voxeljet AG
Q1 2021 Earnings Call Transcript

Published: 14 May 2021

[Operator:]

Greetings and welcome to the voxeljet AG First Quarter 2021 Financial Results Call. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Johannes Pesch, Director, Investor Relations and Business Development for voxeljet. Thank you. You may begin.

[Johannes Pesch:]

Thank you, operator and good morning everyone. With me today are Dr. Ingo Ederer, voxeljet’s Chief Executive Officer and Rudi Franz, voxeljet’s Financial Officer. Yesterday, after the markets closed, voxeljet issued a press release announcing its first quarter result for the period ended March 31, 2021. The release, as well as the accompanying presentation for this conference call, is available in the Investor Relations section of the company website at voxeljet.com.

[Ingo Ederer:]

Thank you, Johannes. Good morning, everyone. Thank you for joining us on our earnings call today. Let’s turn to Slide 4. Our roots reach back to the year 1995 with the first successful dosing of UV curable resin. In the context of a hidden project, initially 3D printing tests were performed at the Technical University of Munich. I Co-Founded the company on May 5, 1999, as a spin-off from the University with the key addition in mind to establish new manufacturing standards. Today, we provide our customers a strategic competitive advantage by upgrading the existing conventional production methods to additive manufacturing solutions. We push technological boundaries and develop new generated processes for the series production of complex components. On Slide 5, you can find some more information about Rudi and myself. We and our Supervisory Board, together hold roughly 20% of the company. We are happy to announce that we both extended our contracts just recently. We have a clear plan in mind and are fully committed to make this a success for all stakeholders. Let’s turn to Slide 6 and some thoughts on the additive manufacturing market. As you can see, Volex Associates projects growth to accelerate over the next years. This growth will be driven by a larger share of sales to manufacturing. How big could this opportunity become? If we assume that the global economy is about $80 trillion and if we assume that manufacturing accounts for 60% of it, this would put the manufacturing economy at around $12.8 trillion. If additive manufacturing captures only 5% of it, this could potentially become a $640 billion industry. I believe we are in an excellent position to capture our fair share of this growing market over the next years, because what really differentiates us from the other players in the 3D printing industry is our focus on solutions for manufacturing or industrial production at scale.

[Rudi Franz:]

Thank you, Ingo. Good morning, everyone. We are off to a decent start to the progress we have been making in our principal project, VJET X and the large HSS printer. We successfully collected additional funds because we believe we are approaching an inflection point and have to accelerate to size the upcoming opportunities in front of us. As we mentioned in the last conference call, we believe that the share of our revenues from manufacturing will expand in the coming years as we will be offering and starting recognizing revenue from our new manufacturing focused products. In addition to working on the new printers, we continue to upgrade our existing portfolio of 3D printers. For example, we have added an updated printer engine to our high-end VX2000 systems, basically doubling the speed of the printer. We sold such system to a client in the first quarter of this year. We have a new fully environmental friendly printing material in pipeline, which could potentially be used on our largest printers, including the VX4000.

[Operator:]

Our first question comes from the line of Brian Kinstlinger with Alliance Global Partners. Please proceed with your question.

[Brian Kinstlinger:]

Hi guys. Thanks for taking my question. Thanks for giving us the update on the 5 printers for the German automotive manufacturer. It’s helpful. Can you talk about discussions du are having with other German auto manufacturers? Is there enough success yet given your printing – sorry, given your one customer is printing without your help? Is there enough success yet to have meaningful conversations? And can you talk about how those conversations are going? And more so, should we expect to see orders from other customers by the end of the year or is that more a 2022 event?

[Ingo Ederer:]

Hi. Thank you for your question. This is Ingo. So as already mentioned, we are in talks with many other providers, not just carmakers, but also suppliers and also suppliers for other industries for similar products and similar solutions as we see with the VJET X. I think the market waits for positive results so far from the German carmaker. As soon as we have, let’s say, the potential to release a press release together with them about the successful implementation, I think it will definitely provide us a good start for further marketing this product.

[Brian Kinstlinger:]

And I guess, do you think that timing is in the second half of this year? Did that happen…?

[Ingo Ederer:]

Yes, absolutely. So, we speak about probably such a success message by later this year.

[Brian Kinstlinger:]

Great. And then regarding the new sintering printer, can you take us through the timeline of where the milestones we should be evaluating this technology against? Again, similar, when do you expect the orders or pipeline metrics that we should be tracking? Just maybe help us evaluate through the remainder of the year for that product?

[Ingo Ederer:]

Absolutely, absolutely. So currently we are in the stages of finalizing the ultra-stage, which means a first printer is running here constantly on our factory floor. And we are also currently designing the upcoming beta units. I’m saying beta units because it will be more than one printer. We will assemble these printers towards the end of the year. And we will be able to start our beta programs with the selected customers probably by the end of this year The plan is to have at least one beta customer. Currently we think that we will have two. The pipeline is already full, so we can select customers from various groups and we will believe that this pipeline will be also good for us to be valid for the upcoming series machine, which is probably taking place by the end of next year.

[Brian Kinstlinger:]

Great. One more question for me. Regarding the supply chain, can you talk about any issues given the global supply chain challenges you may or may not be having with lead times, parts or supplies that you need? And how is it impacting your business, if at all?

[Ingo Ederer:]

Yes. So we also face these problems with the parts that we need for our printers. Luckily we are still having a warehouse which is well-equipped with parts. And we see for this – for the next, next products we will intend to book revenue, no delay. But we are looking forward to get new parts, probably with a delay sometimes between 4 and 6 weeks. And this may have impact on the next year’s revenue. It’s completed for this moment. We do everything in our hands to accelerate the sourcing and to get things done as soon as possible.

[Brian Kinstlinger:]

Great. Thanks so much for answering my questions.

[Ingo Ederer:]

You are welcome.

[Operator:]

Thank you. Our next question comes from the line of Troy Jensen with Lake Street Capital. Please proceed with your question.

[Troy Jensen:]

Hello, gentlemen. Thanks for taking my questions. First of all, is today Rudi’s birthday?

[Rudi Franz:]

Yes.

[Troy Jensen:]

Happy Birthday, sir.

[Rudi Franz:]

Thank you. Very kind.

[Troy Jensen:]

Yes. You guys over 45, so keep up the good work. How about question time here, so can you just talk about the number of high-speed sintering customers you currently have? I know you stick to lot of kind of the demo platforms or test beds. Just curious what that number is?

[Ingo Ederer:]

So I need to question you back. What do you mean specifically, for the 200 or for the 1000 or mix?

[Troy Jensen:]

High-speed sintering customers. Do we have to shift…

[Ingo Ederer:]

So we have – the 200 high-speed sintering is already in the market for 2 years, and we have a bunch of installations out. So these are already customers who are working actively with the technology. Then when you speak specifically about the 1000, we have a list of potential beta clients for this one. Among them are very famous brands and also service suppliers which also are well-known to the industry. And it’s filling up. It’s good news. So most of these guys, they already have experience with some sort of similar technology like coming from SLS or HP, and they are seeking something different for the future.

[Troy Jensen:]

Great. Okay. And then I’m assuming that launch, it’s just going to be Nylon 11 and Nylon 12. Is there anything else or…

[Ingo Ederer:]

So the initial – yes, so the machine basically is an open materials platform, so you can run all materials which are applicable for HSS on the machine basically. But for sure, the initial machines will be equipped with the PA 12 and also with the process for PA 12.

[Troy Jensen:]

Okay. Alright. Then switching gears, last quarter you talked about electrical vehicle markets, specifically the helical cores. Just wondering if you’re getting any traction with that? Or is that also kind of a story made for maybe more for next year?

[Ingo Ederer:]

So the inorganic core making, this is something really special for the automotive industry. And these guys, not just the one where we have supplied the machines to, these guys are seeking for – to use this in non-transport combustion engines but also for electric engines and other components in the car to be cast with inorganic cores. And while the addressable market is still there, the customers are talking to us, requesting benchmark pieces. We are in a good shape to supply further technology upgrades. And yes, we believe it’s quite promising for us. So currently, as you heard me saying, the machines at the customer side are working in preseries mode. The next two printers are in progress to be delivered. Once they are installed and the full setup is complete, and we still probably see some weeks of testing with the customer. And then hopefully we can have this common press release of our success, and then we start from that.

[Troy Jensen:]

Got it. I got two more questions. So can you just talk a little bit about the automotive industry, basically for your services bureau? So I was a little surprised to see the U.S. market weak. It seems like we’re kind of recovering over here, not as close to the European, but just your thoughts on the second half services in the recovery in auto?

[Ingo Ederer:]

So in general, I would say that the auto market is here. In our services center and the on-demand parts center in Germany, brings only a smaller portion of the business. So we currently get more from other industries, energy, engineering components, even art and architecture and so on. In the automotive sector, there is still movement in the electric engine side. So we get more and more of these components also in our service center. But there is still, of course, all those development going on, on combustion engines and components. I would say with the new and now accelerating sales in electric vehicles, we will see more and more of these components for such cars coming also to the service centers since most of these car manufacturers are still in an exploration mode, how to manufacture components in future for these products. And the U.S., well, the U.S., we have a little bit, a different customer base there. A lot of our existing clients are working in the aerospace industry, also in the civil aircraft industry and there – and this industry is still relatively weak for obvious reasons. I think it will pick up and we get some more orders. What helps us definitely is the run on – in space So we’re doing a lot of business. There is a companies working in the space exploration field. And as well, the order is also picking up a little bit.

[Troy Jensen:]

Okay. Now my last question for you, Ingo, there is a lot of interest in metal powder bed binding right now. And given you guys have this established product that can do large format, really fast power bed jetting, could you guys change the material out and use metal powders and binders appropriate for metals? I know you got a lot in your plate right now and kind of focus on what you’re doing. But have you thought about current – going into metal powered bed jetting?

[Ingo Ederer:]

Troy, this is an interesting question. So as you know, that we are working on binder jetting and binder jetting is a very, let’s say, a quite open mature platform. And we are clearly watching what kind of materials are needed and maybe successfully printed on similar machines. And I think we are watching the market carefully. And also the restrictions in post-processing of printed metal parts. I think there is a clear move towards better products in post-processing. And with that, it is obvious that we also try whatever is possible to achieve new goals. I would not directly say that – we are doing metals for this moment, but I would not say we don’t do it.

[Troy Jensen:]

Okay. Understood. Good luck, gentlemen.

[Ingo Ederer:]

Thank you, Troy.

[Operator:]

Thank you. Ladies and gentlemen, that concludes our time allowed for questions. I’ll turn the floor back to Dr. Ederer for any final comments.

[Ingo Ederer:]

Thank you. To sum up, we believe that the value proposition of 3D printing is more compelling than ever to the manufacturing industry, especially in light of the uncertain global environment we are in today. We believe we have the ecosystem, resources and technology to become a key supplier of solutions for high-volume industrial 3D printing. Keep in mind that is the reason why we started the company 20 years ago. Thank you for joining today’s call. And we’re looking forward to speaking with you again in our next call, which we expect to take place in August with financial results for the second quarter 2021. Thank you.

[Johannes Pesch:]

Thank you everybody. Have a good weekend.

[Operator:]

Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.