voxeljet AG Reports Financial Results for the Third Quarter Ended September 30, 2018

Tuesday, November 27, 2018 4:14 pm EST

Dateline:

FRIEDBERG, Germany

Public Company Information:

NYSE:
VJET
US92912L1070
"voxeljet AG Third Quarter 2018 Financial Results Conference Call"

FRIEDBERG, Germany--(BUSINESS WIRE)--voxeljet AG (NYSE: VJET) (the “Company”, or “voxeljet”), a leading provider of high-speed, large-format 3D printers and on-demand parts services to industrial and commercial customers, today announced consolidated financial results for the third quarter ended September 30, 2018.

Highlights - Third Quarter 2018 (1)

  • Total revenues for the third quarter decreased 3.6% to kEUR 7,121 from kEUR 7,387
  • Gross profit margin decreased to 32.5% from 42.7%
  • Systems revenues decreased 9.8% to kEUR 3,744 from kEUR 4,153
  • Services revenues increased 4.4% to kEUR 3,377 from kEUR 3,234
  • Reaffirm full year 2018 guidance, except for full year adjusted EBITDA; adjusted EBITDA for the fourth quarter of 2018 is expected to be neutral to positive

(1) Certain comparative figures for the 3-month and 9-month periods ended September 30, 2017 were restated for immaterial errors. For further information, see Notes 1 and 9 of the interim consolidated financial statements.

Dr. Ingo Ederer, Chief Executive Officer of voxeljet, commented, “We believe that the opportunities are vast both in our direct and our indirect parts portfolio and I am extremely excited about how our new products expand our total addressable market: with indirect metal parts from our OEM solution VJET X, the most productive additive manufacturing platform to date, we believe to be on the forefront of a significant shift from conventional production to serial additive manufacturing. With advanced material combinations for direct parts from High Speed Sintering and a large production platform being launched in 2019, we see us in a position to unlock new customer groups. To develop and commercialize such innovations is precisely the reason why I have started this company 20 years ago.”

Third Quarter 2018 Results

Revenues for the third quarter of 2018 slightly decreased by 3.6% to kEUR 7,121 compared to kEUR 7,387 in the third quarter of 2017.

Revenues from our Systems segment, which focuses on the development, production and sale of 3D printers, decreased 9.8% to kEUR 3,744 in the third quarter of 2018 from kEUR 4,153 in last year’s third quarter. This was mainly due to a lower number of printer sales during the quarter. The Company delivered three new 3D printers in the third quarter of 2018, thereof one of our largest scale printers, compared to six printers (three new and three used and refurbished printers) in last year’s third quarter. Systems revenues also include all revenues from consumables, spare parts and maintenance, which slightly increased compared to the last year’s same period. Systems revenues represented 52.6% of total revenues in the third quarter of 2018 compared to 56.2% in last year’s third quarter.

Revenues from our Services segment, which focuses on the printing of on-demand parts for our customers, slightly increased 4.4% to kEUR 3,377 in the third quarter of 2018 from kEUR 3,234 in the comparative period of 2017. This was due to higher revenue contributions mainly from our subsidiary voxeljet America Inc. (“voxeljet America”). The increase in revenue at our American service center resulted from a growing market penetration in the North American sales region which is accompanied by a larger customer base. The revenue from voxeljet UK Ltd. (“voxeljet UK”) moderately increased while revenues from our German operation as well as our subsidiary voxeljet China Co. Ltd. (“voxeljet China”) slightly decreased.

Cost of sales was kEUR 4,810 for the third quarter of 2018 compared to kEUR 4,236 for the third quarter of 2017.

Gross profit and gross profit margin were kEUR 2,311 and 32.5%, respectively, in the third quarter of 2018 compared to kEUR 3,151 and 42.7% in the third quarter of 2017.

Gross profit for our Systems segment decreased significantly to kEUR 1,197 in the third quarter of 2018 from kEUR 1,617 in the third quarter of 2017. This was mainly related to the lower number of printer sales compared to the last year’s same period. Gross profit margin for this segment decreased to 32.0% in the third quarter of 2018 compared to 38.9% in the third quarter of 2017. The gross profit margin contribution related to the sale of 3D printers was almost unchanged. In contrast, the gross profit margin contribution from consumables, spare parts and maintenance decreased in the third quarter of 2018 compared to last year’s same period. This was mainly due to additional costs for training activities for our workforce within the third quarter of 2018.

Gross profit for our Services segment decreased to kEUR 1,114 in the third quarter of 2018 compared to kEUR 1,534 in the third quarter of 2017. This was mainly due to lower gross profit contributions from the German operation within the third quarter of 2018 compared to last year’s same period due to a larger portion of sales with longer lead times, which generally have lower margins as well as increased personnel expenses related to higher headcount. The gross profit margin for this segment decreased to 33.0% in the third quarter of 2018 from 47.4% in the third quarter of 2017. Gross profit margin contributions from our subsidiaries voxeljet America and voxeljet UK significantly improved while voxeljet UK, still provided a negative contributions. The improvement regarding voxeljet America and voxeljet UK resulted from a higher utilization of these service centers. The higher utilization regarding our American subsidiary was mainly related to a volume contract which started in July 2018 with a revenue contribution of kEUR 315 for this quarter.

Selling expenses were kEUR 1,990 for the third quarter of 2018 compared to kEUR 1,615 in the third quarter of 2017. The increase was mainly due to higher personnel expenses resulting from the build-up of our sales force especially within the German operation compared to the last year’s third quarter. In addition, delivery costs increased, due to the release of shipping expenses related to the sale of one of our largest 3D printers to a client in Indonesia amounting to kEUR 92 which was expensed in the third quarter of 2018.

Administrative expenses were kEUR 1,494 for the third quarter of 2018 compared to kEUR 1,354 in the third quarter of 2017. The increase mainly related to higher personnel expenses resulting from higher headcount especially regarding the German operation compared to the last year’s third quarter. Furthermore the expenses for external consulting increased related to the on-going improvements of our Enterprise Resource Planning (ERP) system amounting to kEUR 52.

Research and development (“R&D”) expenses increased to kEUR 1,660 in the third quarter of 2018 from kEUR 1,142 in the third quarter of 2017. The increase of kEUR 518 was mainly due to higher personnel expenses related to an increase in headcount in order to support further research and development projects. In addition expenses related to material and external services for ongoing research and development projects increased compared to the last year’s same period. Those expenses are usually driven by individual projects and might differ on a quarter to quarter comparison.

Other operating expenses in the third quarter of 2018 were kEUR 195 compared to kEUR 414 in the prior year period. This was mainly due to lower losses from foreign currency transaction of kEUR 105 for the third quarter of 2018 compared to kEUR 305 for the third quarter of 2017.

Other operating income was kEUR 267 for the third quarter of 2018 compared to kEUR 384 in the third quarter of 2017.

The changes in foreign currency gains were primarily driven by the valuation of the intercompany loans granted by the parent company to our UK and US subsidiaries.

Operating loss was kEUR 2,761 in the third quarter of 2018, compared to an operating loss of kEUR 990 in the comparative period in 2017. This was primarily related to the significant decrease in gross profit accompanied by higher operating expenses, compared to the third quarter of 2017.

Financial result was negative kEUR 1,042 in the third quarter of 2018, compared to a financial result of negative kEUR 36 in the comparative period in 2017. The significant decrease was mainly related to the revaluation of derivative financial instruments of the EIB loan, which did not exist in the last year’s same period resulting in a finance expense of kEUR 805. In addition interest expense for long-term debt amounted to kEUR 238.

Net loss for the third quarter of 2018 was kEUR 3,797 or EUR 1.02 per share, as compared to net loss of kEUR 1,026, or EUR 0.27 per share, in the third quarter of 2017.

Based on a conversion rate of five American Depositary Shares (“ADSs”) per ordinary share, net loss was at EUR 0.20 per ADS for the third quarter of 2018, compared to a net loss of EUR 0.06 per ADS for the third quarter of 2017. Earnings per share is computed by dividing net income attributable to stockholders of the parent by the weighted-average number of ordinary shares outstanding during the periods. Earnings per ADS is calculated by dividing the above earnings per share by five as each ordinary share represents five ADSs.

Nine Months Ended September 30, 2018 Results

Revenues for the nine months ended September 30, 2018 increased by 2.1% to kEUR 17,435 compared to kEUR 17,070 in the prior year period.

Systems revenues were kEUR 7,002 for the first nine months of 2018 compared to kEUR 8,388 for the same period last year. This was mainly due to a lower number of printer sales during the period. The Company sold four new and three used and refurbished 3D printers during the first nine months of 2018 compared to eight new and three used and refurbished 3D printers in the prior year’s period. Systems revenues represented 40.2% of total revenue for the nine months ended September 30, 2018 compared to 49.1% for the same period a year ago. Systems revenues also include all revenues from consumables, spare parts and maintenance, where we recorded a significant increase compared to the last year’s same period, which partially set off the declined revenues related to printer sales.

Services revenues were kEUR 10,433 for the nine months ended September 30, 2018 compared to kEUR 8,682 for the same period last year. This increase of 20.2% was mainly due to a higher revenue contribution from our subsidiary voxeljet America. This was partially offset by lower revenues from our subsidiary voxeljet China. Revenues from voxeljet UK as well as the German operation during this period slightly increased.

Cost of sales for the nine months ended September 30, 2018 was kEUR 11,141, an increase of kEUR 792, over cost of sales of kEUR 10,349 for the same period in 2017.

Gross profit and gross profit margin for the nine months ended September 30, 2018 were kEUR 6,294 and 36.1%, respectively, compared to kEUR 6,721 and 39.4% in the prior year period.

Gross profit for our Systems segment decreased to kEUR 2,051 for the nine months ended September 30, 2018 from kEUR 2,929 in the same period in 2017. This decrease was mainly due to the lower number of printer sales. The gross profit margin for this segment decreased to 29.3% compared to 34.9% for the prior period. The decrease was mainly related to lower gross profit margin contribution from consumables, spare parts and maintenance in the nine months ended September 30, 2018 compared to the last year’s same period, while gross profit margin contribution from the sale of 3D printers remained almost unchanged. The decline related to the gross profit margin contribution from consumables, spare parts and maintenance was mainly related to additional costs for training activities for our workforce within the third quarter of 2018.

Gross profit for our Services segment increased to kEUR 4,243 for the nine months ended September 30, 2018 from kEUR 3,792 in the same period of 2017. This was mainly due to the increase in revenues which resulted in higher gross profit. The gross profit margin for this segment slightly decreased to 40.7% for the first nine months of 2018 from 43.7% in the same period in 2017, mainly related to decreased gross profit margin in our German service center due a larger portion of sales with longer lead times, which generally have lower margins as well as increased personnel expenses related to higher headcount in the third quarter of 2018. Gross profit margin contributions from voxeljet America as well as voxeljet UK significantly improved, while voxeljet UK still generated negative contributions.

Selling expenses were kEUR 5,384 for the nine months ended September 30, 2018 compared to kEUR 4,400 in the same period in 2017, an increase of kEUR 984, or 22.4%. This was mainly due to higher shipping costs related to the increase of Services revenues as well as higher personnel expenses related to an increase in headcount resulting from the build-up of our sales force within the German operation.

Administrative expenses increased by kEUR 416 to kEUR 4,118 for the first nine months of 2018 from kEUR 3,702 in the prior year’s period. The increase was mainly due to higher personnel expenses related to additional headcount.

R&D expenses increased to kEUR 4,771 for the nine months ended September 30, 2018 from kEUR 3,954 in the same period in 2017, an increase of kEUR 817, or 20.7%. The increase was mainly due to increased expenditures for personnel and materials to support existing and future research and development projects.

Other operating expenses for the nine months ended September 30, 2018 were kEUR 612 compared to kEUR 1,605 in the prior year period. This improvement was mainly due to lower losses from foreign currency transactions amounting to kEUR 437 compared to kEUR 1,383 in the prior year’s period.

Other operating income was kEUR 1,036 for the nine months ended September 30, 2018 compared to kEUR 766 in the prior year period. The increase was mainly due to higher gains from foreign exchange transactions amounting to kEUR 690 compared to kEUR 78 in comparative period in 2017.

The changes in foreign currency losses and gains were primarily driven by the valuation of the intercompany loans granted by the parent company to our UK and US subsidiaries.

Operating loss was kEUR 7,555 in the nine months ended September 30, 2018, compared to an operating loss of kEUR 6,174 in the comparative period in 2017. The decline was primarily related to a weaker gross profit accompanied by higher operating expenses, partially offset by lower other operating expenses as well as higher other operating income, compared to the nine months ended September 30, 2017. The impact from the employee share option plan amounted to kEUR 477 in the nine months ended September 30, 2018 compared to kEUR 254 in the last year’s same period.

Financial result was negative kEUR 902 for the nine months ended September 30, 2018, compared to a financial result of negative kEUR 78 in the comparative period in 2017. The decrease was mainly related to interest expense for long-term debt of kEUR 705 compared to kEUR 40 in the comparative period in 2017 as well as the revaluation of derivative financial instruments of the EIB loan, which did not exist in the last year’s same period, resulting in a finance expense of kEUR 89.

Net loss for the nine months ended September 30, 2018 was kEUR 8,464, or EUR 2.27 per share, as compared to net loss of kEUR 6,252, or EUR 1.68 per share in the prior year period. This is based on a weighted average number of ordinary shares outstanding of 3.720 million for the first nine months ended September 30, 2018. Compared to the last year’s same period, the number of ordinary shares outstanding was unchanged.

Based on a conversion rate of five ADSs per ordinary share, net loss was EUR 0.45 per ADS for the nine months ended September 30, 2018 compared to net loss of EUR 0.34 per ADS in the prior year period.

Business Outlook

Our revenue guidance for the fourth quarter of 2018 is in the range of kEUR 9,500 to kEUR 10,500.

We reaffirm our guidance for the full year ended December 31, 2018, except for full year adjusted EBITDA.

  • Full year revenue is expected to be in the range of kEUR 28,000 and kEUR 30,000
  • Gross margin is expected to be above 40%
  • Operating expenses for the full year are expected as follows: SG&A expenses expected to be in the range of kEUR 11,000 and kEUR 12,000 and R&D expenses projected to be approximately kEUR 5,000 to kEUR 6,000. Depreciation and amortization expense is expected to be between kEUR 3,750 and kEUR 4,000.
  • Adjusted EBITDA in the fourth quarter of 2018 is expected to be neutral-to-positive. Adjusted EBITDA is defined as net income (loss), as calculated under IFRS accounting principles before interest (income) expense, provision (benefit) for income taxes, depreciation and amortization, and excluding other (income) expense resulting from foreign exchange gains or losses on the intercompany loans granted to the subsidiaries.
  • Capital expenditures are projected to be in the range of kEUR 5,500 to kEUR 6,500, which primarily includes ongoing investments in our global subsidiaries.

Our total backlog of 3D printer orders at September 30, 2018 was kEUR 5,311, which represents twelve 3D printers. This compares to a backlog of kEUR 2,770 representing four 3D printers, at December 31, 2017. As production and delivery of our printers is generally characterized by lead times ranging between three to nine months, the conversion rate of order backlog into revenue is dependent on the equipping process for the respective 3D printer as well as the timing of customers’ requested deliveries.

At September 30, 2018, we had cash and cash equivalents of kEUR 3,101 and held kEUR 9,934 of investments in bond funds, which are included in current financial assets on our consolidated statements of financial position.

Webcast and Conference Call Details

The Company will host a conference call and webcast to review the results for the third quarter on Wednesday, November 28, 2018 at 8:30 a.m. Eastern Time. Participants from voxeljet will include its Chief Executive Officer, Dr. Ingo Ederer, and its Chief Financial Officer, Rudolf Franz, who will provide a general business update and respond to investor questions.

Interested parties may access the live audio broadcast by dialing 1-877-705-6003 in the United States/Canada, or 1-201-493-6725 for international, Conference Title “voxeljet AG Third Quarter 2018 Financial Results Conference Call”. Investors are requested to access the call at least five minutes before the scheduled start time in order to complete a brief registration. An audio replay will be available approximately two hours after the completion of the call at 1-844-512-2921 or 1-412-317-6671, Replay Conference ID number 13684710. The recording will be available for replay through December 5, 2018.

A live webcast of the call will also be available on the investor relations section of the Company’s website. Please go to the website https://event.webcasts.com/starthere.jsp?ei=1218655&tp_key=d79857879b at least fifteen minutes prior to the start of the call to register, download and install any necessary audio software. A replay will be available as a webcast on the investor relations section of the Company’s website.

Non-IFRS Measure

The Company uses Adjusted EBITDA as a supplemental financial measure of its financial performance. Adjusted EBITDA is defined as net income (loss), as calculated under IFRS accounting principles, interest (income) expense, provision (benefit) for income taxes, depreciation and amortization, and excluding other (income) expense resulting from foreign exchange gains or losses on the intercompany loans granted to the subsidiaries. Management believes Adjusted EBITDA to be an important financial measure because it excludes the effects of fluctuating foreign exchange gains or losses on the intercompany loans granted to its subsidiaries which are difficult to forecast for future periods.

Management regularly uses both IFRS and non-IFRS results and expectations internally to assess its overall performance of the business, making operating decisions, and forecasting and planning for future periods. Management believes that Adjusted EBITDA is a useful financial measure to the Company’s investors as it helps investors better understand and evaluate the projections our management board provides. The Company’s calculation of Adjusted EBITDA may not be comparable to similarly titled financial measures reported by other peer companies. Adjusted EBITDA should not be considered as a substitute to financial measures prepared in accordance with IFRS.

While the Company provides guidance for Adjusted EBITDA on a forward-looking basis, a reconciliation of the differences between the non-IFRS expectation and the corresponding IFRS measure (expected net income (loss)) is not available without unreasonable effort due to potentially high variability, complexity and low visibility as to the items that would be excluded from the IFRS measure in the relevant future period, such as unusual gains and losses, fluctuations in foreign currency exchange rates, the impact and timing of potential acquisitions and divestitures, and other structural changes or their probable significance. The variability of the excluded items may have a significant, and potentially unpredictable, impact on our future IFRS results.

Exchange rate

This press release contains translations of certain U.S. dollar amounts into euros at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from U.S. dollars to euros in this press release were made at a rate of USD 1.1576 to EUR 1.00, the noon buying rate of the Federal Reserve Bank of New York for the euro on September 30, 2018.

About voxeljet

voxeljet is a leading provider of high-speed, large-format 3D printers and on-demand parts services to industrial and commercial customers. The Company’s 3D printers employ a powder binding, additive manufacturing technology to produce parts using various material sets, which consist of particulate materials and proprietary chemical binding agents. The Company provides its 3D printers and on-demand parts services to industrial and commercial customers serving the automotive, aerospace, film and entertainment, art and architecture, engineering and consumer product end markets. For more information, visit http://www.voxeljet.com.

Cautionary Statement on Forward-Looking Statements

This press release contains forward-looking statements concerning our business, operations and financial performance. Any statements that are not of historical facts may be deemed to be forward-looking statements. You can identify these forward-looking statements by words such as ‘‘believes,’’ ‘‘estimates,’’ ‘‘anticipates,’’ ‘‘expects,’’ ‘‘plans,’’ ‘‘intends,’’ ‘‘may,’’ ‘‘could,’’ ‘‘might,’’ ‘‘will,’’ ‘‘should,’’ ‘‘aims,’’ or other similar expressions that convey uncertainty of future events or outcomes. Forward-looking statements include statements regarding our intentions, beliefs, assumptions, projections, outlook, analyses or current expectations concerning, among other things, our results of operations, financial condition, business outlook, the industry in which we operate and the trends that may affect the industry or us. Although we believe that we have a reasonable basis for each forward-looking statement contained in this press release, we caution you that forward-looking statements are not guarantees of future performance. All of our forward-looking statements are subject to known and unknown risks, uncertainties and other factors that are in some cases beyond our control and that may cause our actual results to differ materially from our expectations, including those risks identified under the caption “Risk Factors” in the Company’s Annual Report on Form 20-F and in other reports the Company files with the U.S. Securities and Exchange Commission, as well as the risk that our revenues may fall short of the guidance we have provided in this press release. Except as required by law, the Company undertakes no obligation to publicly update any forward-looking statements for any reason after the date of this press release whether as a result of new information, future events or otherwise.

     

voxeljet AG

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

 
Notes 9/30/2018 12/31/2017 (1)
(€ in thousands)
unaudited
Current assets 30,086 37,494
Cash and cash equivalents 2, 7 3,101 7,569
Financial assets 2, 7 9,934 14,044
Trade receivables 2 4,727 5,093
Inventories 4 10,686 9,259
Income tax receivables 16 3
Other assets 1,622 1,526
 
Non-current assets 29,683 29,508
Financial assets 2, 7 268 357
Intangible assets 1,410 1,111
Property, plant and equipment 5 27,914 27,949
Investments in joint venture 30 39
Other assets 61 52
   
Total assets 59,769 67,002

 

Notes 9/30/2018 12/31/2017 (1)
 
Current liabilities 7,557 6,576
Deferred income 2 21 271
Trade payables 2 3,250 3,059
Contract liabilities 2 1,366 --
Financial liabilities 2, 7 940 1,162
Other liabilities and provisions 6 1,980 2,084
 
Non-current liabilities 16,582 16,537
Deferred income 2 -- 18
Deferred tax liabilities 72 66
Financial liabilities 2, 7 16,334 16,413
Other liabilities and provisions 6 176 40
 
Equity 35,630 43,889
Subscribed capital 3,720 3,720
Capital reserves 76,704 76,227
Accumulated deficit 2 (46,111) (37,509)
Accumulated other comprehensive income 1,271 1,380
Equity attributable to the owners of the company 35,584 43,818
Non controlling interest 46 71
Total equity and liabilities 59,769 67,002
 

See accompanying notes to unaudited consolidated interim financial statements.

(1) Comparative figures for the year ended December 31, 2017 were restated for immaterial errors. For further information, see Notes 1 and 9 of the interim consolidated financial statements.

         

voxeljet AG

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)

 
Three months ended September 30, Nine months ended September 30,
Notes 2018 2017 (1) 2018 2017 (1)
(€ in thousands except share and share data)
Revenues 2, 10, 11 7,121 7,387 17,435 17,070
Cost of sales (4,810) (4,236) (11,141) (10,349)
Gross profit 2, 10 2,311 3,151 6,294 6,721
Selling expenses (1,990) (1,615) (5,384) (4,400)
Administrative expenses (1,494) (1,354) (4,118) (3,702)
Research and development expenses (1,660) (1,142) (4,771) (3,954)
Other operating expenses (195) (414) (612) (1,605)
Other operating income 267 384 1,036 766
Operating loss (2,761) (990) (7,555) (6,174)
Finance expense 8 (1,086) (41) (962) (90)
Finance income 8 44 5 60 12
Financial result 8 (1,042) (36) (902) (78)
Loss before income taxes (3,803) (1,026) (8,457) (6,252)
Income taxes 6 -- (7)
Net loss (3,797) (1,026) (8,464) (6,252)
 
Other comprehensive income (18) 67 (109) 397
Total comprehensive loss (3,815) (959) (8,573) (5,855)
 
Loss attributable to:
Owners of the Company (3,787) (1,021) (8,439) (6,238)
Non-controlling interests (10) (5) (25) (14)
(3,797) (1,026) (8,464) (6,252)
 
Total comprehensive loss attributable to:
Owners of the Company (3,805) (954) (8,548) (5,841)
Non-controlling interests (10) (5) (25) (14)
(3,815) (959) (8,573) (5,855)
 

Weighted average number of ordinary
shares outstanding

3,720,000 3,720,000 3,720,000 3,720,000
Loss per share - basic/ diluted (EUR) (1.02) (0.27) (2.27) (1.68)
 

See accompanying notes to unaudited consolidated interim financial statements.

(1) Comparative figures for the 3-month and 9-month periods ended September 30, 2017 were restated for immaterial errors. For further information, see Notes 1 and 9 of the interim consolidated financial statements.

             

voxeljet AG

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

 
Attributable to the owners of the company
Accumulated
other
Subscribed Capital Accumulated comprehensive Non-controlling
(€ in thousands) capital reserves deficit gain (loss) Total interests Total equity
Balance at January 1, 2017 3,720 75,827 (28,971) 873 51,449 87 51,536
Loss for the period -- -- (6,238) -- (6,238) (14) (6,252)

Net changes in fair value of
available for sale financial assets

-- -- -- 1 1 -- 1
Foreign currency translations -- -- -- 396 396 -- 396
Equity-settled share-based payment -- 254 -- -- 254 -- 254
Balance at September 30, 2017 (1) 3,720 76,081 (35,209) 1,270 45,862 73 45,935
             
Attributable to the owners of the company
Accumulated
other
Subscribed Capital Accumulated comprehensive Non-controlling
(€ in thousands) capital reserves deficit gain (loss) Total interests Total equity
Balance at December 31, 2017 (1) 3,720 76,227 (37,509) 1,380 43,818 71 43,889

Adjustment on initial application of
IFRS 15

-- -- (100) -- (100) -- (100)

Adjustment on initial application of
IFRS 9

-- -- (63) -- (63) -- (63)
Adjusted balance at January 1, 2018 3,720 76,227 (37,672) 1,380 43,655 71 43,726
Loss for the period -- -- (8,439) -- (8,439) (25) (8,464)

Net changes in fair value of available
for sale financial assets

-- -- -- (1) (1) -- (1)
Foreign currency translations -- -- -- (108) (108) -- (108)
Equity-settled share-based payment -- 477 -- -- 477 -- 477
Balance at September 30, 2018 3,720 76,704 (46,111) 1,271 35,584 46 35,630
 

See accompanying notes to unaudited consolidated interim financial statements.

(1) Comparative figures for the 9-month period ended September 30, 2017 and for the year ended December 31, 2017 were restated for immaterial errors. For further information, see Notes 1 and 9 of the interim consolidated financial statements.

   

voxeljet AG

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 
Nine months ended September 30,
2018 2017 (1)
(€ in thousands)
Cash Flow from operating activities
 
Loss for the period (8,464) (6,252)
 
Depreciation and amortization 2,605 2,272
Foreign currency exchange differences on loans to subsidiaries 203 213
Equity-settled share-based payment transaction 477 254
Impairment losses on trade receivables 158 214
Change in investment in joint venture 9 --
Non-cash interest expense on long-term debt 581 --
Change in fair value of derivative equity forward 89 --
Change in inventory allowance (361) (404)
Deferred income taxes 6 --
 
Change in working capital (1,567) (2,869)
Trade and other receivables, inventories and current assets (2,875) (2,824)
Trade payables 191 455
Other liabilities, contract liabilities, provisions and deferred income 1,130 (505)
Income tax receivable and payable (13) 5
Total (6,264) (6,572)
 
Cash Flow from investing activities
 
Payments to acquire property, plant and equipment and intangible assets (1,446) (2,118)
Proceeds from disposal of financial assets 10,288 1,835
Payments to acquire financial assets (6,178) --
Investment in joint venture -- (50)
Total 2,664 (333)
 
Cash Flow from financing activities
 
Repayment of bank overdrafts and lines of credit (58) (94)
Repayment of sale and leaseback obligation (235) (292)
Repayment of finance lease obligation (35) (33)
Repayment of long-term debt (594) (533)
Proceeds from long-term debt issuance 40 2,611
Total (882) 1,659
 
Net increase (decrease) in cash and cash equivalents (4,482) (5,246)
 
Cash and cash equivalents at beginning of period 7,569 7,849
Changes to cash and cash equivalents due to foreign exchanges rates 14 184
Cash and cash equivalents at end of period 3,101 2,787
 
Supplemental Cash Flow Information
Interest paid 171 159
Interest received 39 14
 

See accompanying notes to unaudited consolidated interim financial statements.

(1) Comparative figures for the 9-month period ended September 30, 2017 were restated for immaterial errors. For further information, see Notes 1 and 9 of the interim consolidated financial statements.

voxeljet AG

NOTES TO THE INTERIM FINANCIAL STATEMENTS

1. Preparation of financial statements

Our consolidated interim financial statements include the accounts of voxeljet AG, which is listed on the New York Stock Exchange, and its wholly-owned subsidiaries voxeljet America Inc., voxeljet UK Ltd. and voxeljet India Pvt. Ltd., as well as voxeljet China Co. Ltd., which are collectively referred to herein as the ‘Group’ or the ‘Company.’

Our consolidated interim financial statements were prepared in compliance with all applicable measurement and presentation rules contained in International Financial Reporting Standards (‘IFRS’) as set forth by the International Accounting Standards Board (‘IASB’) and Interpretations of the IFRS Interpretations Committee (‘IFRIC’). The designation IFRS also includes all valid International Accounting Standards (‘IAS’); and the designation IFRIC also includes all valid interpretations of the Standing Interpretations Committee (‘SIC’). Specifically, these financial statements were prepared in accordance with the disclosure requirements and the measurement principles for interim financial reporting purposes specified by IAS 34.

Correction of errors

Certain comparative amounts in the consolidated statements of financial position, consolidated statements of comprehensive loss, consolidated statements of changes in equity, consolidated statements of cashflows have been restated to correct for immaterial errors with respect to the elimination of margin on certain intra-group transactions. The impact of this restatement is disclosed in Note 9. “Correction of errors”. Throughout the consolidated financial statements, columns including comparative figures that have been restated, are indicated with ‘(1)’.

The IASB issued a number of new IFRS standards which are required to be adopted in annual periods beginning after January 1, 2018.

   
Standard   Effective date   Descriptions
IFRS 9 01/2019 Amendments Prepayment Features with Negative Compensation
IFRS 16 01/2019 Leases
IAS 19 01/2019 Amendments Plan Amendment, Curtailment or Settlement
IAS 28 01/2019 Amendments Long-term Interests in Associates and Joint Ventures
IFRIC 23 01/2019 Uncertainty over Income Tax Treatments
Improvements to IFRS (2015-2017) 01/2019 IFRS 3, IFRS 11, IAS 12, IAS 23
Others 01/2020 Amendments References to the Conceptual Framework in IFRS Standards
IFRS 17 01/2021 Insurance Contracts
IFRS 10, IAS 28 indefinite

Amendment Sale or Contribution of Assets between Investor and its Associate or
Joint Venture

 

IFRS 16 leases is the IASB’s replacement of IAS 17 leases and specifies how an IFRS reporter will recognize, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring lessees to recognise assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with IFRS 16’s approach to lessor accounting substantially unchanged from its predecessor, IAS 17. The Company has developed a project plan to analyze the potential impact IFRS 16 will have on its consolidated financial statements and related disclosures as well as its business processes, systems and controls. The introduction of IFRS 16 will lead to an increase in leased assets (right of use assets) and corresponding financial liabilities on the balance sheet as well as higher interest expenses.

The interim financial statements as of and for the nine months ended September 30, 2018 and 2017 were authorized for issue by the Management Board on November 27, 2018.

2. Summary of significant accounting policies

Except as described below, the accounting policies applied in these consolidated interim financial statements are the same as those applied in the Company’s consolidated financial statements as of and for the year ended December 31, 2017, which can be found in its Annual Report on Form 20-F that was filed with the U.S. Securities and Exchange Commission. The changes in accounting policies are also expected to be reflected in the Company’s consolidated financial statements as of and for the year ending December 31, 2018.

The Group has initially adopted IFRS 15, Revenue from Contracts with Customers, and IFRS 9, Financial Instruments, on January 1, 2018. A number of other new standards are effective from January 1, 2018 but these do not have a material effect on the Company’s consolidated financial statements.

  • The adoption of IFRS 15 resulted in minor impacts related to the revenue recognition regarding the revenue streams from maintenance as well as extended warranty contracts. Those impacts include immaterial timing differences for revenue recognition related to these types of contracts with customers. The new guidance is not expected to have a material impact to net income (loss) on an ongoing basis.
  • The adoption of IFRS 9 resulted in a minor increase in impairment losses recognized on trade receivables.

IFRS 15 Revenue from Contracts with Customers

IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognized. It replaced IAS 18, Revenue, IAS 11, Construction Contracts, and related interpretations. The Group has adopted IFRS 15 using the cumulative effect method, with the effect of initially applying this standard recognized at the date of initial application (i.e. January 1, 2018). Accordingly, the information presented for 2017 has not been restated – i.e. it is presented, as previously reported, under IAS 18, IAS 11 and related interpretations.

The following table summarizes the impact, net of tax, of transition to IFRS 15 on retained earnings as of January 1, 2018.

 
Impact at January 1, 2018  

Impact on adopting
IFRS 15 at January 1,
2018

(€ in thousands)
Retained earnings (100)
 
Recognition of revenues from maintenance and extended warranty contracts (100)
 

The following table summarizes the impacts of adopting IFRS 15 on the Company’s consolidated interim consolidated statement of financial position as of September 30, 2018 and its consolidated interim statement of comprehensive loss for the nine months then ended for each of the line items affected.

     

 

09/30/2018   As reported   Adjustments  

Amounts without
adoption of IFRS 15

(€ in thousands)
Total assets 59,769 (327) 59,442
 

Current assets

30,086 (327) 29,759
Trade receivables 4,727 (327) 4,400
 
Total equity and liabilities 59,769 (327) 59,442

 

Current liabilities

7,557 (554) 7,003
Deferred income 21 256 277
Contract liabilities 1,366 (1,366) --
Other liabilities and provisions 1,980 556 2,536
 

Equity

35,630 227 35,857
Accumulated deficit (46,111) 227 (45,884)
 

 

09/30/2018   As reported   Adjustments  

Amounts without
adoption of IFRS 15

(€ in thousands)
Revenue 17,435 127 17,562
Impairment loss on trade receivables under IFRS 15 (10) 10 --
Operating loss (7,555) 137 (7,418)
Loss before income taxes (8,457) 137 (8,320)
Net loss (8,464) 137 (8,327)
Total comprehensive loss (8,573) 137 (8,436)
 

The details of the new accounting policies and the nature of the changes to previous accounting policies in relation to the Group’s revenue streams in relation to the Maintenance and extended warranty contracts are set out below.

After the initial one year of statutory warranty period, the Company offers its customers extended warranty and optional maintenance contracts. Extended warranty and maintenance contracts are generally provided for a period of twelve months and automatically extended for another twelve months if not cancelled on a timely basis. Before the adoption of IFRS 15 extended warranty and maintenance service revenue has been recognized on a straight-line basis over the contractual term.

Under IFRS 15, the Company recognizes revenue based on input factors like the number of service visits or the provision of certain goods, in particular printheads under the maintenance and warranty contracts. Therefore the expected number of service visits and goods to be provided under a contract have been estimated by the Company’s service department based on historical experience. This leads to minor timing differences for revenue recognition related to these types of contracts with customers throughout the contract term.

IFRS 9 Financial Instruments

IFRS 9 sets out requirements for recognizing and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. This standard replaces IAS 39, Financial Instruments.

The Company has applied the exemption not to restate comparative information for prior periods with respect to classification and measurement (including impairment) requirements. Differences in the carrying amounts of financial assets and financial liabilities resulting from the adoption of IFRS 9 are recognized in retained earnings and reserves as of January 1, 2018. Accordingly, the information presented for 2017 does not reflect the requirements of IFRS 9 but rather those of IAS 39.

The details of new significant accounting policies and the nature and effect of the changes to previous accounting policies are set out below.

Classification and measurement of financial assets and financial liabilities

IFRS 9 largely retains the existing requirements in IAS 39 for the classification and measurement of financial liabilities. However, it eliminates the previous IAS 39 categories for financial assets of held to maturity, loans and receivables and available for sale.

Under IFRS 9, on initial recognition, a financial asset is classified as measured at: amortized cost, fair value through other comprehensive income (FVOCI), or fair value through profit or loss (FVTPL). The classification of financial assets under IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics.

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

  • it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
  • its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to record subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.

All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the transaction price) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition.

Under IFRS 9, our investments in bond funds will be classified as fair value through other comprehensive income (FVTOCI). As permitted by IFRS 9, the Company has designated these investments at the date of initial application as measured at FVOCI. Unlike IAS 39, the accumulated fair value reserve related to these investments will never be reclassified to profit or loss.

Under IAS 39 as well as upon adoption of IFRS 9, our derivative financial instruments have been designated as at FVTPL.

Impairment of financial assets

IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with an ‘expected credit loss’ (ECL) model. The new impairment model applies to financial assets measured at amortized cost, FVOCI and contract assets. Under IFRS 9, credit losses are recognized earlier than under IAS 39.

The Company’s financial assets at amortized cost consist of trade receivables and cash and cash equivalents. For cash and cash equivalents the adoption of IFRS 9 did not have any impact regarding impairment.

Under IFRS 9, loss allowances are measured on either of the following bases:

  • 12-months ECLs: these are ECLs that result from possible default events within the 12 months after the reporting date; or
  • lifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial instrument.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment and including forward-looking information.

The Company considers a financial asset to be in default when:

  • the borrower is unlikely to pay its credit obligations to the Company in full, without recourse by the Company to actions such as realizing security (if any is held); or
  • the financial asset is more than 90 days past due.

The Company considers an investment to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘investment grade’. The Company limits its exposure to credit risk by investing only in bond funds which are fully guaranteed by the financial institutions and therefore represents short term credit rating of A-3 based on Standard & Poor’s or P-2 based on Moody’s.

Trade receivables

The Company measures loss allowances for trade receivables at an amount equal to lifetime ECLs. ECLs are a probability-weighted estimate of credit losses. The Company calculates the ECL based on the risk scoring its customers’ according to an external rating agency. Following the risk score of each customer, the trade receivables are clustered into different grades. For each grade, the ECL is calculated after deducting from trade receivables a loss allowance based on actual credit loss experience. In addition the Company uses qualitative assessment of the trade receivables, where default has incurred.

The Group considers an equity security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘investment grade’. The Group limits its exposure to credit risk by investing only in bond funds which are fully guaranteed by the financial institutions and therefore represents short term credit rating of A-3 based on Standard & Poor’s or P-2 based on Moody’s.

Presentation of impairment

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets and presented within other operating expenses.

Impairment losses on financial assets classified as FVTPL and FCOCI are presented within the finance expense and other comprehensive income, respectively.

The following table presents the original measurement categories under IAS 39 and the new measurement categories under IFRS 9 for each class of the Company’s financial assets and financial liabilities as of January 1, 2018.

       
01/01/2018  

Original classification
under IAS 39

 

New classification
under IFRS 9

 

Original
carrying amount
under IAS 39

 

New
carrying amount
under IFRS 9

(€ in thousands)
Financial assets 27,063 27,000
 

Non-current assets

Equity securities

Available-for-sale
financial assets

FVOCI 5 5
Derivative financial instruments

A financial asset or
financial liability at fair
value through profit or loss

Mandatorily at FVTPL 352 352

Current assets

Bond funds

Available-for-sale
financial assets

FVOCI 14,044 14,044
Cash and cash equivalents Loans and receivables Amortized cost 7,569 7,569
Trade receivables Loans and receivables Amortized cost 5,093 5,030
 
Financial liabilities 20,416 20,416
 

Non-current liabilities

Long-term debt

Financial liabilities
measured at amortized cost

Amortized cost 16,242 16,242
Finance lease obligation

Financial liabilities
measured at amortized cost

Amortized cost 171 171

Current liabilities

Bank overdraft

Financial liabilities
measured at amortized cost

Amortized cost 58 58
Long-term debt

Financial liabilities
measured at amortized cost

Amortized cost 796 796
Finance lease obligation

Financial liabilities
measured at amortized cost

Amortized cost 308 308
Trade payables

Financial liabilities
measured at amortized cost

Amortized cost 2,841 2,841
 

Impact of the new impairment model

For assets in the scope of the IFRS 9 impairment model, impairment losses are generally expected to increase and become more volatile. The Company has determined that the application of IFRS 9’s impairment requirements at January 1, 2018 results in an additional impairment allowance as follows.

   

(€ in thousands)

Loss allowance at December 31, 2017 under IAS 39 482
Additional impairment recognized at January 1, 2018 on:
Trade and other receivables as at December 31, 2017 62
Additional trade receivables recognized on adoption of IFRS 15 1
Loss allowance at January 1, 2018 under IFRS 9 545
 

The following tables provides information about the exposure to credit risk and ECLs for trade receivables as of January 1, 2018 and September 30, 2018. This was calculated after a specific assessment of the trade receivables and after recording a specific debt allowance.

           
January 1, 2018
Grades  

Equivalent to external
credit rating
(Standard & Poor’s)

  Probability of
default
  Gross carrying
amount
  Impairment loss
allowance
  Net carrying
amount
(€ in thousands)
Grades 1-4: Low risk BBB+ to AAA 0.2% 3,274 5 3,269
Grades 5-7: Fair risk B+ to BBB 1.3% 1,674 22 1,652
Grades 8-9: Substandard CCC- to B 7.0% 363 25 338
Grade 10: Doubtful C to CC 25.0% 14 3 11
Grade 11:   Loss   D   100.0%   8   8   --
                5,333   63   5,270
 
September 30, 2018
Grades  

Equivalent to external
credit rating
(Standard & Poor’s)

  Probability of
default
  Gross carrying
amount
  Impairment loss
allowance
  Net carrying
amount
(€ in thousands)
Grades 1-4: Low risk BBB+ to AAA 0.2% 2,029 3 2,026
Grades 5-7: Fair risk B+ to BBB 1.3% 1,913 26 1,887
Grades 8-9: Substandard CCC- to B 7.0% 792 55 737
Grade 10: Doubtful C to CC 25.0% 103 26 77
Grade 11:   Loss   D   100.0%   11   11   --
                4,848   121   4,727
 

3. Share based payment arrangements

On April 7, 2017, voxeljet AG established a share option plan that entitles key management personnel and senior employees of voxeljet AG and its subsidiaries to purchase shares of the parent company.

Total options available under the share option plan are 372,000. 279,000 options (75%, Tranche 1) were granted on April 7, 2017. 93,000 options (25%, Tranche 2) were granted on April 12, 2018.

The vesting conditions include a service condition (the options vest after a period of four years of continued service from the respective grant date) and a market condition (the options may only be exercised if the share price exceeds the exercise price over a period of 90 consecutive days by at least 20% in the period between the grant date and the respective exercise time frame) of which both conditions must be met.

The fair value of the employee share option plan has been measured for Tranches 1 and 2 using a Monte Carlo simulation. The market condition has been incorporated into the fair value at grant date.

The inputs used in the measurement of the fair value at grant date are as follows:

   
Tranche 1 Tranche 2
Parameter
Share price at grant date USD 13.80 USD 16.15
Exercise price USD 13.90 USD 16.15
Expected volatility 55.00% 58.40%
Expected dividends -- --
Risk-free interest rate 2.49% 2.85%
Fair value at grant date USD 8.00 USD 9.74
 

The respective expected volatility has been based on an evaluation of the historical volatility of the Company’s share price as at the grant date. As at September 30, 2018 no options are exercisable and 372,000 options are outstanding. The weighted-average contractual life of the options at September 30, 2018 amounts to 8.8 years (September 30, 2017: 9.5 years).

The expenses recognized in the profit and loss statement in relation to the share-based payment arrangements amounted to kEUR 178 in the three months and kEUR 477 in the nine months ended September 30, 2018. (three months and nine months ended September 30, 2017: kEUR 132 and kEUR 254, respectively).

4. Inventories

   
9/30/2018 12/31/2017 (1)
(€ in thousands)
Raw materials and merchandise 4,185 2,737
Work in progress 6,501 6,522
Total 10,686 9,259
 

(1) Comparative figures for the year ended December 31, 2017 were restated for immaterial errors. For further information, see Notes 1 and 9 of the interim consolidated financial statements.

5. Property, plant and equipment, net

   
9/30/2018 12/31/2017 (1)
(€ in thousands)
Land, buildings and leasehold improvements 17,206 17,415
Plant and machinery (includes assets under finance lease) 9,104 8,901
Other facilities, factory and office equipment 1,496 1,625
Assets under construction and prepayments made 108 8
Total 27,914 27,949
Thereof pledged assets of Property, Plant and Equipment 6,790 7,046
Leased assets included in Property, Plant and Equipment: 259 881
Printers 106 613
Printers leased to customers under operating lease -- 97
Other factory equipment 153 171
 

(1) Comparative figures for the year ended December 31, 2017 were restated for immaterial errors. For further information, see Notes 1 and 9 of the interim consolidated financial statements.

6. Other liabilities and provisions

   
9/30/2018 12/31/2017
(€ in thousands)
Customer deposits 373
Liabilities from VAT 18 12
Employee bonus 285 303
Accruals for vacation and overtime 293 222
Accruals for licenses 134 140
Liabilities from payroll 274 236
Accruals for commissions 80 50
Accruals for compensation of Supervisory board 175 180
Accrual for warranty 388 286
Others 509 322
Total 2,156 2,124
 

After the adoption of IFRS 15 customer deposits amounting to kEUR 556 are presented within contract liabilities.

7. Financial instruments

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.

                 
Carrying amount Fair Value
9/30/2018 FVTPL FVOCI Assets at
amortized
cost
Liabilities
at amortized
cost
Total
carrying
amount
Level 1 Level 2 Level 3 Total

Financial assets measured at
fair value

Non-current assets

Derivative financial instruments 263 -- -- -- 263 -- 263 -- 263
Equity securities -- 5 -- -- 5 -- -- 5 5
 

Current assets

Bond funds -- 9,934 -- -- 9,934 9,934 -- -- 9,934
 

Financial assets not measured
at fair value

Current assets

Cash and cash equivalents -- -- 3,101 -- 3,101 3,101 -- -- 3,101
Trade and other receivables -- -- 4,727 -- 4,727 -- -- -- --
 

Financial liabilities not
measured at fair value

Non-current liabilities

Long-term debt -- -- -- 16,255 16,255 -- 15,082 -- 15,082
Finance lease obligation -- -- -- 79 79 -- 76 -- 76
 

Current liabilities

Bank overdraft -- -- -- -- -- -- -- -- --
Long-term debt -- -- -- 810 810 -- 803 -- 803
Finance lease obligation -- -- -- 130 130 -- 128 -- 128
Trade payables -- -- -- 3,250 3,250 -- -- -- --
 
             
12/31/2017   A financial
asset or
financial
liability
at fair value
through
profit
or loss
  Held-to-
maturity
investments
  Available-
for-sale
investments
  Loans and
receivables
  Financial
liabilities
measured at
amortized cost
  Fair Value   Level
Assets
 

Non-current assets

Equity securities -- -- 5 -- -- 5 Level 3
Derivative financial instruments 352 -- -- -- -- 352 Level 2

Current assets

Bond funds -- -- 14,044 -- -- 14,044 Level 1
Cash and cash equivalents -- -- -- 7,569 -- 7,569 Level 1
 
Liabilities
 

Non-current liabilities

Long-term debt -- -- -- -- 16,242 15,119 Level 2
Finance lease obligation -- -- -- -- 171 163 Level 2

Current liabilities

Bank overdraft -- -- -- -- 58 58
Long-term debt -- -- -- -- 796 787 Level 2
Finance lease obligation -- -- -- -- 308 310 Level 2
 

The fair value of the Company’s investments in the bond funds was determined based on the unit prices quoted by the fund management company.

The fair value of long-term debt was determined using discounted cash flow models based on the relevant forward interest rate yield curves. The fair value of finance lease obligations was determined using discounted cash flow models on market interest rates available to the Company for similar transactions at the relevant date.

Due to their short maturity and the current low level of interest rates, the carrying amounts of credit lines and bank overdrafts approximate fair value.

8. Financial result

   
Three months ended September 30,
2018 2017
(€ in thousands)

Interest expense

(1,086) (41)
Finance lease obligations (20) (22)
Long-term debt (238) (11)
Expense from revaluation of derivative financial instruments (805) --
Other (23) (8)

Interest income

44 5
Income from bond funds 34 2
Other 10 3
Financial result (1,042) (36)
 
Nine months ended September 30,
2018 2017
(€ in thousands)

Interest expense

(962) (90)
Finance lease obligations (79) (39)
Long-term debt (705) (40)
Expense from revaluation of derivative financial instruments (89) --
Other (89) (11)

Interest income

60 12
Income from bond funds 48 9
Other 12 3
Financial result (902) (78)
 

9. Correction of errors

During the preparation of the consolidated interim financial statements for the three-month and nine-month periods ended September 30, 2018, the Company became aware that the margin within certain intra-group transactions has not been properly eliminated in the consolidation process, resulting in misstatement of cost of sales in its consolidated financial statements since the first quarter in fiscal year 2017. These errors have been corrected by restating each of the affected financial statement line items for prior periods. The Company has evaluated the effect of these errors, both qualitatively and quantitatively, and concluded that the corrections did not have a material impact on, nor require amendment of, any previously filed financial statements. The following tables summarize the impacts on the Company’s consolidated financial statements.

Consolidated statement of financial position

 
March 31, 2017 Impact of correction of error
As previously
reported
  Adjustments   As corrected
(€ in thousands)
 
Current assets 33,601 (65) 33,536
Inventories 9,475 (65) 9,410
Non-current assets 28,003 28,003
Property, plant and equipment 26,872 26,872
 
Total assets 61,604 (65) 61,539
 
Equity 49,120 (65) 49,055
Accumulated deficit (31,400) (65) (31,465)
 
Total equity and liabilities 61,604 (65) 61,539

 

June 30, 2017 Impact of correction of error
As previously
reported
Adjustments As corrected
(€ in thousands)
 
Current assets 30,937 (121) 30,816
Inventories 9,507 (121) 9,386
Non-current assets 28,300 28,300
Property, plant and equipment 27,010 27,010
 
Total assets 59,237 (121) 59,116
 
Equity 46,883 (121) 46,762
Accumulated deficit (34,067) (121) (34,188)
 
Total equity and liabilities 59,237 (121) 59,116
 
September 30, 2017 Impact of correction of error
As previously
reported
Adjustments As corrected
(€ in thousands)
 
Current assets 29,840 (187) 29,653
Inventories 9,391 (187) 9,204
Non-current assets 28,990 28,990
Property, plant and equipment 27,617 27,617
 
Total assets 58,830 (187) 58,643
 
Equity 46,122 (187) 45,935
Accumulated deficit (35,022) (187) (35,209)
 
Total equity and liabilities 58,830 (187) 58,643
 
December 31, 2017 Impact of correction of error
As previously
reported
Adjustments As corrected
(€ in thousands)
 
Current assets 37,774 (280) 37,494
Inventories 9,539 (280) 9,259
Non-current assets 29,257 251 29,508
Property, plant and equipment 27,698 251 27,949
 
Total assets 67,031 (29) 67,002
 
Equity 43,918 (29) 43,889
Accumulated deficit (37,480) (29) (37,509)
 
Total equity and liabilities 67,031 (29) 67,002
 
March 31, 2018 Impact of correction of error
As previously
reported
Adjustments As corrected
(€ in thousands)
 
Current assets 38,347 (417) 37,930
Inventories 11,309 (417) 10,892
Non-current assets 29,360 254 29,614
Property, plant and equipment 26,792 254 27,046
 
Total assets 67,707 (163) 67,544
 
Equity 42,223 (163) 42,060
Accumulated deficit (39,219) (163) (39,382)
 
Total equity and liabilities 67,707 (163) 67,544
 
June 30, 2018 Impact of correction of error
As previously
reported
Adjustments As corrected
(€ in thousands)
 
Current assets 35,781 (623) 35,158
Inventories 13,116 (623) 12,493
Non-current assets 29,056 257 29,313
Property, plant and equipment 26,550 257 26,807
 
Total assets 64,837 (366) 64,471
 
Equity 39,633 (366) 39,267
Accumulated deficit (41,958) (366) (42,324)
 
Total equity and liabilities 64,837 (366) 64,471
 

Consolidated statement of comprehensive loss

 
Impact of correction of error
three months ended March 31, 2017
As previously
reported
  Adjustments   As corrected
(€ in thousands except share and share data)
 
Cost of sales (2,949) (65) (3,014)
Gross profit 1,581 (65) 1,516
Operating loss (2,388) (65) (2,453)
Net loss (2,431) (65) (2,496)
Total comprehensive loss (2,416) (65) (2,481)
 
Loss attributable to owners of the company (2,429) (65) (2,494)
Total comprehensive loss attributable to owners of the company (2,414) (65) (2,479)
 
Loss per share - basic/ diluted (EUR) (0.65) (0.02) (0.67)
         
Impact of correction of error Impact of correction of error
three months ended June 30, 2017 six months ended June 30, 2017
As previously As previously
reported Adjustments As corrected reported Adjustments As corrected
(€ in thousands except
share and share data)
(€ in thousands except
share and share data)
 
Cost of sales (3,043) (56) (3,099) (5,992) (121) (6,113)
Gross profit 2,110 (56) 2,054 3,691 (121) 3,570
Operating loss (2,675) (56) (2,731) (5,063) (121) (5,184)
Net loss (2,674) (56) (2,730) (5,105) (121) (5,226)
Total comprehensive loss (2,359) (56) (2,415) (4,775) (121) (4,896)
 
Loss attributable to owners of the company (2,667) (56) (2,723) (5,096) (121) (5,217)

Total comprehensive loss attributable to
owners of the company

(2,352) (56) (2,408) (4,766) (121) (4,887)
 
Loss per share - basic/ diluted (EUR) (0.72) (0.01) (0.73) (1.37) (0.03) (1.40)
 
Impact of correction of error Impact of correction of error
three months ended September 30, 2017 nine months ended September 30, 2017
As previously As previously
reported Adjustments As corrected reported Adjustments As corrected
(€ in thousands except
share and share data)
(€ in thousands except
share and share data)
 
Cost of sales (4,170) (66) (4,236) (10,162) (187) (10,349)
Gross profit 3,217 (66) 3,151 6,908 (187) 6,721
Operating loss (924) (66) (990) (5,987) (187) (6,174)
Net loss (960) (66) (1,026) (6,065) (187) (6,252)
Total comprehensive loss (893) (66) (959) (5,668) (187) (5,855)
 
Loss attributable to:
Loss attributable to owners of the company (955) (66) (1,021) (6,051) (187) (6,238)

Total comprehensive loss attributable to
owners of the company

(888) (66) (954) (5,654) (187) (5,841)
 
Loss per share - basic/ diluted (EUR) (0.26) (0.01) (0.27) (1.63) (0.05) (1.68)
 
Impact of correction of error Impact of correction of error
three months ended December 31, 2017 year ended December 31, 2017
As previously As previously
reported Adjustments As corrected reported Adjustments As corrected
(€ in thousands except
share and share data)
(€ in thousands except
share and share data)
 
Cost of sales (3,662) 158 (3,504) (13,824) (29) (13,853)
Gross profit 2,446 158 2,604 9,354 (29) 9,325
Operating loss (2,633) 158 (2,475) (8,620) (29) (8,649)
Net loss (2,460) 158 (2,302) (8,525) (29) (8,554)
Total comprehensive loss (2,352) 158 (2,194) (8,020) (29) (8,049)
 
Loss attributable to owners of the company (2,458) 158 (2,300) (8,509) (29) (8,538)

Total comprehensive loss attributable to
owners of the company

(2,350) 158 (2,192) (8,004) (29) (8,033)
 
Loss per share - basic/ diluted (EUR) (0.66) 0.04 (0.62) (2.29) (0.01) (2.30)
     
Impact of correction of error
three months ended March 31, 2018
As previously
reported Adjustments As corrected
(€ in thousands except share and share data)
 
Cost of sales (2,785) (134) (2,919)
Gross profit 2,267 (134) 2,133
Operating loss (2,254) (134) (2,388)
Net loss (1,582) (134) (1,716)
Total comprehensive loss (1,661) (134) (1,795)
 
Loss attributable to owners of the company (1,576) (134) (1,710)
Total comprehensive loss attributable to owners of the company (1,655) (134) (1,789)
 
Loss per share - basic/ diluted (EUR) (0.42) (0.04) (0.46)
 
Impact of correction of error   Impact of correction of error
three months ended June 30, 2018 six months ended June 30, 2018
As previously   As previously
reported Adjustments As corrected reported Adjustments As corrected
(€ in thousands except
share and share data)
(€ in thousands except
share and share data)
 
Cost of sales (3,209) (201) (3,410) (5,994) (337) (6,331)
Gross profit 2,053 (201) 1,852 4,320 (337) 3,983
Operating loss (2,203) (201) (2,404) (4,457) (337) (4,794)
Net loss (2,748) (201) (2,949) (4,330) (337) (4,667)
Total comprehensive loss (2,760) (201) (2,961) (4,421) (337) (4,758)
 
Loss attributable to owners of the company (2,739) (201) (2,940) (4,315) (337) (4,652)

Total comprehensive loss attributable to
owners of the company

(2,751) (201) (2,952) (4,406) (337) (4,743)
 
Loss per share - basic/ diluted (EUR) (0.74) (0.05) (0.79) (1.16) (0.09) (1.25)
 

Segment reporting

 
Impact of correction of error three months ended March 31, 2017
As previously    
reported Adjustments As corrected
(€ in thousands)
SYSTEMS SERVICES SYSTEMS SERVICES SYSTEMS SERVICES
Revenues 1,693 2,837 1,693 2,837
 
Gross profit 353 1,228 12 (77) 365 1,151
Gross profit in % 20.9 % 43.3 % 21.6 % 40.6 %
 
Impact of correction of error three months ended June 30, 2017
As previously
reported Adjustments As corrected
(€ in thousands)
SYSTEMS SERVICES SYSTEMS SERVICES SYSTEMS SERVICES
Revenues 2,542 2,611 2,542 2,611
 
Gross profit 925 1,185 22 (78) 947 1,107
Gross profit in % 36.4 % 45.4 % 37.3 % 42.4 %
 
Impact of correction of error six months ended June 30, 2017
As previously
reported Adjustments As corrected
(€ in thousands)
SYSTEMS SERVICES SYSTEMS SERVICES SYSTEMS SERVICES
Revenues 4,235 5,448 4,235 5,448
 
Gross profit 1,278 2,413 34 (155) 1,312 2,258
Gross profit in % 30.2 % 44.3 % 31.0 % 41.4 %
 
Impact of correction of error three months ended September 30, 2017
As previously
reported Adjustments As corrected
(€ in thousands)
SYSTEMS SERVICES SYSTEMS SERVICES SYSTEMS SERVICES
Revenues 4,153 3,234 4,153 3,234
 
Gross profit 1,584 1,633 33 (99) 1,617 1,534
Gross profit in % 38.1 % 50.5 % 38.9 % 47.4 %
 
Impact of correction of error nine months ended September 30, 2017
As previously
reported Adjustments As corrected
(€ in thousands)
SYSTEMS SERVICES SYSTEMS SERVICES SYSTEMS SERVICES
Revenues 8,388 8,682 8,388 8,682
 
Gross profit 2,862 4,046 67 (254) 2,929 3,792
Gross profit in % 34.1 % 46.6 % 34.9 % 43.7 %
 
Impact of correction of error three months ended December 31, 2017
As previously
reported Adjustments As corrected
(€ in thousands)
SYSTEMS SERVICES SYSTEMS SERVICES SYSTEMS SERVICES
Revenues 3,146 2,962 3,146 2,962
 
Gross profit 1,059 1,387 270 (112) 1,329 1,275
Gross profit in % 33.7 % 46.8 % 42.2 % 43.0 %
 
Impact of correction of error year ended December 31, 2017
As previously
reported Adjustments As corrected
(€ in thousands)
SYSTEMS SERVICES SYSTEMS SERVICES SYSTEMS SERVICES
Revenues 11,534 11,644 11,534 11,644
 
Gross profit 3,921 5,433 337 (366) 4,258 5,067
Gross profit in % 34.0 % 46.7 % 36.9 % 43.5 %
 
Impact of correction of error three months ended March 31, 2018
As previously
reported Adjustments As corrected
(€ in thousands)
SYSTEMS SERVICES SYSTEMS SERVICES SYSTEMS SERVICES
Revenues 1,375 3,677 1,375 3,677
 
Gross profit 429 1,838 (48) (86) 381 1,752
Gross profit in % 31.2 % 50.0 % 27.7 % 47.6 %
 
Impact of correction of error three months ended June 30, 2018
As previously
reported Adjustments As corrected
(€ in thousands)
SYSTEMS SERVICES SYSTEMS SERVICES SYSTEMS SERVICES
Revenues 1,883 3,379 1,883 3,379
 
Gross profit 561 1,492 (87) (114) 474 1,378
Gross profit in % 29.8 % 44.2 % 25.2 % 40.8 %
 
Impact of correction of error six months ended June 30, 2018
As previously
reported Adjustments As corrected
(€ in thousands)
SYSTEMS SERVICES SYSTEMS SERVICES SYSTEMS SERVICES
Revenues 3,258 7,056 3,258 7,056
 
Gross profit 990 3,330 (136) (201) 854 3,129
Gross profit in % 30.4 % 47.2 % 26.2 % 44.3 %
 

There is no impact on the Company’s operating, investing or financing cash flows for the 9-months period ended September 30, 2017.

10. Segment reporting

The following table summarizes segment reporting. The sum of the amounts of the two segments equals the total for the Group in each of the periods.

 
Three months ended September 30,
2018 2017 (1)
(€ in thousands)
SYSTEMS SERVICES SYSTEMS SERVICES
Revenues 3,744 3,377 4,153 3,234
 
Gross profit 1,197 1,114 1,617 1,534
Gross profit in % 32.0 % 33.0 % 38.9 % 47.4 %
 
Nine months ended September 30,
2018 2017 (1)
(€ in thousands)
SYSTEMS SERVICES SYSTEMS SERVICES
Revenues 7,002 10,433 8,388 8,682
 
Gross profit 2,051 4,243 2,929 3,792
Gross profit in % 29.3 % 40.7 % 34.9 % 43.7 %
 

(1) Comparative figures for the 3-month and 9-month periods ended September 30, 2017 were restated for immaterial errors. For further information, see Notes 1 and 9 of the interim consolidated financial statements.

11. Revenues

       
Three months ended September 30, Nine months ended September 30,
2018 2017 2018 2017
(€ in thousands) (€ in thousands)
EMEA 2,935 5,660 9,757 12,053
Germany 1,546 1,202 4,284 4,656
France 397 1,077 2,146 2,105
Sweden 46 1,167 209 1,367
Others 946 2,214 3,118 3,925
Asia Pacific 2,269 653 3,486 1,933
Indonesia 1,758 32 1,784 91
China 132 204 460 1,137
South Korea 361 400 667 656
Others 18 17 575 49
Americas 1,917 1,074 4,192 3,084
United States 1,871 911 4,125 2,742
Others 46 163 67 342
Total 7,121 7,387 17,435 17,070
 

12. Commitments, contingent assets and liabilities

In March 2018, ExOne GmbH, a subsidiary of The ExOne Company, notified voxeljet of its intent not to pay its annual license fees under an existing intellectual property-related agreement and asserted its rights to claim damages pursuant to an alleged material breach of the agreement. At this time, the Company cannot reasonably estimate a contingency, if any, related to this matter.

13. Subsequent events

On October 17, 2018, voxeljet issued 972,000 ordinary shares, equivalent to 4,860,000 American Depository Shares (“ADS”), at an offering price of USD 2.57 per ADS (the “Public Offering Price”). The Company received net proceeds of approximately EUR 9.2 million. Members of our management board, who are also significant shareholders, purchased an aggregate number of 233,462 ADSs in this offering at the Public Offering Price.

On November 8, 2018, voxeljet closed the over-allotment transaction in which it issued additional 144,000 ordinary shares, equivalent to 720,000 ADSs, upon the exercise of the over-allotment option exercised by the underwriter on November 1, 2018. The Company received net proceeds of approximately EUR 1.4 million.

Contact:

Investors and Media
Johannes Pesch
Director Investor Relations and Business Development
johannes.pesch@voxeljet.de
Office: +49 821 7483172
Mobile: +49 176 45398316