AGM 2021

Apr 22, 2021

day, and thank you for standing by. Welcome to the Astotech twenty twenty one Annual General Meeting. At this time, all participants are in a listen only mode. Please be advised, today's conference is being recorded. I would now like to hand the conference over to your speaker today, Peter Madsen. Please go ahead. Thank you, Sarah. Let me just start out by stating that we are in the room here, our Chairman of the Board, Mr. Juukka Perthola the Chairman of the meeting our Attorney, Jurgen Rasmussen our auditor, Mr. Mats Milgard our CEO, Andre Slot Eriksen and myself, the CEO, Peter Madsen. With that, I'll hand over the microphone to Chairman of the Board, Luca. Thank you, Peter. And dear shareholders, welcome to this year's Annual General Meeting of Alcitec. It is somewhat different general meeting than under normal conditions due to the risk of spreading COVID-nineteen. And to protect the health and safety of all and in compliance with Danish government's restriction measures, have strongly recommended that shareholders participate via this virtual conference setup instead of participating in person. And considering these circumstances, we also have encouraged all shareholders to exercise their influence by casting a postal vote or to grant the Board of Directors a power of attorney. Minutes will be prepared for those shareholders and other stakeholders who do not have the opportunity to participate today, and it will be available on our website, astech.com. And in accordance with Article 10.1 of Articles of Association, the Board of Directors appoints the Chairman of the meeting, and the Board has chosen Duygu Rathanson, Article of Law. And I'm very confident to give the floor to Duygu, who will lead us through the agenda for today. So sales is yours, Peter. Thank you, Juukan. And before confirming the formalities in connection with notice and having this general meeting, it should just be mentioned that for personally listening to the Annual General Meeting on the webcast, this is a service offered by the company, but it's not possible to speak or ask questions. So the General Meeting is here in the room and it's only a service so that you can hear as a shareholder how the action and how the general meeting is consummated. Formal there are certain formal requirements for general meeting, and it's my task as a Chairman to check whether these are, I call it, adhered to. And firstly, notification of the date of the general meeting has to be well available no later than eight weeks before the general meeting. And this has been available on the company's homepage and the financial calendar. So this requirement is adhered to. Secondly, on the 03/30/2021, the general meeting was convened by publishing the agenda and the full text proposal and the notice on the company's homepage and has also been forwarded to an e mail to shareholders who has registered to receive notification by e mail. Therefore, the AGM has been convened timely. And thirdly, certain documentation has to be available. And the notice convening the general meeting and the necessary ancillary documentation such that the remuneration policy and other documents has been available on the homepage since the March 30 and therefore has been available timely enough. We can also see that the annual report has been available since and actually also the proposed remuneration report has been available since 02/25/2021. So all is in accordance with the Article Association and timely convened. And in conclusion, it can therefore be confirmed that the general meeting has been lawfully convened. We can see that all votes has been given by proxies and postal votes. And therefore, the total share capital present at this general meeting is 498,603.1 And leads to that there is 4,986,031 votes, which has been presented. And that means that the General Meeting constitutes a forum for a transaction of businesses set out in the agenda. And also, I can inform you that based on the proxies and postal votes received, all items on the agenda has been adopted. Okay. Then we move on to the formal agenda of the meeting. And the first item is number one. And then regarding the Board of Directors report on the company's activities during the past financial year. And in this regard, I will pass on the word to then the Chairman. Thank you, and dear shareholders and friends of Assotec. 2020 was an exciting busy and, in the end, very strong year for Assotec. We started our out being a little pessimistic. The prior year 2019 had not been strong, and we were looking at various scenarios that were all impacted by the American customs tariffs that slowed down the market. Soon, however, the tariffs took a mental tax hit and instead we all focused on how to struggle with the pandemic, and we have no idea what to expect. But as we all know by now, the pandemic kept people at home and the sales of electronics for both work and entertainment grew remarkably. At the same time, data centers were forced to increase their capacities and some of the brighter ones also chose servers with liquid sealing. We saw our revenues increase throughout the year to culminating with Firtal four with $29,000,000 and a 34% growth for the whole year. Both business segments contributed to the revenue growth. Gaming and enthusiasts increased by 25% and data center more than tripled. In Canyon and enthusiasts, we continued our strategy of getting closer to the consumers and the gaming community. The keywords are about storytelling, innovation, quality and reliability. We have also increased our efforts in branding Assertec as best cooling solutions named behind our customers' brands. We have now full funding agreements in place with several OEMs, but we are also connecting directly with gamers and then put together via the full nation board. As you can hear, we are here having this conference on the team. Back to the yes, in 2020, we also launched our new strategic focus area, C Sports. For some time, we have been looking for a new business area that fit into our core competencies and the desired profile. In sales force, we found a high growth area that is still very fragmented and would benefit from consolidation and from an end to end approach. We recognize that it's outside our historic cooling business, but it's firmly inside our core competencies, mechatronics. And there is a strong strategic fit with the gaming and dental gas markets. We are still early into this, but we are very enthusiastic on Simsport and clearly see it as a new growth opportunity. To kick start the Simsport business and to shorten the time to the market, we made two acquisitions including gaming software technology, consultancy hardware and mechanical designs. We bought IPR from Finland based Corona devices and gaming hardware and software technology from U. K.-based Ultimate GameTech. Finally, let me mention our sustainability work. This area is growing in importance throughout the society, and we are committed to support this development with the necessary investments and management focus. You can find our new sustainability report on our website, assetech.com. I would like to extend my thanks to the AdaTech team, around 140 good people working tirelessly on bringing innovative, reliable products to the world. And also, I would like to mention my fellow Board members. It has been a decent, inspiring group of individuals with a broad list of relevant experiences. Christopher, who joined the Board in 2012, will not be upheld for reelection this year. And on behalf of the company and on behalf of the rest of the Board, I would like to thank him for his many, many years of service to Astec to a very critical phase. Thank you, Chris. And with that, I will hand the floor back to the Chairman of the meeting. Thank you. Thank you, Juke. And given the format of this general meeting, I allow myself to conclude that there are no comments to the report, and we can move on to Item two on the agenda. Item two is the Nomination Committee's report on its activity and the proposed remuneration to be paid to the members of the Board of Directors Board committees and the Nomination Committee. We'll start off with report on its activity. And for that purpose, I will leave the floor to CFO, Peter Darmeissen. Yes. Thank you. Let me start out by apologizing for our very enthusiastic audience of seagulls that comes from the location here. It's quite noisy. Mr. Sanderby, who is the Chairman of the Nomination Committee, was not able to be here today. He asked me to convey a few words in the reporting of the committee. In addition to Mr. Sanderby, we have Claus Berndermuller and Jooke Pertler, who is also the Chairman of our Board on this committee. They met 3x last year. The meeting activity last year in 2020 was somewhat lower than in 2019, simply because of the fact that they were not spending cycles on recruiting additional or new Board members throughout 2020. So hence, the smaller amount of quarterly meetings. The work that was performed by the committee was around the proposal of the remuneration for the Board of Directors as well as the annual assessment of the capabilities and competencies of the Board of Directors. Flor, back to you. Thank you. And the second item, under Item two is the proposed remuneration, and this is described in the notice of the general meeting. And therefore, I will allow myself not to elaborate on that proposal and just conclude based on the posted votes and the proxies that it has been adopted. And further, there a provisional recommendation, which is also mentioned in the remuneration next year, which is also mentioned in the notice. With that, we can move on to Item three and actually also Item four, which we suggest you to handle as one item for, you can say, practical purposes on this general meeting. And the first item on that is adoption of the audited annual report and next is appropriation of profit or loss as recorded in the adopted annual report. And before putting the annual report to vote, I kindly ask Peter Darmaschen to accomplish this item. Very good, sir. Thank you. 2020 was a strong year for Esatec. We grew our revenue by 34% from $54,000,000 up to $73,000,000 almost. The gross margins increased to 47%. I believe that was a record, if you look when you look at it per annum, from 42% in 2019. The increase was primarily driven by a change in our business model, which we have discussed in detail through many of our investor meetings throughout the year. Operating expenses increased by 6% throughout 2020 to around $23,000,000 and that reflects an increase on investment in our company's infrastructure. We increased our staff by 35% throughout 2020. And these expansions increases, they came in latter part of the year when we started seeing the increase of our revenue. The first part of the year, the operating expenses were kept at a relatively low level in recognition of what we, at that time, thought would be a challenging year. One of the significant impactors throughout 2020 was foreign exchange rates, which were unfavorable to us throughout the year. All in all, our EBITDA was $15,600,000 in 2020 compared with only $6,200,000 in 2019. Our comprehensive income after taxes was $11,600,000 for 2020 compared with only $1,100,000 in 2019. So all in all, a strong year that corresponds the income here corresponds to €0.35 of income per share versus €02 in the negative for 2019. Shifting focus over to the balance sheet. Our total asset sum at the 2020 was 71,000,000 sorry, 400,000.0 compared to $54,000,000 at the 2019. The principal components of the change that increased was our receivables that increased by $10,000,000 But of course, that comes that's what comes with an increase of what was 78% increase in the fourth quarter revenue compared to the year before. Cash went up by $2,600,000 as a result of all this extra activity and hence the earnings and as a result of us using money on both the business acquisition and a share repurchase program. And finally, talking a little bit about the cash flows. Did that already. We had $11,400,000 come in from operations. We then spent $4,800,000 on intangible assets and purchase of property and equipment and a sum on repurchasing our own shares also. All in all, we have leased $24,000,000 in the bank. Juukka, you mentioned the sustainability report, which is available as per all our other reports on our website. Back to you, Mr. Chairman. Thank you. And it's also suggested that the profit is appropriate as suggested in the annual report. And based on the profits and votes provided, I can conclude that both that suggested, but also the annual report has been adopted. And congratulations on ACTech for a beautiful annual report for 2020. Okay. Let me move on to item number five, which is presentation and adaptation And as mentioned in the beginning, the remuneration report has been available on the company's homepage. And before concluding on the votes and adoption of the item, I'd like to give the word to Peter Dan Messen. Yes. Thank you. Yes, the remuneration report was presented together with the annual report when we sent out the notice of this meeting. And hence, you can read the details on that website. I just want to point your attention to one fact, and that is the fact that this is the first time we presented a remuneration report. We live, we learn, and we learned that we needed to do two additions to the report that was sent out in order for the actual report to be compliant with legislation. And those I'm just showing on the presentation here those two additions. One is on Page eight, where we state clearly that the remuneration paid out was in compliance with the policy in place, and that statement needed to be there. And the other one is a note on Page 10 where, both our auditors, thank you, but also many of some of our investors have pointed out that we needed to have a specific note detailing how individual by individual and goal type by goal type, how the cash bonuses were met or not met. We have added those two comments in the report. We have clearly marked that they have been added after publication. And this new report with its additions is now the formal report. Back to you. Thank you. And as a Chairman, I've read through the changes and also I said that they are of a nonmaterial significance and impact. And therefore also on that basis, I conclude that based on the prox and the postal votes, this remuneration report has been approved. Then we can move on to Item six, which is collection of members to the Board of Directors. And it's the nomination committee has proposed reelection to the following members, Juukkaert Pavlov, Jan Smith, Maria Jorg and Erik Gamsko. And as Uke mentioned in the beginning, Chris Christoffer is resigning. And the Board of Directors has confirmed that they agreed to the Nomination Committee's proposal. And information on the nominated candidate is available on the company's homepage. It has been there throughout the period. And all their managerial posts held by candidates and other Danish owned entities, which is we are which is to be informed before all election with reference to the Danish Companies Act is also available. It's in the annual report Page 54, Item 25 for the one to we need to look at that. And with reference to the proxies and poster votes, it can be concluded that U. K, Yuan, Maria and Ediac Damco has been elected. So compilation on reelection to all of you. Next item is Item seven and that's election of members to the Nomination Committee. And as it appears from the notification, the Nomination Committee process reelection of the following members. That is Yves Sunez, Klaus Bannermuller and Juukha Kaffirah. And the reference to the proxies imposed on votes, it can be concluded that the election has been adopted. Item eight is election of auditor. And in accordance with the recommendation received from the Audit Committee, the Board of Directors proposed the reelection of PVC, state of sale of Schumstack sales cap as the auditor. And before concluding on the votes, it should be mentioned that the Audit Committee has informed us that the committee's recommendation is free from inference by any third party and no clause of a contract or in an issue with any third party restricting the choice by the general meeting to certain auditors. Audit firms has been imposed on the Audit Committee. And with that note, I can conclude that election of also has been adopted and PDC continues as the author of the company. That leads us to Item number nine, which is the proposals by the Board of Directors or shareholders. The first is Item 9A, which is where the Board of Directors has proposed to authorize the company to acquire own shares. For the exact wording of the proposal, I refer to the notice forwarded. And with reference to the proxies and the postal votes, I can conclude that the item as described in the notice has been adopted. Next item is Item number 9b, where the Board of Directors proposes that the new remuneration policy is adopted. And it's been prepared and adopted in accordance with Section 139 and 139A of the Danish Companies Act. And with reference to the properties and postal votes, which we have received, I can conclude that this item has been adopted. Last item is operational to the Chairman. If anything is due to filed to the Danish business authority, and that item has been approved So thank you for the confidence in that regard. Good ending number 10, item number 10, I can conclude that there is no further decision to transact on this general meeting. And therefore, I will give the word back Luka at the general meeting. Thank you. And I'd like to thank all shareholders for their interest and support. And finally, of course, I would like to thank the Chairman for a good and very effective steering of this somewhat different general meeting today. So thank you for that, and thank you for your interest. Have a good day. Thank you. That does conclude the conference for today. Thank you for participating, and you may now disconnect.