In other news, some sales person as SLM Solutions (AM3D.DE) just hit it way out of the park on their quarterly bonus before the end of January. The company announced that it has signed an MOU to sell five of its humungous NXG XII 600 machines to a “major European OEM” for delivery in 2022.
The 12-laser behemoth was unveiled in November and a sale to a “major OEM” is a big step for the firm. It means that the customer trusts SLM Solutions enough to bet on machines that have not been tested completely. So, that’s a lot of money for a rendering. It’s a big company bet that SLM Solutions can develop and deliver this machine on time and in good working order.
Given the complexity of such a task it will be a tall order. It also showcases that, now we’ll be seeing real volume in part size being done with SLM Solutions’ machines. Series production of larger parts in industrial cases looks closer than ever. They also got five machines, which means that the parts are either large or larger volumes than we are used to seeing. Rather than one niche element, we’re looking at a larger production case.
Sam O’ Leary, SLM Solutions’ very new CEO, says, ‘When we launched the NXG XII 600, we knew it would disrupt the industry and spark a new era for manufacturing. Therefore, this MoU just two months after the launch is an exciting milestone for the company. It validates our vision that the OEMs can implement innovative additive manufacturing technology for serial production into their business models. The NXG XII 600 accelerates the future of metal additive manufacturing, and our engineers have further pushed the boundaries of what is possible. This MoU underlines that not only are we prepared to step forward to the industrialization of metal additive manufacturing, but the marketplace is ready as well.”
The firm also says that, “The final binding agreement will be signed by Q2 2021.” So, there is still time for this to go sideways. We’re all curious to find out who this mysterious OEM is. A car company, now? That seems far-fetched, but maybe the person from the works council was on vacation and someone at Volkswagen decided to splurge. If so, it could also mean that they’re more likely to enter into Formula 1, which I’m still hoping that they’ll do someday.
Could it be Airbus, now? Also not a time for them to splurge while selling one plane per quarter. Also, to the person who bought that plane, “good for you!” More likely, it is Tesla or a commercial space company. Who do you think it is?
The timing of the announcement now and the follow-up deal is nagging me. First off, this comes a few days after O’Leary replaced the previous CEO and, boy, would this have been a nice thing for Hadjar to leave on. But, by postponing it like this and announcing the deal in such a way, it looks like either his leaving wasn’t as cordial as it was made out to be or this is finance talk.
This to me looks a lot like a nice little story arc for an IPO or an issue or a raise, to create buzz and a continued building of the SLM Solutions messaging. Then, to all involved, it would make sense to do this now, and with the new CEO in place, in order to get his name out there, as well.
SLM Solutions is public and the stock has been up for the year, but has hovered around $20 per share. That’s less than half of what it was in 2018. Major shareholders are ARK, which is riding the 3D printing market coattails rather well, and Elliott Investment Management, which is still in after botching the sale of SLM Solutions to GE (There was no movie this time). Another is the now 76-year-old Hans-Joachim Ihde, who must have seen more tumultuous board meetings than most due to the fact that he’s been with the oft-reorganized firm since the HEK and MCP days. Invesco Advisers, Inc. and ENA are also in (ENA company wins the Louis Bacon award for the least helpful website by the way for 2021. I can’t tell if they sell insurance or if they’re an exclusive men’s club). Everyone could use some good spirits and a nice bounce. This is especially true when we see precipitous rises in the valuations of other 3D printing firms. We’re 3D printing a Permanently High Plateau this time. It just looks and feels a lot like this is trying to build buzz for a later share issue or capital raise.
If SLM Solutions does successfully ship this huge system, they will need more capital to sell more of them and to get to the next level in their evolution. If they don’t, they’ll need more capital as not to get crushed by EOS and GE. All the complexity of these machines will require a lot more investment as well to get to the next level beyond that. So, some kind of a raise looks like it could be in the offing.
Another option is that the company is trying to make itself more attractive in the eyes of an acquiring company. Of the large machine tool companies, Mazak, DMG Mori, and Trumpf all have 3D printing offerings. Along with others, Schuler, for example, is probably smarting from the slowdown in automotive. So, it’s difficult to say but, everything is a snack for Siemens.
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