2024, com- pense in 2024 includes $0.9 million associated with
cheaper alternatives. These effects were partly off- time charge, operating expense in 2024 increased pared with $15.9 million in 2023. Adjusted EBITDA the U.S. Global Intangible Low-Taxed Income (GILTI)
set by an increase in shipments of SimSports prod- 8% mainly due to marketing and operations costs in 2024 represents operating loss of $19.2 million, inclusion, which requires U.S. companies to report
MANAGEMENT REPORT ASETEK Annual report 2024 / Page 24
foreign corporation intangible income that exceeds 2024 (negative $3.2 million in 2023). The change management initiate fund-raising with the launch 1 to reflect Group full year revenue expected in
effect in 2023). debt in 2024. of December 31, 2024, the Company had working EBITDA margin of 1% to 4%. The Company’s actual
Asetek had a total comprehensive loss of $25.3 capital of $4.4 million and long-term debt of $19.2 results for 2024 were total revenue of $52.5 million
million for 2024, compared with total comprehen- Statement of cash flows million. Upon subsequent completion of a rights of- and adjusted EBITDA margin of 1%. The results
sive income of $6.7 million in 2023. Comprehensive Net cash provided by operating activities was $1.2 fering on January 6, 2025, the Company generated did not meet management’s expectations at the
loss included a negative $1.3 million translation million in 2024 ($16.3 million provided in 2023). net proceeds of $10.5 million through the issuance beginning of the year. Revenue and adjusted EBITDA
adjustment in 2024 (positive $0.7 million in 2023). The change was principally due to operating loss of 219.9 million new common shares of stock. In achievement for the year was within the range of
generated in 2024 compared with operating income May 2023, the Company issued 71.2 million new the revised expectations communicated on July 1,
Balance sheet in 2023. common shares in an equity rights offering, raising 2024.
Asetek’s total assets at December 31, 2024 were Cash used by investing activities was $10.1 net proceeds of $16.1 million.
$79.4 million, compared with $102.7 million at million compared with $27.4 million used in 2023. While there is no assurance that the Company EXPECTATIONS FOR 2025
the end of 2023. The principal factors affecting The construction of Asetek’s headquarters facility will generate sufficient revenue or operating prof- Recently there has been a shift in the liquid cooling
the change were as follows: Property, plant and was completed in Q3 2024, with property, plant its in the future, Asetek’s management estimate market toward more affordable gaming PC’s, which
equipment decreased by $8.9 million, principally as and equipment additions totaling $7.8 million that the Company’s cash position and the liquidity in turn increases the demand for cheaper liquid
a result of a required non-cash impairment charge ($24.9 million in 2023). Additions to capitalized available from its operations, external borrowings cooling options. This shift has impeded revenue
of $13.8 million as a consequence of an assessed assets under development associated with future and other sources available, after the results of growth in the Liquid Cooling segment, as Asetek
impairment within the cash generating units. products was $2.3 million, a decrease of $0.2 the rights offering on January 6, 2025, is sufficient has historically focused on the premium market. In
Deferred tax assets decreased by $5.7 million due to million from 2023. to satisfy its working capital requirements for the 2025, the Company is expanding its product range
uncertainties regarding their future recoverability. Cash provided by financing activities was $5.0 foreseeable future, based on financial forecasts. to include products for the mid-range market,
Cash and equivalents decreased by $5.8 million due million in 2024 compared with $12.3 million provid- To the extent necessary to fund expansion or aiming to capture a broader consumer base in an
to cash requirements of the business. Inventories ed in 2023. $5.7 million was drawn on credit facili- other liquidity needs, management will consider increasingly competitive environment. As a result
decreased by $2.4 million associated with the ties in 2024 to finance completion of the Company’s offerings of debt, equity, or a combination thereof, of these market dynamics, the Company expects
reduced operating volumes. headquarters building. Funds provided by financing depending on the cost of capital and the status of revenue for 2025 at the Group level to be in the
Total liabilities increased by $1.6 million in in 2023 included a rights offering which generated financial markets at that time. range of $52-58 million, with an adjusted EBITDA
decreased by $12.9 million and long-term debt Net decrease in cash and cash equivalents was 2024 RESULTS vs. EXPECTATIONS derived from expected revenue in the Liquid Cooling
increased by $16.6 million principally as a result $5.8 million in 2024, compared with an increase of In the 2023 report, the Company communicated segment in the range of $40 to $43 million, and in
of net $5.7 million in funds drawn to complete $1.7 million in 2023. Cash and cash equivalents at expectations of revenue growth between -5% to the SimSports segment $12 to $15 million. For the
construction of a new headquarters building. Upon December 31, 2024 was $3.3 million ($9.1 million 5% for 2024 (equivalent to estimated total revenue full fiscal year 2025, the Liquid Cooling segment is
completion of construction in 2024, $19.3 million in 2023). of $72.5 to $81.1 million), with expected adjusted expected to achieve a gross margin in the range of
of debt was refinanced to a longer term structure, EBITDA margin to be in the range of 12% to 17%. 40-45%, while the SimSports segment is expected to
maturing in March 2028. This increase in liabilities Liquidity and financing In June 2024, the Company received updated rev- reach a gross margin of 30–35%.
was offset by exchange rate effects of a stronger In mid-2024, the Company experienced a decline enue forecasts from its OEM partners indicating a The potential impact of the geopolitical situation
U.S. dollar, lower accrued employee compensation in revenue resulting from a weakened gaming potentially weak second half of 2024 and therefore and U.S. import tariffs remains uncertain and will
associated with fewer employees, and reduced hardware market while it continued to invest in temporarily suspended its revenue guidance. After depend on various factors beyond the Company’s
transaction volumes in accounts payable. the growing SimSports business as well as finish a detailed customer review which revealed that the control, as well as the Company’s ability to mitigate
Working capital (current assets minus current construction of its new headquarters. As a result, liquid cooling market rebound would be weaker any potential effects.
liabilities) totaled $4.4 million at December 31, a projected near-term cash shortfall required that than anticipated, Asetek reduced guidance on July
CORPORATE GOVERNANCE ASETEK Annual report 2024 / Page 25
CORPORATE GOVERNANCE
The objective of corporate governance is to ensure The general meeting Financial reporting Ordinarily, the Chairman of the Board proposes the
that Asetek is managed as efficiently as possible in The General Meeting has the final authority over The Board of Directors receives regular financial agenda for each Board meeting. Besides the Board
order to create shareholder value. This is achieved the Company. The Board of Directors emphasize reports on the Company’s business and financial Members, Board meetings are attended by the
through a clear division of responsibilities be- that shareholders are given detailed information status. Executive Board.
tween the Annual General Meeting, the Board and and an adequate basis for the decisions to be made Other participants are summoned as needed.
the executive management, as well as through by the General Meeting. Notification of meetings and The Board approves decisions of particular impor-
clear regulations and transparent processes. The General Meeting elects the Board of Direc- discussion of items tance to the Company including the strategies and
tors, which currently consists of five members. The The Board schedules regular meetings each year. strategic plans, the approval of significant invest-
Framework for corporate governance board members are elected for one year at a time Ordinarily, the Board meets eight to ten times a ments, and the approval of business acquisitions
In this process, Asetek uses the corporate gov- with the option for re-election. year, of which four are quarterly update telecon- and disposals.
ernance recommendations from Nasdaq Copen- ferences. The meetings are typically conducted at
hagen as an important source of inspiration. The Amendment of Articles of Association either the facility in Aalborg, Denmark or via web Conflicts of interest
recommendations can be found at: https://www. Unless otherwise required by the Danish Companies based conferencing. Additional meetings may be In a situation involving a member of the Board
nasdaqcom/market-regulation/nordic/copenhagen Act, resolutions to amend the Articles of Association convened on an ad hoc basis. personally, this member will exclude him or herself
The Board of Directors is fundamentally in full must be approved by at least 2/3 of the votes cast All Board members receive regular information from the discussions and voting on the issue.
agreement with Danish Committee on Corporate as well as at least 2/3 of the voting share capital rep- about the Company’s operational and financial pro-
Governance recommendations for good company resented at the General Meeting. gress in advance of the scheduled Board meetings. Use of Committees
governance. Asetek endeavors to follow the relevant The Board members also regularly receive oper- Currently, the Company has a Nomination
recommendations for the Company, which support Board responsibilities ations reports and participate in strategy reviews. Committee, an Audit Committee and a
the business and ensure value for the Company’s The Board of Directors’ main tasks include partici- The Company’s business plan, strategy and risks are Compensation Committee.
stakeholders. The statutory report on Corporate pating in, developing, and adopting the Company’s regularly reviewed and evaluated by the Board. The
Governance, cf. section 107b of the Danish Financial strategy, performing the relevant control functions Board Members are free to consult the Company’s // The Nomination Committee is elected directly
Statements Act, is available on the Company’s and serving as an advisory body for the executive senior executives as needed. by the General Meeting. The Committee consists of
website: https://ir.asetek.com/Corporate- management. The Board reviews and adopts the three members and must be independent from the
Governance-Statement-2024/ Company’s plans and budgets. Items of major Danish Recommendation for Corporate Governance Board of Directors and the management, however, it
strategic or financial importance for the Company
Communication between the Company and are items processed by the Board. The Board is
its shareholders responsible for hiring the CEO and defining his or Participation:
The communication between Asetek and sharehold- her work instructions as well as setting of his or her Complies with 38 38
ers primarily takes place at the Company’s Annual compensation. The Board periodically reviews the recommendations
General Meeting and via company announcements. Company’s policies and procedures to ensure that Explanation provided 2 2
Asetek shareholders are encouraged to subscribe to the Group is managed in accordance with good cor-
the e-mail service to receive company announce- porate governance principles, upholding high ethics.
ments, interim management statements, interim
reports and annual reports as well as other news via
e-mail.
CORPORATE GOVERNANCE ASETEK Annual report 2024 / Page 26
is recommended that the chairman of the Board of BOARD OF DIRECTORS
Directors is a member. The tasks include proposing Compensation
Name Elected Independent Share holdings Board meetings committee Audit committee
candidates for the Board of Directors, propose
remuneration for the Board of Directors as well as René Svendsen-Tune 2023 Yes 241,842 17/17 5/5 –
perform the annual assessment of the Board of Erik Damsgaard 2019 Yes 145,267 16/17 – 4/4
Directors. Members: Ib S?nderby (chairman), Claus
Jukka Pertola 2019 Yes 164,171 15/17 5/5 –
Berner M?ller and René Svendsen-Tune.
Anja Monrad1 2024 Yes 50,000 12/13 – 2/2
Nomination committee meetings
Meetings held during the year: 3
Participation: The Board’s self-evaluation Internal audit Ownership structure
Ib S?nderby (chair) (independent) 100% The Board’s composition, competencies, work- The need for an internal audit function is considered At the end of 2024, the ten largest shareholders
Claus Berner M?ller (independent) 100% ing methods and interaction are discussed on an regularly by the Audit Committee. However, due to controlled 38.35 percent of the capital and votes.
ongoing basis and evaluated formally on an annual the size of the Company and the established control Board members and executive management held
René Svendsen-Tune 100%
basis. In this connection, the Board also evaluates activities, the Audit Committee so far considers it a total of 2.6 percent of the capital and votes. Other
its efforts in terms of corporate governance. unnecessary to establish an independent internal members of management held an additional 0.10
// The Audit Committee is elected among the mem- The composition of the Board is considered executive audit board. percent of the capital and votes. The total number
bers of the Board of Directors and has responsibili- appropriate in terms of professional experience and As part of risk management, Asetek has a whis- of shareholders in Asetek was 6,584 at December
ties related to financial reporting, the independent relevant special competences to perform the tasks tle-blower function for expedient and confidential 31, 2024.
auditor, internal reporting and risk management, in- of the Board of Directors. The Board of Directors notification of possible or suspected wrongdoing. As of December 31, 2024, Asetek A/S had two
cluding cybersecurity risks. The Committee consists continuously assesses whether the competencies major shareholders, each holding more than 5%
of at least two shareholder elected Board members. and expertise of members need to be updated. All Share capital of the voting rights and share capital. These two
Members: Anja Monrad (chair), Erik Damsgaard. of the members are independent persons, and none On December 31, 2024, the share capital in Asetek shareholders are:
// The Compensation Committee has responsibil- of the Board members participates in the day-to-day amounted to DKK 9,831,389.20 divided into
Nordic Compound Invest A/S
ities related to developing proposals for the appli- operation of the Company. At the 2023 Ordinary 98,313,892 shares with a nominal value of DKK 0.10.
Annexstr?de 6, 2500 Valby, Denmark
cable remuneration policy and remuneration of the General Meeting on April 30, 2024, Mr. René Svend- All shares are of the same class and hold the same
Management Board. Members: Jukka Pertola (chair) sen-Tune was re-elected to the Board, receiving 66% share of capital and earnings. Each share entitles Arbejdsmarkedets Till?gspension (ATP)
and René Svendsen-Tune. of the votes cast. Mr. Svendsen-Tune was re-elected the holder to one vote at the General Meeting and Kongens V?nge 8, 3400 Hiller?d, Denmark
Chairman of the Board by the Board of Directors on each shareholder is entitled to vote for all shares
April 30, 2024. held by the shareholder. Share repurchases
In 2024, no shares were repurchased. As of
Risk management December 31, 2024, Asetek holds a total of
Refer to the Risk Management section of the Man- 1,256,115 treasury shares.
agement Report as well as Note 3 of the consolidat-
ed financial statements.
CORPORATE GOVERNANCE ASETEK Annual report 2024 / Page 27
BOARD OF DIRECTORS SHARE AUTHORIZATION
Meeting Date Meeting Type Action Shares Nominal Value Price
April 23, 2014 Board Board issues warrants to employees and Board members 118,210 DKK 0.10/share NOK40.10
August 12, 2014 Board Board issues warrants to employees and Board members 32,970 DKK 0.10/share NOK33.90
August 11, 2015 Board Board issues warrants to employees and Board members 700,000 DKK 0.10/share NOK10.50
April 29, 2016 Board Board issues warrants to employees and Board members 600,000 DKK 0.10/share NOK19.50
April 25, 2017 Board Board issues warrants to employees and Board members 509,687 DKK 0.10/share NOK76.25
July 7, 2017 Board Board issues warrants to employees 106,999 DKK 0.10/share NOK113.00
April 25, 2018 General Board authorized to acquire the Company's own shares
October 31, 2018 Board Board introduces employee stock option program to replace warrant program
and issues options to employees 378,500 DKK 0.10/share NOK46.30
April 10, 2019 General Board authorized to acquire the Company's own shares
September 8, 2019 Board Board issues options to employees 494,900 DKK 0.10/share NOK24.70
April 22, 2020 General Board authorized to acquire the Company's own shares
April 23, 2020 Board Board issues options to employees 320,300 DKK 0.10/share NOK38.33
April 21, 2021 Board Board issues options to employees 216,300 DKK 0.10/share NOK100.15
April 22, 2021 General Board authorized to acquire the Company's own shares
April 28, 2022 General Board authorized to acquire the Company's own shares
September 7, 2022 Board Board issues options to employees 376,500 DKK 0.10/share NOK15.04
March 8, 2023 Board Board authorized capital increase to raise DKK140 million in fully underwritten rights 71,166,167 DKK 0.10/share NOK3.00
issue
May 9, 2023 General Board authorized to acquire the Company's own shares
December 12, 2023 Board Board issues options to employees 2,956,850 DKK 0.10/share DKK4.07
April 30, 2024 General Board authorized to acquire the Company's own shares
November 29, 2024 Extraordinary General Board authorized to to increase Asetek’s share capital and issue new shares with
pre-emptive rights for the existing shareholders
CORPORATE GOVERNANCE ASETEK Annual report 2024 / Page 28
BOARD OF DIRECTORS
Date appointed to
Executive and other positions held Age and gender Qualifications end of current term Independence status
REN? SVENDSEN-TUNE, CHAIRMAN 69 CEO at GN Store Nord A/S for 8 years (2015-2023); May 9, 2023 to Independent
Nilfisk A/S- Deputy Chairman Male Prior to this long, exec level career in tech sector. April 28, 2025
NKT A/S- Deputy Chairman
Committee participation: Compensation; Nomination
Asetek equity holdings: 241,842 owned shares
ERIK DAMSGAARD, VICE CHAIRMAN 60 20+ years of senior positions in electronics & April 10, 2019 to Independent
Masentia Group of companies - Chairman of the Board Male electrical manufacturing, business development. April 28, 2025
Tentoma A/S - Member of the Board
Damm Cellular Systems ApS, Member of the Board
ED Management Holding ApS - Owner and Managing director
ED Management ApS - Owner and Managing director
CRD Invest ApS - Managing director
TRD Invest ApS - Managing director
Committee participation: Audit
Asetek equity holdings: 145,267 owned shares
JUKKA PERTOLA, BOARD MEMBER 65 Former executive at Siemens A/S for 25+ years; April 10, 2019 to Independent
Tryg A/S and Tryg Forsikring A/S - Chairman of the Board Male Technology, Finance, Corporate governance, Risk April 28, 2025
COWI Holding A/S - Chairman of the Board management. Extensive board experience with
Siemens Gamesa Renewable Energy A/S – Chairman of the Board multiple Chairman roles for 10+ years.
GN Store Nord A/S - Chairman of the Board
Committee participation: Compensation (chair)
Asetek equity holdings: 164,171 owned shares
CORPORATE GOVERNANCE ASETEK Annual report 2024 / Page 29
BOARD OF DIRECTORS
Date appointed to
Executive and other positions held Age and gender Qualifications end of current term Independence status
ANJA MONRAD, BOARD MEMBER 58 Former executive at Dell Technologies for 23 years April 30, 2024 to Independent
Bunker Holding A/S - Member of the Board Female where she led the Western Europe region for April 28, 2025
ATP - Long-term Danish Capital - Member of Advisory Board several years and previously headed up 32 coun-
DTU Entrepreneurship - Member of Advisory Board tries for Dell in Europe. Prior sales and marketing
VL - The Danish Management Society - Vice Chair leadership roles at Unisys, Compaq and Digital.
Jamii Invest ApS - Owner and Managing director
Anmoda ApS - Owner and Managing director
Anmoda Holding ApS - Managing director
KogelMogel I/S - Owner
Committee participation: Audit (chair)
Asetek equity holdings: 50,000 owned shares
EXECUTIVE MANAGEMENT
Other positions held:
André Sloth Eriksen, Chief Executive Officer
Valdemar Eriksen Racing A/S - Owner and Chairman of the Board
It’s IT A/S - Chairman of the Board
Peter Dam Madsen, Chief Financial Officer
iFEED Aps - Board of Directors
RISK MANAGEMENT ASETEK Annual report 2024 / Page 30
RISK MANAGEMENT
Asetek’s potential to realize the Company’s stra- The following are some of the risk factors manage- ty may also lead to increased credit and collectibil- Credit risk
tegic and operational objectives are subject to a ment considers as being of special importance to ity risks, reduced availability of capital and credit Credit risk is the risk of a counterpart neglecting
number of commercial and financial risks. Asetek the Group, described in no specific order. markets, reduced profits, liquidity and potentially to fulfill its contractual obligations and in so doing
is continuously working to identify risks that can adverse impacts on Asetek’s suppliers. imposing a loss on Asetek. The Group’s credit risk
negatively impact the Company’s future growth, CSR-related risks originates mainly from receivables from the sale of
activities, financial position and results as well Please see the separate Asetek Sustainability Report Investment in SimSports products as well as deposits in financial institutions.
as CSR-related risks. Asetek conducts its business 2024 for identified risks and remedies. In 2020 and 2021, Asetek acquired technology and Receivables from the sale of products are split be-
with significant focus on continuous risk monitor- intellectual property in support of the Company’s tween many customers and geographic areas.
ing and management. Capital resources and indebtedness entrance into the fast-growing SimSports gaming Three customers represented 31%, 12% and
In recent years, the Company has been dependent market. In March 2022, the Company shipped the 10% of trade receivables at December 31, 2024.
For a comprehensive discussion of risk factors, on third party debt and equity financing. In the first of its SimSports products and has released A systematic credit evaluation of all customers is
refer to the Company’s 2024 Prospectus here: fourth quarter of 2024, a decline in revenue resulted several new products through 2024. Revenue gen- conducted, and the rating forms the basis for the
https://ir.asetek.com/share-info/prospectus/ in a projected near-term cash shortfall requiring erated from SimSports products totaled $9.6 million payment terms offered to the individual customer.
Asetek-2024-Prospectus/ the Company to initiate an equity rights offering in 2024, approximately 18% of the Group’s total Credit risk is monitored centrally.
which raised net $10.5 million in January 2025. The revenue for the year. The SimSports segment is not
The overall goal of risk management is to ensure Company had previously raised $16.1 million in an yet profitable, generating adjusted EBITDA losses of Intellectual property defense
that the Company is run with a level of risk, which is equity rights offering in May 2023. As of December $8.9 million in 2024 and $6.7 million in 2023. There Asetek has filed and defended lawsuits against
in a sensible ratio to the activity level, the nature of 31, 2024 the Company has long-term debt of $19.2 is no assurance that the SimSports segment will competitors for patent infringement. While some
the business, and the Company’s expected earnings million, principally incurred for construction of a new generate operating profits in the future. of the cases have been settled or dismissed, some
and equity. To the largest extent possible, Asetek headquarters facility, which was completed in 2024 may continue, and new cases may be initiated. Such
tries to accommodate and limit the risks which the and is now occupied by the Company. The Company’s Customer concentration cases may proceed for an extended period and
Company can affect through its own actions. principal debt is based on a variable interest rate In 2024, three customers accounted for 34%, 18% could potentially lead to an unfavorable outcome to
(Danish CIBOR 3) and matures in March 2028. and 9% of total revenue. In the event of a decline Asetek. Asetek has historically incurred significant
Insurance or loss of any of these customers, replacement of legal costs associated with litigation and may con-
It is the Company’s policy to mitigate significant risk Economic recession the revenue stream would be difficult for Asetek to tinue to do so in the future to the extent manage-
areas with commercially available insurance prod- A general slowdown in the global economy, includ- achieve in the short term. The Company is actively ment believes it is necessary to protect intellectual
ucts. This currently includes insurance for product ing a recession, inflation or a tightening of the credit working with its other customers to grow their property.
liability, operating material and inventory as well as markets could negatively impact Asetek’s business, respective market shares and order volumes.
compulsory coverage, which varies from country financial condition and liquidity. Adverse global New chip releases
to country. Management assessments indicate that economic conditions have caused or exacerbated Competition Asetek’s liquid cooling revenue is dependent upon
the necessary and relevant precautions have been significant slowdowns in the markets in which the The markets in which the Company operates are timely releases by major suppliers of new GPU’s
taken to thoroughly cover insurance issues. Asetek’s Company operates, which have adversely affected competitive, the technological development is and CPU’s. In recent years, the global economy was
insurance policies and overall coverage approach Asetek’s results of operations recently and in the rapid, and the Company may in the future also be subject to an unprecedented shortage of semi-
are reviewed at least annually. past. Macroeconomic weakness and uncertainty exposed to increased competition from current conductor chips due to production constraints and
also make it more difficult for management to accu- market players or new entrants. increased demand brought on by accelerated digital
rately forecast revenue, gross margin, and expenses.
Further economic downturn or increased uncertain-
RISK MANAGEMENT ASETEK Annual report 2024 / Page 31
transformation. This shortage negatively impacted historically assembled in Xiamen, China by a single U.S. from China. The existence of the tariffs has con- that about one third of its sold products ultimately
demand. The global chip shortage eased in 2023; contract manufacturer which may be difficult to tributed to market uncertainties, particularly in the are delivered in Europe or Japan, which are the two
however, the Company’s revenue continues to substitute in the short term if the need should arise. liquid cooling segment. The Company continues to geographical areas which could have the largest
be dependent upon timely releases of GPU’s and Suppliers are proactively managed by the Compa- work to minimize the impact of the tariffs on Asetek potential impact due to USD fluctuation. Asetek
CPU’s, and future shortages could negatively impact ny’s operations teams based in Xiamen and Aalborg. and its customers. believes that other factors in the end users’ buying
customer demand. In 2023, the Company began outsourced manufac- decision play a larger role than price fluctuation on
turing of certain products in Malaysia, and contin- Foreign exchange rates the liquid cooling component. During 2024, the USD
Manufacturing supply ues to increase production volumes at that site. Substantially all of Asetek’s revenue is billed in USD. strengthened against both the DKK and EUR by 6%
Asetek relies upon suppliers and partners to supply However, many customers resell Asetek products to 7% and strengthened against the Japanese Yen
products and services at competitive prices. Supply U.S. import tariffs to end users in countries where USD is not the by 11%.
constraints and disruptions in the global supply In 2018, the U.S. imposed a 25% tariff on imports of transactional currency. As a result, there is a risk Asetek’s raw materials are predominantly pur-
chain may increase component costs and limit the certain goods manufactured in China, which include that fluctuations in currency will affect the cost of chased with USD, from vendors whose underlying
Company’s ability to fulfill customer demand. Asetek products. In February 2025, an additional product to the end user and negatively impact mar- currency is CNY. The USD strengthened against the
Asetek’s liquid cooling products have been tariff of 10% was added to all goods imported to the ket demand for Asetek products. Asetek estimates CNY by 2% in 2024.
RISK MANAGEMENT ASETEK Annual report 2024 / Page 32
Asetek recognizes that USD appreciation can result Knowledge resources However, USA – in a unilateral tax treaty override –
in sales price pressure for its suppliers. Historically, Asetek is a knowledge-intensive company and in or- still considers Asetek A/S a U.S. tax subject, resulting
the Company has not seen significant reaction from der to continue to develop innovative products and in double taxation of Parent company earnings.
its markets. In addition, Asetek believes that com- attain satisfactory financial results, it is necessary to Asetek has approached both countries’ tax author-
peting products are prone to the same exchange attract and develop the right employees. Asetek has ities with the aim of resolving the situation as per
rate scenarios as Asetek. the goal of maintaining an attractive workplace and the double taxation treaty. However, a determina-
A significant portion of Asetek’s overhead costs achieves this through various programs including tion may take several years, and the authorities are
are incurred in DKK. As a result, fluctuations in USD a stock option incentive program and attractive not obligated to resolve the problem. The Company
vs. DKK will continue to have an influence on results working conditions. The Company seeks to support continues to make progress in working with the tax
of operations and financial position. The Group has a company culture founded on individual responsi- authorities of Denmark and U.S. to possibly resolve
not entered into any forward exchange instruments. bility and performance as well as team accomplish- this issue.
ment. In June 2019, the U.S. released regulation for its
Research and development, product Global Intangible Low-Taxed Income (GILTI) inclusion
innovation, market development IT security for U.S. taxation, effective beginning with tax year
The Company’s future success, including the oppor- Asetek continuously implements measures to moni- 2018. The GILTI regulation requires U.S. companies
tunities to ensure growth, depends on the ability tor and respond to data breaches and cyberattacks. to report foreign corporation intangible income
to continue developing new solutions and products Management ensures that security assessments, that exceeds 10% return on foreign invested assets.
adapted to the latest technology and the clients’ including vulnerability assessments and assumed Under prior law, U.S. owners of foreign corporations
needs as well as improving existing solutions and breach tests are performed on a regular basis. were able to defer recognizing taxable income until
market position. As such, the Company develops Additional security measures to mitigate phishing there was a distribution of earnings back to U.S.
new releases on a regular basis, with emphasis and spam mails are delivered to employees and owners. In 2024, The GILTI regulation caused net
on higher performance, improved efficiency and password policies are maintained to mitigate the incremental tax liability of $0.9 million ($0.9 million
noise-reduction. Providing new and innovative risk of password dictionary attacks or other forms in 2023), which was partly offset by utilization of
applications for Asetek’s cooling technology is also a of brute force hacking of individuals. The Company available deferred tax assets. Because of Asetek’s
focus, as evidenced by the new SimSports products maintains ongoing efforts with external special- U.S. tax status as described above, management
released during 2024. ists to continuously improve and strengthen the believes that the impact of the GILTI regulation as
IT Infrastructure security. Mandatory training in it applies to the Company could be reformed in the
Projects and contracts cybersecurity is carried out for all employees, and future; however, such reform is not certain. The
It is important to Asetek’s overall success that the knowledge level of cybersecurity is thus being Company continues to work with its tax advisors to
development projects are executed at high quality changed from awareness-based to training- and clarify and address these matters.
and at predetermined timeframes and cost prices. compliance-based.
Risks are attached to the sale, analysis and design, The Company has entered into an information
development and initial manufacturing phases. security risk insurance policy. This area is actively
Asetek has carefully defined the individual phases monitored by the Board of Directors’ Audit Com-
and the activities contained therein, with a view to mittee.
active risk management and efficient implementa-
tion. Through project reviews and ongoing analyses Taxation
before, during, and after initiation, Asetek works The tax situation of the Company is complex. In
to ensure that agreements are adhered to and that connection with its initial public offering in 2013,
revenue and margins are as planned. Asetek moved its Parent company from the U.S. to
Denmark.
CORPORATE SOCIAL RESPONSIBILITY ASETEK Annual report 2024 / Page 33
CORPORATE SOCIAL RESPONSIBILITY
Asetek seeks to be a good corporate citizen in Historically, Asetek has been a diverse workplace,
everything that it does, and therefore has com- where employees have very different backgrounds,
bined its operating principles into one framework competencies and living conditions. Not only in
policy. relation to gender, age and origin, but equally in
relation to education, experience and personality. It is
The Asetek Sustainability Report 2024 is the Com- therefore Asetek’s goal that the management should
pany’s Report on Corporate Social Responsibility, c.f. equally reflect the diversity among our employees.
Section 99a of the Danish Financial Statements Act. In order to promote diversity among the company’s
Please refer to the Report here: management and Board of Directors, there is a focus
https://ir.asetek.com/reports-and-presentations/? on this in recruiting new managers. In 2024, Asetek
annual-reports/default.aspx has therefore sought to ensure broad diversity among
The Asetek Sustainability Report 2024 is the applicants when recruiting and promoting.
Company’s Report on Data Ethics, c.f. Section 99d of As of December 31, 2024, the Board of Directors
the Danish Financial Statements Act. Please refer to consists of 4 individuals, of which 75% are men and
the Report here: 25% are women. In terms of nationality composi-
https://ir.asetek.com/reports-and-presentations/ tion, 25% of the Executive Board and Board of Direc-
annual-reports/default.aspx tors are of a nationality other than Danish. In terms
Pursuant to section 107d of the Danish Financial of age composition, 0% of management is under
Statements Act, the Company is reporting on its di- 40 years old, 50% are between 40 and 60 years old,
versity policy in the following sections. Furthermore, and 50% of management is over 60.
Asetek’s diversity policy is available here: The board members of Asetek cover a wide
https://ir.asetek.com/Diversity-Policy. range of experiences from both the Danish and
This statement of Asetek’s diversity policy is a international business community and the high-tech
component of the Management’s Report in the An- industry. This composition is considered appro-
nual Report for 2024 and covers the financial period priate, as it ensures a breadth in the members’
Asetek believes that diversity among employees qualified considerations and decisions.
and management, including an even distribution
of age, nationality and educational background,
contributes positively to the work environment and
strengthens the company’s competitiveness and
performance.
FIVE-YEAR SUMMARY ASETEK Annual report 2024 / Page 34
FIVE-YEAR SUMMARY
FINANCIALS RATIOS & METRICS
FISCAL YEAR 2024 2023 2022 2021 2020 FISCAL YEAR 2024 2023 2022 2021 2020
COMPREHENSIVE INCOME ($000’S) PROFIT & LOSS
Revenue 52,502 76,332 50,650 79,803 72,750 Gross margin 41.8% 45.5% 41.0% 41.8% 47.0%
Gross profit 21,945 34,708 20,765 33,373 34,194 Operating margin –36.7% 12.3% –10.7% 1.0% 15.0%
Operating income (19,248) 9,403 (5,401) 779 10,928 Return on invested capital (ROIC) –20.7% 5.3% –4.4% 1.7% 11.2%
Financial items, net 1,031 (905) (477) 618 (1,502) Organic growth –31.2% 50.7% –36.5% 9.7% 33.9%
Income before tax (18,217) 8,498 (5,878) 1,397 9,426
Income for the year (23,936) 6,001 (4,325) 1,337 9,195 BALANCE SHEET
Comprehensive income (25,273) 6,722 (6,296) (372) 11,587 Quick ratio 0.9 0.6 0.6 1.6 2.4
Operating income before amortization, Current ratio 1.2 0.9 0.8 1.8 2.5
depreciation and financial items Days sales outstanding 78.7 50.6 63.1 69.6 116.1
(EBITDA), unaudited (13,802) 14,503 (1,231) 4,529 14,681
Inventory turns per year 3.9 5.2 4.8 11.5 18.4
Adjusted EBITDA 271 15,864 (791) 7,223 15,600
Days payable outstanding 146.6 129.0 132.2 145.4 133.6
Debt to equity 53.6% 27.8% 50.7% 6.7% 8.7%
BALANCE SHEET ($000’S)
Total assets 79,363 102,739 78,615 75,354 71,393 STOCK MARKET
Total equity 41,135 66,126 42,748 48,388 47,525 Earnings per share, basic (USD) (0.25) 0.07 (0.08) 0.03 0.18
Interest-bearing debt 22,061 18,378 21,689 3,243 4,129 Earnings per share, diluted (USD) (0.25) 0.07 (0.08) 0.03 0.17
Working capital 4,362 (3,232) (6,312) 20,603 32,837 Shares issued (000's) 98,314 98,314 27,147 26,970 26,433
Invested capital 115,860 112,177 99,346 80,900 81,786 Treasury shares (000's) 1,256 1,256 1,256 1,262 931
Investment in property, plant and Share price (DKK) 0.48 3.90 8.46 30.58 76.74
equipment 7,823 24,902 22,215 8,322 2,597
Share price to earnings – 7.87 – 90.56 35.98
Investment in intangible assets 2,320 2,561 3,405 10,196 2,876
Market capitalization ($000's) 6,509 56,122 31,413 119,825 323,054
CASH FLOW ($000’S) BUSINESS DRIVERS
Operating activities 1,213 16,280 (8,354) 14,317 11,430 Sealed loop units shipped (000's) 768 1,165 797 1,386 1,201
Investing activities (10,096) (27,373) (25,395) (13,204) (4,816) Average selling price per unit, liquid
Financing activities 4,959 11,836 18,327 (4,636) (5,088) coolers (USD) 55.7 59.3 56.2 52.6 53.9
Total cash flow (5,828) 1,710 (15,885) (3,803) 2,594 Revenue per employee ($000's) 407 570 362 528 661
Average number of employees 129 134 140 151 110
Refer to the Definitions of Ratios and Metrics on page 79 of this report.
XXXXX ANNUAL REPORT 2024 / Page 35
FINANCIAL STATEMENTS
Consolidated statement of
comprehensive income 36
Consolidated balance sheet 37
Consolidated statement of changes in equity 38
Consolidated statement of cash flows 39
Notes 40
FINANCIAL STATEMENTS ASETEK Annual Report 2024 / Page 36
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(USD 000’s) Note 2024 2023
Revenue 4 52,502 76,332
Cost of sales 8 (30,557) (41,624)
GROSS PROFIT 21,945 34,708
Research and development (8,295) (7,379)
Selling, general and administrative (19,107) (17,079)
Special items 2, 8 (13,791) (847)
TOTAL OPERATING EXPENSES (41,193) (25,305)
OPERATING INCOME (19,248) 9,403
Foreign exchange gain (loss) 9 1,444 (1,015)
Finance income 9 99 265
Finance costs 9 (512) (155)
TOTAL FINANCIAL INCOME 1,031 (905)
INCOME BEFORE TAX (18,217) 8,498
Income tax (expense) benefit 10, 11 (5,719) (2,497)
INCOME FOR THE YEAR (23,936) 6,001
Other comprehensive income items that may be reclassified
to profit or loss in subsequent periods:
Foreign currency translation adjustments (1,337) 721
TOTAL COMPREHENSIVE INCOME (25,273) 6,722
INCOME PER SHARE: (IN USD)
Basic 12 (0.25) 0.07
Diluted 12 (0.25) 0.07
FINANCIAL STATEMENTS ASETEK Annual Report 2024 / Page 37
CONSOLIDATED BALANCE SHEET
(USD 000’s) Note 2024 2023 (USD 000’s) Note 2024 2023
ASSETS EQUITY AND LIABILITIES
NON-CURRENT ASSETS EQUITY
Intangible assets 14 10,943 12,050 Share capital 18 1,478 1,478
Property, plant and equipment 15 44,992 53,897 Retained earnings 52,375 76,029
Deferred income tax assets 11 – 5,689 Translation and other reserves (12,718) (11,381)
Other assets 39 318 TOTAL EQUITY 41,135 66,126
TOTAL NON-CURRENT ASSETS 55,974 71,954
NON-CURRENT LIABILITIES
CURRENT ASSETS Long-term debt 19 19,201 2,596
Inventory 17 6,604 9,053 TOTAL NON-CURRENT LIABILITIES 19,201 2,596
Trade and other receivables 16 13,492 12,611
Cash and cash equivalents 3,293 9,121 CURRENT LIABILITIES
TOTAL CURRENT ASSETS 23,389 30,785 Short-term debt 19, 20 2,860 15,782
Accrued liabilities 2,646 1,790
TOTAL ASSETS 79,363 102,739 Accrued compensation and employee benefits 1,250 1,733
Trade payables 12,271 14,712
TOTAL CURRENT LIABILITIES 19,027 34,017
TOTAL LIABILITIES 38,228 36,613
TOTAL EQUITY AND LIABILITIES 79,363 102,739
FINANCIAL STATEMENTS ASETEK Annual Report 2024 / Page 38
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Translation Treasury Retained
(USD 000’s) capital premium reserves share reserves earnings Total
EQUITY AT DECEMBER 31, 2022 444 – (896) (11,206) 54,406 42,748
Total comprehensive income for 2023
Income for the year – – – – 6,001 6,001
Foreign currency translation adjustments – – 721 – – 721
Total comprehensive income for 2023 – – 721 – 6,001 6,722
Transactions with owners in 2023
Shares issued in rights offering, net of issuance costs 1,034 15,108 – – – 16,142
Transfer – (15,108) – – 15,108 –
Share-based payment expense – – – – 514 514
Transactions with owners in 2023 1,034 – – – 15,622 16,656
EQUITY AT DECEMBER 31, 2023 1,478 – (175) (11,206) 76,029 66,126
Total comprehensive income for 2024
Income for the year – – – – (23,936) (23,936)
Foreign currency translation adjustments – – (1,337) – – (1,337)
Total comprehensive income for 2024 – – (1,337) – (23,936) (25,273)
Transactions with owners in 2024
Share-based payment expense – – – – 282 282
Transactions with owners in 2024 – – – – 282 282
EQUITY AT DECEMBER 31, 2024 1,478 – (1,512) (11,206) 52,375 41,135
FINANCIAL STATEMENTS ASETEK Annual Report 2024 / Page 39
CONSOLIDATED STATEMENT OF CASH FLOWS
(USD 000’s) Note 2024 2023 (USD 000’s) Note 2024 2023
CASH FLOWS FROM OPERATING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES
Income (loss) for the year (23,936) 6,001 Borrowings (repayment) on line of credit 19 5,759 (3,354)
Depreciation and amortization 14,15 5,446 5,100 Proceeds from issuance of share capital 18 – 17,020
Impairment of property, plant and equipment 14 13,791 – Costs incurred for issuance of share capital 18 – (878)
Impairment of intangible assets 14 211 60 Financing of equipment 19 171 181
Finance income recognized 9 (99) (265) Principal payments on equipment financing 19 (262) (293)
Finance costs incurred 9 1,494 1,284 Principal payments on leases 20 (709) (840)
Finance income, cash received 99 265 NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 4,959 11,836
Finance costs, cash paid (1,471) (1,243)
Effect of exchange rate changes on cash and equivalents (1,904) 967
Impairment of deferred tax assets 11 4,209 –
NET CHANGES IN CASH AND CASH EQUIVALENTS (5,828) 1,710
Income tax expense (income) 10, 11 1,510 2,497
Cash receipt (payment) for income tax (1,480) 543 Cash and cash equivalents at beginning of period 9,121 7,411
Share-based payments expense 7 282 514 CASH AND CASH EQUIVALENTS AT END OF PERIOD 3,293 9,121
Changes in receivables, prepaid assets, inventories 1,836 (847)
Changes in trade payables and accrued liabilities (678) 2,371 SUPPLEMENTAL DISCLOSURE – NON-CASH ITEMS
NET CASH PROVIDED BY OPERATING ACTIVITIES 1,213 16,280 Assets acquired under leases 20 152 273
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to intangible assets 14 (2,320) (2,561)
Purchase of property, plant and equipment 15 (7,823) (24,902)
Disposal of long-term assets 15 47 90
NET CASH USED IN INVESTING ACTIVITIES (10,096) (27,373)
FREE CASH FLOW (8,883) (11,093)
NOTES ASETEK Annual report 2024 / Page 40
NOTES
Items included in the financial statements of each of the Group’s entities are measured using the currency
of the primary economic environment in which the entity operates (‘the functional currency’). The function-
Asetek A/S (‘the Company’), and its subsidiaries (together, ‘Asetek Group’, ‘the Group’ or ‘Asetek’) designs,
al currency of the Company’s operations in the United States of America, Denmark and China are the U.S.
develops and markets gaming hardware for computers. The Group’s core products utilize liquid cooling tech-
dollar, Danish kroner, and Chinese Yuan Renminbi, respectively. The consolidated financial statements are
nology to provide improved performance, acoustics and energy efficiency. The Company is based in Aalborg,
presented in U.S. dollars, which is the Group’s presentation currency.
Denmark with personnel in USA, China and Taiwan. The Company’s shares trade on the Nasdaq Copenhagen
Foreign currency transactions are translated into the functional currency using the exchange rates prevail-
under the symbol ‘ASTK’.
ing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and liabilities denomi-
nated in foreign currencies are recognized as operating expense in the income statement in foreign exchange
Subsequent to the balance sheet date, on January 6, 2025, the Company issued 219,925,366 new common
(loss)/gain.
shares of stock in a rights offering, raising net proceeds of $10.5 million. Refer to Note 24. On May 17, 2023,
Group companies that have a functional currency different from the presentation currency are translated
the Company issued 71,166,167 new common shares of stock in a rights offering, raising net proceeds of
into the presentation currency as follows:
$16.1 million after deduction of total issuance costs of $3.7 million.
// Assets
and liabilities for each balance sheet presented are translated at the closing rate at the date of that
// Income and expenses for each income statement are translated at average exchange rates;
The principal accounting policies applied in the preparation of these consolidated financial statements are
// All resulting exchange differences are recognized in other comprehensive income
set out below. These policies have been consistently applied to all the years presented, unless otherwise
stated.
Property and equipment are stated at historical cost less accumulated depreciation. For assets constructed,
borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying
The consolidated financial statements have been prepared on a historical cost convention, in accordance
asset are capitalized as part of the historical cost (Note 2.16). Subsequent costs are included in the asset’s
with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and the sup-
carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future
plementary Danish information requirements for class D publicly listed companies.
economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. The carrying amount of any replaced part is derecognized. All other repairs and maintenance are
charged to the income statement during the financial period in which they are incurred. Depreciation is
The consolidated financial statements comprise the Company and its consolidated subsidiaries. Subsidiaries
provided over the estimated useful lives of the depreciable assets, generally three to five years, using the
are all entities (including structured entities) over which the Group has control. The Group controls an entity
straight-line method. The assets’ useful lives and residual values are reviewed, and adjusted if appropriate, at
when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has
the end of each reporting period. Gains and losses on disposals are determined by comparing the proceeds
the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from
with the carrying amount and are recognized as other income or expense in the consolidated income state-
the date on which control is transferred to the Group. They are deconsolidated from the date that control
ment. Property, plant and equipment is grouped as follows:
ceases. Intercompany transactions, balances, income and expenses on transactions between Group compa-
nies are eliminated. Profits and losses resulting from the intercompany transactions that are recognized in
assets are also eliminated. Accounting policies of subsidiaries are consistent with the policies adopted by the
Group.
NOTES ASETEK Annual report 2024 / Page 41
Group Estimated Useful Life 2.7. Financial assets
Recognition and Measurement
Buildings 30–50 years
The Group determines the classification of its financial assets at initial recognition. Financial assets within the
Leasehold improvements Lesser of 5 years or lease term scope of IFRS 9 Financial Instruments are classified as follows:
Plant and machinery 5 years
Tools and fixtures 3 to 5 years // ‘Amortized cost’ are financial assets representing contractual cash flows held for collection, where such
cash flows solely represent payment of principal and interest.
// ‘Fair value’. All other financial assets, representing other debt and equity instruments that do not meet
Research costs are expensed as incurred. Costs directly attributable to the design and testing of new or taken through the income statement, or for certain debt instruments that qualify, through other compre-
improved products to be held for sale by the Group are recognized as intangible assets within development hensive income.
projects when all of the following criteria are met:
For all years presented, the Group’s financial assets are all classified as ‘amortized cost’.
// it is technically feasible to complete the product so that it will be available for sale;
// management intends to complete the product and use or sell it; Impairment of financial assets
For financial assets carried at amortized cost, the Group measures at the end of each reporting period the
// there is an ability to use or sell the product;
expected credit losses to be incurred for a financial asset or group of financial assets. The Company utilizes
// it can be demonstrated how the product will generate probable future economic benefits; historical experience, evaluation of possible outcomes, current conditions and forecasts of future economic
// adequate
technical, financial and other resources to complete the development and to use or sell the conditions to determine expected credit losses. Evidence may include indications that the debtors or a group
product are available; and of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal pay-
ments, the probability that they will enter bankruptcy or other financial reorganization, and where observa-
// the expenditures attributable to the product during its development can be reliably measured.
ble data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in
arrears or economic conditions that correlate with defaults.
Directly attributable costs that are capitalized as part of the product include the employee costs associated
with development. Other development expenditures that do not meet these criteria are recognized as
expense when incurred. Development costs previously recognized as expense are not recognized as an asset
Recognition and measurement. Financial liabilities within the scope of IFRS 9 are classified as financial
in a subsequent period. Development costs recognized as assets are amortized on a straight-line basis over
liabilities at fair value through profit or loss, or other liabilities. The Group determines the classification of its
their estimated useful lives, which generally range between three and sixty months. Amortization expense
financial liabilities at initial recognition. Financial liabilities are recognized initially at fair value less, in the case
related to capitalized development costs is included in research and development expense.
of other liabilities, directly attributable transaction costs. The measurement of financial liabilities depends on
their classification as follows:
Assets that are subject to amortization are reviewed for impairment annually, and whenever events or
// ‘Financial liabilities at fair value through profit or loss’ are derivatives entered into that do not meet the
changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is
hedge accounting criteria as defined by IFRS 9. Gains or losses on liabilities held for trading are recognized
recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recov-
in profit and loss. At December 31, 2024, the Company has no liabilities measured at fair value through
erable amount is the higher of 1) an asset’s fair value less costs to sell or 2) its value in use. For the purposes
profit and loss.
of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable
cash flows (cash-generating units). Non-financial assets other than goodwill that previously suffered an im- // ‘Other liabilities’ – After initial recognition, interest bearing debt is subsequently measured at amortized
pairment are reviewed for possible reversal of the impairment at each reporting date. Goodwill is tested for cost using the effective interest rate method. Gains and losses are recognized in the income statement
impairment annually and whenever there is indication that the goodwill may be impaired. If an impairment when the liabilities are derecognized as well as through the amortization process. The calculation takes
loss on goodwill is identified, it is recognized as an expense and is not reversed in a subsequent period. into account any premium or discount on acquisition and includes transaction costs and fees that are an
integral part of the effective interest rate.
NOTES ASETEK Annual report 2024 / Page 42
Offsetting of financial instruments. Financial assets and financial liabilities are offset, and the net amount 2.11. Cash and cash equivalents
reported in the consolidated balance sheet if, and only if, there is a currently enforceable legal right to offset Cash and cash equivalents includes cash on hand, deposits with banks, overdrafts and other short-term
the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle highly liquid investments with original maturities of three months or less.
the liabilities simultaneously.
Inventories are stated at the lower of actual cost or net realizable value. Cost is determined using the first-in, shares or options are recorded against equity in the period the equity transaction closes, as a deduction net
first-out (FIFO) method. Net realizable value is the estimated selling price in the ordinary course of business of tax, from the proceeds.
less estimated costs necessary to make the sale. Adjustments to reduce the cost of inventory to its net realiz-
able value, if required, are made for estimated excess, obsolescence, or impaired balances. 2.13. Share-based payments
The Company issues options (or warrants) that allow management and key personnel to acquire shares in
Trade receivables are amounts due from customers for product sold in the ordinary course of business. Trade employees as consideration for the granting of equity options to purchase shares in the Company at a fixed
receivables are recognized initially at fair value and subsequently measured at amortized cost using the exercise price. The fair value of the employee services received in exchange for the grant of the options is
effective interest method, less any provision for expected credit losses. If collection is expected in one year recognized as an expense. The total amount to be expensed is determined by reference to the fair value of
or less, trade receivables are classified as current assets. Expected credit losses are determined utilizing the the options granted, excluding the impact of any non-market service and performance vesting conditions.
simplified approach allowed under IFRS 9 Financial Instruments. The grant date fair value of options granted is recognized as an employee expense with a corresponding in-
NOTES ASETEK Annual report 2024 / Page 43
crease in equity, over the period that the employees become unconditionally entitled to the options (vesting The Group’s revenue is predominantly comprised of shipment of Asetek products in fulfillment of customer
period). The fair value of the options granted is measured using the Black-Scholes model, taking into account purchase orders. As such, the Company recognizes revenue when a valid contract is in place and control of
the terms and conditions as set forth in the share option program. Measurement inputs include share price the goods have transferred to the customer. Customer purchase orders and/or contracts are used as evi-
on measurement date, exercise price of the instrument, expected volatility, weighted average expected life dence of an arrangement. Delivery occurs and control of the goods is deemed to transfer when products are
of the instruments (based on historical experience and general option holder behavior), expected dividends, shipped to the specified location and the risks of obsolescence and loss have been transferred to the custom-
and the risk- free interest rate. Service and non-market performance conditions attached to the transactions er. For certain customers with vendor-managed inventory, delivery does not occur until product is acquired
are not taken into account in determining fair value. At each reporting date, the Company revises its esti- by the customer from the vendor-managed inventory location. The Company assesses collectability based
mates of the number of options that are expected to vest based on the non-market vesting conditions. The primarily on the creditworthiness of the customer as determined by credit checks and customer payment
impact of the revision to original estimates, if any, is recognized in the Statement of Comprehensive Income, history. Customers do not generally have a right of return.
with a corresponding adjustment to equity. Income received as a result of patent litigation settlement is recorded as other income as an offset to
operating expense in the period the award is granted. Estimated costs for future product returns under war-
The tax expense for the period comprises current and deferred tax. Tax is recognized in the income statement,
except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In 2.16. Borrowings and related costs
this case, the tax is also recognized in other comprehensive income or directly in equity, respectively. Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subse-
The current income tax expense is calculated on the basis of the tax laws enacted or substantively enact- quently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and
ed at the balance sheet date in the countries where the Company and its subsidiaries operate and generate the redemption amount is recognized in profit or loss over the period of the borrowings using the effective
taxable income. Management periodically evaluates positions taken in tax returns with respect to situations interest method. Fees paid on the establishment of loan facilities are recognized as transaction costs of the
in which applicable tax regulation is subject to interpretation. Management establishes provisions where loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee
appropriate on the basis of amounts expected to be paid to the tax authorities. is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all
Deferred income tax is recognized, using the liability method, on temporary differences arising between of the facility will be drawn down, the fee is capitalized as a prepayment for liquidity services and amortized
the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. over the period of the facility to which it relates.
However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill; Borrowings are removed from the balance sheet when the obligation specified in the contract is dis-
deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a trans- charged, cancelled or expired. The difference between the carrying amount of a financial liability that has
action other than a business combination that at the time of the transaction affects neither accounting nor been extinguished or transferred to another party and the consideration paid, including any non-cash assets
taxable profit or loss and does not give rise to equal taxable and deductible temporary differences. Deferred transferred or liabilities assumed, is recognized in profit or loss as other income or finance costs.
income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the General and specific borrowing costs that are directly attributable to the acquisition, construction or
balance sheet date and are expected to apply when the related deferred income tax asset is realized or the production of a qualifying asset are capitalized during the period of time that is required to complete and
deferred income tax liability is settled. prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substan-
Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit tial period of time to get ready for their intended use or sale. Investment income earned on the temporary
will be available against which the temporary differences can be utilized. investment of specific borrowings pending their expenditure on qualifying assets is deducted from the
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset borrowing costs eligible for capitalization. Other borrowing costs are expensed in the period in which they
current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate are incurred.
to income taxes levied by the same taxation authority on either the same taxable entity or different taxable
entities where there is an intention to settle the balances on a net basis. 2.17. Leases
Lease liabilities are accounted for under IFRS 16 Leases and measured at the present value of the remaining
Revenue represents sale of the Group’s products to customers which are principally resellers and original present value of: fixed lease payments, amounts expected to be payable under residual value guarantees,
equipment manufacturers. Revenue is measured at the fair value of the consideration received or receivable, any purchase options that are reasonably expected to be exercised, and any penalties for termination re-
and represents amounts receivable for goods supplied, stated net of discounts, sales tax, returns and after flected in the lease term. The corresponding rental obligations, net of finance charges, are included in other
eliminating sales within the Group. long-term debt. Amounts due within one year are included in short-term debt.
NOTES ASETEK Annual report 2024 / Page 44
Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit 2.22. Critical accounting estimates and judgments
or loss over the lease period to reflect a constant periodic rate of interest on the remaining balance of the The preparation of financial statements in conformity with IFRS requires management to make estimates and
liability for each period. assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual
Leased assets are recognized as a right-of-use asset at the date at which the leased asset is available for results could differ from those estimates. Areas where significant judgment has been applied are:
use by the Group, initially measured at the present value of the lease liability and included in Property and
equipment on the balance sheet. // Impairment of non-current assets: In October 2024, management identified external indicators of im-
pairment to the Company’s net asset book value, including a significant decrease in the Group’s market
A provision is recognized when the Company has a present legal or constructive obligation as a result of past performing an impairment test, management measured the net book value of equity for the Group
events, it is probable that an outflow of resources will be required to settle the obligation, and the amount against the net present value of future prospective cash flows. The impairment test was performed using
has been reliably estimated. If the impact of time value is significant, the provision is calculated by discount- the same approach as the test described in Note 14, using the same key assumptions for cash-generat-
ing anticipated future cash flow using a discount rate before tax that reflects the market’s pricing of the pres- ing units (CGUs), periods analyzed, revenue growth, discount rate, terminal growth and tax rates. As a
ent value of money and, if relevant, risks specifically associated with the obligation. Provisions are reviewed result of the test, management estimated impairment to the Group’s equity value of approximately $18
at each balance sheet date and adjusted to reflect the current best estimate. million to be applied to long-term assets. Current assets were not impaired because they are stated at net
realizable value. Intangible assets were assessed separately for impairment and deemed fairly valued as
Contingent liabilities are not recognized in the financial statements. Significant contingent liabilities are dis- paragraph. In property, plant and equipment, the Group’s headquarters building had shown signs of
closed, with the exception of contingent liabilities where the probability of the liability occurring is remote. impairment during a recent assessment of its alternative uses. As a result, management used judgment
to apply $13.8 million impairment to the headquarters building. This impairment charge is classified as a
Business segmentation. The Group is reporting on three segments, Liquid cooling, SimSports and Data // V
aluation of deferred tax assets: Deferred income tax assets are recognized to the extent that the realiza-
center. The three segments are identified by their specific sets of products and specific sets of customers. tion of the tax benefit to offset future tax liabilities is considered to be probable. In prior years, the Com-
The splitting of operating expenses between segments is based on the Company’s best judgment and done pany has recorded deferred tax assets representing the estimated amount of net operating losses that
by using the Company’s employee/project time tracking system to capture total hours charged by project will be utilized to offset future taxable income for the next five years. In 2024, management determined
code. Operating expenses that are not divisible by nature (rent, telecommunication expenses, etc.) have that it is not probable that the tax assets available to the Company would be utilized within five years,
been split according to actual time spent on the three businesses, and the Company’s best estimate for attri- and therefore recorded impairment of $4.2 million in the third quarter of 2024 and valued the assets at
bution. Costs incurred for intellectual property defense and headquarters administration have been classified zero on the balance sheet at December 31, 2024. The deferred tax asset impairment charge is included
separately as headquarters costs and excluded from segment operating expenses. The CEO is the Group’s in income tax expense in the consolidated income statement. Refer to the previous paragraph regarding
chief operating decision maker. The CEO assesses the performance of the Group principally on measures of the impairment of other non-current assets. In future periods, management will continue to assess the
revenue and adjusted EBITDA. probability of realization of the assets’ value and adjust the valuation in accordance with IAS 12.
Geographical segmentation. Each of the Group’s offices in its three principal geographies fulfills a particu-
lar function that serves the Asetek Group as a whole. The majority of costs incurred in each of the geogra- // C
apitalization of development costs: the Group’s business includes a significant element of research and
phies are generally incurred for the benefit of the entire Group and not to generate revenue in the respective development activity. Under IAS 38, there is a requirement to capitalize and amortize development spend
geography. As a result, the financial results of the Group are not divided between multiple geographical to match costs to expected benefits from projects deemed to be commercially viable. The application of
segments for key operating decision-making. Revenue and assets by geography is measured and reported in this policy involves the ongoing consideration by management of the forecasted economic benefit from
Note 4, Geographical information. such projects compared to the level of capitalized costs, together with the selection of amortization peri-
ods appropriate to the life of the associated revenue from the product. If customer demand for products
The cash flow statement is prepared using the indirect method.
NOTES ASETEK Annual report 2024 / Page 45
In 2008, the Company established a defined contribution savings plan (the “Plan”) in the U.S. that meets the There are some new standards and amendments to standards and interpretations that have not been
requirements under Section 401(k) of the U.S. Internal Revenue Code. This Plan covers U.S. employees who applied in preparing these consolidated financial statements. None of these is expected to have a significant
meet the minimum age and service requirements and allows participants to defer a portion of their annual effect on the consolidated financial statements of the Group:
compensation on a pre-tax basis. Company contributions to the Plan may be made at the discretion of the
Board of Directors. For the year ended December 31, 2024, the Company’s matching contributions total Effective
$15,000 ($17,000 in 2023). Standard Content date
The Company may identify special items that are significant non-recurring items that management does not Amendments to IAS 21 The Effects of Amends IAS 21 to 1) specify when a currency is 1-Jan-25
consider to be part of the Group’s ordinary activities. Such special items may include one-time impairment Changes in Foreign Exchange Rates: exchangeable to another currency and when it is
Lack of Exchangeability not; 2) specify how to determine the exchange
costs, restructuring, and strategic considerations regarding the future of the business, and are presented
rate to apply when a currency is not exchangea-
separately in the Consolidated Statement of Comprehensive Income to provide a more comparable basis
ble; 3) require disclosure of additional informa-
for the Company’s operations. Management assesses which items are to be identified as special items and tion when a currency is not exchangeable.
shown separately, in order to give a correct presentation of the statement of profit or loss and other compre-
hensive income. Not endorsed by EU as of December 31, 2024
IFRS 18 Presentation and Disclosure New standard issued to replace IAS 1, focusing 1-Jan-27
The Company’s Annual Report is prepared, in all material respects, in compliance with the Commission Dele- requiring management-defined performance
gated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) which includes measures and enhanced principles on aggrega-
requirements related to the preparation of the Annual Report in XHTML format and iXBRL tagging of the tion and disaggregation in reporting.
Consolidated Financial Statements. Amendments to the Classification May permit discharge of financial liabilities before 1-Jan-26
and Measurement of Financial settlement when paid by electronic transfer;
New standards and amendments included in Annual Report for 2024 and IFRS 7) requires additional disclosures for investments in
equity instruments and disclosure of contractual
Certain new standards, amendments to standards, and annual improvements to standards and interpreta-
terms that could change the timing or amount of
tions are effective for annual periods beginning after January 1, 2024 and have been applied in preparing
contractual cash flows.
these consolidated financial statements. These applications did not materially impact the Group’s consolidat-
ed financial statements.
NOTES ASETEK Annual report 2024 / Page 46
The Group’s activities expose it to a variety of risks: liquidity risk, market risk (including foreign exchange risk payment of dividends or Asetek share purchases, the Board takes into consideration the Company’s growth
and interest rate risk) and credit risk. The primary responsibility for Asetek’s risk management and internal plans, international tax implications, liquidity requirements and necessary financial flexibility.
controls in relation to the financial reporting process rests with executive management.
Asetek’s internal control procedures are integrated in the accounting and reporting systems and include Debt covenants. Under lines of credit terms with Jyske Bank, the Company is required to comply with the
procedures with respect to review, authorization, approval and reconciliation. All entities in the Asetek Group following financial covenants at each quarter-end:
report financial and operational data to the executive office on a monthly basis, including commentary
regarding financial and business development. Based on this reporting, the Group’s financial statements // Group solvency of at least 40%
are consolidated and reported to executive management. Management is in charge of ongoing efficient risk
// Segment reporting of EBITDA at Group level
management, including the identification of material risks, the development of systems for risk management,
and that significant risks are routinely reported to the Board of Directors. // Minimum liquidity reserve of USD 2.5 million, with the exception that a minimum liquidity reserve of USD
Liquidity risk. The Group incurred losses from operations and negative cash flows from operations from The Company complies with these covenants at December 31, 2024 and there are no indications that the
inception through 2015. Positive operating cash flows and operating income were first generated in 2016 Company will not comply with these covenants in the next reporting period (Q1 2025).
and continued through 2021. In 2022, the Company incurred operating losses and began facilities construc-
tion which required new capital. In 2023, the Company issued 71.2 new common shares of stock in a rights The following are contractual maturities of financial liabilities, including lease and other financing payments
offering, raising net proceeds of $16.1 million (refer to Note 18) and generated $9.4 million of operating in- on an undiscounted basis:
come and $16.3 million of operating cash flows. In mid-2024, the Company experienced a decline in revenue
resulting from a weakened gaming hardware market while it continued to invest in the growing SimSports
business and finish construction of its new headquarters. As a result, a projected near-term cash shortfall AS OF DECEMBER 31, 2024
required that management initiate fund-raising with the launch of an equity rights offering in November
On Less than 3 to 12 1 to 5
net proceeds of $10.5 million through the issuance of 219.9 million new common shares of stock. The
Lines of credit – (1,226) (987) (18,634) (20,847)
Company believes that its cash position and the liquidity available from its operations, external borrowings
and other sources after the recent offering completion on January 6, 2025 is sufficient to satisfy its working Leases and equipment financing – (274) (461) (598) (1,333)
capital requirements for the foreseeable future. Payables and accrued liabilities – (15,622) (545) – (16,167)
The Group’s corporate finance team monitors risk of a shortage of funds through regular updates and – (17,122) (1,993) (19,232) (38,347)
analysis of cash flow projections and maturities of financial assets and liabilities. The finance teams also
review liquidity, balance sheet ratios (such as days’ sales outstanding, inventory turns) and other metrics on a
AS OF DECEMBER 31, 2023
regular basis to ensure compliance both on a short- and long-term basis.
Asetek will continue to invest its capital principally in the development and marketing of its products. On Less than 3 to 12 1 to 5
In 2016, the Board of Directors implemented a policy under which it may declare and distribute dividends (USD 000’s) Demand 3 months months years Total
to shareholders. At the Annual General Meetings in 2024 and 2023, the Board was authorized to acquire Construction commitments – (1,689) (2,213) – (3,902)
the Company’s own shares. In 2024 and 2023, the Company did not repurchase shares. When considering Lines of credit – – (14,700) (1,489) (16,189)
Leases and equipment financing – (256) (910) (1,180) (2,346)
Payables and accrued liabilities – (17,447) (788) – (18,235)
– (19,392) (18,611) (2,669) (40,672)
NOTES ASETEK Annual report 2024 / Page 47
Market risk factors. The Group’s current principal financial liabilities consist of principally long-term lines of
credit and amounts owed on equipment financing and leases. The Group’s financial assets mainly comprise
trade receivables, cash and deposits. The Group’s operations are exposed to market risks, principally foreign
exchange risk and interest rate risk.
(a) Foreign exchange risk. With few exceptions, the Group’s inventory purchase and sale transactions
are denominated in U.S. dollars. The Group operates internationally and is exposed to foreign exchange risk
arising from currency exposures, principally with respect to the Danish kroner. Foreign exchange risk arises
from operating results and net assets associated with Denmark-based operations where the Danish krone is
the functional currency. Translation of the Denmark entity balance sheet accounts from Danish kroner to U.S.
dollars affect the equity balances of the Group.
The Group has available lines of credit totaling 153 million Danish krone, of which DKK 149 million (USD
lines of credit are revalued at the year-end exchange rate with the offset recognized as foreign exchange gain
or loss in the consolidated income statement. In 2024, the strengthening of the U.S. dollar versus the Danish
kroner resulted in a gain of $1.1 million related to revaluation of the lines of credit. The Group does not enter
into derivatives or other hedging transactions to manage foreign exchange risk. Management mitigates this
exposure through timely settlement of intercompany operating liabilities.
The ending exchange rate at December 31, 2024 was 7.14 Danish kroner to one U.S. dollar (6.74 to the
U.S. dollar at December 31, 2023). The effect of a 10% strengthening of the Danish kroner against the U.S.
dollar for the reporting period would have resulted in a decrease in pre-tax income for fiscal year 2024 of
$2.5 million (in 2023, decrease of the pre-tax income of $1.6 million).
(b) Interest rate risk. The Group’s interest rate risk consists of the following credit lines. As of December 31,
million has been utilized, principally to finance a new headquarters facility.
// A
setek A/S, the Parent company, has a line of credit with Jyske Bank for DKK 138.75 million (USD 19.4
million), of which USD 19.25 million was utilized at December 31, 2024. This line is secured by the Group’s
land and building and carries interest at Danish CIBOR 3 rate plus 2.45 percentage points which in total
was 5.2% at December 31, 2024. The line specifies quarterly payments of DKK 2.35 million (USD 329,000)
and matures on March 31, 2028.
// A
setek Danmark A/S has a revolving line of credit with Jyske Bank for DKK 5 million (USD $0.7 million),
with a temporary increase to DKK 15 million (USD 2.1 million) until January 2, 2025, of which DKK 9.8
million (USD 1.37 million) was utilized at December 31, 2024. The line is secured by the assets of Asetek
Danmark A/S and carries interest at the Danish CIBOR 3 rate plus 4.25 percentage points, which in total
was 7.0% at December 31, 2024. The line matures on March 31, 2028. Amounts outstanding in excess of
DKK 5 million are payable on January 2, 2025.
The variable nature of the Danish CIBOR 3 rate results in risk of increased interest cost due to potential
changes in rates. At the level of borrowings as of December 31, 2024, the effect of a 50% relative increase in
the Danish CIBOR 3 rate would result in increased annual interest cost of $0.3 million ($0.3 million in 2023).
Capital and debt management. To date the Company’s primary focus has been to support its product de-
velopment initiatives, maintain liquidity through use of financing alternatives, and maximize shareholder val-
NOTES ASETEK Annual report 2024 / Page 48
ue. The Group manages its capital and debt structure with consideration of the liquidity needs of the Compa- 4. GEOGRAPHICAL INFORMATION
ny and existing economic conditions. In mid-2024, the Company experienced a decline in revenue resulting
from a weakened gaming hardware market while it continued to invest in the growing SimSports business as
The Group operates internationally in several geographical areas, principally in Asia, Europe and the Americas.
well as finish construction of its new headquarters. As a result, a projected near-term cash shortfall required
The following table presents the Group’s revenue and assets in each of the principal geographical areas:
that management initiate fund-raising with the launch of an equity rights offering in November 2024. Upon
subsequent completion of a rights offering on January 6, 2025, the Company generated net proceeds of 2024 2023
$10.5 million through the issuance of 219.9 million new common shares of stock. In May 2023, to bridge Non- Non-
a short-term working capital deficit associated with its facility construction, the Company issued 71,166,167 Current current Current current
new common shares of stock in a rights offering, raising net proceeds of $16.1 million. (USD 000’s) Revenue assets assets Revenue assets assets
Credit risk factors. Credit risk refers to the risk that a counterparty will default on its contractual obli- Asia 40,132 10,316 130 65,252 11,045 119
gations resulting in financial loss to the Group. The Group is exposed to credit risk primarily through trade Americas 6,420 5,029 49 5,130 5,369 1,099
receivables and cash deposits. Management mitigates credit risk through standard review of customer Europe 5,950 8,044 55,795 5,950 14,371 70,736
credit-worthiness and maintaining its liquid assets primarily with banks with credit ratings of A or higher,
TOTAL 52,502 23,389 55,974 76,332 30,785 71,954
such as Wells Fargo Bank in the U.S. and Jyske Bank in Denmark. The carrying amount of the financial assets
represents the maximum credit exposure.
For the purpose of the above presentation, the information pertaining to revenue and current assets is
Trade receivables that are deemed uncollectible are charged to expense with an offsetting allowance
calculated based on the location of the customers, whereas information pertaining to non-current assets is
recorded against the trade receivable. Historically, bad debt expense has not been significant. Certain cus-
based on the physical location of the assets. The information pertaining to current assets is calculated as a
tomers have accounted for a significant portion of the Company’s revenue in the years presented, as follows.
summation of assets such as trade receivables and finished goods inventories reasonably attributable to the
In 2024, the Company’s three largest customers, all in the liquid cooling segment, accounted for 34%, 18%
specific geographical area.
and 9% of revenue (three customers accounted for 38%, 24% and 13% of revenue in 2023), respectively. The
Company mitigates risk with its largest customer by requiring two remittances per month as well as frequent Non-current assets
monitoring and communicating regarding invoices coming due. (USD 000’s) 2024 2023
At December 31, 2024 three customers, all in the liquid cooling segment, represented 31%, 12% and 10% Denmark 55,795 70,736
of outstanding trade receivables (three represented 35%, 16% and 12% at December 31, 2023), respectively. USA 49 1,099
The reserve for uncollectible trade accounts was $32,000 at December 31, 2024 and $59,000 at December 31,
China 130 119
TOTAL 55,974 71,954
The maximum exposure to credit risk at the reporting dates was:
(USD 000’s) 2024 2023
Revenue
Cash and cash equivalents 3,293 9,121
(USD 000’s) 2024 2023
Trade receivables and other 13,492 12,611
Denmark 609 525
Other assets 39 318
China 5,631 8,576
MAXIMUM CREDIT EXPOSURE 16,824 22,050
Singapore 6,808 6,756
Taiwan 22,570 46,737
USA 6,240 4,917
Japan 4,034 2,667
All others 6,610 6,154
TOTAL 52,502 76,332
NOTES ASETEK Annual report 2024 / Page 49
In 2024, the Company reports on three segments, Liquid cooling, Data center and SimSports. The three seg-
ments are identified by their specific sets of products and customers. The CEO is the Group’s chief operating
decision-maker. The CEO assesses the performance of each segment principally on measures of revenue, gross
margin and adjusted EBITDA. Refer to page 79 for definition of adjusted EBITDA. The following tables repre-
sent the results by operating segment in 2024 and 2023. Disaggregation of revenue by sales channel is also
presented for the major markets within each segment. Revenue generated from retailers and online webstore
is principally from the sale of SimSports products.
Reconciliation of Adjusted EBITDA to Income before tax
(USD 000’s) 2024 2023 Disaggregation of revenue
EBITDA adjusted - Liquid Cooling 12,495 25,861 (USD 000’s) 2024 2023
EBITDA adjusted - Data center – 192 OEM and System Integrators 42,803 69,153
EBITDA adjusted - SimSports (8,897) (6,688) Retailers 5,265 4,289
Special items (13,791) (847) Online webstore 4,329 2,890
Headquarters costs, net (3,327) (3,501) Office lease 105 –
Share-based compensation (282) (514) TOTAL 52,502 76,332
Depreciation and amortization (5,446) (5,100)
Total financial income (expenses) 1,031 (905)
CONSOLIDATED INCOME BEFORE TAX (18,217) 8,498
Segment operating results – years ended December 31
Liquid Not allocable Liquid Not allocable
(USD 000's) Cooling Data center SimSports to divisions Total Cooling Data center SimSports to divisions Total
Revenue 42,803 – 9,594 105 52,502 69,052 102 7,178 – 76,332
Gross margin 45% – 25% – 42% 47% – 28% – 45%
Personnel expense 5,476 – 6,286 112 11,874 5,259 71 5,508 451 11,289
Adjusted EBITDA 12,495 – (8,897) (3,327) 271 25,861 192 (6,688) (3,501) 15,864
NOTES ASETEK Annual report 2024 / Page 50
(USD 000’s) 2024 2023 The Company’s CEO has an agreement of twelve months’ severance pay in case of termination or ter-
Salaries 11,460 11,382 mination in connection with change of control. The Company’s CFO has an agreement of seven months’
severance pay in case of termination or termination in connection with change of control. Except for the
Retirement fund payments to defined contribution plan 629 578
Company’s CEO and CFO and other members of the executive group, no member of the administrative,
Social cost 1,492 1,541 management or supervisory bodies has contracts with the Company or any of its subsidiaries providing for
Share-based payment 282 514 benefits upon termination of employment.
Other expenses 1,186 806 Total compensation to Other Executives for the year ending December 31, 2024 includes a one-time
TOTAL PERSONNEL COSTS 15,049 14,821 severance payment of $161,000 representing six months salary to the Chief Operating Officer (COO), as per
the terms of his separation agreement and is included in ‘Other’ compensation to ‘Other Executives’ in the
Less: Costs applied to inventory production (1,065) (1,592)
compensation table below. Total compensation to the Board of Directors and Officers was $2,167,000 and
Less: Capitalized as development cost (2,110) (1,940) $2,299,000 in 2024 and 2023, respectively.
TOTAL PERSONNEL COSTS IN OPERATING EXPENSE 11,874 11,289
AVERAGE NUMBER OF EMPLOYEES 129 134 Share ownership of officers, including immediate family members, at December 31, 2024:
André S. Peter D.
(USD 000’s) 2024 2023 Eriksen Madsen
Research and development 4,688 4,517 Common shares 1,391,128 467,594
Selling, general and administrative 10,361 10,304 Options at DKK 4.07 1,150,000 393,400
TOTAL PERSONNEL COSTS 15,049 14,821 Options at DKK 4.49 151,900 50,975
Options at DKK 7.37 106,800 61,750
Options Granted
Options at DKK 11.44 68,500 42,075
Options at DKK 13.82 53,300 26,500
Board of Directors – –
Options at DKK 29.89 57,200 17,700
Officers – 1,543,400
TOTAL SHARES CONTROLLED 2,978,828 1,059,994
Other executives – 646,900
Other employees – 766,550
TOTAL – 2,956,850
Compensation to Board of Directors, Officers and Other Executives
*Other *Other
(USD 000’s) Directors Officers Executives Total Directors Officers Executives Total
Salary – 1,147 1,003 2,150 – 1,047 887 1,934
Bonus – 287 311 598 – 520 637 1,157
Share-based – 210 68 278 – 258 117 375
Other 255 268 233 756 255 219 65 539
TOTAL 255 1,912 1,615 3,782 255 2,044 1,706 4,005
* Other executives include the Chief Operating Officer and other members of the executive team who are leaders of the key functions (Engineering, Sales and Operations).
NOTES ASETEK Annual report 2024 / Page 51
Asetek’s Equity Incentive Program is a share compensation program where the employees that deliver servic- Activity for exercise prices of DKK 4.07 to DKK 7.37
es to the Group have been granted share options (or warrants). The options, if vested and executed, will be Weighted Weighted
settled in common shares of the Company. Average Average
The options are granted at the time of employment and, under other circumstances, at the discretion Exercise price Exercise price
of the Board of Directors. The options are granted with exercise prices equaling the fair market value of the
underlying security. The exercise prices of option grants are determined based on the closing market price of Outstanding on January 1 3,721,003 4.46 992,460 5.94
the shares for the five most recent trading days prior to the grant date. Share-based compensation expense Options/warrants granted – – 2,956,850 4.07
was $282,000 and $514,000 for the years ended December 31, 2024 and 2023, respectively. The goals of the Options/warrants exercised – – – –
equity incentive program are as follows:
Options/warrants forfeited (255,157) 4.31 (228,307) 5.84
// To attract and retain the best available personnel for positions of substantial responsibility; OUTSTANDING ON DECEMBER 31 3,465,846 4.47 3,721,003 4.46
EXERCISABLE ON DECEMBER 31 659,145 6.14 558,766 6.52
// To provide additional incentive to employees, directors and consultants, and
No exercise for the above shares in 2024 & 2023.
// To promote the success of the Company’s business.
Activity for exercise prices of DKK 11.44 to DKK 33.72
In July 2023, in consideration of the dilution effect of the Company’s May 2023 rights offering (Note 18), and Weighted Weighted
transition of listing to the Nasdaq Copenhagen, the Board of Directors reduced the exercise prices of out- Average Average
standing share options by 45% and converted the currency denomination to Danish krone. Stock compensa- Exercise price Exercise price
tion expense in 2023 associated with the exercise price adjustments was $142,000. The repricing of options 2024 (DKK) 2023 (DKK)
is summarized as follows: Outstanding on January 1 1,198,476 20.20 1,226,419 20.15
Options/warrants granted – – – –
Original Revised Options/warrants exercised – – – –
Grant year Exercise Price Exercise Price
Options/warrants forfeited (518,148) 24.29 (27,943) 18.32
OUTSTANDING ON DECEMBER 31 680,328 17.08 1,198,476 20.20
EXERCISABLE ON DECEMBER 31 680,328 17.08 1,170,239 20.19
No exercise for the above shares in 2024 & 2023.
The Company’s shares trade on the Nasdaq Copenhagen at prices denominated in Danish krone (DKK). The
exchange rate at December 31, 2024 of DKK to USD was 7.14.
The Company did not grant any options in 2024. In December 2023, the Company granted 2,956,850
options with exercise prices of DKK 4.07 per share. Movements in the number of share options outstanding
and their related weighted average exercise price are specified on the following table.
NOTES ASETEK Annual report 2024 / Page 52
The composition of options and warrants outstanding at December 31 is as follows: 8. EXPENSES BY NATURE
Options and Warrants Outstanding at December 31 Expenses by Nature
DKK 4.07 2,733,300 2,956,850 Inventories recognized as cost of sales 17 30,557 41,624
DKK 4.49 355,580 370,381 Personnel expenses 6 15,049 14,821
DKK 7.37 376,966 393,772 Depreciation and amortization 14,15 5,446 5,100
DKK 11.44 249,867 258,427 Legal, patent, consultants and auditor 2,430 2,269
DKK 13.82 255,442 278,791 Facilities and infrastructure 1,720 1,192
DKK 22.76 – 384,054 Special items 13,791 847
DKK 29.89 175,019 180,205 Other expenses 4,867 3,637
DKK 33.72 – 96,999 TOTAL OPERATING EXPENSES BEFORE CAPITALIZATION 73,860 69,490
TOTAL 4,146,174 4,919,479 Less: capitalized costs for development projects 14 (2,110) (2,561)
TOTAL EXPENSES 71,750 66,929
Total outstanding options and warrants represents 4.3% of total common shares issued at December 31,
The Company calculated the fair value of each option award on the date of grant using the Black-Scholes Depreciation and amortization expense classfication
option pricing model, which requires subjective assumptions, including future stock price volatility and ex-
(USD 000’s) 2024 2023
pected time to exercise. The Company sets the exercise price of shares granted as the average closing price
of the Company’s shares for the five most recent trading days prior to the grant date. The expected volatility Depreciation and amortization expense included in:
was based on the historical volatility of the Company’s stock price. The weighted average remaining contrac- Research and development 2,866 2,560
tual term of options outstanding is 3.23 years. The options granted in December 2023 have an estimated Selling, general and administrative 2,580 2,540
total value of $1.2 million.
TOTAL 5,446 5,100
Expected volatility is calculated based on the actual volatility experienced during the three-year period
prior to each option’s grant date. The following weighted average assumptions were used for the period Special items. In 2024, the Company recorded a non-cash impairment charge of $13.8 million as a conse-
indicated. quence of an assessed impairment within the cash generating units. This one-time charge is classifed as a
special item in operating expense on the income statement and was recorded as impairment of the Compa-
ny’s headquarters facility included in property, plant and equipment. Refer to Note 2.22 in the consolidated
Valuation assumptions for options granted financial statements.
Risk-free interest rate NA 4.33%–4.58% tion of its shares for trading from Oslo Stock Exchange to Nasdaq Copenhagen. Operating expense in 2023
Dividend yield NA 0.0% includes $0.8 million of non-recurring costs associated with this listing change, classified as a special item in
operating expense on the income statement.
Expected life of options (years) NA 2.5–3.96
Expected volatility NA 114%
NOTES ASETEK Annual report 2024 / Page 53
(USD 000’s) 2024 2023 (USD 000’s) 2024 2023
FOREIGN EXCHANGE GAIN (LOSS) 1,444 (1,015) Potential tax assets from net losses 5,227 6,064
FINANCE INCOME 99 265 Potential tax assets resulting from timing differences between book and tax 6,799 618
Interest cost on line of credit (1,105) (1,009) Tax assets not recognized (12,026) (993)
Interest cost on leases and equipment financing (83) (109) DEFERRED INCOME TAX ASSETS – 5,689
Other banking and finance fees (306) (166)
At December 31, 2024, potential income tax assets totaled $12.0 million (2023: $6.7 million) in respect of
Subtotal (1,494) (1,284)
timing differences and losses to be carried forward amounting to $19.4 million applied to different tax rates.
Less: amount capitalized 982 1,129 The losses can be carried forward against future taxable income but may be limited in use according to local
FINANCE COST (512) (155) jurisdictions. The potential tax assets resulting from timing differences include the effect of dual taxation of
the Parent company, by both U.S. and Denmark. In 2024, due to uncertainty of the realizability of deferred
tax assets, the Group fully reserved the value of potential assets, resulting in zero value on the balance sheet
In accordance with IAS 12, the Company recognizes deferred tax assets arising from unused tax loss-
Asetek A/S, the Group’s parent company, moved from U.S. to Denmark in 2013 and is currently subject to es or tax credits only to the extent that the entity has sufficient taxable temporary differences or there is
income tax in both U.S. and Denmark. The Company is working with the U.S. and Danish tax authorities to convincing other evidence that sufficient taxable profit will be available against which the unused tax losses
negotiate a resolution in accordance with international double taxation treaties. or unused tax credits can be utilized by the Company. The estimated tax benefit is calculated considering
The tax expense on the group’s income before tax differs from the theoretical amount that would arise historical levels of income, expectations and risks associated with estimates of future taxable income. The
using the weighted average tax rate applicable to profits of the consolidated entities as follows: calculation utilizes the statutory tax rates that are expected to apply to taxable income for the years in which
the asset is expected to be realized.
(USD 000’s) 2024 2023 Losses of the U.S. parent company and U.S. subsidiary will begin to expire in 2029 for carryforward pur-
INCOME (LOSS) BEFORE TAX (18,217) 8,498 poses. Losses of the Denmark subsidiary do not expire.
Tax calculated at domestic rates applicable to profits/losses in respective
countries 3,991 (1,902) (USD 000’s) Tax effected loss
Tax effects of: Expire in years 2029 to 2044 965
R&D credit 61 50 Expire in year 2033 59
Timing differences between book and tax, recognized – 70 Do not expire 4,203
Timing differences between book and tax not recognized, principally due TOTAL 5,227
to book impairment charge on property plant and equipment (3,206) –
Impairment of deferred tax assets (4,209) –
Deferred tax value of current year losses, net unrecognized (1,491) –
Effect of U.S. GILTI regulation applied to foreign corporation income
pertaining to fiscal 2023 (867) (766)
Other permanent differences between book and tax 2 51
TAX (EXPENSE) BENEFIT (5,719) (2,497)
NOTES ASETEK Annual report 2024 / Page 54
value approximates fair value for all financial instruments as of December 31, 2024 and 2023. The values of
Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Com- the Group’s assets and liabilities are as follows:
pany by the weighted average number of common shares outstanding during the period. Diluted earnings
per share is calculated by adjusting the number of common shares outstanding used in the Basic calculation At December 31, 2024
for the effect of dilutive equity instruments, which include options and warrants to the extent their inclusion (USD 000’s) Amortized cost
in the calculation would be dilutive. Assets as per balance sheet:
In a rights offering in May 2023, the Company issued new shares to existing shareholders at a discounted
Trade receivables and other 13,492
price from fair market value. IAS 33 requires that the price discount be recognized as a bonus element, with
retrospective adjustment to the denominators for both basic and diluted earnings per share amounts for Cash and cash equivalents 3,293
all periods before the rights issue. In accordance with IAS 33, the Company calculated and applied a bonus 16,785
factor of 2.05 to the weighted average shares outstanding for all prior periods.
At December 31, 2023
Income attributable to equity holders of the Company (USD 000's) (23,936) 6,001 (USD 000’s) Amortized cost
Weighted average number of common shares outstanding (000's) 97,058 81,642 Assets as per balance sheet:
BASIC EARNINGS PER SHARE ($0.25) $0.07 Trade receivables and other 12,611
Weighted average number of common shares outstanding (000's) 97,058 81,642 Cash and cash equivalents 9,121
Instruments with potentially dilutive effect: Warrants and options (000's) – – 21,732
Weighted average number of common shares outstanding, diluted (000's) 97,058 81,642
At December 31, 2024
DILUTED EARNINGS PER SHARE ($0.25) $0.07
Liabilities at fair Other Financial
value through Liabilities at
As described in Note 24, on January 6, 2025, the Company issued 219,925 thousand shares in a rights (USD 000’s) profit and loss amortized cost Total
offering. If these shares had been outstanding from January 1, 2024, the weighted average number of shares Liabilities as per balance sheet:
outstanding used for both basic and diluted earnings per share calculations would have been 316,983 thou-
Long-term debt – 19,201 19,201
sand shares in 2024.
Short-term debt – 2,860 2,860
Trade payables and accrued liabilities – 16,167 16,167
The Company uses the following valuation methods for fair value estimation of financial instruments:
// Quoted prices (unadjusted) in active markets (Level 1). At December 31, 2023
// Inputs other than quoted prices included within level 1 that are observable for the asset or liability, Liabilities at fair Other Financial
either directly (as prices) or indirectly (derived from prices) (Level 2) value through Liabilities at
(USD 000’s) profit and loss amortized cost Total
// Inputs for the asset or liability that are not based on observable market data (unobservable inputs)
Liabilities as per balance sheet:
(Level 3).
Long-term debt – 2,596 2,596
All of the Company’s financial assets as of December 31, 2024 are classified as “amortized cost” having fixed Short-term debt – 15,782 15,782
or determinable payments that are not quoted in an active market (Level 3). As of December 31, 2024, all of Trade payables and accrued liabilities – 18,235 18,235
the Company’s financial liabilities are carried at amortized cost having fixed or determinable payments that – 36,613 36,613
are not quoted in an active market (Level 3).
NOTES ASETEK Annual report 2024 / Page 55
In 2021, the Company purchased intellectual property and other assets from a third party which included Capitalized development costs
intangible assets with an estimated fair value of $7.8 million, the majority of which were in development. As (USD 000’s) 2024 2023
the assets are placed in service, they are being amortized over their estimated useful lives ranging from 6 to
COST:
Goodwill. Goodwill of $0.5 million originated from an acquisition by the Company in 2020. Goodwill is Balance at January 1 9,850 7,487
not amortized but reviewed for impairment once a year and also if events or changes in circumstances indi- Additions 2,320 2,561
cate the carrying value may be impaired. If impairment is established, goodwill is written down to its lower Deletions- completion of useful life - (61)
recoverable amount. The goodwill recorded is denominated in Danish krone and is subject to fluctuation in Impairment loss (2,029) (137)
the consolidated financial statements due to changes in foreign exchange rates.
BALANCE AT DECEMBER 31 10,141 9,850
Intangible assets as of December 31 are as follows:
ACCUMULATED AMORTIZATION AND IMPAIRMENT LOSSES:
(USD 000’s) 2024 2023 Balance at January 1 (4,639) (2,724)
Goodwill 513 543 Amortization for year (2,158) (2,053)
Capitalized development costs 5,162 5,211 Amortization associated with deletions - 61
Other assets 5,268 6,296 Amortization associated with impairment losses 1,818 77
TOTAL INTANGIBLE ASSETS 10,943 12,050 BALANCE AT DECEMBER 31 (4,979) (4,639)
CARRYING AMOUNT 5,162 5,211
Capitalized development costs. The Group routinely incurs costs directly attributable to the design and
testing of new or improved products to be held for sale. These costs are capitalized as intangible assets and
amortized over the estimated useful lives of the products, typically three to sixty months. Other intangible assets
Impairment tests are performed annually on developed assets and assets under construction. Impairment (USD 000’s) 2024 2023
tests are also performed on completed assets whenever there are indications of a need for write-offs and for
COST:
assets still in development regardless of whether there have been indications for write downs. If the value of
expected future free cash flow of the specific development project is lower than the carrying value, the asset Balance at January 1 7,195 6,958
is written down to the lower value. The booked value includes capitalized salary and related expenses for the Additions - -
cash flow producing project. Expected future free cash flow is based on budgets and anticipations prepared Exchange rate differences (401) 237
by management. The main parameters are the development in revenue, EBIT and working capital. Impair- BALANCE AT DECEMBER 31 6,794 7,195
ment losses represent principally assets which are no longer associated with a future income stream. Refer
ACCUMULATED AMORTIZATION AND IMPAIRMENT LOSSES:
to the end of this Note for the Company’s approach, assumptions and conclusion regarding impairment test
Balance at January 1 (899) (233)
of carrying values in 2024.
In 2024 and 2023, the Company recognized impairment of $2.0 million and $0.1 million, respectively, on Amortization for year (704) (637)
capitalized development costs associated with Liquid Cooling as a result of updated prioritization of future Exchange rate differences 77 (29)
commercial projects. BALANCE AT DECEMBER 31 (1,526) (899)
The following table presents a summary of the Company’s development projects.
CARRYING AMOUNT 5,268 6,296
NOTES ASETEK Annual report 2024 / Page 56
Impairment assessment. In compliance with IAS 36 Impairment of Assets, the Company assessed impair- The following table summarizes the key assumptions used in the impairment assessment:
ment of intangible assets as follows.
Liquid
// Identify Cash-Generating Units (CGUs). The Group has identified two principal businesses as its operating Key Assumption Cooling Simsports
segments and CGUs – Liquid Cooling and SimSports. Assets pertaining to the Company’s third segment,
Projection time period analyzed 5 years 10 years
Data center, are not significant. Refer to Note 5 for segment information.
// Approach to assessment. The Group considers both qualitative and quantitative factors when determining Compound annual growth rate of revenue 8.0% 29.0%
whether an asset or CGU may be impaired. Management measured the book value of intangible assets EBITDA margin in year 5 25.3% 9.4%
against the net present value of future projected cash flows for the respective CGU. In doing so, manage- Discount rate 14.0% 14.0%
ment incorporated the Company’s fiscal 2025 budget and subsequent year projections by management
Terminal growth rate 4.1% 4.1%
utilizing market data and assistance from external advisors. Internal management reporting is in place to
Income tax rate 22.0% 22.0%
monitor revenues and cash flows at an operating segment-level basis to enable management to properly
assess impairment.
// Conclusion. The Company’s assessment concluded that the net present value of projected future cash
// Allocation of assets to CGU. Capitalized development costs are accounted for and specifically identified
flows is sufficient to support the valuation of intangible assets at December 31, 2024. As part of this test,
by CGU as either Liquid Cooling or SimSports products under development. Other intangible assets and
management identified external indicators of impairment to the Company’s net asset book value, includ-
goodwill represents assets acquired in prior years associated with SimSports.
ing a significant decrease in the Group’s market-based valuation. Refer to Note 2.22.
// Key assumptions. In preparing the assessment, management used a five-year projection for Liquid Cool-
ing and ten-year projection for SimSports. Liquid cooling revenue is projected to decrease by 6% in 2025
and return to 14% growth in 2026 and 2027, and 10% growth thereafter. For SimSports, because it is in
a higher growth stage and currently at a lower base level of revenue, annual growth rates averaging 75%
are expected over the first three years, leveling off to 15% by 2029. SimSports’ anticipated growth rate is
reflective of the high rate of new product introductions planned into the foreseeable future.
The present value of expected cash flows is determined by applying a suitable discount rate. The discount
rate of 14% was derived based on a weighted-average cost of capital (WACC) for comparable entities in the
industry, based on market data. For the calculation of the net present value (NPV), Asetek’s WACC is applied,
which is based on the current borrowing rate and its expected development as well as the return on equity
requirement, which is determined based on the risk profile.
NOTES ASETEK Annual report 2024 / Page 57
In 2024, the Company capitalized $6.1 million of costs associated with the construction of a new headquar- The Company is leasing sections of the building that are not occupied by Asetek and plans to continue to do
ters facility, including $1.0 million of borrowing costs ($22.8 million and $1.1 million, respectively in 2023). this for three to five years and to subsequently occupy the entire facility thereafter. The sections leased are
Refer to Notes 19 and 25. The building was completed in September 2024 and occupied by the Company. contiguous with the premises occupied by Asetek and cannot be feasibly separated. As a result, the asset is
Asetek recorded an impairment charge of $13.8 million against this asset in 2024. Refer to Note 2.22. accounted for as a domicile property, recorded at cost and depreciated over its estimated useful life of 50
years. In 2024, the Company recognized $0.1 million of rental income associated with this lease.
The following table presents total property, plant and equipment:
Other fixtures,
Leasehold fittings, tools, Building under
(USD 000’s) Improvements Machinery equipment Properties construction Total
COST:
Balance at January 1, 2023 1,657 7,043 3,573 5,969 23,854 42,095
Additions 20 1,517 843 29 22,766 25,175
Disposals (141) (852) (788) (654) – (2,435)
Exchange rate differences (34) 246 92 98 – 402
BALANCE AT DECEMBER 31, 2023 1,502 7,954 3,720 5,442 46,620 65,237
Balance at January 1, 2024 1,502 7,954 3,720 5,442 46,620 65,237
Additions 43 580 1,274 – 6,078 7,975
Transfer – – – 52,698 (52,698) –
Disposals (1,383) (601) (764) (130) – (2,878)
Exchange rate differences (40) (442) (159) (163) – (804)
BALANCE AT DECEMBER 31, 2024 122 7,491 4,071 57,847 – 69,531
ACCUMULATED DEPRECIATION:
Balance at January 1, 2023 (1,469) (5,173) (2,185) (2,184) – (11,011)
Disposals 141 849 701 654 – 2,345
Depreciation for the year (151) (1,058) (611) (590) – (2,410)
Exchange rate differences 38 (173) (61) (68) – (264)
BALANCE AT DECEMBER 31, 2023 (1,441) (5,555) (2,156) (2,188) – (11,340)
Balance at January 1, 2024 (1,441) (5,555) (2,156) (2,188) – (11,340)
Disposals 1,382 600 586 – – 2,568
Impairment – – – (13,791) – (13,791)
Depreciation for the year (40) (1,154) (654) (740) – (2,588)
Exchange rate differences 37 327 109 139 – 612
BALANCE AT DECEMBER 31, 2024 (62) (5,782) (2,115) (16,580) – (24,539)
CARRYING AMOUNT AT DECEMBER 31, 2023 61 2,399 1,564 3,254 46,620 53,897
CARRYING AMOUNT AT DECEMBER 31, 2024 60 1,709 1,956 41,267 – 44,992
NOTES ASETEK Annual report 2024 / Page 58
Trade receivables are non-interest bearing and are generally on payment terms of Net 30 days. The trade Credit Loss Provision Matrix 2023
receivables of Asetek Danmark A/S carry a general lien on the business of Asetek Danmark A/S (refer to Note Past due:
maturity. Regarding credit risks, refer to Note 3. (USD 000’s) Total Not yet due 1 to 30 days days days
Gross carrying amount 10,641 9,355 1,142 71 73
(USD 000’s) 2024 2023
Expected credit loss rate 0.1% 0.4% 4.2% 58.9%
Gross trade receivables 11,349 10,641
Lifetime expected credit loss (59) (8) (5) (3) (43)
Provision for uncollectible accounts (32) (59)
NET TRADE RECEIVABLES 11,317 10,582
Other receivables 1,236 1,153 17. INVENTORIES
Prepaid assets 939 876
The Company’s inventories are pledged as security for lines of credit outstanding as per Note 19. Inventories
TOTAL TRADE RECEIVABLES AND OTHER 13,492 12,611
at December 31 are as follows:
Provision for uncollectible accounts
(USD 000’s) 2024 2023
(USD 000’s) 2024 2023
Raw materials and work-in-process 3,197 5,320
Balance at January 1 (59) (41)
Finished goods 4,390 4,995
Additions (32) (59)
Total gross inventories 7,587 10,315
Reversals 59 41
Less provision for inventory reserves (983) (1,262)
BALANCE AT DECEMBER 31 (32) (59)
TOTAL NET INVENTORIES 6,604 9,053
The aging of trade r? eceivables as of reporting date is as follows: (USD 000’s) 2024 2023
Past due: Inventories recognized as cost of sales during period (30,557) (41,624)
(USD 000’s) Total Not yet due 1 to 30 days days days
December 31, 2024 11,349 9,225 1,400 517 207
A summary of the activity in the provision for inventory reserves is as follows:
December 31, 2023 10,641 9,355 1,142 71 73
Provision for inventory reserves
Credit Loss Provision Matrix 2024 (USD 000’s) 2024 2023
Past due: Balance at January 1 (1,262) (781)
(USD 000’s) Total Not yet due 1 to 30 days days days Write-offs 1,262 781
Gross carrying amount 11,349 9,225 1,400 517 207 BALANCE AT DECEMBER 31 (983) (1,262)
Expected credit loss rate 0.1% 0.5% 1.9% 2.9%
Lifetime expected credit loss (32) (9) (7) (10) (6)
NOTES ASETEK Annual report 2024 / Page 59
with a temporary increase to DKK 15 million (USD 2.1 million) until January 2, 2025. This line is secured by
Subsequent to 2024 year-end, on January 6, 2025, the Company issued 219,925,366 new common shares of the mortgage deed for the Group’s land and building and carries interest at the Danish CIBOR 3 rate plus
stock in a rights offering, raising net proceeds of $10.5 million after deduction of total issuance costs of $1.8 4.25 percentage points, which in total was 7.0% at December 31, 2024. The line matures on March 31,
million. Refer to Note 24. 2028. Amounts outstanding in excess of DKK 5 million are payable on January 2, 2025.
In May 2023, the Company issued 71,166,167 new common shares of stock in a rights offering, raising
net proceeds of $16.1 million after deduction of total issuance costs of $3.7 million. The shares were issued Debt covenants. Under the terms of the lines of credit, the Company is required to comply with certain
through an offering to then-existing shareholders to purchase 2.62 common shares for each share held at financial covenants as described in Note 3. As of December 31, 2024, the Company is in compliance with all
a price of NOK3.00 per share, representing a 64% discount on fair market value. The transaction meets the covenants.
requirements for exemption from accounting for derivative financial instruments per IAS 32 Financial Instru- The capitalization rate for borrowing costs on lines of credit was 100% up through September 30, 2024,
ments Presentation. as all funds drawn to that point were utilized for additions to the qualifying asset.
In conjunction with the 2023 rights offering, the Company established a dual listing of its shares for trad- The Company has entered into agreements to finance previously purchased equipment. The amortized
ing on Nasdaq Copenhagen, in addition to its existing listing on Oslo B?rs Stock Exchange. The Company del- cost of the equipment at transaction date was used as the estimate on fair value and the liability is account-
isted from Oslo B?rs in March 2024. Operating expense in 2023 includes $0.8 million of non-recurring costs ed for at amortized cost using the effective interest rate method. The financing agreements carry interest
associated with the dual listing, classified as a special item in operating expense on the income statement. at the Danish CIBOR 3 rate plus 2.4 to 3.1 percentage points, which in total ranged from 5.2% to 5.9% at
In 2024 and 2023, there were no stock options exercised. December 31, 2024.
As of December 31, 2024, there are 97,058 thousand common shares outstanding with a nominal value The following is a summary of the Company’s net debt and reconciliation of the lines of credit:
of 0.10 DKK per share and 1,256 thousand shares (1.3% of total shares, nominal value DKK 125.6 thousand)
held in treasury. Included in equity is a reserve for treasury shares of approximately $11,206 thousand at (USD 000’s) 2024 2023
December 31, 2024. All common shares outstanding are fully paid and carry no special rights. Line of credit - due within one year (2,213) (14,700)
The Company does not cancel shares that are repurchased but maintains them in treasury to fulfill option
Equipment financing- due within one year (320) (270)
exercises. Refer to ‘Shareholder information’ in this report for information regarding the composition of
Asetek shareholders. Leases - amounts due within one year (327) (812)
The following table summarizes the common share activity in the years presented: DEBT INCLUDED IN CURRENT LIABILITIES (2,860) (15,782)
(USD 000’s) 2024 2023 Line of credit - due after one year (18,634) (1,489)
Common shares outstanding - January 1 97,058 25,891 Equipment financing - due after one year (556) (756)
Common shares issued in rights offering – 71,167 Leases - amounts due after one year (11) (351)
COMMON SHARES OUTSTANDING – DECEMBER 31 97,058 97,058 TOTAL DEBT (22,061) (18,378)
Less cash and cash equivalents 3,293 9,121
NET DEBT (18,768) (9,257)
(USD 000’s) 2024 2023
The Company’s debt at December 31, 2024 consists of the following:
Beginning balance, line of credit (16,189) (18,971)
// A
setek A/S, the Parent company, has a line of credit with Jyske Bank for DKK 137.5 million (USD 19.3 Net paid (drawn) on line of credit (5,759) 3,354
million) at December 31, 2024. This line is secured by the mortgage deed for the Group’s land and Foreign exchange impact 1,101 (572)
building and carries interest at Danish CIBOR 3 rate plus 2.45 percentage points which in total was 5.2% at ENDING BALANCE, LINE OF CREDIT (20,847) (16,189)
December 31, 2024. The line specifies quarterly payments of DKK 2.35 million (USD 329,000) and matures
on March 31, 2028.
NOTES ASETEK Annual report 2024 / Page 60
Asetek leases certain equipment, office facilities and motor vehicles. Contracts are typically for fixed periods Right-of-use Assets. The following table presents a summary of the Right-of-use assets under lease, which is
of five years or more for office facilities, five years for equipment, and two years or less for motor vehicles. a subset of the property, plant and equipment presented in Note 15:
The leased asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line Other
basis. Operating expenses associated with leases of one year or less are not significant in 2024 and 2023. fixtures,
In 2024, the Company moved its Aalborg, Denmark headquarters from a leased facility to a newly con- fittings, tools,
structed facility owned by Asetek in Svenstrup, Denmark. The lease on the former office space in Aalborg (USD 000’s) Machinery equipment Properties Total
expires in March 2025. The Company’s office space in Taipei, Taiwan is under lease until August 2025. COST:
Balance at December 31, 2023 1,402 339 2,912 4,653
Reconciliation of lease liability Additions - 152 - 152
(USD 000’s) 2024 2023 Disposals and transfers - (223) (130) (353)
Beginning balance 1,163 1,664 Exchange rate differences - (3) (163) (166)
Additions to lease liabilities 152 273 BALANCE AT DECEMBER 31, 2024 1,402 265 2,619 4,286
Payments of lease liabilities (709) (802) ACCUMULATED DEPRECIATION:
Adjustments/reductions to leases (133) (54) Balance at December 31, 2023 (1,098) (68) (2,160) (3,326)
Foreign exchange impact (135) 82 Disposals and transfers - 90 - 90
ENDING BALANCE 338 1,163 Depreciation for the year - (88) (496) (584)
Exchange rate differences - 1 138 139
Total cash payments for leases was $735,000 and $840,000 in 2024 and 2023, respectively.
Future minimum lease payments are as follows as of the balance sheet date: BALANCE AT DECEMBER 31, 2024 (1,098) (65) (2,518) (3,681)
CARRYING AMOUNT AT DECEMBER 31, 2023 304 271 752 1,327
Future minimum lease payments CARRYING AMOUNT AT DECEMBER 31, 2024 304 200 101 605
(USD 000’s) 2024 2023
Minimum lease payments at December 31 221 1,010
Asset residual at end of lease 147 183
Less: amount representing interest (30) (30)
TOTAL OBLIGATIONS UNDER LEASES 338 1,163
Obligations under leases due within one year 327 812
Obligations under leases due after one year 11 351
TOTAL OBLIGATIONS UNDER LEASES 338 1,163
NOTES ASETEK Annual report 2024 / Page 61
The Company’s CEO serves as Chairman of the Board for a vendor that supplies information technology ser- The Group’s principal auditors perform audits for all of Asetek’s entities except for the Xiamen, China sub-
vices to the Company. In 2024, the Company purchased services totaling $0.9 million ($0.8 million in 2023) sidiary, which is audited by a local firm. The Group’s principal auditors received a total fee of $415,000 and
from this vendor. At December 31, 2024 and 2023, the Company had outstanding payables to this vendor of $586,000 in 2024 and 2023, respectively.
$56,000 and $66,000, respectively. Fees for services other than statutory audits provided by PricewaterhouseCoopers Statsautoriseret Revi-
The Company sponsors and occasionally purchases equipment and other services from Valdemar Eriksen sionspartnerselskab to the group amount to $111,000 ($371,000 in 2023). Other assurance services in 2024
Racing A/S (“VER”), an organization partially owned by the Company’s CEO. In the years ended December 31, were principally review and verification of filings associated with the Company’s rights offering preparation
ing, U.S. tax structure considerations, and other miscellaneous services. Other assurance services in 2023
were principally financial review and verification of filings associated with the Company’s rights offerings and
to transfer pricing and other miscellaneous services.
The following entities are included in the consolidated accounts:
Voting The fee is distributed between these services:
Company Domicile Stake Share Activity (USD 000’s) 2024 2023
Asetek A/S Denmark 100% 100% Trading Audit 267 215
Asetek Holdings, Inc. USA 100% 100% Inactive Other assurance services 51 294
Asetek USA, Inc. USA 100% 100% Trading Tax services 88 62
Asetek Danmark A/S Denmark 100% 100% Trading Other services 9 15
Xiamen Asetek Computer Industry Co., Ltd. China 100% 100% Trading TOTAL 415 586
NOTES ASETEK Annual report 2024 / Page 62
The Company has evaluated the period after December 31, 2024 up through the date of the Management
Statement and determined that there were no transactions that required recognition in the Company’s
financial statements, except for the following:
On January 6, 2025, the Company issued 219,925,366 new common shares of stock in a rights offering
raising net proceeds of DKK 75.5 million, after deducting offering expenses of DKK 12.5 million (Net proceeds
of USD 10.5 million, after deducting offering expenses of USD 1.8 million). The shares were issued through
an offering to then-existing shareholders to purchase three common shares for each share held at a price of
DKK 0.40 per share, representing an approximate discount of 14% from fair market value. Incremental costs
incurred directly attributable to the share issuance will be recorded as an offset to equity in January 2025.
The transaction meets the requirements for exemption from accounting for derivative financial instruments
per IAS 32 Financial Instruments Presentation.
On January 27, 2025, in consideration of the dilution effect of the January rights offering, the Board of
Directors reduced the exercise prices of outstanding share options by 51%. The effect of this option repricing
is not expected to have a material impact to share-based compensation expense.
Debt collateral. In conjunction with the debt referenced in Note 19, Asetek’s creditors have secured the adverse judgment in any pending litigation could cause a material impact on the Group’s business opera-
following as collateral for the credit provided: The total loan amount of DKK 142.5 million (USD 20.0 million) tions, intellectual property, results of operations or financial position. In addition to the above, Asetek Group
at the Group level with Jyske Bank, representing DKK 137.5 million (USD 19.3 million) to Asetek A/S and DKK is engaged in various other ongoing cases. In the opinion of Management, neither settlement nor contin-
at Skjoldet 20, 9230 Svenstrup. The mortgage deed of DKK 140 million (USD 19.6 million) serves as collateral profit or cash flow.
for the loan commitments in both Asetek A/S and Asetek Danmark A/S. Asetek A/S has executed a guarantee The Company has challenged the Danish tax authorities in a matter related to the deductiblity of expens
to Jyske Bank for all outstanding matters with Asetek Danmark A/S. es related to stock options granted to certain employees of a subsidiary. The maximum tax exposure for the
Company is about $0.1 million. A formal complaint has been initiated and further proceedings are pending.
Legal proceedings. In the ordinary course of conducting business, the Company is involved in various intel- On September 30, 2024, Cooler Master Co., Ltd. filed a review petition with the Patent Trial and Appeal
lectual property proceedings, including those in which it is a plaintiff that are complex in nature and have Board (PTAB) of the U.S. Patent and Trademark Office to challenge the validity of Asetek’s ’681 patent. Asetek
outcomes that are difficult to predict. Asetek records accruals for such contingencies to the extent that it is will soon file an opposition to Cooler Master’s petition, explaining flaws in Cooler Master’s petition and
probable that a liability will be incurred, and the amount of the related loss can be reasonably estimated. requesting that the PTAB not institute trial on the petition. The PTAB will decide whether to institute trial
The Company’s assessment of each matter may change based on future unexpected events. An unexpected later in 2025. If the PTAB institutes trial, Asetek will have the opportunity to provide more fulsome briefing to
explain why the petition should be denied.
XXXXX ANNUAL REPORT 2024 / Page 58
PARENT COMPANY
FINANCIAL STATEMENTS
Comprehensive income statement,
parent company 64
Balance Sheet, parent company 65
Statement of changes in equity,
parent company 66
Statement of cash flows, parent company 67
Notes, parent company 68
FINANCIAL STATEMENTS, PARENT COMPAMY ASETEK Annual report 2024 / Page 64
COMPREHENSIVE INCOME STATEMENT, PARENT COMPANY
(USD 000’s) Note 2024 2023
Service fees 14 2,646 3,699
Rental income 7 507 –
TOTAL REVENUE 3,153 3,699
Research and development 3, 4 (52) (61)
Selling, general and administrative 3, 4 (4,065) (3,769)
Special items 3 (13,791) (847)
TOTAL OPERATING EXPENSES (17,908) (4,677)
OPERATING INCOME (14,754) (978)
Foreign exchange gain (loss) 6 947 (294)
Finance income 6 5 101
Finance costs 6 (1,414) (333)
TOTAL FINANCIAL INCOME (462) (526)
INCOME BEFORE TAX (15,216) (1,504)
Income tax (expense) benefit 10 (763) 58
INCOME FOR THE YEAR (15,979) (1,446)
TOTAL COMPREHENSIVE INCOME (LOSS) (15,979) (1,446)
FINANCIAL STATEMENTS, PARENT COMPAMY ASETEK Annual report 2024 / Page 65
BALANCE SHEET, PARENT COMPANY
(USD 000’s) Note 2024 2023 (USD 000’s) Note 2024 2023
ASSETS EQUITY AND LIABILITIES
NON-CURRENT ASSETS EQUITY
Investments in subsidiaries 11 20,100 20,100 Share capital 13 1,478 1,478
Property, plant and equipment 7 42,150 49,549 Retained earnings 43,264 58,961
Receivables from subsidiaries 12 – 337 Translation and other reserves (11,206) (11,206)
TOTAL NON-CURRENT ASSETS 62,250 69,986 TOTAL EQUITY 33,536 49,233
CURRENT ASSETS NON-CURRENT LIABILITIES
Other assets 446 999 Payables to subsidiaries 12 8,634 5,323
Cash and cash equivalents 49 183 Long-term debt 8, 9 17,998 –
TOTAL CURRENT ASSETS 495 1,182 TOTAL NON-CURRENT LIABILITIES 26,632 5,323
TOTAL ASSETS 62,745 71,168 CURRENT LIABILITIES
Short-term debt 8, 9 1,700 14,896
Accrued liabilities 437 153
Accrued compensation and employee benefits 299 65
Trade payables 141 1,498
TOTAL CURRENT LIABILITIES 2,577 16,612
TOTAL LIABILITIES 29,209 21,935
TOTAL EQUITY AND LIABILITIES 62,745 71,168
FINANCIAL STATEMENTS, PARENT COMPAMY ASETEK Annual report 2024 / Page 66
STATEMENT OF CHANGES IN EQUITY, PARENT COMPANY
Share Share Translation Treasury Retained
(USD 000’s) capital premium reserves share reserves earnings Total
EQUITY AT DECEMBER 31, 2022 444 – – (11,206) 44,785 34,023
Total comprehensive income for 2023
Income for the year – – – – (1,446) (1,446)
Total comprehensive income for 2023 – – – – (1,446) (1,446)
Transactions with owners in 2023
Shares issued in rights offering, net of issuance costs 1,034 15,108 – – 16,142
Transfer – (15,108) – – 15,108 –
Share-based payment expense – – – – 514 514
Transactions with owners in 2023 1,034 – – – 15,622 16,656
EQUITY AT DECEMBER 31, 2023 1,478 – – (11,206) 58,961 49,233
Total comprehensive income for 2024
Income for the year – – – – (15,979) (15,979)
Total comprehensive income for 2024 – – – – (15,979) (15,979)
Transactions with owners in 2024
Share-based payment expense – – – – 282 282
Transactions with owners in 2024 – – – – 282 282
EQUITY AT DECEMBER 31, 2024 1,478 – – (11,206) 43,264 33,536
FINANCIAL STATEMENTS, PARENT COMPAMY ASETEK Annual report 2024 / Page 67
STATEMENT OF CASH FLOWS, PARENT COMPANY
(USD 000’s) Note 2024 2023 (USD 000’s) Note 2024 2023
CASH FLOWS FROM OPERATING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES
Income (loss) for the year (15,979) (1,446) Lease payments on right-of-use assets 9 (63) (88)
Depreciation and amortization 7 407 86 Borrowings (repayment) on line of credit 8 5,790 (18)
Impairment of property, plant and equipment 7 13,791 – Proceeds from issuance of share capital 13 – 17,019
Share-based payments expense 4 282 514 Costs incurred for issuance of share capital 13 – (878)
Finance cost incurred 6 2,396 1,062 Financing of equipment 76 –
Finance cost, cash paid 6 (2,389) (1,058) NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 5,803 16,035
Income tax expense (income) 10 763 (58)
Effect of exchange rate changes on cash and cash equivalents (1,019) 482
Cash received (paid) for income taxes 10 (1,287) 841
NET CHANGES IN CASH AND CASH EQUIVALENTS (134) (1,426)
Changes in other assets 553 3,548
Changes in trade payables and accrued liabilities (322) (3,385) Cash and cash equivalents at beginning of period 183 1 609
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (1,786) 104 CASH AND CASH EQUIVALENTS AT END OF PERIOD 49 183
CASH FLOWS FROM INVESTING ACTIVITIES SUPPLEMENTAL DISCLOSURE - NON-CASH ITEMS
Purchase of property and equipment 7 (6,780) (22,985) Assets acquired under leases 152 273
Net receipts from (payments to) subsidiaries 12 3,648 4,938
NET CASH USED IN INVESTING ACTIVITIES (3,132) (18,047)
FREE CASH FLOW (4,918) (17,943)
NOTES, PARENT COMPANY ASETEK Annual report 2024 / Page 68
NOTES, PARENT COMPANY
quence of an assessed impairment within the cash generating units. This one-time charge is classifed as a
Regarding accounting policies, refer to Note 2 to the Consolidated Financial Statements. special item in operating expense on the income statement and was recorded as impairment of the Compa-
ny’s headquarters facility in property, plant and equipment. Refer to Note 2.22 in the consolidated financial
statements.
statements, the Company began transition of its shares for trading from Oslo Stock Exchange to Nasdaq Co-
The 2024 financial statements for Asetek A/S have been prepared in accordance with International Financial penhagen. Operating expense in 2023 includes $0.8 million of non-recurring costs associated with this listing
Reporting Standards (IFRS) as issued by IASB and adopted by the EU. change, classified as a special item in operating expense on the income statement.
The financial statements are presented in U.S. Dollars (USD), which is the functional currency.
The accounting policies for the Parent Company are the same as for the Asetek Group, as per Note 2 to 4. PERSONNEL EXPENSES
the consolidated financial statements, with the exception of the items listed below:
Total personnel costs by type for the year ended December 31
ividends on investments in subsidiaries, joint ventures and associates. Dividends on investments in (USD 000’s) 2024 2023
subsidiaries, joint ventures and associates are recognized as income in the income statement of the Salaries, pension and other 1,842 1,948
Parent Company in the financial year in which the dividend is declared.
Share-based payment 282 514
and associates are measured at the lower of cost or the recoverable amount. An impairment test on
the investment in subsidiaries is performed if the carrying amount of the subsidiaries’ net assets is
below the carrying value of the Parent Company’s investments in the consolidated financial state- Total personnel costs by classification in the income statement for the year ended December 31
ments.
(USD 000’s) 2024 2023
Research and development 52 61
TOTAL EXPENSES 2,124 2,462
Operating expenses consisted of the following for the year ended December 31
(USD 000’s) 2024 2023 The average number of employees in the Parent company is two for both years presented. The figures listed
Personnel expenses (Note 4) 2,124 2,462 above include a portion of the executive management’s cash compensation based on an estimate of the
actual resources allocated to the management of the Parent company. The figures include incentive-based
Legal, consultants and auditor 769 622
compensation in the form of share options and warrants granted to employees in the Asetek Group. Refer
Special items 13,791 847 to Notes 6 and 7 in the Consolidated Financial Statements for information regarding incentive compensation
Other expenses 1,224 746 programs and management remuneration.
TOTAL EXPENSES 17,908 4,677 Remuneration of the Group Board of Directors is specified in Note 6 to the Consolidated Financial
Statements. The Company’s share-based incentive pay program is described in Note 7 to the Consolidated
Financial Statements.
NOTES, PARENT COMPANY ASETEK Annual report 2024 / Page 69
Fees associated with the Parent company financial statements for services provided by the Company’s princi- In September 2024, the Company completed construction of its headquarters building and occupied it.
pal auditors were as follows: The Company is leasing sections of the building that are not occupied by Asetek and plans to continue to
(USD 000’s) 2024 2023 do so for three to five years and to subsequently occupy the entire facility thereafter. The sections leased
are contiguous with the premises occupied by Asetek and cannot be feasibly separated. As a result, the
Audit 189 157
asset is accounted for as a domicile property, recorded at cost and depreciated over its estimated useful
Other assurance services 51 294 life of 50 years. In 2024, the Company recorded an impairment charge of $13.8 million as a consequence of
Tax services 88 62 an assessed impairment within the cash generating units. Refer to Note 2.22 in the consolidated financial
Other services 7 14 statements.
TOTAL 335 527 As of December 31, 2024 and 2023, carrying value of vehicles under right-of-use leases totaled $181,000
and $195,000, respectively, and their associated leases are for terms of 12 months. Total property, plant and
Services other than statutory audit are described in Note 23 in the consolidated financial statements. equipment is specified as follows:
Vehicles and Land and Building under
Company software Building construction Total
Balance at January 1, 2023 158 2,493 23,854 26,505
(USD 000’s) 2024 2023 Additions 492 – 22,766 23,258
FOREIGN EXCHANGE GAIN (LOSS) 947 (294) Disposals (95) – – (95)
BALANCE AT DECEMBER 31, 2023 555 2,493 46,620 49,668
Interest income on loans to subsidiaries – 90 Balance at January 1, 2024 555 2,493 46,420 49,668
Interest from bank accounts 5 12 Additions 854 – 6,078 6,932
FINANCE INCOME 5 101 Transfer – 52,698 (52,698) –
Disposals (223) – – (223)
Interest cost on loans from subsidiaries (1,027) (326) BALANCE AT DECEMBER 31, 2024 1,186 55,191 – 56,377
Interest cost on line of credit (1,237) (698) ACCUMULATED DEPRECIATION:
Interest cost on leases and equipment financing (7) (4) Balance at January 1, 2023 (75) – – (75)
Other banking and finance fees (126) (34) Disposals 42 – – 42
Subtotal (2,396) (1,062) Depreciation for the year (86) – – (86)
Less: amount capitalized 982 729 BALANCE AT DECEMBER 31, 2023 (119) – – (119)
FINANCE COST (1,414) (333) Balance at January 1, 2024 (119) – – (119)
Impairment – (13,791) – (13,791)
Disposals 90 – – 90
Depreciation for the year (163) (244) – (407)
BALANCE AT DECEMBER 31, 2024 (192) (14,035) - (14.227)
CARRYING AMOUNT AT DECEMBER 31, 2023 436 2,493 46,620 49,549
CARRYING AMOUNT AT DECEMBER 31, 2024 994 41,156 - 42,150
NOTES, PARENT COMPANY ASETEK Annual report 2024 / Page 70
Asetek A/S has a long-term line of credit with Jyske Bank for DKK 137.5 million (USD 19.3 million) at Decem- Obligations under leases are as follows:
ber 31, 2024, with a temporary increase of DKK 1.6 million (USD 0.2 million) payable on January 2, 2025. This
line is secured by the mortgage deed for the Group’s land and building and carries interest at Danish CIBOR 3 (USD 000’s) 2024 2023
rate plus 2.45 percentage points which in total was 5.2% at December 31, 2024. The line specifies quarterly
Minimum lease payments as of December 31 5 15
payments of DKK 2.35 million (USD 329,000) and matures on March 31, 2028.
Asset residual value at end of lease 147 184
Less: amount representing interest (1) (3)
Net debt is as follows at December 31: TOTAL OBLIGATIONS UNDER LEASES 151 196
(USD 000’s) 2024 2023
Total lease obligations due within one year were $151,000 and $196,000 at December 31, 2024 and 2023,
Line of credit - amounts due within one year (1,537) (14,700)
respectively. Operating expenses associated with leases of one year or less are not significant.
Leases - amounts due within one year (151) (196)
Equipment financing -amounts due within one year (12) –
DEBT INCLUDED IN CURRENT LIABILITIES (1,700) (14,896) 10. INCOME TAX
Line of credit - amounts due after one year (17,934) –
Equipment financing - amounts due after one year (64) – At December 31, 2024 and 2023, the tax benefit (provision) for Asetek A/S differed from the statutory tax
rate principally as a result of impairment charges and share compensation expenses that are treated differ-
TOTAL DEBT (19,698) (14,896)
ently for tax purposes.
Cash and cash equivalents 49 183
NET DEBT (19,649) (14,713)
(USD 000’s) 2024 2023
INCOME BEFORE TAX (15,216) (1,504)
Reconciliation of line of credit Tax calculated at domestic rates applicable to profits/losses in respective 3,348 331
countries
(USD 000’s) 2024 2023
Differences between book and tax (4,111) (273)
Beginning balance (14,700) (14,236)
INCOME TAX (EXPENSE) (763) 58
Net paid (drawn) on line of credit (5,790) 18
Foreign exchange impact 1,018 (482)
ENDING BALANCE, LINE OF CREDIT (19,471) (14,700) 11. INVESTMENT IN SUBSIDIARIES
Investment in
(USD 000’s) Asetek Holdings, Inc.
Balance at December 31, 2023 20,100
Additions –
Balance at December 31, 2024 20,100
CARRYING AMOUNT AT DECEMBER 31, 2023 20,100
CARRYING AMOUNT AT DECEMBER 31, 2024 20,100
Asetek A/S acquired 100% of Asetek Holdings, Inc. through the exchange of shares in February 2013. At the
time of acquisition, Asetek Holdings, Inc. had negative net equity, resulting in the initial investment to be
valued at zero. Asetek Holdings, Inc. represents Asetek A/S’s only direct investment in subsidiaries.
NOTES, PARENT COMPANY ASETEK Annual report 2024 / Page 71
Net receivables is as follows at December 31: Refer to Note 24 to the consolidated financial statements.
(USD 000’s) 2024 2023
Asetek Danmark A/S (7,220) (5,323) 16. CONTINGENT LIABILITIES
Asetek USA, Inc. (1,541) 135 The Danish group enterprises are jointly and severally liable for tax on group income subject to joint taxation,
Asetek Xiamen 31 109 as well as for Danish withholding taxes by way of dividend tax, royalty tax, tax on unearned income and any
Asetek Holdings, Inc. 96 93 subsequent adjustments to these. Asetek A/S has executed a guarantee to its Group’s principal bank, Jyske
NET DUE FROM (TO) SUBSIDIARIES (8,634) (4,986) Bank, for all outstanding matters with its wholly owned subsidiary, Asetek Danmark A/S. Refer to Note 25 to
the Consolidated Financial Statements.
AVERAGE EFFECTIVE INTEREST RATE 10.3% 10.2%
During construction of the headquarters facility, Asetek Danmark A/S maintained a line of credit to support
financing of the building for Asetek A/S. The total outstanding on this line of credit was $0 and $1.5 million as
of December 31, 2024 and 2023. Refer to Note 19 in the consolidated financial statements. Borrowing costs
of $0.4 million and $0.4 million incurred in 2024 and 2023, respectively, on the Asetek Danmark A/S line of
credit are included as capitalized cost of the building.
Refer to Note 18 to the Consolidated Financial Statements.
Asetek A/S charges its subsidiaries a management service fee. Reference Notes 6 and 12 regarding trans-
actions with subsidiaries. With regard to transactions with related parties that are not subsidiaries, refer to
Note 21 to the consolidated financial statements.
MANAGEMENT STATEMENT ASETEK Annual report 2024 / Page 72
MANAGEMENT STATEMENT
The Board of Directors and Executive Board have today considered and adopted the Annual Report of Asetek In our opinion, Management’s Review includes a fair review of the development in the operations and
A/S for the financial year 1 January – 31 December 2024. financial circumstances of the Group and the Parent Company, of the results for the year and of the financial
The Consolidated Financial Statements and the Parent Company Financial Statements have been pre- position of the Group and the Parent Company as well as a description of the most significant risks and ele-
pared in accordance with IFRS Accounting Standards as adopted by the EU and further requirements in the ments of uncertainty, which the Group and the Parent Company are facing.
Danish Financial Statements Act. Management’s Review has been prepared in accordance with the Danish In our opinion, the annual report of Asetek A/S for the financial year 1 January to 31 December 2024 with
Financial Statements Act. the file name Asetek-2024-12-31-en.zip is prepared, in all material respects, in compliance with the ESEF
In our opinion, the Consolidated Financial Statements and the Parent Company Financial Statements give Regulation.
a true and fair view of the financial position at 31 December 2024 of the Group and the Parent Company and We recommend that the Annual Report be adopted at the Annual General Meeting.
of the results of the Group and Parent Company operations and cash flows for 2024.
Aalborg, Denmark
March 7, 2025
Executive Board
André S. Eriksen Peter Dam Madsen
CEO CFO
Board of Directors
René Svendsen-Tune Erik Damsgaard
Chairman Vice chairman
Jukka Pertola Anja Monrad
Member Member
INDEPENDENT AUDITOR’S REPORTS ASETEK Annual report 2024 / Page 73
INDEPENDENT AUDITOR’S REPORTS
To the shareholders of Asetek A/S
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Our opinion
In our opinion, the Consolidated Financial Statements and the Parent Company Financial Statements give a true and fair view of the Group’s and the Parent Compa-
ny’s financial position at 31 December 2024 and of the results of the Group’s and the Parent Company’s operations and cash flows for the financial year 1 January to
Our opinion is consistent with our Auditor’s Long-form Report to the Audit Committee and the Board of Directors.
What we have audited
The Consolidated Financial Statements and Parent Company Financial Statements of Asetek A/S for the financial year 1 January to 31 December 2024 comprise in-
come statement and statement of comprehensive income, balance sheet, statement of changes in equity, cash flow statement and notes, including material account-
ing policy information for the Group as well as for the Parent Company. Collectively referred to as the “Financial Statements”.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities
under those standards and requirements are further described in the Auditor’s responsibilities for the audit of the Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance with the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Account-
ants (IESBA Code) and the additional ethical requirements applicable in Denmark. We have also fulfilled our other ethical responsibilities in accordance with these
requirements and the IESBA Code.
To the best of our knowledge and belief, prohibited non-audit services referred to in Article 5(1) of Regulation (EU) No 537/2014 were not provided.
Appointment
Following the admission of the shares of Asetek A/S for listing on Oslo Stock Exchange, we were first appointed auditors of Asetek A/S on 24 April 2014 for the finan-
cial year 2014. We have been reappointed annually by shareholder resolution for a total period of uninterrupted engagement of 11 years including the financial year
INDEPENDENT AUDITOR’S REPORTS ASETEK Annual report 2024 / Page 74
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Statements for 2024. These matters
were addressed in the context of our audit of the Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Key audit matter
Capitalization of development costs How our audit addressed the key audit matter
The Group capitalizes development costs when certain criteria according to IFRS We assessed whether the Group’s accounting policies are in accordance with
are met. The criteria for recognition and measurement of development costs IFRS Accounting Standards.
are subject to Management’s judgment and assumptions, which is uncertain by
nature. Completed development projects are assessed for impairment indica- We carried out risk assessment procedures in order to obtain an understanding
tions. For in-progress development projects impairment tests are performed at of IT systems, business processes and relevant controls regarding capitalized de-
least annually. The impairment tests are based on the strategy plan approved by velopment costs. For the controls, we assessed whether they were designed and
Management and value-in-use calculations based on expected future cash flows. implemented to effectively address the risk of material misstatement.
We selected a sample of in-progress development projects and considered
We focused on this area because the criteria for recognition and measurement whether all criteria described in IFRS Accounting Standards were met as basis for
of development projects are subject to Management judgments and assump- capitalization.
tions. Refer to note 14 in the Consolidated Financial Statements.
We evaluated and challenged Management’s assessment of impairment indica-
tors of completed development projects based on the commercial prospects of
the projects. For in-progress development projects and projects with impairment
indicators, we challenged the key assumptions applied in the value-in-use cal-
culations. Our work was based on our understanding of the business cases and
significant assumptions applied.
We challenged whether the intent to finalize the projects remain and whether
the projects are expected to generate future economic benefits exceeding the
carrying values.
INDEPENDENT AUDITOR’S REPORTS ASETEK Annual report 2024 / Page 75
Key audit matter
Impairment of non-current assets How our audit addressed the key audit matter
During 2024, Management identified impairment indicators for the Group. As part of our audit, we considered the appropriateness of the CGUs defined by
Consequently, Management prepared impairment tests resulting in impairment Management and the methodology used by Management to assess the carrying
losses recognized for the Group’s property, plant and equipment. amount of the non-current assets assigned to CGUs.
The impairment tests are based on Management’s assumptions of expected cash We performed detailed testing of Management’s impairment tests for the CGUs,
inflows and outflows for the individual cash-generating units (CGUs). The impair- and challenged the significant assumptions affecting the future cash flows, in-
ment tests are prepared as value-in-use calculations for the individual CGUs. cluding assumptions related to revenue growth, margins and operating expenses
as well as the discount rate.
The significant assumptions in estimating the future cash flows are Manage-
ment’s outlook for revenue growth rates, margins and operating expenses, as We used our internal valuation specialists to independently challenge the dis-
well as Management’s determination of the discount rate. count rate used. In calculating the discount rate, the key inputs used were inde-
pendently sourced from market data, and we assessed the methodology applied.
We focused on this area because the impact on the profit for the year is signif- Further, we tested the mathematical accuracy of the impair-ment models pre-
icant, and because the impairment tests of non-current assets are considered pared by Management.
complex non-routine transactions and require significant judgments in determin-
ing the assumptions. Finally, we assessed the adequacy of disclosures provided by
Management in the Financial Statements.
Reference is made to notes 2.22 and 15 in the Consolidated Financial State-
ments.
INDEPENDENT AUDITOR’S REPORTS ASETEK Annual report 2024 / Page 76
Statement on Management’s Review
Management is responsible for Management’s Review.
Our opinion on the Financial Statements does not cover Management’s Review, and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Financial Statements, our responsibility is to read Management’s Review and, in doing so, consider whether Management’s Re-
view is materially inconsistent with the Financial Statements, or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
Moreover, we considered whether Management’s Review includes the disclosures required by the Danish Financial Statements Act.
Based on the work we have performed, in our view, Management’s Review is in accordance with the Consolidated Financial Statements and the Parent Company
Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstate-
ment in Management’s Review.
Management’s responsibilities for the Financial Statements
Management is responsible for the preparation of consolidated financial statements and parent company financial statements that give a true and fair view in
accordance with IFRS Accounting Standards as adopted by the EU and further requirements in the Danish Financial Statements Act, and for such internal control as
Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the Financial Statements, Management is responsible for assessing the Group’s and the Parent Company’s ability to continue as a going concern, disclos-
ing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Group or the
Parent Company or to cease operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or
error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of these Financial Statements.
As part of an audit in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the pur-
pose of expressing an opinion on the effectiveness of the Group’s and the Parent Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management.
INDEPENDENT AUDITOR’S REPORTS ASETEK Annual report 2024 / Page 77
Conclude on the appropriateness of Management’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material un-
certainty exists related to events or conditions that may cast significant doubt on the Group’s and the Parent Company’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the Financial Statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group or the Parent Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the Financial Statements, including the disclosures, and whether the Financial Statements represent the
underlying transactions and events in a manner that gives a true and fair view.
Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the group
as a basis for forming an opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and review of the audit work performed
for purposes of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to commu-
nicate with them all relationships and other matters that may reasonably be thought to bear on our independence and, where applicable, actions taken to eliminate
threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Financial
Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter.
Report on compliance with the ESEF Regulation
As part of our audit of the Financial Statements we performed procedures to express an opinion on whether the annual report of Asetek A/S for the financial year
Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) which includes requirements related to the preparation of the annual report in
XHTML format and iXBRL tagging of the Consolidated Financial Statements including notes.
Management is responsible for preparing an annual report that complies with the ESEF Regulation. This responsibility includes:
• The preparing of the annual report in XHTML format;
• The selection and application of appropriate iXBRL tags, including extensions to the ESEF taxonomy and the anchoring thereof to elements in the taxonomy, for all
financial information required to be tagged using judgement where necessary;
• Ensuring consistency between iXBRL tagged data and the Consolidated Financial Statements presented in human-readable format; and
• For such internal control as Management determines necessary to enable the preparation of an annual report that is compliant with the ESEF Regulation.
INDEPENDENT AUDITOR’S REPORTS ASETEK Annual report 2024 / Page 78
Our responsibility is to obtain reasonable assurance on whether the annual report is prepared, in all material respects, in compliance with the ESEF Regulation based
on the evidence we have obtained, and to issue a report that includes our opinion. The nature, timing and extent of procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material departures from the requirements set out in the ESEF Regulation, whether due to fraud or error. The
procedures include:
• Testing whether the annual report is prepared in XHTML format;
• Obtaining an understanding of the company’s iXBRL tagging process and of internal control over the tagging process;
• Evaluating the completeness of the iXBRL tagging of the Consolidated Financial Statements including notes;
• Evaluating the appropriateness of the company’s use of iXBRL elements selected from the ESEF taxonomy and the creation of extension elements where no suita-
ble element in the ESEF taxonomy has been identified;
• Evaluating the use of anchoring of extension elements to elements in the ESEF taxonomy; and
• Reconciling the iXBRL tagged data with the audited Consolidated Financial Statements.
In our opinion, the annual report of Asetek A/S for the financial year 1 January to 31 December 2024 with the filename Asetek-2024-12-31-en.zip is prepared, in all
material respects, in compliance with the ESEF Regulation.
In our opinion, the annual report of Asetek A/S for the financial year 1 January to 31 December 2024 with the filename Asetek-2024-12-31-en.zip is prepared, in all
material respects, in compliance with the ESEF Regulation.
Aalborg, 7 March 2025
PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
CVR no 33 77 12 31
Mads Melgaard Line Borregaard
State Authorised Public Accountant State Authorised Public Accountant
mne34354 mne34353
DEFINITION OF RATIOS AND METRICS ASETEK Annual report 2024 / Page 79
DEFINITIONS OF RATIOS AND METRICS
Asetek uses various metrics, financial and non-financial ratios which provide shareholders with useful
information about the Group’s financial position, performance and development.
PROFIT & LOSS STOCK MARKET
Adjusted EBITDA Operating income + amortization & depreciation Earnings per share, basic Refer to Note 12 of the Consolidated financial statements
+ share-based compensation + special items
Earnings per share, diluted Refer to Note 12 of the Consolidated financial statements
Gross margin Gross profit / Revenue
Share price to earnings Share price / DKK to USD exchange rate / Earnings per share,
Operating margin Operating income / Revenue diluted. If earnings is negative, not reported.
Return on Invested Income for the year / Invested capital Market capitalization (Shares issued – Treasury shares) x (Share price in DKK /
Capital (ROIC) DKK to USD exchange rate)
Organic growth (Revenue current year – Comparable revenue* prior year) / Comparable
revenue* prior year
BUSINESS DRIVERS
Average selling price per unit, Liquid cooling revenue / Sealed loop units shipped
BALANCE SHEET Liquid Cooling
Invested capital Equity raised from sale of shares and conversion of Revenue per employee Revenue / Number of employees
debt + interest bearing debt
Quick ratio (Cash and cash equivalents + Trade receivables and other) /
Total Current Liabilities
Current ratio Total current assets / Total current liabilities
Days sales outstanding Trade receivables / (Revenue / 365 days)
Inventory turns per year Cost of sales / (beginning inventory + ending inventory / 2)
Days payable outstanding Trade payables / (Cost of sales / 365 days)
Debt to equity Interest-bearing debt / Total equity
* Comparable revenue excludes changes in revenue attributable to foreign exchange rates and any acquisitions or divestments.
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