voxeljet AG

Greetings and welcome to the VoxelJet AG first quarter 2021 financial results call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Johannes Pesch, Director of Investor Relations and Business Development for Voxeljet. Thank you.

Thank you, operator, and good morning, everyone. With me today are Dr. Ingo Ederer, Voxeljet Chief Executive Officer, and Rudy Franz, Voxeljet National Officer. Yesterday, after the market closed, Voxeljet issued a press release announcing its first quarter resides 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's website at www.walkthejet.com. During our call, we may make certain forward-looking statements about the company's performance, including expectations on results from our current order backlog. Such forward-looking statements are not guarantees of future performance, and therefore one should not place undue reliance upon them. Forward-looking statements are also subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed, including the risks and uncertainties caused by the current COVID-19 pandemic and the resulting uncertainty in the global economy. For additional information concerning factors that could cause actual results to differ from those discussed in our forward-looking statements, you should refer to the cautionary statements contained in our press release as well as the risk factors contained in the company's filing with the Securities and Exchange Commission. With that, I would now like to turn the call over to Ingo, Chief Executive of Central Project.

Thank you, Johannes. Good morning, everyone. Thank you for joining us on our earnings call today. Let's turn to slide four. Our rules reach back to the year 1995 with the first successful dosing of unique durable resins. In the context of a hidden project, initial 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 a clear vision in mind to establish new manufacturing standards. Today, we provide our customers a strategic competitive advantage by upgrading their 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 Rudy and myself. We and our supervisory board together hold roughly 20% of the company. We are happy to announce that we both extended our contract 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 six and some thoughts on the additive manufacturing. As you can see, Wohler's associates project grows 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, 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 be a $640 billion industry. I believe we are in an excellent position to capture our fair share of this growing market over the next year. because what really differentiates us from other players in the 3D printing industry is our focus on solutions for manufacturing or industrial production at scale. I would estimate that with our current portfolio of 3D printers, our share in sales for manufacturing is already higher than any of our competitors. I expect this to grow further significantly with VGDX and the new high-density printers. I believe so because we are working with leading industrial OEMs basically since our foundation. We sold our first 3D printers to BMW and Daimler in 2002. In addition, our technology evolved significantly over the last years in terms of speed, accuracy, and the degree of automation of the whole process chain. I firmly believe there is currently no other company in our industry who can offer a fully automated 3D printing line for large-scale manufacturing like we do with the VJX. Before we start with the formal part of the presentation, let's quickly remind those who are new to what we do. Let's turn to slide 7, where we describe our technology. In the additive manufacturing market, we have probably more than 10 different technologies, each with its specialized field of application. We use a technology called binary shading. Binary shading is especially used for high volume manufacturing because of its potential to fail. On slide 8, you can see some of our products. It starts with the week 200 on the left and goes all the way down to the week 4,000, which is the largest binder checking system available in the market. The idea is that we have one platform with many applications. Each model can be used with multiple materials. For example, we offer the 1,000 3D printer for the printing of highly accurate sand casting molds and as a plastic polymerization printer. We expect also to offer it as a high-speed polymer sintering 3D printer. Looking at slide 9 and our integrated business model. With this integrated model, we can capture business either as a 3D printer sale or on-demand printing contract. In the services segment on the left side of this slide, we operate our own 3D printers in three facilities around the world to offer affordable on-demand access to our technology. The barriers to entry are very low, and customers just need to send in the 3D data, and we will print parts for them. That is a great and easy way for our customers to understand new business opportunities in 3D printing. The short sales cycles and services help us balance the typical long sales cycles in our systems. In our system segment, we manufacture and sell industrial-grade high-speed large-format 3D printing systems geared towards mass production of complex models, molds, and direct parts. Systems revenue also includes recurring revenue from the sale of consumables, maintenance contracts, upgrades, and other after-sales activities. Slide 10 shows our global sales network and production footprint. As you can see, we have reached an established position in all major markets in Europe, USA, as well as Asia. We focus on educating our channel partners to ensure true global coverage. Turning to slide 11, we differentiate ourselves from our competitors by build size, material diversity, and speed. Our printing systems are modular, versatile, and highly scalable, and therefore uniquely positioned to support critical, demanding applications and address the challenges and needs that are most important to our customers. We have established excellent relationships with future customers from various industries. Products made with our technology are flying in space, make mobility more efficient, and view engineering solutions possible. Let's start with the formal part of the presentation. I will begin with an overview of the results of the first quarter. Rudi will then provide a more in-depth view of our financials for the third quarter and our outlook for 2021. Following his comments, we will be happy to take your questions. It has been six weeks since our fourth quarter and full year 2020 earnings call. Among other things, we have continued to assemble VJX units number four and five. In one of the later slides, we have included a picture of the current status. I'm happy to say that we are on track and slightly ahead of our schedule for delivery to the carmaker in the next weeks. Remember, the first two units are at the carmaker's facility since a couple of years. Together with this OEM and our partners, we use the time to further optimize the printers and the whole supply chain. Keep in mind, this is a fully automated production line, including robotic systems, which take the 3D printed parts and remove unbound material. When it comes to 3D printing and high-volume manufacturing, I firmly believe that this project is at the forefront of technology. We expect to book revenue for the first units in the next upcoming months. We have also included a picture of our new HSS printer in one of the later slides. We are very happy with the progress we are making. For example, just recently we put the printer under a sort of stress test and were successfully printing a job utilizing the full height. This is an important milestone. As mentioned in the beginning, we are a technology company with a clear mission to establish new manufacturing standards. Consequently, we continue to invest a significant amount of our resources into research and development. Expanding our IP, because when you have IP, you will have a cross margin. IP is the reason why our R&D investments are very important. Turning to slide 13. Total revenue for the quarter increased 4.5% to 4.1 billion euros as compared to 3.9 billion euros in the first quarter last year. In our system segment, we sold two new printers this quarter as compared to one new and refurbished printer in the first quarter 2020. Historically, the majority of 3D printer sales is recognized in the second half and the fourth quarter of the year, and it was no exception this time. Today, the revenue increased as compared to the first quarter 2020, which is good news. We achieved excellent gross margin contribution from the sales of consumers. Services revenue means the revenue from selling on the printed parts continued to be strong in Europe with sales on a similar level as in the fourth quarter of 2020, but below the first quarter of 2020. In the US, market demand for services was weak over the first month of this year. We hear from our customers that the demand for their product is picking up again, and we certainly see that in the order and flow over recent weeks, which was much better than in previous months. Looking at the right side of this slide and growth margins, as a result of lower utilization, growth margin contribution from our U.S. and China 3D parts production center was lower. in our european service center utilization growth margin contribution remained at a good level comparable to the fourth quarter of 2020. slide 14 breaks down order backlog by quarters revenue by geography dating expenses the category and we looking at revenue by geographic region we target an even distribution across the three regions to hedge against risk from local events Let's move to slide 15 and an update on our growth drivers, VJDX and high-speed sintering. In the following slides, we have included pictures of the new 3D printers. The pictures were taken at the end of April this year. We believe these new products will help us capture a significant portion of manufacturing-related revenue. Keep in mind, these printers are made for automated industrial productions. Let's start with VJX on slide 16. In the presentation with fourth quarter and full year 2020 results, we included a detailed timeline. Today, we want to show you a picture of VJX units four and five. On top of the printers, you can see the large control cabinet. The printers are designed for industrial production, which requires high performance and availability, as well as straightforward servicing and flexible expansion options. Meanwhile, the assembly is completed, and the printers were handed over to our in-house commission. We expect to bring them to the carmaker's facility in the next weeks. In this facility, we have trained technicians of the OEM, and they are now operating the printers independently for months and supply pre-series production. Our teams are on standby if something unexpected happens. This is a very important milestone, and we are optimistic that we can book revenue for the first unit in the next month. On slide 17, you can see a VJX-coated unit with bidirectional recoding technology for layer times of around four seconds. We have also included a link to a video of this purpose unit in action. Let's move to slide 18 and an update on high-speed sintering. On the left side of this slide, you can see a picture of the new high-speed sintering printer. As mentioned in the fourth quarter and full year 2020 conference call, it successfully printed on the full build area. To my knowledge, this is the largest polymer sintering 3D printer in this industry. We have filed IP for this, which we believe is critical to achieve consistent results in centering across such a large field area. Just recently, we put the printer to a stress test and achieved another significant milestone. We fired it up early in the morning, and it was successfully printing a full job until late in the evening. This was critical because we did not yet know how the printer would behave when exposed to these temperatures for an extended period. We are happy to say that the test was successful. There is still some optimization to do, and we are making excellent progress. Based on some initial calculations, we can reach costs per part, which are significantly better than that of competing technologies and close to those of conventional manufacturing. Our batch size is of several hundred thousand parts. On slide 19, we have included a link to a video featuring our week's 1,000 agencies. 3D printer in action and an insight into our high speed filtering technology. On slide 20, we have compared parts printed with HP MultiJet Fusion and our high speed filtering technology. On the bottom of this slide, you can find a link to a detailed comparison between HP MultiJet Fusion and VJ-8 high speed filtering. With that, I would now like to turn the call over to William. William?