Fewer orders than expected in the first half of FY2019 mean that German metal 3D printer manufacturer SLM Solutions Group AG will not meet the revenue and EBITDA guidance set by management earlier in the year.
In a corporate update dated July 26, the company has announced that it will not set a new revenue and EBITDA guidance for FY2019. In the meantime, a thorough assessment of measures to improve growth and profitability is to take place, with a strategy to be presented on the company’s Q2 2019 earnings call, scheduled for August 8, 2019.
First drop in sales in seven years
Last month, at the company’s AGM, a presentation showed SLM Solutions has been experiencing the first drop in sales since 2011. Between 2017 and 2018, sales for the company dropped 13% from €82.5 million to €71.7 million.
Reporting earnings for Q1 2019, the company also reported a 51% decrease in consolidated revenue from €14.9 million in Q1 2018 to €7.3 million in Q1 2019, with its Machine Business being the hardest hit, decreasing 57% from €9.4 million in Q1 2018 to €4 million in Q1 2019.
The latest update from the company suggests that revenue generated in Q2 2019 has not been enough to make up for the performance of Q1 2019. In particular, the company states that “order expectations from the Chinese frame agreement did not materialize as the previous management had anticipated.” Sales in North America have also “continued to underperform” despite a general strengthening of the additive manufacturing machine market.
Getting SLM Solutions back on track
Since May 1, 2019, SLM Solutions has been under the new direction of CEO and executive board member Meddah Hadjar, who joined the company following leadership roles at GE including service as General Manager of SLM Solutions competitor Concept Laser. In relation to Hadjar’s appointment Hans-Joachim Ihde, Chairman of the Supervisory Board of SLM Solutions previously stated, “We are very happy to have signed a new CEO, Mr. Hadjar, who will be able to bring SLM Solutions back on its growth track,”
“The Supervisory Board strongly believes that Mr. Hadjar, due to his broad and deep experience, is ideally suited to lead SLM Solutions as CEO.”
In addition to reinvigorating its personnel, SLM Solutions recently increased its registered shares by 10% generating a €13 million boost in capital from UK fund manager Elliott Advisors. At the time of the shares increase Franck Tuil, Portfolio Manager at Elliott Management Corporation, said, “The commitment of additional capital is based on our belief in SLM’s technological leadership in the additive manufacturing industry and its strong customer base.”
An in-depth presentation of the company’s long term outlook and its strategy going forward will be presented in a dedicated investor event in Q4 2019. Further details about its current plans will be presented in the company’s impeding Q2 2019 report in August.
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Featured image shows a metal 3D printed gyro produced by SLM solutions. Photo via mynewsdesk