Good day, and welcome to the Asetek Q3 2023 financial report and earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question- and- answer session. If you would like to ask a question during this time on the phone, simply press star- one, followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one -again. I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome Peter Madsen, CFO, to begin the conference. Peter, over to you. Thanks, operator, and welcome to the audience to this Asetek Q3 2023 financial reporting earnings call. My name is Peter Dam Madsen, I'm the CFO, and I'm joined here by André Eriksen, our founder and CEO. Hello, André. Good afternoon. Good afternoon. A little bit of housekeeping first. We'll go through the presentation. When we're done with that, we'll open up for a Q&A session. You will have either the option to call in via cell or via phone line, or maybe easier, you can type in your questions in the app or the website you are on, and then we'll get to those questions one by one. So the board met with the full management group yesterday for a full day of strategy meetings, et c., and then that meeting this morning then turned into a more traditional board meeting. The board approved the presentation that we're about to give now and the press release that we released earlier today. With that, André, I'll hand over the microphone to you for the highlights. Yes. So the highlights of Q3, we had a revenue of $20.5 million, up 96% compared to the same period of last year. Gross margins of 46%, compared to 42%, also same quarter last year, and adjusted EBITDA of $4.8 million, compared with a loss of $0.6 million last year. SimSports revenue of $1.2 million in the quarter, compared with $0.5 million, same quarter last year, and a nine-month revenue increase of 45% to just shy of $60 million and an EBITDA of shy of 14 versus a loss of, yeah, a loss of $0.2 million last year. Our newest OEM, Lian Li, launched their first high-end liquid cooler with our technology. In terms of guiding, we maintain our previous guiding with a little bit of precision in terms of the income that we have narrowed into a window of between $8 million and $9 million. A little bit about what we see right now as a business. I would say the headline is low visibility and continued market challenges. That may seem a bit odd with the results that we have just launched, but nevertheless, I would say during the year and up until now, we have seen and we see a strong interest and a positive feedback for our products in both sectors. We are seeing and have seen a market improvement, of course, that's reflected in our numbers, but it's also reflected in the number of orders we get and the execution of product launch plans with our customers. Our recent forecasts indicate a normal business activity for some of our customers, but there's also still a lot of up and down and volatility. We see a nice increase in our sim racing shipments on the back of our rollout, but I would also say the pace is impacted by the challenging consumer markets right now. That's no secret, and I think that can be read in our competitors' reports as well. We are successfully building a strong brand, and we are rapidly expanding in the sim racing community, so that's nice. In terms of what we do and what we continue to do, is that we continue to develop new and relevant products. That's true for both segments. We focus a lot on efficiency, supply chain, capacity and capabilities. We are continuing shipments from Malaysia with our current contract manufacturers. We also set up a new contract manufacturer that's now operational in Malaysia, starting with pedal builds. I would say, almost needless to say, the geopolitical events, high inflation, rising interest rates is obviously having an impact, a negative impact on our business. The thing is that a lot of people, they don't think that a liquid cooling device for some hundred dollars, it's a luxury goods, but it actually is because it goes into a $3,000-$5,000 gaming machine. So for sure, for sure, we can see and feel what's going on in the world right now. And the way we see it is that we, as always, I would say, have limited visibility, perhaps even more limited right now, and there is a high volatility in the forecasts. Changing gears a little bit, you can see the graphic representation of the revenue here in Q3 and also a very nice EBITDA margin. And just to recap why we are here, we are here to talk about gaming devices. That's what we do. We have two different segments, you could call it. One is the sim racing, what we call Asetek SimSports, and then we have liquid cooling that can be divided into two soft segments. One is pure OEM for gaming PCs, so Dell Alienware is the most well-known of that. And then we have the do-it-yourself parts, where we also sell OEM, but to customers who is taking our products, so to speak, and put into their own packaging and sell it directly to consumers who are then building their own gaming PC versus buying a gaming PC. I will not spend a lot of time on this slide, other than for those of you who are new, can see we are a global company, and some of the recent developments is our Malaysia manufacturing plant and contract manufacturer. I went there myself quite recently, actually, to check it out. If we dive a little bit deeper into the liquid cooling business, let's start with the money side. I almost dare to say, during the last four years, we have accumulated roughly $80 million in EBITDA, so I think it's important to remind ourselves that the liquid cooling business is actually a very strong cash generator. In 2023, as I already mentioned, there's been a high activity on product launches, and that's always a good sign because that means our customers are busy launching new products. And in Q3, we started shipping seven new products, of which four of them featured our latest and greatest eighth generation technology. We expect around eight new products to start shipping in Q4, and we, of course, continue investing in product development and branding to expand our reach to customers, of course. Our newest OEM customer is Lian Li. We finally launched the first product with them. You can see it on the right side, the Galahad II. We are currently shipping to plus 20 OEMs. Top five represented 90% of the revenue the last 12 months, versus 85% in 2022 as a full year. Of course, as always, our ambition is to increase diversification and lessening the dependence on one single customer. We do expect our new partner, new customer, Lian Li, to be a top five customer relatively soon. Not much have changed on what it is we're doing and what we're planning to do. The goal, of course, as always, is to develop our leadership in the liquid cooling market, in the enthusiast liquid cooling market. How do we do that? We develop exciting and great products with great quality, trying to expand existing customers as well as building new OEM relationship, and of course, also letting our customers and end user know who we are. The development and outlook is that, yeah, we focus on what we're good at, that's doing the core liquid cooling solution. We ramp up new developments, new innovations. We keep doing that, and of course, always trying to be on top of the performance, performance being thermal performance, acoustic performance, quality and reliability, of course. If we dive a little bit into the SimSports portion, we have been on a mission for the last two years, and the mission is quite simple to understand. That is, we want to have a full product program or a full ecosystem, and the latest and greatest within that is we released our quick release adapter in the quarter, in Q3. And what that does is it basically enables end users to use steering wheels from other manufacturers. And as I said before, to me, if an end user buys our wheelbase and combine it with a competitor wheel, to me, that's not a lost sale of a steering wheel. To me, that's a gain sale of a wheelbase. So, very happy that we finally got that out. This year alone, we have released up until now 13 new products, so it's fast-paced. We have another 8 new products to be released in this quarter. It's basically 2 button boxes and 6 different wheel rims. We had a Q3 revenue, as already said, of $1.2 million, and I would say the gross margins, they still reflect that this is a very fast-paced start-up. And what I mean by that is typically to have something to sell, we fly it in rather than ship it in with a boat. And of course, there is a cost penalty associated with that. But that's a penalty we are willing to accept for the time being. The focus, of course, is to establish profitability as soon as we can. But as I alluded to earlier, it's also no secret that right now the market is soft for spending EUR 3,000, EUR 4,000 EUR on a simulator. I'm not sure I understand why, but it's not on the top of everybody's list right now. We were just here in October at the Sim Racing Expo in Dortmund. I personally like going to trade shows. It's nice to see the customers, in this case, end users in eye height, of course, also resellers and press. I would say that you can't win a business on having the largest booth or the greatest booth, but for sure, I would say we have the best booth and the most professional showing at the entire show. And I think that's important when you build a new brand and a high-end brand. And we had really great feedback from the audience. And I would say that our stand was occupied for all the opening hours for all the days. I would say that the trade show in itself was a success. No different from the liquid cooling. Our goal, of course, is to be the market leader. We are far from that, yet, but we are working on it. And the strategy for those of you who've been here for a while knows that it's really about leveraging the capabilities we already have in the company, both in terms of product development, but also supply chain and manufacturing. And then, of course, we want the Sim Sports business to be every bit as profitable as the liquid cooling business. So far, so good. We have released a lot of new products, and I would say later this year, I think we will be able to claim that we finally have a full ecosystem. It's still high-end products, only, I would say, but, but nevertheless, it's now possible for an end user to come and buy all the essentials that's needed to build a simulator. And, let's just remind ourselves that all of this basically happened during the last 24 months. So, that's actually a development I'm really proud of. And with that, we go to the financials, Peter. Yes, sir. Thank you, André. We are happy today to report a very strong Q3. $20 million of revenue on the top line in Q3 versus $10 million, same quarter last year. That's 96% up. For the year as such, we had $59.7 million, almost $60 million versus $41 million last year. That is 45% up. So all in all, a very strong comeback on the revenue. Gross profit in dollars obviously is up in the same way. I'll come back a little bit later to the gross margins. Quick comment on the revenue still. We sold 329,000 units in Q3. That's 112% more than the same quarter last year, and 921,000 units year to date, which is 44% up compared to last year. Out of the revenue I mentioned, as also Andre said, $1.2 million is coming from SimSports versus $500,000 in the same quarter last year. Split over basically three product groups. I'll come back to the gross profit, profits, I'll promise you that. Other operating expenses for the quarter, $6 million, I should say $6.1 million versus $6.1 million last year, so flat. Keep in mind, though, as a little bit, a little bit of a tidbit, extra information here, we capitalized $400,000 less this year, compared to the same quarter last year, meaning the cash effect of our operating expenses is $400,000 less this year than it was last year, which reflects the savings efforts we've got been going through over the last year or so. And those savings exercises, they are also more obviously clear when we look at year-to-date operating expenses at $18.5 million versus $20.3 million last year. If we take the special items out of this equation, the special items here, that's the money we spent on moving our share from Oslo to Copenhagen of $870,000. It's a savings or a reduction of 12% year- to- date this year versus last year. So that brings us to the operating income, which was $3.3 million for the quarter, versus $1.7 million same quarter last year in the negative. So that's an improvement of $4.9 million. Not bad, I would say. For the nine months accumulated, we are at $8.4 million in the positive, versus $3.5 million in the negative same period last year. That's $11 million, almost $12 million of improvement on that line. Financing income calls for an explanation, $720,000 of income. That comes all of it from a foreign exchange rate related adjustment of our construction line. So you will probably know that we are in the midst of constructing a new domicile, and that construction line is denominated in Danish kroner, while we are operating and reporting as a company in U.S. dollars. All in all, pre-tax income of $4 million, versus $1 million of loss last year, or $8.7 million for the period as a whole. Net all in all, is $0.03 of income per share for the quarter and $0.09 for the income per share for the year as such. If you want to dive more into details, please feel free to follow the link in the very left bottom of the slide, with blue text. I don't believe that the data is updated as per now, but they will be later today. We're just waiting for the American provider to get out of bed, so to speak. I promised you further comments on the gross margins. Q3 2023 gross margins, a combined business of 45.9% versus 42.5% the same quarter last year. Of course, as you can see the graphics to the left, the same goes for the accumulated number, where we are at 45.2% versus 41% in the same period last year. Things are looking quite well on this line here. It's this, the reason behind it are the same components as we've been mentioning before. We have been lucky. If you could scroll like that, yeah, we should scroll like that, like that. F rom the impact of foreign exchange rates, China, RMB versus U.S. dollars, our reporting currency, where we've been so supported by a favorable exchange rate there. And we don't see that so much anymore. If you look into the foreign exchange rates, you will see that currency cross has stabilized over the last few months, so we don't expect much more improvement coming from the foreign exchange rate at this point. However, we all know foreign exchange rates is something you cannot predict very well, but so but that's how it stands right now. Other components are cost price increases and optimizations of our designs, etc., to improve our gross margins. And that work started significantly last year as an initiative to improve our business case in total. Of course, there's always a lag in these things, and we are certainly harvesting the fruits of those efforts during this year. Balance sheet. We have $7.3 million in the bank at this point. You know, we went through a rights issue, where we raised $16.1 million early in the year. We've been spending that money, if you could say so, on investment in our HQ. We spent $3.6 million on that investment in Q3 alone, and $18.4 million for the year as a whole at this point. And then we have also been spending money on increasing our working capital, especially when it comes to inventories, and we have been paying down the construction line by $3.5 million in Q3 alone. So we now owe, I believe, it's $13.6 million in the construction line. That means, if you keep in mind, that the total investment at the HQ is around $50 million, $52 million dollars or so, that means there's around $8 million left of investment between now and mid-next year. You may also recall that we have a credit facility at this point of around $28 million, so that means there's plenty of room within the construction line facility to finalize the constructions. While we're on the balance sheet, just a quick comment on the move of the listing from Norway to Copenhagen. It's ongoing. We are planning, we are waiting for, at the right time to send out an invite for an extraordinary general assembly for the shareholders to approve the delisting in Norway. It has been quite a complicated matrix of legalities between Norway and Denmark, and the Norwegian Stock Exchange, and the Danish Stock Exchange. It's been a quite a complex exercise, but we are coming to the end of that, and I expect to be able to send out the invite quite soon. Let me just see. There you go. Now I clicked two ones too many. Sorry about that. The domicile coming up right there. We are just a quick where there's not so much to report other than we are still progressing on schedule and on budget. We visited the building yesterday. It's closed, it's nearing completion, you would say, but of course, there's still a lot of time to be used on actually completing the insides of it and all that stuff. We have seen limited cost inflation because we locked in the deliveries quite early. And I am also happy to report that we are in the closing stage of signing an agreement, or at least negotiating an agreement with a potential additional tenant in addition to ourselves. And when all this is done, when the building is up and running, then we'll re-evaluate whether to keep it on our books in all eternity or at some point, eventually, do a sale and leaseback, or whatever the solution will be. For now, we need the building to get up and running and finalized, so we have it out there. There's still the case that we believe there is a shortage of office space and warehouse space in the greater Aalborg area. Financial strategy is not so much to talk about. There'll be right size the organization last year, and of course, that has been quite a task to get the smaller organization re-implemented in their duties, so to speak. With that, André, back to you for a summary and outlook. Yes. Yes, we have seen, of course, in the quarter, a strong interest, and we do see a strong interest for our products. That's always nice. We have, of course, seen a strong market come back in 2023 compared to last year. We are still focusing on growing our SimSports business as well as the liquid cooling business. The guidance, we have narrowed down the window to a profitability of between $8 million and $9 million. We do have a low visibility into 2024 at this point in time. That is not uncommon. That's actually, in fact, the opposite, very common for our business. But on top of that, we do see the consumer spend being impacted right now. As always, our long-term average growth is roughly 15% per year when markets normalize, and that's the $100 question here is: before, during, and after Corona, what's normal these days? But nevertheless, that's our guidance. Thanks, André. And with that, we will change gear and go over to the questions- and- answers session. Gavin, operator, I think you will take us through any verbal questions on the phones? If you wish to ask a question on the phone, please press star followed by one on your telephone and wait for your name to be announced. That is star one, if you wish to ask a question on the phone. Currently, there are no questions on the phone, so I'd like to hand back. Very good. We'll do the written questions up front then. André, did you want me to start with that part? Was that you? Yeah, you can take the other part. You were gesturing, yeah. Sorry, you can't see that we're here. A question related to, to SimSports. You're in a ramp-up phase, what kind of revenue is needed for break-even? Right now, we are showing overhead expenses in the range of $7 million per year. So that means that we're still, still looking at break-even revenues somewhere between $13 million and $16 million. Yes, and in terms of whether the production cost in Malaysia is in line with our forecast to get to the gross margin we want to see and when the volume is there. Yes, it is. However, keep in mind that so far it's only the pedals that we have put out to Malaysia, and we're not far enough that they have even come into inventory yet. So this is brand new and perhaps just to expand a little bit on manufacturing strategy. What we do and what we have done for many, many years, independent of business segment, is when we bring new products to market, we always set up, let's say, a mini production line here in Denmark to sort out all issues before we go out to contract manufacturers. And we've been very successful at that. And that's also what we're doing right now at SimSports. So it's brand new, but to ask the question, black and white, yes, the prices we see from the contract manufacturer are the prices we expected to see. Very good. And then the next question, I think I can just read it out loud. I think that makes more sense, the most sense. Even at the high end of your guidance, the guidance implies a significant sequential slowdown in Q4 of this year. While I understand the uncertainty of, is particularly high at the moment, I was wondering how much prudence did you build into the guidance? I think prudence is the right word here, o r do you really expect a significant sales slows down? I would say before answering, we do not guide on quarters, and the reason we do not guide on quarters is because it's sometimes very random if the revenue lands in one quarter over the other, it's a one date, more or less. For example, our Q1 this year was $14 million, as far as I remember. So you cannot really read anything into the size of the quarter compared to the quarter before, and I think that's very important to stress. But yes, if you look at the math, it seems as Q4 becomes significantly less than Q3. That's pure math. Very good. André, this one is for you. Are there more substantial upgrades to the sim racing ecosystem planned for this or next year? Yes, there are plenty. So for this quarter, if you don't mind watching me on video, you can actually go to our YouTube channel and see the GT wheels that we just released or announced, rather, and they will be available for sale here in Q4, on November 20. I actually think we will start selling them. And for next year, at least what I could say in public is yes, Invicta Wheels. So there are plenty of new stuff coming all the time, and we basically intend to keep up that pace. In terms of whether we estimate significant increases in demand alongside the Assetto Corsa 2 release, I would say it really depends on the consumer spending pattern, because it is, unfortunately, much cheaper to buy a new game than it is to buy a new simulator. So we have not built any of that, those assumptions into our internal forecast for next year, at least. Very well. Then there's a question of this new top five customer of ours. The question goes about actual revenue this quarter and how much we expect in further quarters. Correct me if I'm wrong, André, but I don't think it's wise commercially to address very specific questions. It's neither wise nor legal, because we obviously cannot disclose that. There was one thing we skipped o n the headquarters, yeah, I can say that. That's the subleasing space. So first of all, I think the subleasing, we already addressed that we are in the closing stages, and for those of you who are interested in financials, that will be all of you. I can say that the terms in the contract will be reflected, the building cost or the construction cost. So that's of course very nice because I think that's been one of the big question marks. In terms of sales and leaseback, I think as we addressed earlier, it's not very smart to sell and lease back a building that's not completed, especially not with the current interest rates. So that is something we will evaluate more than a year out in time when the building is up and running. Very good. Data centers, André? No, there's no update on data centers. We are simply not spending time on it. Very good. Question about customer X here. Yes, I would put it in another way, if I should comment on it. That's whether our retail, how our retail experiment, as we call it, that has gone. I would say, how should I put it? The operation succeeded, but the patient died. And what I mean by it is that the sales out has been fine. But I would say the process have not been pretty, and I think we have just been validated in our initial assumptions that retail is not the way to go on this. Very good. Question about the sales synergies between gaming enthusiast or cooling, as we call it today, for gaming and SimSports. Based on your sales efforts in SimSports so far, have you seen any cross-selling opportunities? It's different, or it's difficult to gauge, because with SimSports, to a large extent, we are dealing with end users, of course. But it's very clear that a lot of the SimSports customers, they have Asetek liquid cooling, or when they find out that we are the same company, they actually go and buy Asetek liquid cooling. So for sure, there is an overlap. And for those of you who are perhaps not intimate with the technical details, for now, we only support PC gaming on the simulator side. So in order to actually use our stuff, you need a high-end PC, and in most high-end gaming PCs, there is liquid cooling. So there is a nice overlap there. Very good. I have been hitting the refresh button for a number of times, nothing more is coming up. So that concludes this part of the meeting here. Write us if you have questions, investor dot relations at asetek.com, investor.relations@asetek.com. We have increased our investor relations capabilities recently. We are ready to answer your questions and communicate as needed. With that, thank you for your interest in Asetek. Thank you. That does conclude our conference for today. Thank you for participating. You may now all disconnect.