Following the suspension of guidance for 2024 announced on 11 June, the Company has analyzed the latest available purchase forecasts from the largest OEM customers and conducted a review of operations, resulting in:
- Updated full-year guidance reflecting weaker customer demand and increased price pressure in the liquid cooling market
- SimSports growth expectations unchanged
- Measures implemented to right size organization and management, including scaling down US operation
-
Preliminary second quarter 2024 revenue of
$13 million - Agreement on an extension of the existing financing agreement and updated covenants with the Company's bank
The updated 2024 Group revenue expectation implies a decrease of 28% to 32% compared to 2023 with an adjusted EBITDA margin of 1% to 4%. The previous revenue development expectation was in the range of -5% to 5% with an EBITDA margin of 12% to 17%, as communicated in the Q1 2024 report.
Liquid Cooling business segment
Full-year revenue for the Liquid Cooling business segment is expected to decrease in the range of 35% to 40% compared to 2023, corresponding to 2024 revenue in the range of
The new guidance follows a detailed review of the majority of the Company's customers after the
In 2025,
The liquid cooling business segment is expected to continue to be profitable for the full year 2024 and beyond. After 2024, the Company expects that the profits generated from the liquid cooling business segment may not be sufficient to fully finance the planned investments in the fast-growing SimSports business.
SimSports business segment
Guidance for the SimSports business segment is unchanged, with an expected revenue growth between 40-60% in 2024 compared to 2023, corresponding to revenue in the range of
The SimSports business has solid long-term growth opportunities based on an attractive product range, superior customer service and a strong brand name. Investment in SimSports product development, sales and marketing, and brand building is expected to continue in the second half of 2024 and beyond to capitalize on the strong growth opportunities. The impact on EBITDA of the investments is reflected in the 2024 Group margin expectation. In line with the strategy to launch a competitive mass-market product line in the first half of 2025, a new position as interim Commercial Lead in the SimSports business segment has been established. The Commercial Lead will support the product launch and execute the go-to-market strategy for the mass market segment.
Cost saving program
Against the background of weaker customer demand and increased price pressure in the market,
Starting with full effect from the first quarter of 2025, the cost reduction program is expected to generate annual cost savings of approximately
"We are experiencing a sudden and unexpected perfect storm of several factors impacting our liquid cooling business. We are taking immediate and significant steps to reduce our cost base to support profitability, and thereby increasing the ability to continue the planned investments in our SimSports operations. The measures to reduce cost are necessary, but I am saddened by the impact on many people in our organization. I would like to thank all of them for their contribution.
Through dialogue with our bank, we have agreed on a new financing agreement that secures our credit facilities and is better adapted to the current market situation. We are continuing to monitor the development closely and are ready to take further actions if needed. We remain fully confident in the long-term potential in both our business segments", CEO
For questions or further information, please contact:
Head of Investor Relations,
About
www.asetek.com
https://news.cision.com/asetek/r/asetek-updates-2024-outlook-and-initiates-cost-saving-program,c4009656
https://mb.cision.com/Main/6758/4009656/2895683.pdf
(c) 2024 Cision. All rights reserved., source