German 3D printer manufacturer SLM Solutions has reported annual revenue growth of 26 percent for fiscal year 2020, surpassing an initial projection of 24 percent in its preliminary financial results and superseding the firm’s 20 percent annual growth guidance.
During the course of 2020, the company generated total revenue of €61.8 million, an improvement of 26 percent over FY 2019 (€49 million). Although SLM Solutions surpassed its annual growth guidance, the figure indicates the firm appeared to experience a slowdown during the second half of 2020, after reporting an initial 90 percent revenue increase in H1.
The industrial adoption of the company’s Laser Powder Bed Fusion (LPBF) 3D printing technology continued to increase throughout the year, however, despite economic and operational challenges arising from the COVID19 pandemic, according to CEO Sam O’Leary.
“Laser Powder Bed Fusion continues to be the most dynamic driver of growth and innovation in the metal Additive Manufacturing market and SLM is proud to be leading the way,” he said. “Despite the difficult COVID19 related business environment, we made tremendous progress in innovation and with key customers, adopting our technology on a larger scale. We launched our industry defining new machine platform, the NXG XII 600, in November 2020. The initial customer feedback we received has been overwhelming.
“We are convinced that the commercialization of the NXG XII 600 will be a significant growth driver for our business in the coming years.”
SLM Solutions’ FY 2020 results
In addition to revenue growth of 26 percent, SLM Solutions recorded an improvement in its earnings before tax for FY 2020 over the prior year with an EBITDA of -€14.8 million. This figure falls well within the company’s initial guidance of between -€13 million and -€18 million, credited to the firm’s “operational rigor” demonstrated throughout last year.
According to the results, order uptake in H2 more than doubled that of H1, rising from €13.7 million to €32.4 million. As of 31 December 2020, the firm’s order backlog has amounted to €30.4 million which should ensure its continued growth as the pandemic begins to ease.
Looking ahead to 2021, SLM Solutions is targeting revenue growth of at least 15 percent and expects improvements to its EBITDA to continue. The firm’s optimistic outlook for the year is based on the successful launch of its new NXG X11 600 3D printer, launched in November at Formnext Connect.
Designed for the mass production of large parts, the NXG XII 600’s enhanced size and speed could open up serial production applications for the system in the automotive and aerospace sectors. SLM Solutions’ management estimates an acceleration of revenue growth as a result of the “positive effects” of the machine’s introduction.
“With an order backlog of €30 million at the beginning of the year, we are well positioned to achieve the revenue target for 2021,” said Dirk Ackermann, CFO of SLM Solutions. “Furthermore, with the expected uptick in business in the second half of the year as well as positive effects from ongoing optimization initiatives, we expect a further improvement to our bottom line.”
The second tranche of SLM Solution’s convertible bond 2020/2026 is expected to be issued in April this year, delivering proceeds of around €15 million which will be used to scale up manufacturing of the NXG X11 600 and expand the firm’s services network.
The company is also planning to establish a presence on the West Coast of the US in order to be closer to its key customers, and is weighing up a potential secondary listing of shares in the US via a Level 111 ADR offering.
“Our current forecast cautiously assumes that the economic environment will slowly normalize and the COVID19 burdens will ease during the second half of 2021,” Ackermann continued. “Should our core markets recover faster than assumed in this scenario, we do not rule out a stronger sales growth than currently expected.”
SLM’s progress in 2020
Despite challenging economic circumstances as a result of the pandemic, SLM Solutions experienced a year of near-continuous growth throughout 2020.
The firm took strides within its core aerospace market through a partnership with multinational manufacturing conglomerate Honeywell to qualify parameters for 3D printing thicker aerospace parts with aluminum F357, and bolstered its activities within the automotive space by working with Porsche to 3D print concept E-drive housings for one of its sports cars.
Most recently, the company announced it had signed a memorandum of understanding (MOU) with an unspecified “major European OEM” for the sale of five of its NXG X11 600 3D printing systems. SLM Solutions has also signed a beta contract with a different customer for delivery in Q2 2021, indicating market interest for the large-format machine.
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Featured image shows SLM Solutions saw its revenue increase by 26 percent during FY 2020. Photo via SLM Solutions.