Prodways (EPA:PWG – market capitalisation Euro 230M) has reported full 2017 and first quarter 2018 financial results in April 2018. The statements provide a clear and detailed indication of the progress made by the Group since its IPO in May 2017 to become a major player in the 3D printing industry.
Prodways: an integrated group
Prodways was founded in 2013 with a clear vision to build a specialist in industrial and professional 3D printing with a unique positioning as an integrated European player. The group is composed of the System and Product divisions. The System division includes Prodways Technologies, Deltamel, Exceltec and Avenao.
Prodways Technologies is a maufacturer of 3D printers. The L series are resin based additive manufacturing systems for the dental, jewellery and footwear industry. The V series is a DLP ceramic 3D printing system for the biomedical sector. Finally, the P series is SLS based and addresses the aerospace and automotive sectors.
Deltamel was acquired in 2014 and has a focus on manufacturing liquid and medical grade resin. Exceltec, acquired in 2015, is a manufacturer of polymer powders. Avenao, a reseller of 3D design software (primarily SOLIDWORKS) was acquired in November 2017.
The Product division includes Initial, Les Creations, Scientifeet, Cristal, Interson Protac and Prodways Conseil.
Initial, a part design and production company acquired in 2015. Les Creations, an art, luxury and design company founded by the group. Scientifeet, a podiatry company started in 2016. Cristal, a dental laboratory was acquired in 2016. Interson Protac, a traditional earmold business has 20% of sales related to 3D printing was acquired in August 2017. Prodways Conseil is the consulting arm of the group.
Prodways has full ownership (or quasi full ownership) of all its subsidiaries. The overall group total headcount is just under 400 (375 at end 2017). It is led by Alban D’Halluin, a graduate of Ecole Polytechnique in France with a Master of Science from Harvard University.
Raphael Gorge is the Chairman and CEO of Groupe Gorge, the majority shareholder of Prodways with 56.6%. At end of 2017 the group had sold over 100 industrial 3D Printers.
The group has a healthy balance sheet following the IPO of May 2017 when it raised Euro 66M. It spent Euro 8.5M of cash in 2017 for the acquisition.
| M euro | 31st December 2017 |
| Available Cash | 41 |
| Financial Debt | 5 |
| Goodwill & Intangible | 42 |
| Total shareholdings | 86 |
| Cash flow from operations | -4 |
Prodways: significant growth in Q1/18 helped by recent acquisitions
In the first quarter of 2018, Prodways reported an impressive 81% sales growth at Euro 13.5M. While the company does not disclose their organic growth rate, we estimated it at circa at 28% after taking into account the impact from the acquisition of Avenao and Interson Protac.
| Million Euro | Q1/18 as reported | Q1/18 adjusted 3DPI | Q1/17 as reported |
| Systems | 7.8 | 5.3 | 3.9 |
| Products | 5.8 | 4.3 | 3.7 |
| Eliminations | -0.1 | -0.1 | -0.2 |
| Total sales | 13.5 | 9.5 | 7.4 |
Source Prodways and estimation from 3DPrintingIndustry.com
Prodways: on track with Euro 100M annual sales in 2019
WIth the most recent financial returns, Prodways reiterated its sales target for 2018 at Euro 50M, following the growth recorded in the first quarter 2018.
The company expects to update the market on the sales forecast for 2018 and will present their half year report at the end of July 2018. Considering the continued acquisitive strategy led by the Chairman, we estimate that the company will upgrade its sales target to Euro 60M for 2018 with a Euro 100M target in mind for 2019.
Indeed 2017 total sales were standing at Euro 29M (excluding Euro 6M contribution from Interson and Avenao). Including full year contribution from Interson and Avenao as estimated by Prodways in its 2017 annual report, total sales for 2017 would have been Euro 44M. Assuming a 35% growth, we can expect total sales for 2018 at near Euro 60M.
Following the Q1/18 report Raphael Gorge commented on the acquisition strategy: “On the M&A side we are presently studying other acquisitions in the two divisions, mainly out of France, in US and Europe. Depending on the size but the majority of proceed of the IPO (75M$) is still available for acquisitions, so we don’t expect to raise further funds”
The high acquisitive strategy will definitely bring some challenges. We have seen how Stratasys and 3D Systems failed to integrate their acquisitions in the 2010-2015 period of intensive M&A activity. We believe that the company would need to keep a clear focus on innovating and on keeping / nurturing its talents if its wants to maintain an healthy organic growth. We will keep reporting on Prodways progress to build a serious challenger to the current world leaders.
For more analysis of 3D printing investments read our report on Stratasys
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Featured image shows Prodways high precision 3D printing. Photo by Michael Petch.
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