German metal 3D printer manufacturer SLM Solutions Group AG has reported a 90 percent increase in revenue over the first half of 2020.
For the three months ending June 30, 2020, SLM recorded revenue of €31.1 million compared to the €16.3 million generated in H1 2019. SLM’s revenue has shown continued growth during 2020, and it reported the best Q1 revenue performance in its history earlier this year, rising 143 percent.
The company’s H1 2020 revenue results come as other 3D printing companies suffer from the impact of the ongoing COVID-19 pandemic on their customer demand. In the last two weeks, Stratasys, 3D Systems and Groupe Gorgé have each announced revenue declines in their Q2 2020 financials.
By contrast, following the release of its positive H1 2020 results, SLM’s shares rose 8 percent from $6.95 to $7.51.
Dirk Ackermann, CFO of SLM Solutions, commented: “After a significant slowdown starting in March, we experienced an uptake of customer activities towards the end of the first half of the year. So far, this trend has continued into the third quarter. We believe that we are currently well positioned to steer SLM Solutions through these challenging times and to continue our turnaround.
“For the remaining second half of 2020, we expect customer activities to intensify and our business to pick up further.”
SLM Solutions financial results
SLM reports its revenue across two segments, Machine Business and After Sales Business. The Machine Business includes SLM’s selective laser machines and accessory devices. SLM’s After Sales Business consists of revenue generated by services, spare parts, powder, training and the installation of machines.
In H1 2020, the Machine Business segment drove the company’s overall growth, generating €23.7 million in revenue, compared to the €9.3 million reported in H1 2019. This figure represents a 154 percent increase in revenue for the segment year-on-year. SLM’s After Sales business reported €7.4 million over H1 2020, a 5 percent rise on the €7 million generated in H1 2019.
| Revenues (€) | H1 2020 | H1 2019 | Variance (€) | Variance (%) |
| Machine Business | 23.7m | 9.3m | +14.4m | +154.8 |
| After Sales Business | 7.4m | 7m | +0.4m | +5.7 |
| Total Revenue | 31.1m | 16.3m | +14.8m | +90.7 |
The company’s ongoing revenue growth has been built on a strong end to 2019, in which SLM saw made progress in its Machine sales. A significant improvement in its order intake allowed SLM to start 2020 with a better backlog of orders, which it has converted into revenue during H1 2020. SLM’s order backlog remains strong, with €19.2 million of machine orders held in H1 2020, compared to €14.6 million in H1 2019.
Despite the COVID-enforced lockdown during H1 2020, SLM doubled its sales in European markets. In H1 2020, the company’s European sales grew to €11.9 million from €5.9 million in H1 2019. Sales in the United States also increased from €4.3 million in H1 2019 to €9.3 million in H1 2020. Altogether, SLM’s sales rose from €16.6 million in H1 2019 to €31.1 million in H1 2020, representing an increase of 87 percent.
| Sales by Region (€) | H1 2020 | H1 2019 | Variance (%) |
| Germany | 5.6m | 2.7m | +107 |
| Asia/Pacific | 9.1m | 5.6m | +62.5 |
| European countries (excl. Germany) | 6.2m | 3.1m | +100 |
| United States of America | 9.3m | 4.3m | +116.2 |
| Other Countries | 0.8m | 0.7m | +14 |
| Total Sales | 31.1m | 16.6m | +87 |
The company reported a net loss of €12.4 million during H1 2020, an improvement of 56 percent on the €30.7 million loss in H1 2019. SLM’s earnings before interest, taxes, depreciation, and amortization (EBITDA) also improved from -€18.9 million in H1 2019 to -€6 million in H1 2020.
Since the firm began a corporate restructuring in May 2019, it has slowly made strides towards profitability. In March 2020, SLM offered €60 million of convertible bonds to its shareholders. As of July 15 2020, the bonds have raised €15 million, and future tranches will be backed by funds managed by shareholders Elliott Advisors, reflecting confidence in the company’s approach.
SLM Solutions and the COVID-19 pandemic
In a statement issued with the results, Meddah Hadjar, CEO of SLM Solutions, explained that the pandemic had impacted on the company’s ability to conduct business with clients. Installing systems at customers’ premises took longer than before, and many firms looked to curtail spending in an attempt to mitigate their falling customer demand.
SLM saw a sharp decline in its aerospace business in particular, but Hadjar added that the pandemic had created opportunities within supply chain optimization. “The COVID-19 pandemic had a significant impact on our customers being able to conduct business. The ability and willingness of our clients to interact with us in this extraordinary time on new, complex projects also slowed, as many were more inward focused as they tried to navigate the challenges brought on by COVID-19,” stated Hadjar.
“However, we have experienced increased interest from customers across the manufacturing space for our technology, as the pandemic focusses companies on de-risking their global supply chains,” added Hadjar.
Working on the assumption that the pandemic doesn’t worsen during the second half of 2020, the company is forecasting a revenue increase of “at least” 20 percent on H2 2019. SLM is also projecting an improvement in its EBITDA, from around -€13 million to -€18 million. The positive outlook is based on a faster recovery in its US and Asian markets than expected, and SLM predicts that its business “will pick up further” during H2 2020.
The company will also present a NextGen machine to the public in H2 2020, which it expects to drive its machine sales and be a key factor in its ongoing economic success. “We have made good progress with our turnaround at SLM Solutions,” concluded Hadjar. “This applies in particular to the development process for our next generation machine, which has progressed according to plan and will be launched in the week commencing 9 November 2020. We strongly believe this machine will be a game changer for us and the entire metal additive industry.”
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Featured image shows SLM Solutions’ world headquarters. Photo via SLM Solutions.
