FRIEDBERG, Germany–(BUSINESS WIRE)–voxeljet AG (NASDAQ: VJET) (the ‘Company’, ‘voxeljet’, or ‘we’), a provider of high-speed, large-format 3D printers and on-demand parts services to industrial and commercial customers, today announced consolidated financial results for the third quarter ended September 30, 2023.
Highlights – Third Quarter 2023 compared to the Third Quarter 2022
- Total revenues for the third quarter increased 7.5% to kEUR 6,167 from kEUR 5,735
- Gross profit margin decreased to 26.8% from 28.7%
- Systems revenues increased 25.2% to kEUR 3,386 from kEUR 2,704
- Services revenues decreased 8.2% to kEUR 2,781 from kEUR 3,031
- Refine in part our full year 2023 guidance, to reflect the upper end of our prior revenue guidance and lowered expenditures
Dr. Ingo Ederer, Chief Executive Officer of voxeljet, commented: “Demand for our products remains at a high level in all regions. Supply chain issues are becoming less critical; accordingly, we are targeting the upper end of our full-year sales guidance for 2023. Everyone at voxeljet is fully focused on making the fourth quarter of this year our best quarterly result ever. Another key priority in this market environment is to preserve cash: we have launched an initiative to reduce costs without jeopardizing our growth targets. This took effect in the third quarter of this year and includes lower OPEX, CapEx and personnel costs. Our goal is to achieve break-even adjusted EBITDA on a full-year basis by 2025 at the latest.”
Three Months Ended September 30, 2023 Results
Revenues for the third quarter of 2023 increased by 7.5% to kEUR 6,167 compared to kEUR 5,735 in the third quarter of 2022.
Revenues from our Systems segment, which focuses on the development, production and sale of 3D printers, increased 25.2% to kEUR 3,386 in the third quarter of 2023 from kEUR 2,704 in last year’s third quarter. The Company sold three new 3D printers in the third quarter of 2023 compared to one new and one used and refurbished 3D printer in last year’s third quarter resulting in significantly higher revenue from the sale of 3D printers. Systems revenues also include all Systems-related revenues from consumables, spare parts and maintenance. Those Systems-related revenues slightly decreased in the third quarter year-over-year. Systems revenues represented 54.9% of total revenues in the third quarter of 2023 compared to 47.1% in last year’s third quarter.
Revenues from our Services segment, which focuses on the printing of on-demand parts for our customers, decreased 8.2% to kEUR 2,781 in the third quarter of 2023 from kEUR 3,031 in the comparative period of 2022. This was due to lower revenue contributions from our subsidiary voxeljet America Inc. (‘voxeljet America’), our German service center as well as our subsidiary voxeljet China Co. Ltd. (‘voxeljet China’). The decrease reflected a lower market demand in all of our sales regions in the third quarter of 2023, compared to last year’s same period.
Cost of sales were kEUR 4,515 for the third quarter of 2023 compared to kEUR 4,089 for the third quarter of 2022.
Gross profit and gross profit margin were kEUR 1,652 and 26.8%, respectively, in the third quarter of 2023 compared to kEUR 1,646 and 28.7%, respectively, in the third quarter of 2022.
Gross profit for our Systems segment increased to kEUR 829 in the third quarter of 2023 from kEUR 651 in the third quarter of 2022. Additionally, gross profit margin for this segment increased to 24.5% in the third quarter of 2023 compared to 24.1% in the third quarter of 2022. Gross profit from the sale of 3D printers increased in line with the increase in revenue, while gross profit margin decreased due to a less favorable product mix. Systems-related revenues gross profit and gross profit margin improved significantly mainly due to lower quarter over quarter expenses from the change in valuation allowance for inventories following the Company’s inventory reserve policy amounting to kEUR 77 negative for the third quarter of 2023 compared to kEUR 263 negative in last year’s same period.
Gross profit for our Services segment decreased to kEUR 823 in the third quarter of 2023 compared to kEUR 995 in the third quarter of 2022. Additionally, gross profit margin for this segment decreased to 29.6% in the third quarter of 2023 from 32.8% in the third quarter of 2022. The main driver for the decline in gross profit, and gross profit margin were lower contributions from our German operation and from our Chinese service center. This was a result of lower utilization of both service centers in line with the substantial decreases in revenues. Gross profit contributions from our American service center decreased related to the decline in revenues, while gross profit margin was almost flat.
Selling expenses were kEUR 1,790 for the third quarter of 2023 compared to kEUR 2,015 in the third quarter of 2022. This decrease was mainly related to lower distribution expenses. Distribution expenses such as shipping and packaging are a main driver of selling expenses, and not only depend on the amount of revenue, but also on quantities and types of products sold and the destinations of where those goods are being delivered. Therefore, distribution expenses can vary noticeably from quarter to quarter.
Administrative expenses were kEUR 1,782 for the third quarter of 2023 compared to kEUR 1,566 in the third quarter of 2022. This increase was mainly related to higher advisor fees related to communication with financial institutions in connection with funding activities.
Research and development (‘R&D’) expenses decreased to kEUR 1,534 in the third quarter of 2023 from kEUR 1,673 in the third quarter of 2022. The decrease of kEUR 139 was mainly due to lower usage of external services, lower material consumption as well as lower personnel expenses. R&D expenses can vary from quarter to quarter and are usually driven by variations in project types and phases.
Other operating expenses in the third quarter of 2023 were kEUR 181 compared to kEUR 159 in the prior year period. This was mainly due to higher losses from foreign currency transactions of kEUR 171 for the third quarter of 2023 compared to kEUR 100 for the third quarter of 2022.
Other operating income was kEUR 837 for the third quarter of 2023 compared to kEUR 1,227 in the third quarter of 2022. The decrease was mainly due to lower gains from foreign currency transactions, which decreased to kEUR 349 for the third quarter of 2023 from kEUR 763 in last year’s third quarter. This was partially offset by higher cost reimbursements for R&D expenses amounting to kEUR 259 for the third quarter of 2023, compared to kEUR 104 for the third quarter of 2022. Furthermore, other operating income included government grants awarded for R&D projects of kEUR 179 (third quarter 2022: kEUR 158).
The changes in foreign currency gains were primarily driven by the valuation of the intercompany loans granted by the parent company to our U.S. subsidiary. The changes in foreign currency losses were mainly driven by the valuation of the promissory note issued to Anzu in January 2023.
Operating loss was kEUR 2,798 in the third quarter of 2023 compared to an operating loss of kEUR 2,540 in the comparative period in 2022. This was mainly due to a lower positive net impact from other operating expenses and other operating income amounting to kEUR 656 for the third quarter of 2023 compared to a positive net impact amounting to kEUR 1,068 for the third quarter of 2022, in combination with higher administrative expenses in the third quarter of 2023 compared to the third quarter of 2022. This was partially offset by lower selling expenses as well as lower research and development expenses, while gross profit was almost flat.
Financial result was negative kEUR 381 in the third quarter of 2023, compared to a financial result of negative kEUR 6,167 in the comparative period in 2022. The primary components of the financial result are described below.
In October 2022, the loan granted by the European Investment Bank (the ‘EIB Loan’) including all interest was early settled and consequently the loan and the related derivative financial instruments were derecognized, therefore there is no finance income/expense from EIB Loan/derivatives for the third quarter of 2023. The derecognition in October 2022 resulted in the write-down of the bifurcated embedded derivative financial instruments relating to the performance participation interest for tranches A and B1 of the EIB Loan amounting to kEUR 4,664 for the third quarter of 2022. Those derivative financial instruments were revalued on each balance sheet date, with changes in the fair value between reporting periods recorded within the financial result of the consolidated statements of comprehensive loss. An increase in our share price resulted in a finance expense, while a decrease led to a finance income, keeping other parameters constant. Additionally, in the course of the early settlement of the EIB Loan, we recognized a finance expense of kEUR 907 in the third quarter of 2022 related to the revision of estimated future cash flows from tranches A and B1 of the EIB Loan that led to an adjustment of the carrying amounts of the two tranches.
This decrease in the above-mentioned interest and fair value expenses was partially offset by increased interest expense on lease liabilities amounting to kEUR 286 for the third quarter of 2023, compared to kEUR 33 for the comparative period in 2022 related to the sale and leaseback transaction regarding voxeljet AG’s properties located in Friedberg, Bavaria, Germany. The transaction closed on October 31, 2022 and the lease term commenced on November 1, 2022.
Financial result also included finance income from revaluation of derivative financial instruments related to the Anzu Note (as described in Note 1) amounting to a finance income of kEUR 7 for the third quarter of 2023, compared to kEUR 0 for the comparative period. For further information, see Note 7.
Net loss for the third quarter of 2023 was kEUR 3,179 or EUR 0.34 per share, as compared to net loss of kEUR 8,702, or EUR 1.23 per share, in the third quarter of 2022.
Nine Months Ended September 30, 2023 Results
Revenues for the nine months ended September 30, 2023 increased by 11.4% to kEUR 19,019 from kEUR 17,066 for the prior year period.
Systems revenues were kEUR 10,570 for the first nine months of 2023 compared to kEUR 7,732 for the same period last year. The Company sold seven new 3D printers during the first nine months of 2023, compared to four new and two used and refurbished 3D printers during the prior year period. Systems revenues also include all Systems-related revenues from consumables, spare parts and maintenance. The increase in revenues from our Systems segment was mainly related to a significant increase in revenues from the sale of 3D printers due to a higher number of units sold in combination with a more favorable product mix which included more larger scale platforms. In addition, Systems-related revenues increased due to higher market demand in our after-sales activities in connection with an increased installed base of our 3D printers. Systems revenues represented 55.6% of total revenue for the nine months ended September 30, 2023 compared to 45.3% for the same period in the prior year.
Services revenues were kEUR 8,449 for the nine months ended September 30, 2023 compared to kEUR 9,334 for the same period last year. This decrease of 9.5% was mainly due to lower revenue contributions from our German service center and our subsidiary voxeljet China. This was negligibly offset by slightly higher revenue contributions from our American service center, and we see continuing strong market demand in our Services segment from the Americas region. After a particularly strong fiscal year 2022 in the EMEA region, in 2023 we have witnessed a relative decrease in market demand in this region, but a considerable level of demand, in absolute terms, remained for the nine months ended September 30, 2023.
Cost of sales for the nine months ended September 30, 2023 were kEUR 13,597, an increase of kEUR 1,859 compared to cost of sales of kEUR 11,738 for the same period in 2022.
Gross profit and gross profit margin for the nine months ended September 30, 2023 were kEUR 5,422 and 28.5%, respectively, compared to kEUR 5,328 and 31.2%, respectively, for the prior year period.
Gross profit for our Systems segment increased to kEUR 2,804 for the nine months ended September 30, 2023 from kEUR 1,765 for the same period in 2022. This improvement was mainly driven by an increase in revenues. Gross profit margin for our Systems segment also increased, amounting to 26.5% for the nine months ended September 30, 2023 compared to 22.8% for the prior year period, mainly due to a more favorable product mix, especially regarding Systems-related revenues but also related to the sale of 3D printers. The sale of larger scale platforms usually provides higher gross profit (margins) compared to smaller platforms. In addition, we recognized a change in valuation allowance for inventories following the Company’s inventory reserve policy amounting to kEUR 233 negative for the nine months ended September 30, 2023, compared to kEUR 597 negative for last year’s same period.
Gross profit for our Services segment decreased to kEUR 2,618 for the nine months ended September 30, 2023 from kEUR 3,563 in the same period in 2022. Also gross profit margin for this segment decreased to 31.0% for the first nine months of 2023 from 38.2% in the same period in 2022. Both decreases were mainly related to lower gross profit as well as gross profit margin contributions from our German operation and from our Chinese subsidiary, reflecting the lower utilization of both service centers in line with the declined revenues. This was partially offset by our subsidiary voxeljet America, where gross profit as well as gross profit margin improved as a result of a higher utilization of the American service center, reflecting the increase in revenues.
Selling expenses were kEUR 5,822 for the nine months ended September 30, 2023 compared to kEUR 5,540 for the same period in 2022. The year-over-year increase was mainly due to higher personnel expenses as well as higher expenses for trade fairs and exhibitions including travel expenses. This was partially offset by lower distribution expenses in spite of increased revenues. Shipping and packaging expenses as a main driver of selling expenses vary noticeably from quarter to quarter depending on quantities and types of products sold and the destinations where those goods are being delivered.
Administrative expenses increased by kEUR 176 to kEUR 4,924 for the first nine months of 2023 from kEUR 4,748 for the prior year period. This was mainly related to higher personnel expenses.
R&D expenses slightly decreased to kEUR 4,671 for the nine months ended September 30, 2023 from kEUR 4,767 for the same period in 2022, a decrease of kEUR 96. This was mainly due to lower expenses for usage of external services as well as lower personnel and material expenses. This was partially offset by higher maintenance expenses as well as higher depreciation. R&D expenses can vary from quarter to quarter and are usually driven by variations in project types and phases.
Other operating expenses for the nine months ended September 30, 2023 were kEUR 795 compared to kEUR 573 for the prior year period. This was mainly due to higher losses from foreign currency transactions amounting to kEUR 722 for the nine months ended September 30, 2023 compared to kEUR 357 for the prior year period.
Other operating income was kEUR 2,214 for the nine months ended September 30, 2023 compared to kEUR 4,685 for the prior year period. This decrease was mainly due to the reclassification of the foreign currency translation reserve in the first quarter of 2022, which was previously recognized in other comprehensive income on consolidation of the accounts of our UK subsidiary voxeljet UK Ltd. (‘voxeljet UK’), to profit and loss account on deconsolidation amounting to kEUR 1,475, related to the finalization of the wind-up of voxeljet UK on February 17, 2022. In addition, we recorded lower gains from foreign exchange transactions amounting to kEUR 619 for the nine months ended September 30, 2023 compared to kEUR 2,171 for the comparative period in 2022. This was partially offset by higher cost reimbursements for R&D expenses amounting to kEUR 830 for the nine months ended September 30, 2023 compared to kEUR 299 for last year’s same period. Furthermore, other operating income included government grants awarded for R&D projects of kEUR 527 (nine months ended September 30, 2022: kEUR 293).
The changes in foreign currency gains and losses were primarily driven by the valuation of the intercompany loans granted by the parent company to our U.S. subsidiary.
Operating loss was kEUR 8,576 in the nine months ended September 30, 2023 compared to an operating loss of kEUR 5,615 in the comparative period in 2022. This was mainly due to a lower positive net impact from other operating expenses and other operating income amounting to kEUR 1,419 for the nine months ended September 30, 2023 compared to a positive net impact amounting to kEUR 4,112 for last year’s same period in combination with higher selling and administrative expenses. This was partially offset by a slight improvement of gross profit and slightly lower research and development expenses.
Financial result was negative kEUR 1,479 for the nine months ended September 30, 2023, compared to a financial result of negative kEUR 5,723 for the comparative period in 2022. The primary components of the financial result are described below.
In October 2022, the EIB Loan including all interest was early settled and consequently the loan as well as the related derivative financial instruments were derecognized, therefore there is no finance income/expense from EIB Loan/derivatives for the nine months ended September 30, 2023. The derecognition in October 2022 resulted in the write-down of the bifurcated embedded derivative financial instruments relating to the performance participation interest for tranche A of the EIB Loan, which resulted in finance expense amounting to kEUR 2,827 for the nine months ended September 30, 2022. This was partially offset by the write-down of the bifurcated embedded derivative financial liability for the performance participation interest for tranche B1 of the EIB Loan, which resulted in finance income of kEUR 516 for the nine months ended September 30, 2022.
Additionally, in the course of the early settlement of the EIB Loan, we recognized a finance expense of kEUR 907 in the third quarter of 2022 related to the revision of estimated future cash flows from tranches A and B1 of the EIB loan that led to an adjustment of the carrying amounts of the two tranches.
Finance expense related to long term debt amounted to kEUR 395 for the nine months ended September 2023, compared to kEUR 2,625 for the nine months ended September 30, 2022, including the kEUR 907 adjustment of the carrying amounts of tranches A and B1 of the EIB Loan as described above.
The decrease in the above-mentioned interest and fair value expenses was partially offset by increased interest expense on lease liabilities amounting to kEUR 866 for the nine months ended September 30, 2023, compared to kEUR 103 for the comparative period in 2022, mainly related to the sale and leaseback transaction regarding voxeljet AG’s properties located in Friedberg, Bavaria, Germany. The transaction closed on October 31, 2022 and the lease term commenced on November 1, 2022.
In addition, finance expense related to the change in fair value of bond funds decreased from kEUR 773 for the nine months ended September 30, 2022 to kEUR 0 for the nine months ended September 30, 2023.
Financial result also included finance expense from revaluation of derivative financial instruments related to the Anzu Note amounting to kEUR 325 for the nine months ended September 30, 2023, compared to kEUR 0 for the comparative period. For further information, see Note 7.
Net loss for the nine months ended September 30, 2023 was kEUR 10,067, or EUR 1.09 per share, as compared to net loss of kEUR 11,254, or EUR 1.59 per share for the prior year period.
Business Outlook
Our revenue guidance for the fourth quarter of 2023 is expected to be in the range of kEUR 10,000 to kEUR 13,500.
We refine in part and reaffirm in part our guidance for the full year ending December 31, 2023:
– Full year revenue is expected to be in the range of kEUR 29,000 to kEUR 32,500 (range is refined to the upper end of our earlier guidance)
– Gross profit margin remains expected to be above 31.5%
– Operating expenses for the full year are expected as follows: selling and administrative expenses remain expected to be in the range of kEUR 14,000 to kEUR 16,000 and R&D expenses are projected to be between approximately kEUR 6,750 and kEUR 7,000 (slightly lowered from our earlier guidance). Depreciation and amortization expense remains expected to be between kEUR 3,000 and kEUR 3,250.
– Adjusted EBITDA for the fourth quarter of 2023 remains expected to be slightly negative to neutral. Adjusted EBITDA is defined as net income (loss), as calculated under IFRS accounting principles before interest (income) expense, provision (benefit) for income taxes, depreciation and amortization, and excluding other operating (income) expense resulting from foreign exchange gains or losses on the intercompany loans granted to the subsidiaries.
– Capital expenditures are projected to be in the range of kEUR 1,500 to kEUR 1,750 (lowered from our earlier guidance), which primarily includes ongoing investments in our global subsidiaries.
Our total backlog of 3D printer orders as of September 30, 2023 was kEUR 11,737, which represents fifteen 3D printers. This compares to a backlog of kEUR 9,975 representing eleven 3D printers, December 31, 2022. As production and delivery of our printers are generally characterized by lead times ranging between three to nine months, the conversion rate of order backlog into revenue is dependent on the equipping process for the respective 3D printer, as well as the timing of customers’ requested deliveries.
As of September 30, 2023, we had cash and cash equivalents of kEUR 4,968, and additionally held kEUR 2,988 of restricted cash and kEUR 1,891 of term deposits, which are included in current other financial assets on our consolidated statements of financial position.
Webcast and Conference Call Details
The Company will host a conference call and webcast to review the results for the third quarter of 2023 on Friday, November 17, 2023 at 8:30 a.m. Eastern Time. Participants from voxeljet will include its Chief Executive Officer, Dr. Ingo Ederer, and its Chief Financial Officer, Rudolf Franz, who will provide a general business update and respond to investor questions.
Interested parties may access the live audio broadcast by dialing 1-877-704-4453 in the United States/Canada, or 1-201-389-0920 for international, Conference Title “voxeljet AG Third Quarter 2023 Financial Results Conference Call”. Investors are requested to access the call at least five minutes before the scheduled start time in order to complete a brief registration. An audio replay will be available approximately two hours after the completion of the call at 1-844-512-2921 or 1-412-317-6671, Replay Conference ID number 13742023. The recording will be available for replay through November 24, 2023.
A live webcast of the call will also be available on the investor relations section of the Company’s website. Please go to the website https://events.q4inc.com/attendee/670347144 at least fifteen minutes prior to the start of the call to register, download and install any necessary audio software.
Contacts
Investors and Media
Johannes Pesch
Director Investor Relations and Business Development
[email protected]
Office: +49 821 7483172
Mobile: +49 176 45398316
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