Home / 3D Printing Processes / voxeljet Down 18.2% in Q2, Optimistic on New HSS Systems and Service Revenues

voxeljet Down 18.2% in Q2, Optimistic on New HSS Systems and Service Revenues

Some might have missed it but voxeljet is moving fast on its 3D printing capabilities as binder jetting technology as a whole is experiencing a kind of a renaissance. This does not yet reflect on the sale of voxeljet systems for the latest fiscal quarter, where the company reported revenues down 18.2% mostly due to decreasing system revenues (-33.4%) to €2.6 million. It does, however, make the company optimistic for the near future. As voxeljet CEO Dr. Ingo Ederer clearly stated:

“We had another solid quarter and I am pleased with our overall performance. We continue to make progress in all our segments with the goal to ignite the next phase of accelerated growth. I am especially pleased with the progress of our research and development initiatives as we plan to announce new and exciting products and applications later this year and in the years to come, especially regarding High Speed Sintering (HSS). HSS systems are already in use at selected customers and the feedback we gather is very promising.”

For those (like ourselves) who had missed this very relevant piece of news, voxeljet systems are being used with Xaar printheads to implement Professor Hopkinson’s High Speed Sintering (HSS) technology, which rivals with HP’s multijet fusion (MJF) as the upcoming high-rate production-ready AM process.

As Mr. Johannes Pesch, voxeljet Director of Investor Relations & Business Development summarized: “voxeljet is well known as a provider of a large format and high productivity 3D printing equipment. Our material sets so far have focused on tooling and pattern making applications, but with HSS voxeljet will be entering the thermoplastics market with the ability to directly print end products.”

The basis for HSS is the same as voxeljet’s core technology, binder jetting. HSS works by selectively jetting an infrared absorbing ink onto layers of plastic powder. Each layer is exposed to infrared light, which melts the powder to form functional plastic parts directly out of the machine. It enables to print parts with properties similar to injection molding. In combination with the excellent surface quality, sharp and clear edges, as well as true-to-detail resolution, HSS parts can be directly used for functional applications in automotive, industrial equipment, and even consumer goods.

Furthermore the company had signed in 2015 a licensing agreement with Evonik industries on development of a high speed polymer-based process, involving powder bed fusion, and able to compete with injection molding in terms of productivity rates. The process was expected to be ready for market within three years so it seems that the company is perfectly on target.

In the meantime, however, financial results were not exactly sparkling. As mentioned above, revenues for the second quarter of 2017 decreased by 18.2% to kEUR 5,153 compared to kEUR 6,296 in the second quarter of 2016.

Revenues from our Systems segment, which focuses on the development, production and sale of 3D printers, decreased 33.4% to kEUR 2,542 in the second quarter of 2017 from kEUR 3,815 in last year’s second quarter. This was mainly due to a lower number of printer sales. The Company delivered three new printers in the second quarter of 2017, compared to six printers (three new and three used and refurbished) delivered in last year’s second quarter. Systems revenues also include all revenues from consumables, spare parts and maintenance, where the company could record a slight increase compared to the last year’s same period. Systems revenues represented 49.3% of total revenues in the second quarter of 2017 compared to 60.6% in last year’s second quarter.

Revenues from the Services segment, which focuses on the printing of on-demand parts for customers, increased 5.2%, to kEUR 2,611 in the second quarter of 2017 from kEUR 2,481 in the comparative period of 2016. This was mainly due to higher revenue contribution from subsidiary voxeljet China Co. Ltd (“voxeljet China”) and subsidiary voxeljet America Inc. (“voxeljet America”). This was partially offset by lower contributions from subsidiary voxeljet UK Ltd. (“voxeljet UK”).

Gross profit was also decreasing at kEUR 2,110 in the second quarter of 2017 compared to kEUR 2,303 in the second quarter of 2016. Gross profit for the Systems segment decreased to kEUR 925 in the second quarter of 2017 from kEUR 1,112 in the second quarter of 2016. This is due to the decrease in revenues. In contrast to this, gross profit margin for this segment increased to 36.4% in the second quarter of 2017 compared to 29.1% in the second quarter of 2016. The increase mainly resulted from better gross profit margin on printer sales due to the product mix. In the last year’s period voxeljet sold three used printers, which usually provide weaker gross profit margins compared to new printers. Gross profit includes a release of accruals for compensation amounting to kEUR 81 in the second quarter of 2017 (2016: kEUR 183).

Gross profit for the Services segment remained largely unchanged at kEUR 1,185 in the second quarter of 2017 compared to kEUR 1,191 in the second quarter of 2016. The gross profit margin for this segment decreased to 45.4% in the second quarter of 2017 from 48.0% in the second quarter of 2016. This was mainly related to a lower release of accruals for compensation. In the second quarter of 2017 the release of accruals for compensation amounted to kEUR 34, compared to a release of kEUR 128 in the comparative period. The gross profit margin contributions from the German operation and voxeljet America decreased slightly.

Research and development (“R&D”) expenses increased to kEUR 1,315 in the second quarter of 2017 from kEUR 1,049. The increase of kEUR 266 was mainly due to higher personnel expenses and higher expenses for materials and external services related to various projects. R&D expenses were also impacted by the release of compensation accruals amounting to kEUR 79 in the second quarter of 2017 compared to kEUR 261 in the comparative period of 2016..

Operating loss was kEUR 2,675 in the second quarter of 2017, compared to an operating loss of kEUR 1,608 in the comparative period in 2016. This was primarily related to the lower gross profit in combination with higher operational expenses and unfavorable foreign currency effects. Operational loss was primarily impacted by the release of accruals for compensation amounting to kEUR 307 compared to a release of accruals amounting to kEUR 818 in the second quarter of 2016.

Net loss for the second quarter of 2017 was kEUR 2,674 or EUR 0.72 per share, as compared to net loss of kEUR 1,378, or EUR 0.46 per share, in the second quarter of 2016. Net loss was also impacted by the employee stock option plan, which was executed in the current quarter with an impact amounting to kEUR 122.

Based on a conversion rate of five American Depositary Shares (“ADSs”) per ordinary share, net loss was at EUR 0.14 per ADS for the second quarter of 2017, compared to a net loss of EUR 0.09 for the second quarter of 2016.

Six Months Ended June 30, 2017 Results

Revenues for the six months ended June 30, 2017 decreased by 13.3% to kEUR 9,683 compared to kEUR 11,166 in the prior year period.

Systems revenues were kEUR 4,235 for the first six months of 2017 compared to kEUR 6,598 in last year’s period. The Company sold five new 3D printers during the first six months of 2017 compared to six new and three used and refurbished 3D printers in the prior year period. Systems revenues represented 43.7% of total revenue for the six months ended June 30, 2017 compared to 59.1% for the same period a year ago.

Services revenues were kEUR 5,448 for the six months ended June 30, 2017 compared to kEUR 4,568 for the same period last year. This increase was mainly due to a higher revenue contribution from the German operation and subsidiaries voxeljet America and voxeljet China. This was partially offset by a lower revenue contribution from voxeljet UK.

Cost of sales for the six months ended June 30, 2017 was kEUR 5,992, a decrease of kEUR 1,540, or 20%, over cost of sales of kEUR 7,532 for the same period in 2016. Gross profit and gross margin for the six months ended June 30, 2017 were kEUR 3,691 and 38.1%, respectively, compared to kEUR 3,634 and 32.5% in the prior year period.

Gross profit for the Systems segment decreased to kEUR 1,278 for the six months ended June 30, 2017 from kEUR 1,805 in the same period of 2016. This decrease is mainly due to the decline in revenues. The gross profit margin for this segment increased to 30.2% compared to 27.4% for the prior period. The increase mainly resulted from better gross profit margin regarding printer sales due to the product mix. In the last year’s period we sold three used printers, which usually provide weaker gross profit margins compared to new printers. The gross profit margin for revenues from consumables, spare parts and maintenance almost remained on the same level, compared to the six months ended 2016.

Gross profit for the Services segment increased to kEUR 2,413 for the six months ended June 30, 2017 from kEUR 1,829 in the same period of 2016. This was mainly related to the increase in revenues. The gross profit margin for this segment increased to 44.3% from 40.0% mainly due to a better utilization ratio. Gross profit margin contributions from voxeljet America as well as voxeljet China improved. From the German operation voxeljet recorded an almost unchanged gross profit margin contribution, while the contribution from voxeljet UK decreased.

 

Net loss for the six months ended June 30, 2017 was kEUR 5,105, or EUR 1.37 per share, as compared to net loss of kEUR 4,819, or EUR 1.29 per share in the prior year period. This is based on a weighted average number of ordinary shares outstanding of 3.720 million for the first six months ended June 30, 2017. Compared to the last year’s same period, the number of ordinary shares outstanding was unchanged.

Business Outlook

Revenue guidance for the third quarter of 2017 is in the range of kEUR 7,000 to kEUR 8,000. voxeljet is reaffirming guidance for the full year ending December 31, 2017.

  • Full year revenue is expected to be in the range of kEUR 26,000 and kEUR 28,000
  • Gross margin is expected to be above 40%
  • Operating expenses for the full year are expected as follows: SG&A expenses in the range of kEUR 9,250 and kEUR 10,250 and R&D expenses to be approximately kEUR 4,750 to kEUR 5,750. Depreciation and amortization expense is expected to be between kEUR 3,000 and kEUR 4,000.
  • EBITDA is expected to be neutral-to-positive in 2017

Total backlog of 3D printer orders at June 30, 2017 was kEUR 4,384, which represents seven 3D printers. This compares to a backlog of kEUR 3,784 representing five 3D printers, at December 31, 2016. As production and delivery of printers is generally characterized by lead times ranging between three to nine months, the conversion rate of order backlog into revenue is dependent on the equipping process for the respective 3D printer as well as the timing of customers’ requested deliveries.

At June 30, 2017, voxeljet had cash and cash equivalents of kEUR 4,028 and held kEUR 11,657 of investments in bond funds, which are included in current financial assets on consolidated statements of financial position.

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