voxeljet AG

Greetings. Welcome to VoxelJet AG's third quarter 2022 financial results conference call. At this time, all participants will be in listen-only mode. A question and answer session will follow the formal presentation. If anyone today should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. At this time, I'll now turn the conference over to Johannes Pesch, Director of Investor Relations, Business Development. Mr. Pesch, you may now begin.

Thank you, operator, and good morning, everyone. With me today are Dr. Ingo Ederer, Voxelchat's chief executive officer, and Rudi Franz, Voxelchat's chief financial officer. Yesterday, after the market closed, Voxelchat issued a press release announcing its third quarter financial results for the period ended September 30th, 2022. 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 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 extra results to differ materially from those expressed, including the risks and uncertainties caused by the current COVID-19 pandemic and to reciting uncertainty in the global economy. For additional information concerning factors that could cause extra recites 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, Chief Executive Officer of Oxford.

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 5th, 1999 as a spinoff 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 the existing conventional production methods to additive manufacturing solutions. We push technological boundaries and develop new generative processes for the serious production of complex components. Let's turn to slide five, where we describe our technology. In the additive manufacturing market, There are likely more than 10 different technologies, each with its specialized field of application. We use a technology called binary jetting. Binary jetting is especially suited for high-volume manufacturing because of its potential to scale. With our VJSX technology, we are pushing new boundaries. In slide 6, you can find a high-level overview of our company, including recently achieved milestones. We believe these will help us on our mission to establish new manufacturing standards. In recent months, we have seen some of the best order inflow for 3D printers we have ever had. Now the focus is on delivering these printers on time. Order backlog for our 3D printers is at a record high. Recently, we cleaned up the balance sheet by completing the sale and leaseback transaction of our headquarters here in Germany. With a gross proceeds of approximately 26.5 million euros, we have repaid our financial liabilities. On slide seven, you can see pictures of our production facilities in Germany, US, and China. Now let me briefly explain our two business segments. In the services segment, top 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. Demand in this segment has been outstanding in recent months in Europe and in the US and we were basically at overcapacity for the whole time. 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 system segment. Customers come from various industries, including automotive, aerospace, general engineering, as well as art and architecture. In the US, one of our largest on-demand printing clients is a supplier to a leading space exploration company. 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. Let's turn to slide eight and an illustration of the wide range of applications of our technology. We are encouraged by the many discussions that we are having with different players in a broad variety of industries. They are all seriously looking at adopting our technology for well-chosen applications. And this interest is translating into orders. In recent months, we have seen some of the best order inflow for our 3D printers ever. Let's turn to slide nine and some thoughts on the additive manufacturing market. As you can see, Wohler's associates project grows to accelerate over the next few years. This growth will be driven by a larger share of sales to manufacturing. I believe we are in an excellent position to capture our fair share of this growing market over the next few 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. We have been working with leading industrial OEMs since our foundation. We sold our first 3D printers to BMW and Daimler more than 20 years ago. Our technology has evolved significantly over the last few years in terms of speed, accuracy, and the degree of automation of the whole process chain. 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 have halted our activities in Russia and Belarus until further notice. Turning to slide 11, on the left side, we have summarized our USPs. We differentiate ourselves from our competitors by build size, material diversity, and speed. This leads to a complete set of industrial 3D printers to support critical, demanding applications and address the challenges and needs that are most important to our customers. Each model can be used with multiple materials. For example, we offer the VEEX 1000 3D printer for the printing of high-accurate sand casting molds for ceramics or as a plastic polymerization printer. On the right side of this slide, you can see our portfolio of 3D printers and the corresponding build volume. Layer times vary with platform and process and can go as fast as four seconds with the VJD. The new BSP printer, which we are currently developing together with GE, is expected to have a build volume of more than 50 cubic meters. The normal size offers completely new opportunities. We are very excited for it. Let's start with the formal part of the presentation on slide 13. I will begin with an overview of the results for the third quarter. Woody will then provide a more in-depth view of our financials for the third quarter and our outlook for the rest of 2022. Following his comments, we will be happy to take your questions. We are very happy with our performance over the last month as we continue to collect large orders for our 3D printers, made progress in key R&D projects, and were extremely busy in our on-demand 3D printing segment. The demand for our products is as high as ever. We are very excited about how we are positioned for the coming years. Now we are working hard to make the deliveries and installations on time to be able to book revenue for these orders in 2022. Similar to many other companies, we continue to see some delays with our suppliers, especially for electrical components. We are working closely with our suppliers and the support we receive is excellent. Let's look at their numbers in some more detail. Total revenue for the quarter increased 16%. Revenue in the on-demand 3D printing segment increased 24% year over year. It is great to see that this growth comes from a wide variety of applications, projects for space exploration and yachts in the U.S., large orders from the art and architecture sector in Germany, components for cooling of parts in electric vehicles in the UK, and so on. Very recently, we received another large order for printed parts here in Germany from a supplier to a large US electric car maker. Looking at the right side of the slide and gross margins, we are pleased with the gross profit and gross profit margins in our services segment, especially in Germany, It was a bit weaker in the US and China. This is partially the result of timing, for example, when we installed a new printhead. In our system segment, gross profit margin from the sale of 3D printers decreased as a result of product mix. These fluctuations from quarter to quarter are nothing that makes us nervous. It is great to see that the systems related revenue significantly increased in the third quarter year over year. reflecting the higher install base of our 3D printers in the market. Slide 14 breaks down order backlog by quarters, revenue by geography, and operating expenses by category. Regarding order backlog, I would like to highlight we mentioned in our earlier conference calls that on-demand printing revenue is a good leading indicator for future sales of 3D printers. This is exactly what we have seen in recent months Order inflow for 3D printers was one of the best we ever had so far, and order backlog for 3D printers was at 13.7 million views at the end of September 2022. That is a new record. In looking at revenue by geographic region, we target an even distribution across the three regions to hedge against risk from local events. Let's turn to slide 15 and a quick status update on some of the projects we are working on and why we believe there is no other company in this space with a comparable portfolio of solutions for additive mass production. Most additive manufacturing machines are designed for prototyping and single-part production. They cannot be easily integrated into the shop floor. Integration requires machine controls that can be included seamlessly in the factory's manufacturing execution systems and enterprise resource planning software. It also requires high levels of automation to reduce manual work and comprehensive maintenance services, similar to those for other production machinery to reduce the number of costly production stops. This means the integration of 3D printers into automated processes and workflows is critical. We have gained significant knowledge in this area over the last few years, especially with the VJX in our project with the German car maker. You can see some pictures at the bottom of this slide. While the project was extremely challenging, we now have five printers in operation. All of them have been handed over operationally to the customer. We have gained invaluable insights that can be applied to other projects and developments. We have summarized some of them on the upper half of this slide. For example, with our WIGS 1000 PMMA printers, We help U.S. clients mass produce critical components in marine and aerospace applications. Cheryl Marine, for example, who has developed a next generation propeller system that can only be made with 3D printing, earlier this year announced a global distribution and manufacturing supply agreement with Yamaha marine precision propellers. They looked at all the available 3D printing technologies and also conventional technologies and decided to go with water jet technology, as it is the only one that allows them to manufacture at sufficient scale and at acceptable costs. With GE Renewable Energy, we are developing an ultra-large 3D printer for the production of next-generation wind turbines. We are currently sourcing components for the prototype printer. TEI, a long-standing customer in the U.S., is using several of our VX4000 printers to make large, complex castings. Recently, they won a multi-year contract from a large U.S. carmaker to make certain components of a new electric vehicle. In this case, it's the underbody of the car that is made by printing the molds, followed by casting. Just six large, hollow, structural castings make up the complete vehicle underbody for this future EV. The rear rail combines the torque box, longitudinal and shock tower into one complex hollow casting. All hollow sections will be made using 3D printed cores in production. In doing so, they can combine the advantages of 3D printing, namely product and process innovation, with those of conventional manufacturing of metal parts via casting, cost advantages and high degree of automation. Another important advantage of our technology is avoiding high recertification costs, as the casting process is a standard process for the production of metal cast parts. In Germany, we recently received an order for structural components from a supplier to another U.S. electric carmaker. Structural geometries of printed components are becoming ever more complex, and demand for lightweight hollow structures is growing fast. means we are 3D printing a lot of parts for the casting of structural components, which is a really exciting application of our technology. On the right side of this slide, you can see an update on the new high-speed sintering or HSS printer. Assembly of the first beta systems is complete, and we are currently doing the in-house commissioning. Next, we prepare shipment to our clients, which we expect to take place early next year. We believe we are now reaching an inflection point and the number of parts that are currently going into production is increasing fast. On to some material development use on slide 16. As mentioned in the last conference call, we have put commercially available concrete powder from a local store on our week 200 and were able to print parts of excellent quality. The large part on the left side of this slide was printed in sand and then casted in concrete. On top of the large part, you can see a smaller part that was directly 3D printed and is as it is out of the printer, meaning no post-treatment was necessary. The surface is exceptionally smooth and the degree of detail is far better than we had expected. In the middle of the right side of the slide, you can see close-ups of parts directly printed in concrete. We have seen interest from companies that, among many other things, operate very large theme parks. Turning to slide 17, we hosted a two-day customer seminar. Finally, again, live and in person, the seminar featured fascinating speakers and presentations about metal castings and 3D printing, topology, optimization, large-format art castings, and material development for polymer additive manufacturing, networking sessions, and get-togethers. To sum up the recent months, excellent growth rates and exciting projects in our on-demand printing segment. one of the best order inflows for our 3D printers, good progress in the key R&D projects, and full focus on execution. We have a lot to look forward to in the coming months and years, and with that, I would now like to turn the call over to Woody.