German metal 3D printer manufacturer SLM Solutions Group AG has reported its financial earnings for the first quarter 2020.
Total revenue for Q1 2020 was reported at €17.8 million, on the back of the strong order backlog at the end of 2019. The results are more than double the revenue generated by the company during Q1 2019, which was €7.3 million, a 143 percent increase. This figure also represents the best first quarter revenue performance in SLM’s history.
While the COVID-19 pandemic had no significant impact on the company’s revenue, SLM’s order intake for the first quarter was negatively affected.
Meddah Hadjar, CEO of SLM Solutions, comments: “Our first quarter results reaffirm that we are taking the right steps towards a successful future for SLM once the economic environment normalizes.”
“Despite the overall uncertainty around the implications of the COVID19 situation, we see evidence that the increased focus on de-risking global supply chains elevates the importance of the Additive Manufacturing certification technology in global manufacturing.”
SLM Solutions financial results
SLM reports its revenue across two segments, Machine Business and After Sales Business. The Machine Business comprises SLM’s selective laser machines and accessory devices, whereas After Sales Business consists of revenue generated by service, spare parts, powder, training and installation of machines.
In Q1 2020, revenue from the Machine Business segment was reported at €13.4 million, compared to €4 million in Q1 2019. This figure represents a 232.4 percent increase in revenue for the segment year-on-year.
From the After Sales segment, SLM generated €4.4 million in revenue, an increase of 32.8 percent compared to the same period last year, which was €3.3 million.
|Revenues||Q1 2020||Q1 2019||Variance thousands of Euros||%|
|After Sales Business||4,352||3,276||1,076||32.84%|
As expressed in the FY2019 results by Hadjar, who was appointed as SLM Solutions CEO in early 2019, SLM gained momentum in the latter half of 2019. The company explains that it made good progress in its Machine sales, and thus significantly improved its order intake. The company was able to start fiscal year 2020 with a much better order backlog compared to last year, while also successfully converting a significant share of the new orders into revenue for Q1 2020.
SLM recorded revenue in total for 22 machines in the first quarter of 2020, compared to 7 machines in the previous year quarter. The mix of machines sold improved in favor of the company’s larger multi-laser machines as well, like the SLM 500. As such, its Machine revenue accounted for 75.6 percent of the total revenue, whereas for Q1 2019 it was 55.3 percent.
Impact of the COVID-19 pandemic
As showcased above, the COVID-19 pandemic had no significant impact on SLM’s revenue for Q1 2020. In the company’s financial report, Hadjar explains that, “Despite the unprecedented macroeconomic headwinds brought on by the COVID19 pandemic, we continued to make good progress in the first quarter of 2020 in capturing market share and continued reversing our financial trend from last year. We see customers continue to gain confidence in our technology and engage more actively with us on their future plans.”
However, the slowdown of several core markets, caused by the health crisis, means that customers were only selectively available in the last weeks of the quarter due to the contact restrictions imposed by governments. As such, SLM’s order intake was negatively affected for Q1 2020. The company reported a new order intake of 7 machines for Q1 2020, the same figure for Q1 2019. “While our first quarter was strong in terms of revenue generation, we started to feel the implications of the COVID19 pandemic in markedly lower order intake. The resulting economic slowdown hits some of SLM’s key end markets like the aircraft, the aero-engines, and the oil & gas industries,” comments Hadjar.
Prior to the pandemic, SLM’s Executive Board had expected a positive development in the financial year 2020. However, the global economic slowdown has drastically limited the Executive Board’s ability to provide guidance on SLM’s performance for the rest of the year. Therefore, the board has opted not to offer a full year guidance at this point.
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