SLM Solutions (ETR:AM3D) released its first-half 2022 earnings report, including record second-quarter and first-half revenue for the business, as well as an order backlog that is at its position largest for the third consecutive quarter.
To put it succinctly, SLM Solutions CEO Sam O’Leary said the metal 3D printer maker is having a “record quarter” thanks to its second-quarter revenue, which grew 60% in 2018. year on year to 26.1 million euros against 16.4 million last year. This translated into a 34% increase in first-half revenue of €42.5 million, compared to €31.7 million for the same period of 2021.
Revenue performance was driven by the first two deliveries of NXG XII 600 machines in validated production condition, strong performance from the existing portfolio and continued growth in the aftermarket business segment. While minimizing the effects of continued supply chain disruptions, which remain a critical risk.
Additionally, for the third consecutive quarter, SLM Solutions recorded its largest ever backlog at €49.1 million, up 62% year-on-year, while orders for the second quarter amounted to 22.6 million euros, up 100% compared to last year.
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Other key milestones in the quarter include the successful transition of the revolutionary and market-leading NXG XII 600 into the production stage delivery phase and Rolls Royce’s purchase of two SLM 500 systems for the production stage. of its 18,000 pound thrust Pearl 10X engine, the newest member of the Pearl family.
The first two validated NXG XII 600 production machines have been delivered to SLM Solutions development partner Divergent Technologies, a long-time customer with an installed base of 16 SLM systems, including five NXG XII 600 machines, with more in order for delivery in 2022. SLM’s NXG XII 600 is set to become the AM driver of the Divergent Adaptive Production System, delivering sustainable volume manufacturing and disrupting the automotive industry.
In addition to Rolls Royce’s purchase of two SLM 500 machines, Bosch has completed the installation of two SLM 500 cordless machines to produce parts for its powertrain technology, including customer components for hydrogen generation applications and electric drive.
However, the company’s loss for the first half of the year amounted to 9.1 million euros. The second quarter, in particular, posted a loss of 1.7 million euros; an improvement over the results for the previous half and second quarter, which had recorded losses of €12.3 million and €7.1 million respectively.
During a conference call with investors on August 18, 2022, O’Leary and Chief Financial Officer (CFO) Dirk Ackermann focused more on their EBITDA (earnings before interest, tax, depreciation and amortization) numbers, which led to a positive net income of €1.3 million for the second quarter, which is in line with the company’s 2022 guidance which called for positive EBITDA by the second half of the year.
Ackermann also commented on some of the headwinds that SLM Solutions is facing: “Our gross margin is still particularly affected by the low productivity of our production lines, which is mainly caused by the continued shortage of electronic components, and we do not expect to an improvement in this situation. area in the second half. In addition, we are also seeing a slow increase in direct material costs, given the overall inflationary pressure. EBITDA was positive in the second quarter, which means that we have already reached our FDA guidance ahead of schedule. However, we benefited from the publication of a legacy provision and positive currency impacts during the quarter. »
So while the company is anticipating a stronger second half (which has also historically been the case), it is still notably impacted by parts shortages, which could hamper its ability to execute backlog in the latter part. of 2022. Another position that could affect the second period of 2022 is the early redemption tranche of the 2017-2024 convertible bond in October, which will be around 30 million euros.
Nevertheless, Ackermann assured investors that, as in the first part of the year, they were actively working on multiple mitigation measures to avoid any negative impact. This includes assessing several options for new funding, although the executive said he will have more information on this in the coming weeks.
Finally, the company remains confident of reaching its revenue target of at least 100 million euros in 2022. SLM Solutions reaffirms its forecasts, given its solid position in its order book and its sales force. keep on going. Ending the first half with 42.5 million euros in revenue, the company now needs at least 57.5 million euros in the second half. Regarding its EBITDA guidance for the full year 2022, SLM has already reached EBITDA breakeven in the second quarter due to one-off effects and aims to maintain positive EBITDA in the second half of the year. ‘year.
Looking ahead, O’Leary suspects that hardware availability of electronic components will remain a key concern for the rest of the year. However, he remains optimistic about SLM’s product offerings and how they are driving innovations across multiple industries and “redefining manufacturing.”
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