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Yes. Thank you very much, and welcome to everybody. Welcome to our Q1 results earnings call. And I would like to guide you through the presentation -- through the presentation and then we will have a chance to listen to Meddah a little bit. He will introduce himself, so this is the first conference call where our new CEO Meddah Hadjar attends the call. But let me start with the presentation.As always, we prepared a very quick and brief overview of what has happened in the Q, in the first quarter 2019. Unfortunately, our revenues decreased by EUR 7 million, roughly to EUR 7.34 million. The total operating revenue, including inventories is also much lower than the year before. The new order intake in value terms is also decreasing, and as a result, our EBITDA is down as well. These are the facts and the things that are -- that happened in Q1 2019.The positive is that our new CEO, Meddah Hadjar started on May 1st this year. We also had some changes in the Supervisory Board that we will explain later on, and we've had a capital increase end of March with gross receipts of EUR 13 million, and that allow us to implement the right measures to get back on growth track and set the company in the right way again. So this is the overview.I would now like to hand over to Meddah Hadjar, our new CEO, in order to introduce himself.
Okay. Thank you, Uwe. Good morning, good afternoon everyone. My name is Meddah Hadjar. I'm the new CEO. I have been here for a week. And currently I'm going through the process, really reviewing the business and the organization and the strategy.Obviously, as you might know, I have spent my last 20 years at GE and I have been with major sectors of the industry of the company in aviation, power generation, electrification and additive. I am a big believer of the technology and its full potential capabilities as both a user and also a supplier. I believe that SLM has a great technology and has significant potential, and this is why I am here.However, this is an emerging technology, and where the users sometimes are not fully aware of the full potential of the capabilities of additive. At the same time additive product producers remain lag in other industries from product maturation and industrialization. Therefore, I think short-term volatility in the performance is very common in this industry, as I have seen it for.The key is really to look at the long-term capabilities and potentials. In the next 90 days I'll be going through, reviewing the entire organization and the business operations and take a look at the appropriate actions, specifically to go to market. I will share those with you once I finalize them in the next time. Back to you, Uwe.
Yes. Thank you, Meddah. As always, we now take a look at the share price development. And as you can see, and all of you are aware, we've gone through difficult times over the last 12 months. Share price came down significantly. Nevertheless, with that new appointment we see an increase again. And I'm convinced, as a shareholder, not just as a Board Member, as a shareholder I'm convinced that this company has much more potential than what we've shown in the last 3 months. We know that we defined the right measures and the right -- we identified the right measures to get back on growth track again and that's why I'm still convinced that the current share price doesn't reflect the potential of this company.The shareholder structure, due to the capital increase I just mentioned, has changed. Hans Ihde is still the founder -- the initial founder, is still one of our major shareholders. But Elliot with 28% is still the -- is now the main shareholder, together with ENA. ENA Opportunity Master, they own 10% of the company, so the parties that supported us with the capital increase are now our main shareholders. And together with them, we defined the right measures for this company. As I said, I'm still a shareholder, and I'm still a strong believer in the potential of this company and therefore I'm happy to be there.So coming to the financial highlights, I would like to hand over to our colleague Axel who is responsible for sales in order to shed some light on the order intake development and the revenue development.
Okay. Thank you very much, Uwe. As you can see on the chart, the order increase now is below our expectations. We have an order intake of 7 machines in Q1 '19. We know from the Q1 results of the previous year that this -- that quarter is the one with the smallest number of order intakes of the year. The hot projects from 2018 where expected as order intake in Q1, but there were still delayed. We got a lot of global orders in Q1, but we couldn't convert them into POs, and so we are -- but we're on a good way.There are lot of reasons for delays. One reason is the writing attitude of customers due to the changes of SLM situations like -- as mentioned by Uwe, capital increase, shareholder structure what will happened in the future, is SLM also future acting as a global player, and also changes in the Supervisory Board. Also the timeframe for customers' negotiations until we get the order has increased due to new challenges with new competitors on this stage and so we have -- you need a lot of more discussions with the customer until finalizing the order.Yes, next slide you can see, as in the previous years the SLM 280 is still the top seller of our products due to the -- due to its robustness and also due to its productivity. After Sales business. After Sales business becomes more and more important. The biggest portion of After Sales is -- the project is full of very shortly after the new machine purchase. So in Q1 the amount is related also to the smaller number of sold machine. But for the future, we see also growth potential for maintenance contracts and for future consulting services.
Thank you very much. Now we're taking closer look at the EBITDA margin development. It's significantly below Q1 2018, and this is due to the unfortunate revenue development in Q1 2019. Our organization is still set up for a much higher revenue. Yes. We stick to that organization, because we still believe that the potential of this technology is much higher and the potential of this company is much higher and we expect to be on growth track again.But due to the fact that we maintain that cost structure, EBITDA margin is significantly lower than the year before, and this is disappointing result on the one hand. On the other hand, this shows that we want to maintain the people; we want to maintain the organization and get it back on growth track. And as soon as the revenues will be higher again, the EBITDA margin will follow that immediately. So the development is to a certain extent disappointing, on the other hand, necessary, in order to get back on growth track.In terms of working capital, we have improved a little bit. The reason for that is very simple. We are getting in the accounts receivable from 2018. And as we have changed our production system to build to order strategy, we decreased our working capital intensity slightly. That's the good news.From a cash perspective, we are well financed. Our cash level is EUR 37 million right now because of the positive cash inflow from these receivables and the capital increase. And this allows us to define and implement the right measures. This gives us the time to implement those measures in order to change the company.So before we enter the Q&A session, we would like to give some comments on our strategy and I am handing over to you Meddah again.
As I said again, so I am still reviewing the strategy and so I still have some homework to do here to go through the details and review with the entire organization. So a week later, so still work to do.Probably directionally, what I will be focusing on is really products monetization, maturation of liability, the quality of our products, so we are a bit -- ready for industrialization of our products. And also probably we will be looking at areas where we -- make sense for us to be in and where it doesn't. So those are the things that really I will spend some time hopefully in the next couple of months or so, and during this 90-day period. Then -- and I will share more in details as much as I can here in the call and probably on other forums with you with more detail. But -- so please stay tuned and we will talk more on this.
Okay. Thank you very much for your attention. As always, we are now open to answer your questions. And therefore, I would like to hand over to the operator.
The first question is from Adrian Pehl, Commerzbank.
This is Adrian Pehl from Commerzbank, actually couple of questions from my side. First of all warm welcome, Meddah actually that you joined the company maybe you could give us -- although I know that the review will obviously take some time. But nevertheless you are expert in the market and probably from a relative angle on all the products of SLM Solutions very well. Maybe from your -- in your words what makes you confident on the product line up on the competitive edge? What do you see there going forward on what items or elements you can elaborate on and develop your strategy and terms?And a question little bit linked to that is actually, obviously SLM has a new product in the pipeline SLM square or SLM 600. So is that actually something you would push through forward or it also the whole product line up an element of your review here?And then coming to the financials and Q1 actually is surprisingly softer. I was wondering on the very low order intake that you fairly exhibited in the quarter, have you seen cancellations within the quarter. And what are customers telling you? You were little bit referring to the shift in the shareholder base. Obviously, to some extent it is now -- actually a topic for quite some. But has there been a change in dynamics to some extent?And lastly on the second quarter, I mean given that the review, obviously will take some time. So is there any reason why we should assume Q2 to look significantly different from Q1? And having said this, maybe you could give us an update on your Chinese accounts. What did they tell you? What is the potential delivery that we could still see in 2019? And maybe I will have some follows ups then.
Thanks Adrian. This is Meddah. I can -- I'll start with answering the first 2 questions, and then I will pass it on to Axel and maybe Uwe to answer your latter questions. Really -- obviously, again, it's a week, so I will answer you, but I will put some caveat around that is what I am going to be telling you is probably premature at this stage. But, definitely, the products that we have here right now in the company are extremely advanced products. Multi-laser technologies, that's number one. Stability of processes and capabilities, which really helps a lot around built quality when it comes down to. So that's number one.Number two, the 600, although it's still in development, it is a key product that I see right now as our potential key product for growth going forward. Not just because of the size of it, but I think it's in terms of the productivity of this product is going to be superior probably to any other products that I know out there. Much more -- has lot more capability. The key for us is just to make sure we execute it correctly and get it done and get it to the market probably ready, and not rushing to it and put it out there too soon. So that's something in terms of the timing of that. I still have to understand that little bit better.I need to review the product timeline and have those fully understood in terms of when do we really have an industrial product that we feel very comfortable with, that can go into serial production and that's basically what I am going to be interested in. I will share that with you. Definitely the next time I would have more change to dig into that. On the rest, I will pass it on to the team for the orders and revenues.
Thank you, Meddah. Shall I give some comments on the shareholder structure? You mentioned the -- you are right, Adrian, in the past we -- this was always a topic that was discussed. But I think with the recent changes and the capital increase that we have seen, this is a clear commitment of our main shareholders that this company is supported and that they are longer term oriented and that they want to resolve that situation. So this is -- I see that as a very strong commitment that allows us to argue that in that way and I think our customers, they did understand that and that's a great support. Axel, can you add on some comments on Q2 and the Chinese accounts?
Yes, yes. As I mentioned before, as -- we got in Q1 from global orders, not to be converted in POs unfortunately in Q1, so we are expecting Q2 by far much more order intake then in Q1. And for the Chinese frame contracts, I visited these -- our Chinese customers a couple of weeks ago. And they're coming now back into a movement, so we are now here to -- ready for delivery for the next charge of machines to China. And also we got the commitment from one other Chinese customer with the frame contract that he is now preparing the next call offs in next couple of months. So we are coming -- be coming back on track with Chinese contracts. I do not know if how long is the delay, but they are still in working and we would expect that we will have some answers here, we get couple of orders and also for the next year. Cancellations. Yes, yes, we have in Q1 there are no cancellation. This is good news because all projects are postponed, but not cancelled, so we have a lot of volume of active quotations available. So we have a lot of big bucket. We can pull all of the hot projects for the future. Well, it's I think one of the good news. Yes, the delay was a little bit challenging for us, but it's -- I think we are on the good bet.
Does that answer your question, Adrian?
Yes, it does. Actually, so can I take your comments in the sense of that you got positive comments recently on the support from your main shareholders, and does that ease the situation to some extent after the capital increase significantly?
Yes, I think so. There's a strong commitment. And this is exactly what we need it. Yes. It allows us to implement -- gives us time to implement the measures, and that's a strong support.
And customers do also perceive this positively in a sense of -- they are now having a clear picture to what the company is heading towards given the new structure?
Yes, I think so. We cannot talk to each single customer. But what I've heard so far is very positive, because it is a strong signal. Are there any further questions?
The next question is from Uwe Schupp, Deutsche Bank.
2 questions please. Meddah, first of all -- again, as much as you can, what do you think are some of the easier fixes, if you will, based on what you saw in the first week and maybe in some in your proprietary work that you've done before you formally joined SLM? Are there any easy fixes that can be done? What do you think are those? Are these more on the technology side? Are they more on the R&D side? I would, actually looking at both Q4 and Q1, I would actually assume they're more on the sales and distribution side. Just some rough ideas if you can at this early stage would be highly welcome.And then secondly, regarding the guidance for 2019, I didn't see this one being reiterated nor removed, I have to say as well. So what's the thinking here?
Okay. Thanks, Uwe. On the first question, I'll tell you as much as I can without really divulging other confidential information. But so far, look, and I talked to the team into the shop floor and I looked at the products briefly. I think the products are differentiated, I think, in the market. What I see probably -- this is with -- again, this is early. Probably it's really related to execution on our side in terms of how we close some of these deals probably, that's related to that.On -- and obviously, it's a growing market, we know that and it's -- we want to grow this. And it's an industry that we feel very, very bullish about and we feel very optimistic about. It's a matter of timing for sure. But we want to make sure we grow and we are set for growth, and making sure that we don't really hamper our R&D growth when this thing turns around and goes up, we're ready for it.So I think short term, what I see is really probably related to execution and maybe our -- maybe way we go-to-market that we need to review shortly here and make sure we can bring these deals home quickly. So on the second one, I'll pass it on to the team.
Yes, regarding the guidance, you are correct, Uwe, we didn't mention the guidance in this slideshow. First of all, please accept that Meddah has just joined the company. We are taking an in-depth view on the strategy and we are reviewing the strategy. So this will take some time. So we are not yet in a position to set a new guidance or confirm the guidance. So please give Meddah some time to finish that strategic review and then we will come up with further information on that one. So we are not reiterating, but not -- and also not changing the guidance.
Meddah, just one follow up, please. When do you expect the review to be over? Would that be coinciding with Q2 or could that be at an earlier stage already? So will there be a formal announced or whatever or even a Capital Markets Day or whatever?
Yes, as I said early, I said the 90 days. And if we're ready earlier, we'll be more than happy to do it earlier. But we want to make sure we actually -- well, first of all, we want to make sure we do it right, because we want to do this first time first -- first time you'd want, so we're going to actually get it right.So I'll be very careful in terms of -- especially when we talk about strategy because, it's going to be our short term, obviously execution, but long term strategy for growth. So we're going -- we don't want to rush into something quickly if I don't have all the facts. So we're going to -- plus I have to go talk to some customers, so that will take me some time, because I really need to discuss directly with our key customers and get their feedback before we finalize. So I would say 90 days. If I -- if I finished earlier, definitely I will be talking to some of you probably offline or some on this call. Thank you.
Are there any further questions?
We have another question from Carlos Becke, Hauck & Aufhauser.
Actually just some follow up questions here in general. First, to Axel's comments about that we should expect a much stronger order intake with Q2. I was wondering if then you would be comfortable in giving some statements about current trading as you did in the past to gauge a confidence level on this one.
Okay. I know from Q1 and from the qualification of the hot projects that be expect a lot of more order intake, but Q1 -- Q2 is not finished now, and we are now in negotiations with a lot of customers and so I cannot give a final figures for Q2, please excuse me.
And just another follow up question then on maybe the fixed cost base. Obviously, we see significantly negative EBITDA when revenues are missing to this extent. But I was wondering if also all your engineers that you have in-house, if on a quarter like this, did you see some migrating or do you want to keep them all even if you sustain these low levels for some time now. What's the sense on that?
Carlos, of course, we are reviewing our cost structure permanently. Yes? And, of course, we do here and there capacity adjustments. But you always have to keep in mind, this is a company driven by R&D activities. Yes? It's still a new technology and we have to make sure that we get our projects through. And therefore, we -- of course, we'll maintain the engineers as long as possible. And that's exactly one of the reasons why we've done the capital increase. Yes? We know that the potential of this company is much higher. We know that we have to keep the knowhow onboard in order to be successful in the future and that's what we're doing.
Just then maybe last one from my side. What was that got, so to say, cutoff if I look at the CapEx from last year in Q1 to CapEx this year in Q1? What were -- where do these less, so to say, EUR 3 million come from?
Yes. Well, we are sitting in a nice building here, and this is very new. Yes? As you know, we have set up the building recently. So Q1 2018 was highly impacted by the investments in the new building. So what you see in 2019 is the run rate, it's closer to the run rate. In Q1 2018 it was exceptional due to the investments in the building. Thank you. Any other questions?
There are no further questions.
Okay. So, thank you very much to all of you. Thank you for your attention. As always, we are open to answer questions through our investment -- Investor Relations office. So if you have any further questions, please let us know. Thank you for your attention and goodbye.
And thank you -- by the way, this is Meddah. I want to -- this is last call for Uwe with us. Thank you, I appreciate all of the hard work and effort you have done and wish you best luck.
Yes, thank you. It's always been a pleasure. And I'm convinced that the company will look different in a few months. And yes, that's why I'm still a shareholder and remain a shareholder. It's an interesting company and it's amazing to have been part of that story. Thank you.
Thanks, everyone. Appreciated.
Thank you, bye, bye.
Bye, bye.