French 3D printer producer Prodways Group (PWG.PA) has introduced that it’s going to discontinue its small printers enterprise for the jewellery market, a transfer geared toward refocusing its efforts on the commercial phase. This resolution follows a interval of disappointing efficiency in 2023, primarily attributed to weak equipment gross sales within the jewellery sector.
The cessation of the small printers enterprise, marketed beneath the Solidscape model, is part of Prodways Group’s broader “progress and profitability” technique. The corporate’s goal is to enhance its outcomes rapidly and structurally by allocating assets to extra worthwhile segments. Regardless of producing a turnover of round €5 million in 2023, the small printer enterprise for jewellery additionally resulted in a big working loss, prompting this strategic redirection.
All of the Small Issues
Prodways acquired Solidscape from business stalwart Stratasys (Nasdaq: SSYS) in 2018, with the aim of increasing its market share within the dental and jewellery sectors, in addition to furthering its attain in North America, the place the subsidiary is predicated. With its easy-to-use methods for 3D printing wax materials, Solidscape’s extraordinarily excessive decision has confirmed efficient for the misplaced wax casting of bijou and dental restoration items. Below Prodways possession, the newest improvement from the wax printing group was the discharge of the sub-$15,000 Muse wax printer.
The Muse wax 3D printer. Picture courtesy of Solidscape.
The choice to get out of constructing small 3D printers for jewellery suggests a sale of Solidscape, however may merely imply specializing in the dental sector. Maybe an organization with ample money reserves and present jewellery and dental companies will give the enterprise a brand new residence. Prodways Group will now think about the big industrial printers phase, notably the excessive value-added MovingLight vary. In accordance with the agency, this division provides larger potential for activating progress levers and guarantees larger profitability profiles in Prodways’ extra established markets, just like the medical sector, and will open up new alternatives in industries like aeronautics.
The method of discontinuing the jewellery printer enterprise is underway and anticipated to be accomplished by the top of summer season 2024. The monetary affect of this resolution on the 2023 statements is estimated at round €15 million in depreciation, with extra prices of over €1 million anticipated in 2024, primarily within the first half of the yr.
Moreover, Prodways Group is present process vital modifications in its Software program enterprise. A notable shift is the transition from conventional “on-premises” gross sales to the SaaS (Software program as a Service) mannequin, which started gaining traction within the second half of 2023. This transformation, supported by Dassault Systèmes, is anticipated to generate a smoother, extra recurrent income stream regardless of an preliminary drop in revenues in the course of the transition interval. Moreover, a change in income recognition beneath the IFRS 15 customary has reclassified Prodways Group as an “agent” since July 2023, altering the way in which revenues are reported.
Prodways’ Financials
The corporate is scheduled to publish its full-year 2023 revenues on 14 February, the place it is going to present additional particulars on the efficiency of its varied enterprise segments and its outlook for 2024. As of now, the corporate has sometimes demonstrated a constant upward development when it comes to income, although the trailing twelve-month (TTM) interval exhibits solely about €2 million in progress from the earlier yr.
These strategic modifications, together with the refocusing on the commercial printer phase and the shift within the software program enterprise mannequin, are anticipated to reinforce Prodways Group’s prospects for recurring income technology and progress alternatives, positively impacting its profitability and money technology from the second half of 2024 onwards. Gross revenue has additionally steadily elevated, whereas the corporate has practically change into worthwhile and recovered from the COVID-19 downturn. It has additionally improved its Earnings Per Share from a unfavourable €0.27 in 2020 to a constructive €0.03 in TTM and its Earnings Earlier than Curiosity, Taxes, Depreciation, and Amortization from a unfavourable €8.9 million in 2020 to €9.1 million in TTM.
Prodways’ steadiness sheet and money circulation equally exhibit the corporate’s total restoration, with elevated belongings alongside extra slowly rising liabilities. As a result of the agency has misplaced some working capital between 2020 and 2022 and has had an finish money place drop throughout that point, the sale of its Solidscape enterprise may assist in offsetting this. In the meantime, its working and free cashflow has been typically constructive, other than 2020.
Which means, although Prodways’ inventory value is almost as little as different pure-play additive manufacturing firms within the business, it appears to be comparatively wholesome from a monetary perspective. Whereas the acquisition of Solidscape might not have paid off how Prodways had hoped, the French agency’s total monetary technique could also be a stable one.
Subscribe to Our Electronic mail Publication
Keep up-to-date on all the most recent information from the 3D printing business and obtain data and provides from third social gathering distributors.
