Groupe Gorgé today published financial results for the second quarter of 2016. The stock market viewed the news in a positive light and the announcement drove the companies share price higher with an increase of almost 5%. The unaudited financial statements show that 3D printing revenue is the fastest growing division at the company.
Shaping Up to be Global Competitor
The French company was founded in 1990 and now employs over 1,600 people in operations that span more than 10 countries. Groupe Gorgé derives the majority of revenue from automated smart safety systems and the provision of robotics for use in hazardous environments. They also perform industrial maintenance and install systems for use in nuclear safety, mainly to protect those working with nuclear materials.
Groupe Gorgé’s 3D printing division is focused on, “Enabling major industry players to find new routes to successful innovation and production processes by providing systems, 3D printers and new premium material.” Groupe Gorgé entered the 3D printing market in 2013 with the acquisition of Prodways.
Prodways make 3D printers using their MOVINGlight technology; this uses a mobile Digital Light Projector (DLP) that projects the image and cures as the head moves. This means the printer can create detailed parts at much larger build volumes. The technology is used on their Promaker L Series of industrial 3D printers, while the V Series 3D printers print in ceramics and metals.
When Prodways first demonstrated their printers at Euromold back in 2013, 3DPI suggested the company were one, “to keep an eye on”. The Prodways’ Entrepreneurs program was launched in June 2014 to develop the market and in the same year the company released 9 different printers and 14 materials at Euromold.
3D Printing Revenue Fastest Growing
Today’s announcement illustrates that their 3D printing strategy is paying off. Groupe Gorgé’s revenue from 3D printing was €12.1m ($13.3m) for the 6 months ending 30 June, 2016. The company booked 3D printing related sales driving a 51.3% increase in the period. 3D printing revenue currently contributes less than 10% to the total €141.7m ($155.6m) reported total. However, of the 4 revenue streams growth in the 3D printing category has outpaced other divisions. The Protection in Nuclear Environments division reported the second highest percentage growth rate as 26%, almost half that of 3D printing.
Groupe Gorgé have reported sustained growth over the past 13 quarters and say the revenue from 3D printing is “satisfactory”. According to the company, they anticipate further growth in this area during the second half of the year. 2016 is a, “major phase in the development” of this line of business and work is in progress to consolidate the acquisitions made in 2015 and to build upon partnerships with industry. These partnerships include a deal with the 3rd largest manufacturer of selective laser sintering 3D printers, Farsoon.
Strategic Acquisitions
One of the acquisitions referenced is the purchase of a dental laboratory in France. Initial customers for Prodways were in the dental industry and further vertical integration into supply chain here will allow Groupe Gorgé to capture additional value. This is a strategy seen at other 3D printer manufacturers such as Arcam who own a medical implant contract manufacturer. In Arcam’s case the approach has been successful and allowed customers to dip their feet in the water by testing the viability and economic impact of sourcing 3D printed components before taking the plunge with an investment in a 3D printer of their own. Prodways also acquired a Norge, a startup involved in SLS for plastic powder. Again, this is a common strategy to deepen the value chain and was evident in Arcam’s acquisition of AP&C, a manufacturer of specialist metal powders.
Prodways recently announced their first sales in the important 3D printing market of Korea. The company sold a ProMaker L7000 and a ProMaker L5000, “to one of the most trusted public research and R&D institutes in Korea”. The company has also signed a partnership agreement with Japanese company Altech Co who specialize in the import and sale of machines. Hidehiko Suyama, Managing Director of Altech, said, “This market has experienced massive growth in just a few years, and the product range has expanded through this growth. We are convinced that Prodways has all the necessary resources to meet the professional and industrial demand via products and a sales strategy in perfect keeping with our current equipment offer. We believe in our partnership with Prodways in the long term.”
Expanding International Markets
The Japanese market for industrial grade 3D printers is set to heat up with local company Ricoh announcing a possible addition to their existing line of 3D printers during the Tokyo Big Site last month. Ricoh showcased a, “prototype and not ready for launching in the market” at the show but as of yet, “commercialization and its timing are to be determined” according to Yukari Ezoe at the company. By revenue Ricoh is a much larger company than Group Gorgé, the most recent full year financial results reported $909m compared to $290m for the French company. Ricoh entered the 3D printing market in 2014 with technology developed in association with Aspect Inc. However, 3D printing sales at Ricoh have been sluggish, whereas Groupe Gorgé’s acquisition of Prodways in 2013 gave the French company a head start of one year and access to a range of 3D printers already under development.
With revenue spread across 4 divisions the company has not seen the dip in share price experienced by 3D printing companies with a singular focus. Anticipation is for the 3D printing business to continue to grow and when the company publish their next full year financial report they are confident that, “The annual revenue target will likely be exceeded,” according to today’s release.
