After a record Q1, before the COVID-19 pandemic, SLM Solutions H1 2020 closed with revenues for €31.2 million, a 90% percent improvement on H1 2019. The company now expects 20% growth for the full fiscal year and is closely monitoring the COVID-19 situation, exploring alternative businesses to the aerospace and oil & gas sectors, its core business.
The end of H1 2020 marks the first anniversary of the significant change and restructuring process that SLM Solutions CEO Meddah Hadjar started at SLM Solutions in May 2019. In the last twelve months the company was able to retain experienced executives for vital business areas that required fundamental improvement. The enhanced organizational maturity in all areas of the Company is now allowing SLM to leverage its strong technology position and deliver standardized high quality, reliable 3D printing systems to its customers.
In fact, the segment Machine business, which accounts for the sale of machines including options, generated revenue of €23 million in H2 2020, compared to just $9,4 million during the same period in the previous year, This now represents 76% of the group revenue. The segment After Sales Business, comprising service revenue and the sale of spare parts and commodities, generated revenue of kEUR 7,421 (June 30, 2019: kEUR 7,004), representing 24% of group revenue (June 30, 2019: 43%).
“We have previously mentioned that the fundamental change we are implementing at SLM Solutions will take time to lead to a meaningful improvement in our financial metrics,” said Mr. Hadjar in his opening statement, “however, already in H1 2020 we were able to convert the better technological and economic value proposition for our customers into significant revenue growth, increased profitability, and a better cash flow profile at SLM Solutions. We are especially proud of this against the backdrop of the adverse economic environment that the global COVID-19 pandemic has created.”
The COVID-19 pandemic and the related lockdowns inevitably had a significant impact on SLM customers being able to conduct business. In addition, during the lockdowns in various countries, it became significantly more difficult, and took more effort and time, to install systems at customers’ premises. Certain core end markets, such as aeroengines are experiencing end-market demand weakness, which could result in a delay in the application of Additive Manufacturing technologies in these industries.
At the same time, however, SLM reports an increased interest from current and new customers across the manufacturing space for systems and technology as the COVID-19 pandemic focusses companies heavily on derisking their global supply chains, localizing key component manufacturing and creating increased flexibility in their manufacturing processes. SLM Solutions and Additive Manufacturing technologies in general are expected to play a avital role in supporting companies implementing such strategies.
Within this global business landscape SLM was both able to increase H1 2020 revenue year-on-year and improve EBITDA by EUR 12.9 million to EUR -6.0 million (H1 2019: EUR -18.9 million), providing evidence of the ongoing turnaround of the company. The COVID-19 situation still limits visibility but also highlighted SLM’s strength as an agile organization that can adapt quickly to change.
Under the assumption that the COVID-19 pandemic will not further deteriorate, and new broader lockdowns can be avoided, SLM now expects revenue for FY 2020 to be at least 20% over the previous year (Group revenue 2019: EUR 49.0 million), with EBITDA to improve to between EUR -13 million to -18 million (2019 EBITDA: EUR -26 million).