For the third quarter that ended September 30, German metal 3D printer manufacturer SLM Solutions reported revenues decreased by 13% to €14.8 million compared to last year’s €17 million. Along with net losses of €8.9 million, or 45 cents per share, down from the same period in 2019, when the net loss was €3.8 million, or 20 cents per share. Yet. despite an unfavorable market environment and continuous challenges caused by the ongoing COVID-19 pandemic, SLM Solutions managed to inform an overall significant improvement during the first nine months of the 2020 financial year compared to last year.
From January through September, revenue was up by 37%, year to year. More importantly, the company said it continues to receive new customers interested in the technology, especially as the pandemic has highlighted the shortcomings of traditional supply chain models which can be effectively addressed by additive manufacturing (AM). SLM Solutions has improved order intake compared to the first half of the year, but the company is still below the prior year’s levels, as key customers in end markets, such as aviation and automotive, significantly reduced capital expenditures.
Incoming orders amounted to €11.9 million in the third quarter, continuing the positive trend in order intake in 2020, with a Q2 order intake of €10.7 million and €2.9 million in Q1. Overall, the total order intake during the first nine months of €25.6 million slowed down 33% from €38.2 million in the previous year, mainly due to the significant restrictions imposed by COVID-19 and the resulting global economic slowdown. Meanwhile, the order backlog as of September 30, comprised a total value of €19,5 million. This represented a 6% increase in backlog value compared to €18,4 million in September 2019.
Due to COVID-19 related restrictions, not all machines that were ready for delivery could be installed and put into operation at the customers’ premises. This combined with other collateral effects of the pandemic, including travel limitations and softer capital spending by customers in times of significant uncertainty, drove the year to year decrease in Q3. Quarterly company earnings were also impacted by inventory adjustments and higher expenses in personnel costs compared to the previous quarter in 2020, with a 19% increase from €7,6 million in Q2 to €9,1 million in Q3. There were also higher material costs related to inventory adjustments due to aged inventory.
Quarterly EBITDA (earnings before interest, taxes, depreciation, and amortization) resulted in a loss of €6.2 million, negatively impacted by a one-off €2.3 million inventory adjustment which marked the end of the inventory review began earlier in the year. Most of this impact relates to inventory items purchased years ago, but as SLM Solutions revamped its supply chain team and professionalized processes over the last year, it does not expect to encounter similar issues in the future. Instead, for the nine-month period in 2020, EBITDA has improved by €7.5 million to a loss of €12.2 million, compared to last year’s same period loss of €19.7 million, this was mainly driven by the increase in revenue.
“SLM Solutions showed a solid performance in the third quarter. Although the COVID-19 pandemic burdens our target markets and has led to a clearly noticeable reluctance of customers to invest, we nevertheless were able to improve revenue and order intake compared to the second quarter,” said SLM Solutions’ CEO Meddah Hadjar. “Despite the adverse environment, the development program of our next generation SLM machine is fully on track, which is of particular strategic importance to us. The upcoming market launch of this new machine is a significant milestone for the entire metal manufacturing industry, as it will revolutionize the industrialization of metal additive manufacturing using SLM technology.”
The NXG XII 600, a new selective laser melting machine launched at Formnext Connect on November 10, 2020, is the latest addition to SLM Solutions’ product portfolio and puts productivity on a whole new level, with 12 simultaneously operating lasers, numerous technological innovations, a square build envelope of 600x600x600 mm, and automated features. It is twenty times faster compared to a single laser machine and equipped with innovative technical features like the zoom function to achieve highest productivity and reliability. The company considers it is the fastest system available on the market. It was designed to be used in serial production for high-volume applications as well as for printing large parts, which opens up new applications in the automotive and aerospace industries and paves the way to industrialized serial production.
The new machine could certainly help boost revenue in the next fiscal year. That combined with management expectations of a revenue increase of at least 20% for the full year 2020, compared to the previous year, which ended with revenue of €49 million, translates to a positive forecast looking forward. Assuming of course that there will be no significant deterioration of the COVID-19 situation with extensive lockdown measures in the company’s key sales markets during the remainder of the year.
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