Prodways fiscal 2018 closed with impressive results, almost doubling the previous fiscal year and recording revenues of €60.9 million, compared to €34.8 million in 2017. This marked a up 75.0% year-on-year increment and exceeded the annual target of €58 million, which had previously been upgraded. This increase reflects growth in all of the Group’s activities, boosted by the acquisitions of Solidscape and Varia 3D during the year.
The Group’s EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization), which is one of the simplest indicators of a company’s financial performance, amounted to €1.2 million in 2018, compared to -€1.2 million in 2017. For the first time, the company has exceeded the breakeven point over the full year and reached €1.0 million during the second half of the year, highlighting continued improvements in profitability.
3D printer sales booming
Somewhat surprisingly, the best performance comes from 3D printing hardware sales. Prodways Systems division – including software, 3D printers and related materials and services – achieved revenues of €38.4 million in 2018, with a very sustained and significant growth of +120.8% compared to 2017. These numbers do include the contribution from US-based 3D printing machine manufacturer, Solidscape, acquired in July 2018.
EBITDA for the division amounted to €1.1 million in 2018, versus a loss of €1.6 million in 2017. The strong performance of the software business, along with the positive contribution from materials as the hardware installed base grows, plus the reduction in losses from the machine business, contributed to the strong improvement in the division’s profitability.
The Products division – including parts design and manufacturing and medical applications – delivered revenues of €22.9 million in 2018, compared to €17.8 million in 2017, up by 28.2% boosted by the contribution of parts manufacturing activities and the buoyancy of medical activities.
EBITDA for the division amounted to €0.5 million, down compared to 2017 given the investments in parts manufacturing business to prepare the ramp-up of series production and the continued strengthening of sales efforts in the dental and audiology sectors.
The acquisitions and R&D developments since the IPO have strengthened the Group’s positions in its core businesses, notably machine manufacturing and international activities with the acquisition of Solidscape in 2018. The management team aims to reinforce the synergies and promote the Group’s consolidation into a major player in design and digital manufacturing using 3D printing.
Leading with production applications
Pursuing this strategy, in January 2019 Prodways Group acquired Surdifuse-L’Embout Français, a major audiology player in France. Thanks to the merger of Surdifuse-L’Embout Français with Interson-Protac acquired in 2017, the Group aims to become the French market leader and one of the European leaders in customized eartips, a market that has been transformed by 3D printing. This acquisition should generate revenue of over €3 million and make a positive contribution to the Group’s results this year.
For 2019, Prodways Group should continue to benefit from the development of 3D printing as a production method in an increasing number of markets, as well as its differentiated positioning and technologies.
The R&D effort will remain at a sustained level, albeit relatively down in relation to revenue. The Group will continue its investments in the applications of the future in 3D printing (i.e. Rapid Additive Forging technology, digitalization of processes in the medical sector). These investments – which are creating value for the future – will continue to weigh on the Group’s income statement. However they will be increasingly offset by the already profitable businesses that are enjoying strong growth.
In the current scope and excluding new acquisitions, the Group expects for 2019 full-year revenue growth above 15%. This increase will be particularly pronounced in the Systems division, boosted by the launch of new 3D printers (ProMaker V10, ProMaker LD-20, Solidscape DL) developed since the IPO. In the Products division, the Group continues to implement the digital transition of its medical activities and the greater use of 3D printing for series production, that should bear fruit in the medium term. The company’s stocks do continue to trade near the minimum level reached since the 2018 IPO (see chart above) but could represent a valuable investment as the company is set for significant expansion and can always rely on the support of its mother company, Group Gorgè.