Prodways group: 3D printing expert Prodways slashes its 2023 forecasts, its action unscrews

(BFM Bourse) – The group has halved its growth forecast for the current financial year and drastically lowered its margin target. The company says it is suffering from a lag in industrial investments as well as a refocusing on major accounts.

Prodways made a very bad impression at the market this Thursday. The action of the group entered on the Parisian coast in May 2017 plunges, falling by 20% around 2 p.m.

The 3D printer specialist was forced to issue a resounding earnings warning on Wednesday evening. The like-for-like growth forecast for the current financial year 2023 has been halved, now expected at around 5% over one year compared to around 10% previously.

As a result, the current gross operating margin (EBITDA margin) target is revised to around 8% from around 12% due to operating leverage (i.e. the sensitivity of a company’s results to compared to that of its activity).

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Project shifts

The group indicates that it is suffering from delays in its customers’ investments in industrial projects, “particularly due to the tense financing context”. “As a result, deliveries of new 3D printers, as well as sales of materials associated with these new printers, are revised downwards for 2023”, he adds in his press release.

Prodways also indicates that its activity is penalized by its decision to refocus its commercial efforts on its major customer accounts. “This refocusing makes it possible to target industrial projects that are larger in number of printers and in consumption of 3D materials, but whose sales processes are longer, closer to long-term partnership projects than to unit transactions”, develops Prodways.

In addition to the fall in revenues, its profitability for 2023 is also weighed down by recruitment to expand its teams.

A cold shower

Implicitly, the company indicates that this exercise will constitute a transition period. “The main challenge for 2023 is to lay the foundations for a two-digit organic growth trajectory for the following years, in particular thanks to the strengthening of the teams”, underlines Prodways. “Some recruitments were also made earlier than expected, allowing employees to be integrated into the development plan more quickly but generating additional costs in 2023”, adds the company.

Still, for now it’s a cold shower. TP ICAP Midcap, which was buying on the file, revised its copy, moving to “hold” while adjusting its target price to 2.5 euros against 3.3 euros previously. The design office evokes “a new disappointment” on the action. “In the end, if we remain convinced of the group’s strong potential in the medium term on its market, in the short term, we believe that there is now a clear lack of catalysts to hope for a revaluation of the title”, develops TP ICAP Midcap.

Julien Marion – ©2023 BFM Bourse