Aalborg, Denmark - August 03, 2022 - Asetek A/S today provided an update to its
full-year 2022 revenue and operating income expectations and on recent
operational developments:
· Full-year guidance temporarily suspended due to reduced visibility on OEM
customer and end-user demand for Gaming & Enthusiast products as rising
inflation and interest rates add to a continued uncertain and challenging
business climate
· Organizational rightsizing implemented to reduce operating costs and improve
efficiency
· Allocating resources to accelerate SimSports product development
· Preliminary second quarter revenue of $17 million and operating income of $0
million
Rising inflation and interest rates have recently added to the continued impact
of pandemic lockdowns, supply chain disturbances and general geo-political
tensions, delaying a normalization of the business climate. The effects are
reduced discretionary consumer spending with decreased demand for the Company's
Gaming & Enthusiast products. In addition, the Company experiences reduced
visibility, caused by significantly increased volatility, in the forecasts
provided by OEM customers for the second half of the year.
Due to the increased uncertainty, the Company has suspended its revenue and
operating income guidance for 2022, beyond that revenue and operating income
will likely be below previously communicated expectations. Previous guiding
framed a revenue development in the range between a 5% decrease and 15%
increase, and operating income in the range from -$1 to +$5 million. The Company
will resume guidance when it has a more certain basis for providing full-year
expectations.
"Inflation and rising interest rates are directly affecting demand and adds to
the lingering headwinds and supply chain disturbances created by shutdowns in
China, shipping bottlenecks and the invasion of Ukraine. The weaker market
outlook and probable OEM inventory reductions for our Gaming & Enthusiast
products has led to reduced visibility going forward and our decision to
temporarily suspend guidance," said André Sloth Eriksen, CEO and founder of
Asetek. "Despite being part of an industry with volatile markets and varying
visibility, Asetek has over time provided guidance to ensure transparency around
future expectations. In the current extraordinary environment, we need to be
transparent when it comes to the shorter-term uncertainty related to our full
-year 2022 numbers. We do however expect to make a loss this year, leading us to
optimize our cost base as announced today", Sloth Eriksen added.
To reduce costs and drive efficiencies, the company has laid off 52 full-time
employees in Asia, the US and Denmark, with an expected annual cost reduction of
$4 to $5 million with full effect during the second half of the year. The staff
reduction affects all business segments. The company does not expect to book any
material related non-recurring costs.
As SimSports and Gaming & Enthusiast end customers largely are part of the same
population, the temporary decrease in demand is experienced in both businesses.
The company has limited ability to impact its Gaming & Enthusiast OEM customers'
enduser demand and inventories, but possibly a stronger ability to impact the
customers in the SimSports segment. As such, Asetek has allocated development
resources from that segment to SimSports to accelerate product development. The
company aims to expand its product program with several new products such as
pedals, wheelbases and steering wheels later in 2022 and in 2023. This follows
the positive market reception of the Invicta and Forte sim racing pedal sets
launched earlier this year.
"The continued logistics, component and COVID-19 issues also had a negative
impact on our SimSports revenue this year. On top of this, end-user demand has
temporarily softened. We fully expect this to recover despite the overall market
challenges that everyone currently is facing. Asetek continue to receive strong
end-user feedback and acclaim from the sim racing community which is reflected
in real incoming orders. We now see an opportunity to accelerate product
development within SimSports as we move towards becoming a next-level immersive
gaming experiences provider," said André Sloth Eriksen.
The Company will release its second quarter and report for 2022 on August 11.
Preliminary figures indicate second quarter revenue of $17 million and operating
income of $0 million.
For questions or further information, please contact:
CEO and Founder André S. Eriksen, +45 2125 7076, email: ceo@asetek.com
CFO Peter Dam Madsen, +45 2080 7200, email: investor.relations@asetek.com
About Asetek:
Asetek (ASTK.OL), a global leader in mechatronic innovation, is a Danish garage
-to-stock-exchange success story. Founded in 2000, Asetek established its
innovative position as the leading OEM developer and producer of the all-in-one
liquid cooler for all major PC & Enthusiast gaming brands. In 2013, Asetek went
public while expanding into energy-efficient and environmentally friendly
cooling solutions for data centers. In 2021, Asetek introduced its line of
products for next level immersive SimSports gaming experiences. Asetek is
headquartered in Denmark and has operations in China, Taiwan and the United
States.
This information is considered to be inside information pursuant to the EU
Market Abuse Regulation and is subject to the disclosure requirements pursuant
to Section 5-12 the Norwegian Securities Trading Act. This stock exchange
release was published by Peter Dam Madsen, CFO at Asetek A/S, on August 03, 2022
at 20:30 CEST.