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SLM Solutions financial results “not a true reflection” of potential

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German metal 3D printer manufacturer SLM Solutions Group AG has reported its financial earnings for the second quarter and first half of fiscal 2019.

Having already shared that the company would be experiencing a decline in machine sales for the quarter, revenue for Q2 2019 was reported at €9 million, a decline of 38.3 percent compared to the same period in 2018 which was €14.6 million.

Q2 FY2019 Q2 FY2018 Variance € millions %
Revenue 9,042 14,662 -5,620 -38.33%
Gross Profit 4,194 7,983 -3,789 -47.46%

For H1 2019, revenue was reported at €16.4 million, compared to €29.6 million in Q2 2018. As expected, EBITDA was also below guidance set by management earlier in the year. Due to the sales decline, EBITDA for Q2 2019 was reported at -€10.8 million, compared to -€2.2 million in Q2 2018. H1 2019 EBITDA in was reported at -€18.9 million, compared to -€3.8 million EBITDA in H1 2018.

H1 2019 H1 2018 Variance € millions %
Revenue 16,378 29,643 -13,265 -44.75%
Gross Profit 7,650 16,970 -9,320 -54.92%

Commenting on the results Meddah Hadjar, CEO and Chairman of the Executive Board at SLM Solutions who has been working to redirect the company since appointment in May 2019, said simply that they “have not delivered.” “This result, however,” he adds, “is not a true reflection of the full potential of the company. ”

At the time of Q2 and H1 2019 results reported on August 8, 2019, Hadjar had only been CEO at the company for 100 days. In this time he says he has taken “immediate actions” to drive SLM Solutions’ delivery to its shareholders and customers, and that “We will continue to drive for improvements in all areas.”

SLM Solutions sales performance by region

Between 2017 and 2018, and between the first half of 2018 and 2019, SLM Solutions has been experiencing the the first drop in machine sales since 2011. Between 2017 and 2018, sales for the company dropped 13 percent from €82.5 million to €71.7 million. For Q2 2019, this sales decline was anticipated by management as an order for China did not materialize, and sales in North America have continued to underperform.

Machine Business (SLM systems and peripheral devices) and After Sales Business (Service, spare parts, powder sales, training, installation) are the two reportable segments at the company. Of these segments combined, Asia/Pacific still held the highest distribution of revenue for H1 2019, reported at €5.6 million, however this is compared to €11.3 million in revenue for the region in H1 2018. For European countries, excluding Germany which is reported separately, segment revenue was reported at €3.9 million, compared to nearing €10 million in revenue from the region in H1 2018. For the U.S. as a whole, H1 2019 segment revenue was reported at €4.3 million, compared to €5.9 million in H1 2018.

An SLM Solutions lab. Photo via SLM Solutions.

“We will get the company back on track for growth”

Gross profit for H1 2019 at SLM Solutions was reported at €7.7 million, compared to nearing €17 million for H1 2018. Q2 2019 constituted a gross profit €4.2 million within H1 2019, compared to nearing €8 million in H1 2018.

The company ends the period with total current and non-current assets of €154.7 million.

Going forward, Hadjar states, “Our immediate priorities are to grow the top line number, run the company better, and reposition our products,”

“From my perspective, SLM Solutions Group AG is the leader in the area of multi-laser machines for metal-based 3D printing certification and we will get the company back on track for growth.”

SLM Solutions’ financial results for Q2, H1 2019 can be accessed here.

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Featured image shows the Divergent3D Blade at SLM Solutions booth. Photo by Michael Petch.