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spk00: Greetings and welcome to VoxelJet AG second quarter 2021 financial results conference call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during today's conference, please press star zero on your telephone keypad. If anyone should require operator assistance, you may do so by pressing star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Mr. Johannes. Thank you, sir. You may begin.
spk03: Thank you, operator, and good morning, everyone. With me today are Dr. Ingo Ederer, RoxyChess Chief Executive Officer, and Rudy Franz, RoxyChess Chief Financial Officer. Yesterday, after the market closed, RoxyChess issued a press release Announcing its second quarter results for the period ended June 30, 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 voxelchat.com. During our call, we may make certain forward-looking statements about the company's performance, including expectations on results from our current order backlogs. 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 residing 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 filings with the Securities and Exchange Commission. With that, I would now like to turn the call over to Ingo, the Chief Executive Officer of Rob2Chat.
spk04: Thank you, Johannes. Good morning, everyone. Thank you for joining us on our earnings call today. Let's turn to slide four. Our roots reach back to the year 1995 with the first successful dosing of UV resins. In the context of a hidden project, initial 3D printing tests were performed at the Technical University Munich. I co-founded the company on May 1st, 1999 as a spin-off from the university with the clear vision in mind to establish new manufacturing standards. today we provide a customer strategic competitive advantage by upgrading the existing conventional production methods to additive manufacturing solutions we push technology boundaries and develop new generative processes for the serious production of complex components on slide 5 you can find some more information about woody and myself we are significant shareholders and As we previously announced, we both extended our contract effective as of July 1st, 2021. We have a clear plan in mind and we are fully committed to make this a success for all stakeholders. Let's turn to slide six and some thoughts on the additive manufacturing market. As you can see, Wohler Associates projects growth to accelerate over the next years. This growth will be driven by larger share of sales manufacturing. 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 other players in the 3D printing industry is our focus on solutions for manufacturing or industrial production at scale. Keep in mind, we are working with 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. Before we start with the formal part of the presentation, let's quickly remind those who are new to that what we do. Let's turn to slide seven, where we describe our technology. In the additive manufacturing market, you have probably more than 10 different technologies, each with its specialized field of application. We use a technology called binder jetting. Binder jetting is especially suited for high volume manufacturing because of its potential to scale. On slide 8, you can see some of our products. It starts with the VX200 on the left and goes all the way to the VX4000, which is the largest binder chatting system available in the market. The idea is that we have one platform with many applications, means each model can be used with multiple material sets. For example, we offer the VX1000 3D printer for the printing of highly accurate sand casting molds, and there's a plastic polymerization printer. We expect to also offer it as a high-speed polymer-centering 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 the slide, we operate our own 3D printers in free facilities around the world to offer affordable on-demand access to our technology. The barriers to entry are very low as customers just need to send in the 3D data and we will print parts for them. That is great and easy way for our customers to understand new business opportunities in 3D printing. The short sales cycles and services helps us balance the typical long sales cycles in our system segment. 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, the US, as well as Asia. We focus on educating our channel partners to ensure true global coverage. Climbing to slide 11. We differentiate ourselves from our competitors by build size, mature 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 Blue Chip customers from various industries. Products made with our technology are flying in space, make mobility more efficient and new engineering solutions possible. Let's now start with the formal part of the presentation. I will begin with an overview of the results for the second quarter. Uli will then provide a more in-depth view of our financials for the second quarter and our outlook for 2021. Following his comments, we will take your questions. I am very happy with the results for the quarter as we have made significant progress in our key projects. Just recently, we signed a deal with a large multinational company for our new high-speed centering 3D printer as part of the beta program we have launched earlier this year. In addition to that, we are in advanced negotiations with another large multinational company, but cannot assure you that we will come to terms on a final contract. Over the last months, we have significantly improved the stability and reliability of the new HSS 3D printer and are currently in the process of ordering parts for the assembly of the first units. We have shipped the next VJDX units to the car makers facility. The 3D printers are brought in and installed in parallel with the ongoing operation of the VJDX units already in production. As you know, we are supplying a full production solution here. Our partners are currently making some upgrades to the post-processing workflows. For example, they are bringing in larger and more powerful microwave ovens, which cures the 3D printed cores prior to casting. In addition to that, we are working on an interesting project in the field of renewable energies and expect to announce more details on that soon. In our services segment, the demand for 3D printed parts continues to be high in Europe and has significantly picked up in the US and also in China. In our German 3D parts production center, we were able to achieve gross margins around 40%, which is an excellent result. Turning to slide 13, total revenue for the quarter increased 26% to 4.9 million euros as compared to 3.9 million euros in the second quarter last year. In our system segment, we sold two printers this quarter as compared to two printers in the second quarter 2020. Historically, the majority of 3D printer sales is recognized in the second half and the fourth quarter, and we expect it to be no exception this time. Aftersales revenue increased significantly as compared to the second quarter 2020, which is great news. We continue to achieve very strong gross margin contribution from the sale of consumables. Services revenue means the revenue from selling on-demand 3D printed parts continue to be strong in Europe, with sales up substantially and significantly higher than in the second quarter of 2020. Revenues in the U.S. and China increased substantially from the first quarter this year. Particularly in the U.S., we have seen a strong order inflow, probably the strongest in the last 15 months. For example, we have just recently received a large repeat order from a leading U.S.-based exploration company for printed PMMA patents for the casting of extra-large tetanium parts. Looking at the right side of this slide in gross margins, as a result of higher utilization, gross margin contribution from our 3D parts production centers in the US and China improved. In our European service center, utilization and gross margin contribution remained on a very good level comparable to the first quarter of 2021. Slide 14 breaks down order backlog by quarters revenue by geography and operating expenses by category. The majority of administrative expenses are related to the cost of being a public company, like, for example, audit and legal consulting fees. When 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 16, where you can see a close-up of the new large high-speed printer and 3D printer in action. We are very happy with the progress we are making. In the conference call with the first quarter results, we showed you a picture of the new printer. Since then, we have developed and implemented significant stability and performance improvements. We are currently ordering parts for the assembly of the first beta systems and are very happy that we already won a large multinational company. as the first customer for this new printer. On slide 17, you can see how a large part is taken out of the job box. The part was printed in PA 12 on the new HSS printer. On slide 18, we have summarized recent progress in other projects. As mentioned in the beginning, we successfully shipped and installed VJX units 4 and 5 at the carmaker's facility and received a technical pre-example for them. Regarding materials, over the year, Last year, we have developed ceramic materials that can be printed, for example, on a tailored Leaks 1000 system. Together with the Japanese company H&T, which is a market leader in glass and gas-related products and employs more than 50,000 people, we developed a material called Bridal. The ceramic parts 3D printed with this material can be used among other applications as calls for the investment casting process, in order to reproduce complex and filigree cavities within the castings. In the future, this process could make it possible, for example, to integrate internal cooling channels in turbine plates. With that, turbine efficiency could be increased and downtimes reduced to a minimum. Bridov is a high-performance ceramic that is extremely well-suited for metal casting to its high chemical stability, heat resistance, thermal conductivity, and low thermal expansion. We have just recently sent samples to selected customers, and the feedback so far has been very positive. In one of the later slides, you can see a printed part on our VIX1000 with a bright old material. Now let's move to another interesting 3D printing material. As you know, VJX is working with a fully environmentally friendly material set called Inorganics. 3D printed Inorganic calls create zero emissions during the handling and casting. Taking the knowledge we have gained over the last years, and especially so with the VJX, we developed a second generation inorganic material which can be processed with our standard 3D printers as well. The second generation material is cold hardening and can be used for larger parts, geometries, and thick-walled structures. In HSS, we have successfully completed recycling tests with an 80 to 20 configuration for thermoplastic polyurethane or TPU materials and increased the speed for running both axes in parallel on our VP200. This feature is already implemented on the large VX1000 HSS printer. A very large international sportswear manufacturer has recently done preliminary test tests in a 20,000 cycle setup with new GPU parts printed on VJ3D printers. And the results were much better than expected. There was significantly less loss in bounce and elasticity in the parts 3D printed with VJX, VJ HFS printers as compared to the other 3D printing technologies. This is excellent news. In our assembly department, we have implemented modular design streamline the process of 3D printer production. As we say, we have one platform in many applications. What does that mean exactly? For example, we offer our Wix 1000 3D printer in various materials and process configurations, like PM&A for investment casting, PDD for inorganic materials, and so on. What we do now is to assemble a basic machine, which is the same for all processes, and add on a process kit, which defines the type of material the printer will be using in the end. We expect this to reduce lead times and lower the costs related to the manufacturing of the 3D printers. On slide 19, you can see a part printed with write-up material on our Wix 1000 printer. 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. With this, we are continuously expanding our IP base going forward. We believe this will help us on our path to become a profitable company. With that, I would now like to turn the call over to Woody. Woody?
spk02: Thank you, Ingo. Good morning, everyone. It is good to see the progress we are making with our principal project, SweetShedX, and the large HSS printer. Just recently, we successfully collected additional funds from institutional investors to further strengthen our balance sheet. As a growing number of companies is realizing the opportunities in industrial 3D printing, we believe we are approaching an inflection point and have to accelerate to size the opportunities in front of us. Just a couple of weeks back, for example, we signed a deal with a large multinational company for our new high-speed sintering 3D printer as part of the better program we have launched earlier this year. Our aim is to deliver long-term value for shareholders to attract the growth, stronger margins, and optimal development of capital. Our attention remains firmly on driving operation execution to deliver these outcomes while managing our gradual transformation from a technology to a product company. Regarding COVID-19, we continue to work with some special measures in place around isolation and contamination protocols to ensure the safety of our employees and to reduce risk of operational disruption. Over the past month, COVID-19 cases have increased in certain areas of the world, and we are monitoring the evolving situation carefully. I will now take you through the financials for the quarter. After that, we are happy to take your questions. Turning to slide 21. Total revenues increased 26.2% to 4.9 million euros in the second quarter as compared to 3.9 million euros in last year's second quarter. Revenue from our 3D parts production center in Germany continues to be strong. It is good to see the U.S. and China catching up. Especially in the U.S., we have seen strong order inflow over the last week for on-demand printed parts. Cross-profit and gross margin per quarter were €1.4 million and 28% compared to €1.0 million and 25.9% in the second quarter of 2020. If you break this down, systems provided slightly lower gross profit margins by gross margin contributions from services increased significantly. A positive margin development in this segment is driven by continued strong performance in our German 3D parts production center. In the German 3D printing center, we reached a gross profit margin of around 40%. Contribution from our facilities in the US and China has improved as utilization is picking up. The next slides show our segment reporting for the quarter. On slide 22, revenues from our system segment, which includes revenues from selling 3D printers, consumables, and spare parts, as well as maintenance, increased 43% to 2.7 billion euros for the quarter. from 2.1 million euros in the second quarter of 2020. We saw one new and one refurbished printer this quarter as compared to two new printers in last year's second quarter. It is good to see that revenues from our after-sales segment means consumables and maintenance continues to contribute strongly. On slide 23, revenues increased 11% to 2.3 million euros in the second quarter of 2021 compared to 2.1 million euros in the same quarter last year. The increase is driven by continued strong performance in our German 3D parts production center. Contribution from our 3D printing centers in the US and China improved substantially from the first quarter this year as utilization is picking up. As a result of higher utilization, services gross margin improved to 28.9% from 19.4% in the second quarter 2020. Looking now to the rest of the income statement on slide 24, Selling expenses were 1.5 million euros as compared to 1.3 million euros in last year's quarter. The majority of our selling expenses are personal expenses and distribution expenses, such as trade and commissions for sales agents. Administrative expenses were 2 million euros as compared to 1.8 million euros in the second quarter of 2020. Keep in mind, we typically spend more than a million euros in auditing fees per year and over 5 million euros in legal consulting fees. Research and development expenses slightly increased to 1.7 million euros from 1.6 million euros in the second quarter of 2020. Operating loss was 3.9 million euros in the second quarter this year compared to an operating loss of 4 million euros in the comparative period last year. Net loss for the quarter was 2.5 million euros or 0.41 euros per ADS compared to a net loss of 5.1 million euros or 1.06 euros in the five years same quarter. The improvement is related to the revaluation of the derivative financial instruments with the European Investment Bank as part of the financial results. This revaluation is a non-cash item. We have provided the same presentation for the first half period ended June 30, 2021, on slide 25 to 28. Slide 29 shows selected balance sheet items. At June 30th, 2021, the company had cash, cash equivalents and short-term investments in bond funds of roughly 18.5 million euros. We increased our cash position with a registered direct offering in July 2021 that added cost proceeds of $10 million. Total debt at June 30th, 2021 was approximately 29.3 million euros. Of this, 28.1 million euros are long-term. Long-term debt primarily consists of 15 million euros from the EIB Horizon 2020 Venture Debt Program. Weighted average number of shares outstanding for the second quarter 2021 were 5.9 million 584 ADF. Current shares outstanding are 7 million 26,711 ADF. On slide 30, we have summarized our financial guidance for the full year 2021 which remains unchanged. Revenue for the third quarter 2021 is expected to be between 4.5 and 5.5 million euros. This concludes my remarks. With that, we will now open the call up for your questions. Operator.
spk00: At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad A confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue for participants using speaker equipment. It may be necessary for you to pick up your handset before pressing the star key. One moment while we poll for questions. Our first question comes to the line of Brian Kingslinger with Alliance Global Partners. You may proceed with your question.
spk01: Hi, guys. Thanks for taking my questions. The fourth quarter of guidance is obviously solid. It's always been a back-end loaded business. But can you remind us the range of the number of printers you expect to deliver at the high and the low-end range and their rough average price points? And then how many printers are sitting at the automotive OEM site that you have not yet been able to recognize? And what goals need to occur for you to recognize revenues?
spk02: So I start with the last part of your question. Currently, there are sitting five printers with this client, meaning sitting on our balance sheet, but installed at the client's premises. We expect to get the final acceptance for this printer during the next quarter. The other questions were how many printers Do we plan to ship in the upcoming quarters? We have not given specific guidance on when and how many printers we ship. What I can say is the average price of a printer is between $500,000 and $700,000, and I think you could easily calculate how many it can be. Overall, currently, we ship on a yearly basis between 20 and 25 printers. That's the number which we are currently working on, and this is what we want to grow over the next couple of years.
spk01: Have I answered all topics of your question? Yes. And then if anything changed with the timeline for the better or worse, I mean, obviously the automotive industry is having problems with chips and inventory. I'm not sure that impacts you in the short term, but it's worth asking how that impacts, you know, their process, their priorities as it relates to your business.
spk02: So currently, as every party in the industry sees that there are restrictions on some end, but overall we're dealing with the situation pretty good and don't see any significant delays when ordering parts.
spk01: Okay. That's ordering parts, but what about your customers? You're always, you know, I take it all the automotive companies are having trouble creating inventory with the lack of chips. So did that impact you in any way? No, it did not.
spk02: It did not impact us. Got it. You always have inventory, you deal with it, but I could not say that we significantly impacted at this stage. It might change, but currently we're not significantly impacted and we're monitoring this very carefully. And our purchasing department is very close to both matters.
spk01: Great. And then with the sportswear company, it sounds like the performance of the HSS was very solid. So what's the next step there? Have they ordered a couple? Do you expect them to order a couple based on the performance? Is there more testing to do? Just take us through the process now that you've proven out a solid performance of your printers.
spk04: As you heard me saying, we are in the process of starting the on-site data project with the HSS printers. One of these printers is dedicated to a special material set, which is explicitly needed for these kind of spot-through applications. Once we have the results from the data project, we can roll it out So I think the customers are very happy so far about the results and waiting for the machine and then in a serious position.
spk01: OK, thank you.
spk00: Ladies and gentlemen, we have reached the end of today's question and answer session. I would like to turn this call back over to Ingo for closing remarks.
spk04: Thank you. To sum up, we are very much encouraged by the recent progress we have made in our principal projects. We believe we have the ecosystem resources and technology to become a key supplier of solutions for high-volume industrial 3D printing. The opportunities all around the world are based and we are ready to take them Thank you for joining today's call, and we look forward to speaking with you again in our next call, which we expect to take place in November with the financial results for the third quarter 2021. Thank you.
spk00: Thank you for joining us today. This concludes today's conference. You may disconnect your lines.
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