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Edited Transcript of VJET earnings conference call or presentation 16-Aug-19 12:30pm GMT

Q2 2019 Voxeljet AG Earnings Call

Friedberg Sep 4, 2019 (Thomson StreetEvents) -- Edited Transcript of Voxeljet AG earnings conference call or presentation Friday, August 16, 2019 at 12:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Ingo Ederer

voxeljet AG - Founder, CEO & Member of Management Board

* Johannes Pesch

voxeljet AG - Director of Business Development & IR

* Rudolf P. Franz

voxeljet AG - CFO, COO & Member of Management Board

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Conference Call Participants

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* Troy Donavon Jensen

Piper Jaffray Companies, Research Division - MD and Senior Research Analyst

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Presentation

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Operator [1]

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Greetings, and welcome to the voxeljet AG Second Quarter 2019 Financial Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Johannes Pesch, Director of Investor Relations and Business Development for voxeljet. Thank you. You may begin.

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Johannes Pesch, voxeljet AG - Director of Business Development & IR [2]

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Thank you, operator, and good morning, everyone. With me today are Dr. Ingo Ederer, voxeljet's Chief Executive Officer; and Rudi Franz, voxeljet's Chief Financial Officer.

Yesterday, after the market closed, voxeljet issued a press release announcing its second quarter financial results for the period ended June 30, 2019. The release as well as the accompanying presentation for this conference call is available in the Investor Relations section of the company's website at voxeljet.com.

During our call, we may make certain forward-looking statements about the company's performance. Such forward-looking statements are not guarantees of future performance and, therefore, one should not place undue reliance upon them.

Forward-looking statements are also subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed.

For additional information concerning factors that could cause actual results to differ from those discussed in our forward-looking statements, you should refer to the cautionary statements contained in our press release as well as the risk factors contained in the company's filings with the Securities and Exchange Commission. With that, I would now like to turn the call over to Ingo, Chief Executive Officer of voxeljet.

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Ingo Ederer, voxeljet AG - Founder, CEO & Member of Management Board [3]

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Thank you, Johannes, and good morning, everyone. Thanks for joining us today for our second quarter call. We are happy with the results for the first half of 2019. Revenue from our Systems segment for the first 6 months this year is up 40% compared to the same period last year. The first 2 units of VJET X are installed at the leading German car maker's plant, and we are starting printing. As you know, the frame contract for this consists of 5 units, and we expect to receive the order for the next 3 VJET X units in the coming weeks.

Let's turn to Slide 4. This year we are celebrating our 20th anniversary and are looking back at the multitude of exciting projects. Remember, we basically started in a garage in Munich, and fast forward today, products made with our technology are flying in space. And we are implementing with VJET X, an additive manufacturing solution, for true mass production.

In our indirect parts segment, we addressed the need of our customers for production-ready solutions and start to commercialize high-performance products like VJET X and HSS.

In our direct parts segment, we have successfully entered the market for direct and functional parts with High Speed Sintering. We have built on the knowledge we have accumulated in the development of VJET X and HSS to accelerate the commercialization of large direct parts production platform.

The HSS production solution combined with new materials should be a game-changing combination. We will present the first version of this new printer at the Formnext show in Frankfurt later this year.

Our goal today is the same as it has been 20 years ago. We want to establish a new manufacturing standard. As pioneers in technology, we put high emphasis on relentless research and development with a clear focus in mind to expand our total addressable market for new and improved products and applications.

The vision statement we shared throughout the year represents who we strive to be every day, and essentially, how we operate across all aspects of our business, as we build this company for the long term.

On Slide 5, we have highlighted our unique selling propositions, which are strongly aligned with the growing trend for higher performance products across all of our end-use markets. We differentiate ourselves from competitors by build size, material diversity and speed.

Our printing systems are modular, versatile and highly scalable and, therefore, uniquely positioned to support critical demanding applications and address the changes and needs that are most important to our customers.

Looking at Slide 6 and our integrated business model. It balances long with short sales targets and helps us to maintain close relationships with our customers.

In our Systems segment, we manufacture and sell industrial-grade, high-speed, large-format 3D printing systems geared towards mass production of complex molds and direct parts.

The primary target for this segment is to sell market system contracts.

In addition to that, we put a high emphasis on aftersales activities and are already seeing positive results from these initiatives.

In our Services segment, we operate these systems and facilities around the world to offer affordable, on-demand access to our technology.

The primary target for this segment is to sell large multiyear volume contracts. We are in advance talks with several parties for such volume contracts all across the world.

In addition to that, offering services is a great cash flow positive marketing tool to convince customers to purchase 3D printers.

Slide 7 shows our global sales network and production footprint. As you can see, we have reached and established position in all major markets in Europe, USA as well as China.

We continue to expand our sales teams around the world by investing in sales leadership, additional application engineers and training. To complement this, we focus on educating our channel partners to ensure true global coverage.

Turning to Slide 8. In May this year, we officially opened our new factory in Shanghai. We had a lot of customers coming in and are very excited for this new building and the opportunities it brings both in our Services and Systems segment.

This new facility was built to our specifications and is free of rent for 36 months beginning in March 2019.

We plan to source and manufacture certain parts of our printers at this facility to lower the cost of our equipment and increase our addressable market, especially in the Asian region.

On Slide 9, we see some of the potential applications of our products and selective customers. Over the last 20 years, we have been working with leading companies from a variety of industries to produce parts that cannot be produced in any other way with traditional methods of manufacturing.

In the automotive sector, for example, we support manufacturing of the most complex engine components like cylinder heads or turbochargers to improve engine and overall vehicle performance.

Meanwhile, we are also printing, for example, battery casings for optimized heating and cooling in electric vehicles.

We see significant opportunities for revenue growth across our portfolio of Solutions for the remainder of 2019 and beyond.

On the right side of this slide, you can see an illustration of our new large HSS printer. We are very excited to present this platform for the first time to the public at the Formnext show in Frankfurt, in November this year.

This is really exciting news as we expect the new HSS printer to expand our addressable market considerably. Besides VJET X, this project has the high priorities in our R&D and manufacturing teams.

Let's now start with the formal part of the presentation. I will begin with an overview of the second quarter results, Rudi will then provide a more in-depth view of our financials and our outlook for the third quarter of 2019.

Following his comments, we will be happy to take your questions.

Let's turn to Slide 11. We had a very exciting GIFA show in Düsseldorf this year, where we presented our new lineup of high-speed 3D printers.

We had 3 different printers at the show: one VX1000-S IOB at our partner ASK's booth; one VX1000-S ODB at our own booth; and one VJET X printer at our partner Loramendi's booth.

We showed VJET X for the first time to the public and received a lot of attention.

I strongly believe that this is the most powerful additive manufacturing solution currently available on the market.

Keep in mind, a leading German car maker plans to use this 3D printer in the mass production of a new engine component. This new light metal aluminum component can help to reduce vehicle CO2 emission significantly.

According to the BMW, by using additive manufacturing technologies, engineers can manufacture cylinder heads with the lowest weight possible and an optimized geometric shape for the heat control.

New cylinder heads created with this technology can reduce engine weight by 2 kilograms. VJET X can not only use to create ultralightweight parts, but the efficient temperature control of combustion engines, but also for batteries in the electric vehicles or for the production of very complex gearboxes and similar lightweight applications.

In total, we generated roughly 150 qualified leads during the show, which is a great result.

Let's turn to Slide 12 of the presentation and begin with the highlights for the second quarter of 2019.

Revenue was approximately EUR 5.1 million, which represents a 4% decrease compared to last year's second quarter, for reasons, Services revenues in EMEA were slightly lower in May and early June.

Since then, it has picked up again. The main reason for the lower revenue was lower demand from French customers, which led to a slightly lower contribution in Services revenue from our German service center.

Overall, demand is good. Just recently, we have had received significant orders from large customers for printed parts. We're working hard to catch up and are optimistic as we see some larger orders coming in. Revenue at our U.S. subsidiary Michigan and our subsidiary in Shanghai is ramping up nicely. To meet the growing demand in U.S., especially for PDB solutions, we are currently shipping at least 2,000 PDB to the U.S. This is our second largest system.

Revenue from our Systems segment, which includes revenue from selling 3D printers, consumables and spare parts as well as maintenance, increased 13% to EUR 2.1 million in the second quarter of 2019 from EUR 1.9 million in last year's second quarter. We delivered 2 new printers in this year's second quarter compared to 1 used and 1 refurbished printer in last year's second quarter.

The demand for our solutions continues to be high, and we're working hard to convert those opportunities into orders. We are very happy to report that we are making good progress in increasing aftersales revenue. This is partially related to the higher install base of our 3D printers.

In addition to that, we reorganized some responsibilities in the aftersales segment and are offering tailored solutions to our customers, for example, 2 modular maintenance contracts. At the end of the second quarter, we had a backlog for systems of roughly EUR 3.1 million, which represents 6 3D printers.

Revenue from our Services segment, which focuses on the printing of on-demand parts for our customers decreased 40% to EUR 2.9 million in the second quarter this year from EUR 3.4 million for the same quarter last year. This decrease is due to the reasons mentioned earlier and has also impacted our gross margin.

Slide 13 summarizes the results. When looking at the operating expenses, I would like to highlight 2 points.

First, selling expenses increased as we hired additional colleagues and increased annual salaries. We remained focused on our growth strategy, which includes expanding our sales team around the world. In addition to that, we have had the GIFA show in June, which is the biggest show for us and takes place every 4 years.

Second, we will maintain the expenses allocated for research and development at a high level and invest in order to be able to expand market share and to open up new markets. Because we are manufacturing complex and extensive hardware and are dealing with industrial customers, these R&D investments are not immediately contributing to top line growth. However, as our new printer VJET X highlights, we are uniquely positioned to support critical demanding applications and address the challenges that are most important to our customers and make additive series production possible. I strongly believe that there is no other company close to reaching the same level of productivity as we do with the VJET X.

Let's turn to Slide 14, an explanation of what we do with VJET X.

Conventionally, sand parts for the series production of metal parts are produced by so-called core-shooting system.

Sand is shot into a mold metal tool under high pressure to produce the sand part, which is then used in the casting process. This is inexpensive but limits the possible complexity of the sand part. For example, undercuts or draft angles are difficult or not possible at all.

Sometimes individual parts would need to be manufactured as multiple components and then assembled into a single piece. Therefore, the complexity of the sand part and as a consequence, the complexity of the resulting metal component is very limited.

This means that new desired properties like to reduced weight and optimal geometric shape for the heat control cannot be achieved.

With VJET X, we have developed a new printer, which is 10x faster than previous models, processes an inorganic binding system which creates 0 emissions during core printing, storage and when using the sand cores in the casting process. It is integrated into fully automated handling systems for pre and post processes, like loading and unloading of the 3D printers, cleaning of the printed parts via robotic systems and the transport of the sand cores to the casting lines.

VJET X replaces core shooting systems with 3D printer to mass produce highly complex sand parts.

The rest of the already existing supply chain remains unchanged and can still be used which saves our customers a significant amount of infrastructure investment. This allows the advantages of 3D printing, namely product and process innovation, to be combined with those of conventional manufacturing of metal parts via casting. Cost advantages and high degree of automation, we call this combination hybrid additive manufacturing or HAM. With this technology, it is possible to mass produce metal components with the new desired properties at the cost of conventional manufacturing.

Another important advantage of HAM is that high recertification cost can be avoided as the casting process is the standard process for the production of metal parts.

So let's turn to Slide 15 and an explanation of why we believe this is important. With tightening regulation on pollution and fuel consumption, the evolution of CO2 regulation remains the main driver for changes in vehicle technology.

China, for example, is implementing one of the most stringent emission standards, and the Ministry has set a goal for carmakers to cut new models comprehensive fuel consumption to 5 liters per 100 kilometers by 2020.

We can see similar developments in Europe and U.S. This prompts car makers to make extra efforts on lightweight materials and to introduce smaller, downsized engines with similar performance numbers, but less fuel consumption.

This means that energy density is higher and new geometric shapes are necessary for an efficient heat control. As mentioned in the beginning, these new shapes can only be built via additive manufacturing.

On this slide, you can see the cost per part of printing in aluminum.

In the automotive industry, demand for lightweight material is projected to grow at an unprecedented rate and its use and manufacturing is expected to double by 2030.

On this slide, we can immediately see that direct metal printing of aluminum in its current form is too expensive.

The reason here is the lack of printing speed and automation as well as the high material cost. Those are expected to come down and the printer speed is expected to increase over time, as we can see by vision 2025. However, it will take a substantial amount of time and investment to realize this vision, if it is at all possible.

In the bottom right of the graphic, you can see why our solution VJET X is so critical. It allows the production of complex aluminum parts at the cost of conventional manufacturing already today.

Let's turn to Slide 16 and see what this means in practice. A leading German car manufacturer launched a project several years ago with the aim of bringing additive manufacturing into automotive series production for the reasons just explained. Voxeljet and its partners prevailed over several competitors and developed a new high-speed style 3D printer VJET X.

The problem of the lack of automation was solved together with the partner company, which is an established supplier of core shooting systems for the same automotive manufacturer.

Together with another partner from the chemical industry, the new inorganic binder system was developed that does not produce any harmful emissions during production and casting of the sand models. This is very significant, as you can already see today, mass manufactured complex metal parts at a fraction of the cost of other players in the industry. We estimate that we have a competitive advantage of at least 5 years.

On Slide 17, we have summarized some impression of the first presentation of VJET X.

On Slide 18, you can see the massive process unit, which is the reason why this new printer is so fast. It is the heart of VJET X and makes additive mass production possible. It is a combination of 1 large linehead and 2 re-coating units and IR lens which leaves with unparalleled speed.

I believe this to be the most advanced piece of technology in the whole additive manufacturing industry. We have also included a link to a video on the slide.

Turning to Slide 19. I believe, we have the unique opportunity in front of us. Our investments in solutions and innovations are pointed directly at this opportunity. We expect our R&D investment to have high returns for us.

We can develop products that carry gross margins above the company's average, and we can diversify with those technologies in a wide variety of applications. We are a technology-led additive manufacturing company and these investments will continue to strengthen our position as a leader in the global AM industry.

While introducing our business model in the beginning, I have mentioned 2 primary targets, one for each of our business segments.

In Services, we want to sell large volume contracts for printed parts. One example for this type of business is the contract we have signed with a customer in U.S. As mentioned in the beginning, we are in advance talks with parties across the globe for such volume contract. In Systems, we want to sell multisystem contracts. Recent examples here are the VJET X signed at the end of last year and the 2 units of VJET X we have delivered to the car makers so far. I firmly believe that overall demand for our technology is greater than it has ever been.

Our priorities this year remains on execution, improving efficiency and introducing disruptive newer products to drive customer shift to 3D production. With that, I would now like to turn the call over to Rudi.

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Rudolf P. Franz, voxeljet AG - CFO, COO & Member of Management Board [4]

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Thank you, Ingo, and good morning, everyone. We remain committed to increase our levels of profitability and sales. We're closely managing discretionary expenses while maintaining investments that will drive future profitable growth, and I think we are striking the right balance here. Our pipeline for potential future printer sales is well filled with sales opportunities in various phases of completion, and we continue to work hard to turn these prospects into orders.

We put the highest emphasis on managing our sales pipeline as accurately as possible and are investing a significant amount of our time into monitoring the progress of our colleagues all around the globe.

I would like to begin my -- by providing financial details and adding some additional context to our results before discussing our outlook for the rest of 2019.

Turning to Slide 21. Our total revenue decreased 4% to EUR 5.1 million in the second quarter, compared to EUR 5.3 million in the last year's second quarter.

The reason is that Services revenues in EMEA were slightly lower in May and early June. This was mainly related to low orders from France since senate has picked up again. Overall demand is good and based on the current information, we expect the next month to be similar as in the previous years in terms of service revenues. The U.S. and Chinese service centers continue to ramp up nicely and contribute higher revenues.

In Systems, we had strong aftersales activities as a consequence of higher installed base of our printers and more focused aftersales activities like offering modular maintenance contracts.

Gross profit and gross margin in the quarter were EUR 1.5 million and 30.2% compared to EUR 1.9 million and 35.2% in last year's second quarter.

The decrease was mainly related to lower gross profit margin contribution from the service segment, as a result of lower utilization in the German service center and higher depreciation expense in the U.S. facility, as we added additional 3D printers last year to meet the growing demand.

The next slide show our segment reporting for the quarter. On Slide 22, revenues from our Systems segment, which includes revenues from selling 3D printers, consumables and spare parts as well as maintenance, increased 13.1% to EUR 2.1 million from EUR 1.9 million in last year's second quarter. This is excellent news.

As mentioned in the prior calls, the recurring revenues portion from our population of 3D printers continues to grow.

The reason is twofold: first, we sell more printers; and second, we focus on aftersales activities. Therefore, we believe, we are well positioned to ensure the more predictable growth and such recurring revenues that provide us with.

We sold 2 new printers in this quarter compared to 1 new and 1 used refurbished printer in last year's same period. Systems revenue represented 42.2% of the total revenue this quarter compared to 35.8% in last year's second quarter.

Gross profit and gross margin for our Systems segment in the quarter was EUR 0.53 million and 24.9% compared to EUR 0.47 million and 25.2% in last year's same period.

As utilization picks up, we expect gross margins from the Systems segment to be above 40%, consistent with the outlook we have given in the past.

Remember, not all new products are yet contributing to revenue growth, as we just started to commercialize them. We expect to book revenues for the 2 VJET X units next year. Also, it's important to understand that the individual printer gross margin contribution can already be above 50% depending on printer type and system configuration. We expect to receive the order for additional 3D VJET X printers in the next 2 weeks.

On Slide 23, Services revenue decreased 13.6% to EUR 2.9 million compared to EUR 3.4 million in the last year's second quarter. This decrease is mainly due to a lower utilization rate in the German service center primarily as a result of lower demand from France in May and early June.

This was partially offset by higher demand in the U.S. and China. We are working hard to catch up and are optimistic as we see some larger orders coming in.

The top line outlook, of course, remains dependent on the underlying economic conditions. We are carefully monitoring our markets and are in constant dialogue with our customers.

Gross profits for our Service segment decreased to EUR 1 million from EUR 1.4 million in the second quarter of 2018. This was mainly due to the lower utilization rate at the German service center for the reasons mentioned earlier.

To meet the growing demand in the U.S. and China, we continue to add additional 3D printers. For example, we are shipping our second largest system of VX2000 PDB to the U.S. We are in talks with several potential customers for the system.

Looking now to the rest of the income statement on Slide 24. SG&A expenses were EUR 3.3 million in the second quarter of 2019. This compares to EUR 3.1 million in last year's second quarter. If you break this down, we can see that selling expenses increased as we hired additional colleagues and as a result of annual salary increases. Also, we had GIFA show in June, which is the largest and most important show to us and takes place every 4 years.

Administrative expenses increased as our ongoing cost related to being a public company increased.

Research and development expenses were EUR 1.7 million or 34% of revenue, which is really significant.

And the large portion of R&D and expenses are related to VJET X and the large HSS production platform, as Ingo highlighted earlier.

Operating loss was EUR 4.2 million in the second quarter of this year compared to an operating loss of EUR 2.4 million in the comparative period in 2018.

This increase was primarily related to significant higher other operating expenses as a result of noncash effects from intercompany loan. The total quarter-over-quarter negative impact from gains and losses from foreign currency transactions, an operating loss of EUR 1.1 million. Net loss for the quarter was a roughly EUR 3.9 million or EUR 0.79 per ordinary share compared to a net loss of EUR 2.9 million or EUR 0.79 per ordinary share in the prior year's quarter.

On an ADS base, net loss was EUR 0.16 per ADS in the second quarter of 2019 compared to a net loss of EUR 0.16 per ADS in the second quarter of 2018. This is based on the weighted average number of outstanding ADSs of EUR 24.18 million for the 3 months ended June 30, 2019, compared to the last year same period. The number of ADS outstanding was EUR 18.6 million.

Slide 25 showed selected balance sheet items. At June 30, 2019, the company had cash, cash equivalent and short-term investments in bond funds approximately EUR 15.1 million. Total debt at June 30, 2019, was EUR 21.8 million. Total debt consists of 24 -- EUR 20.4 million of long-term liabilities, which includes EUR 10 million from the EIB Horizon2020 venture debt program and EUR 4.2 million of lease liabilities as a result of initially applying the IFRS 16 standard.

These lease liabilities were previously classified as operating leases. Weighted average ordinary shares outstanding for the quarter was 4.836 million, which equates to EUR 24.18 million ADSs. I remain confident with our cash balance and overall liquidity position. We believe that our balance sheet with an equity ratio above 60% positions us well for the long term.

Moving now to Slide 26 and our revenue guidance for the full year, which remains unchanged from the last earnings call.

Full year 2019 revenue is expected to be between EUR 27 million and EUR 30 million with gross margins expected to be above 40%.

SG&A spending is expected to be in the range of EUR 12 million to EUR 12.5 million and R&D spending is expected to be between approximately EUR 5.5 million and EUR 6 million. Depreciation and amortization expenses are expected to be between EUR 3.75 million and EUR 4 million.

CapEx spending for 2019 is projected to be in the range of EUR 2 million to EUR 2.5 million, which primarily consists of ongoing investments in our global subsidiaries. Adjusted EBITDA, which excludes the impact of foreign exchange valuation, is expected to be neutral-to-positive for the second half of 2019.

Revenue for the first part of 2019 is expected to be in the range of EUR 4.5 million and EUR 5.5 million.

On Slide 27, we have summarized our projected long-term operating model. This concludes my remarks. And with that, I will now open the call up for your questions. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Troy Jensen with Piper Jaffray.

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Troy Donavon Jensen, Piper Jaffray Companies, Research Division - MD and Senior Research Analyst [2]

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I guess -- so I just want to talk about kind of the Q4 implied guidance here. I mean if we go to the midpoint of your guidance for September, it implies you got to do like EUR 11.5 million if you stay at the low end of your range. So can you just talk about the visibility that you have for that implied December quarter number?

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Rudolf P. Franz, voxeljet AG - CFO, COO & Member of Management Board [3]

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So you -- we just now talk about Q3, Troy, and the visibility on those numbers is reflected by the guidance. I would say we see the growing revenue of our service center activities plus the revenues, which we see from our other system-related revenues as secured. We have backlog on hand, which we currently shipping or installing to clients. And based on the information, we believe that a guidance which has been given is very likely, but I can't predict -- I can't make it closer simply because of we don't know when we get to sign off on the individual printer. It always can move from one month to the other and especially at the end of September, for example, it's pretty -- I would say, a pretty busy month. So we are cautious. On Q4, we have a pretty good overview currently already. We are currently shipping equipment already in the relevant markets for installation, meaning that's part of the backlog. And we have equipment in the relevant markets, meaning in the U.S. and in China, to be in a position to sign off on revenue on relatively short -- no time. And so well prepared for achieving pretty strong Q4 quarter.

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Troy Donavon Jensen, Piper Jaffray Companies, Research Division - MD and Senior Research Analyst [4]

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Okay. And so can I just ask a couple more on that. I know you guys talked about the big European customer and you've shipped to and you guys expect to get 3 more orders shortly. Will those orders convert into revenues this year or is that something that slips into 2020?

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Ingo Ederer, voxeljet AG - Founder, CEO & Member of Management Board [5]

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So the -- the first 2 machines have been installed this year. To be a realistic, we expect revenue for these 2 systems in next year. So there is a certain sign of procedure needed and this is a big, big company. So they will go according to the sign-off procedure. The new order, which we expect to come in, in the upcoming weeks with the 3 machines is set for installation for mid of next year, with the timetable we have had on the first 2 systems, we don't believe that we can account these 3 for revenue in 2020. So it's over 2021.

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Troy Donavon Jensen, Piper Jaffray Companies, Research Division - MD and Senior Research Analyst [6]

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Okay. All right. Understood. And then how about just -- Ingo for you too, the European automotive that's something we've heard for the past 8, 9 months that it's weak. It sounds like for you guys it was just weak in France, if I heard you correctly? And I mean how confident are you that we have bottomed now and we can grow from here?

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Ingo Ederer, voxeljet AG - Founder, CEO & Member of Management Board [7]

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So surely that -- the automotive industry has currently a hard time, especially in Europe. We don't see it for this moment in our services business too much, as you know we have various clients. We have also a big chunk of our market is coming outside of automotive. The clients we have on -- typically also first tier suppliers, they have long-term contracts with their customers. So for the moment, we are doing fine. But, of course, we are cautious and looking carefully at the markets for the moment. We don't see it as dramatic as maybe other reports in the news. Interestingly also with the Systems segment, the Systems segment demand is very strong. Currently, we don't see any influence on the systems inflow with the current discussions here you can follow in the media. So maybe this is something for the next year. For the moment, as that market is very strong, demand is strong. So all good for this moment.

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Operator [8]

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Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Dr. Ederer for any final comments.

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Ingo Ederer, voxeljet AG - Founder, CEO & Member of Management Board [9]

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Thank you. The momentum we are driving is grounded in strong product innovation. I've mentioned in the beginning we are a technology company whose mission is to establish a new manufacturing standard. The foundation of our success will always be inspiring and innovative product. It is how we drive distinction in the marketplace and it is the competitive advantage under any market conditions. While our organic investment remains the primary engine for growth, we may partner with other industry players in the investment that accelerate our life-cycle value strategy and strengthen our vertical capabilities, like, for example, it is the case with VJET X.

Wrapping things up, I'm excited about both our progress and our prospects. And we are competing aggressively for our total addressable market, the largest opportunity in our history with lots of room to grow, market segment share. In some of our segments, we are facing new research and competitors and in other segments we are the new competitor. But in all cases, competition brings out the very best in our company.

Thank you for joining today's call, and we're looking forward to speaking to you, again, in November. Thank you.

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Rudolf P. Franz, voxeljet AG - CFO, COO & Member of Management Board [10]

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Thank you.

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Operator [11]

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Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.