After a rough 2020 earnings reporting season, voxeljet finally announced strengthening revenues, higher 3D printer sales and gross profit margins, as well as encouraging expectations for the last three months of the year. The German industrial 3D printer manufacturer reported 10.6% revenue growth in its first earnings statement since the company moved its shares from the New York Stock Exchange (NYSE) to the NASDAQ.
This year’s third-quarter earnings report beat analyst estimates but still reported a net loss of €4 million, or 82 cents per share, compared to a net loss of €3.7 million, or 76 cents per share, year over year. On November 12, voxeljet announced total revenue for the 2020 third-quarter period had increased by 11% to €4.9 million, up from last year’s €4.4 million. This is primarily related to a strong increase in systems revenue, which was partially offset by a decrease in the company’s on-demand printing segment where revenues decreased by roughly 20% as compared to the third quarter of 2019.
Looking at the systems segment, total revenue for the third quarter was €2.7 billion, as systems revenues increased 64.2% from €1,6 million last year. The company detailed selling two used and refurbished 3D printers in the third quarter of 2020 compared to three new 3D printers in last year’s third quarter. Yet revenue from the sale of 3D printers significantly increased due to the product mix, as it sold larger scale platforms in Q3 this year as opposed to smaller platforms in the comparative period. Systems revenues also include earnings from consumables, spare parts, and maintenance, which increased in the third quarter year over year, reflecting a higher installed base of 3D printers in the market and associated growth in after-sales activities.
Yet voxeljet was not able to achieve its targeted numbers, as revenues from the sale of 3D printers and systems-related products were still impacted by the economic slow-down due to the ongoing global coronavirus pandemic. Scheduled 3D printer installations were stalled due to travel restriction reimpositions and shutdowns after a resurgence of COVID-19 cases.
Similar issues limited the business’s ability to perform service and maintenance visits worldwide, which adversely affected any opportunity to recognize revenue. Also, as many clients had to reduce production activities, the demand for consumables, as well as spare and wear parts, was on a lower level than expected. Nevertheless, Q3 saw some level of recovery compared to the prior two quarters in 2020, with systems revenues representing 54.7% of total revenues in the third quarter of 2020 compared to 36.9% in the same period in 2019.
In addition, the company received follow-up orders for three more VJET X units as part of a frame contract concluded in 2018 with an unnamed premium German car manufacturer, bringing the current total to five VJET X units for the automaker. The company stated that the follow-up order reaffirmed voxeljet’s new 3D printer for additive serial production as cost-efficient and environmental-friendly, thanks to its zero-emissions binder system. Revenue for the first batch of the five VJET X will be recognized in mid-2021 though.
“With the follow-up order for B2B [business to business], we reached a significant milestone in our mission to bring 3D printing into high volume industrial production. This is excellent news, and this not only highlights the significance of our technology, but also the confidence that leading German carmakers have in our solutions and the players behind it. Together with our partners, we tend to offer solutions for the mass production of complex light metal parts, and what we believe to be a fraction of the cost compared to other players in the additive manufacturing industry,” described voxeljet CEO Ingo Ederer. “We plan to follow a similar path with our new large High-Speed Sintering printers and are extremely excited about the new opportunities and market potential addressed with it.”
Alternatively, services revenue, which focuses on the printing of on-demand parts for customers, failed to recover, decreasing 20.6% to €2,2 million from €2,8 million in the comparative period in 2019. This was mainly due to lower revenue contributions from the company’s subsidiary voxeljet America, mainly due to a significant decrease in demand from North American clients. Revenues from the voxeljet UK subsidiary were also down. Instead, for the German operation as well as for the Chinese voxeljet subsidiary, there was a considerable market recovery in the third quarter of 2020 compared to the second quarter of 2020, reaching similar levels as last year’s third quarter.
In fact, in the European Union (EU), revenues in the services segment are already on the same level as in the third quarter of 2019. And this trend seems to continue as voxeljet revealed strong order inflow in its EU service center over the last week. In the U.S., the company claimed it is roughly 30% below the third quarter of 2019. But looking ahead, things are starting to improve for them there as well, as revenue in the services segment in the U.S. was up 6% from the previous quarter. Ederer revealed during an earnings call with investors on November 13, that the company has begun printing patterns for the casting of components for space rockets for a supplier to a leading U.S.-based exploration company, as an example of significant progress towards ensuring true global coverage.
During the past three months, voxeljet managed to reduce operating expenses, significantly as a result of a structural efficiency program implemented at the beginning of the year and expected to project annual savings between €2.5 million to €3 million from the fourth quarter 2020 onwards. The restructuring program, that initiated in the latter part of 2019 at the German entity, was successfully completed at the end of June 2020 and included a workforce reduction mainly in the systems segment in order to streamline the company’s operations, and will provide further cost reductions in the near future.
Going forward, the business expects to benefit from the increased demand for solutions for additive series production, anticipating the commercialization of 3D production cells – comprised of multiple 3D printers each – as well as large volume contracts for 3D printed parts. Even more so, voxeljet’s Chief Financial Officer (CFO) Rudi Franz estimated revenues for the fourth quarter of 2020 to be in the range of €8 million and €10 million and gross profit margin above 40%. If the prediction is correct, then voxeljet would be able to end the last quarter of the year at similar levels as it did in 2019, which would be a solid outcome for such an unprecedented year that has many companies eager to leave it behind.
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