Last close As at 05/08/2026
USD1.56
▲ −0.02 (−1.27%)
Market capitalisation
USD332m
Research: TMT
Nano Dimension made good progress growing revenue and gross margins in FY23. The company is now focused on reducing cash burn and moving to profitability, via its Reshaping Nano initiative, and is simultaneously looking to acquire in the additive manufacturing space to consolidate its position. Nano Dimension continues to buy back shares while they trade at a discount to book value.
Nano Dimension |
Growth in a tough market
Technology |
Spotlight – Update
25 March 2024 |
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Nano Dimension is a research client of Edison Investment Research Limited |
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Nano Dimension made good progress growing revenue and gross margins in FY23. The company is now focused on reducing cash burn and moving to profitability, via its Reshaping Nano initiative, and is simultaneously looking to acquire in the additive manufacturing space to consolidate its position. Nano Dimension continues to buy back shares while they trade at a discount to book value.
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Historical performance
Source: Company data. Note: *PBT and PAT are normalised, excluding amortisation of acquired intangibles, exceptionals and share-based payments. |
FY23: Revenue growth and gross margin expansion
Nano Dimension grew revenue 29% in FY23 and expanded adjusted gross margin by 2pp to 48%. Adjusted EBITDA loss of $99.9m was larger than the $91.3m loss in FY22, mainly due to elevated costs relating to the tender offer for Stratasys and activist shareholders. Factoring in interest income of $46m and the gain on the valuation of its stake in Stratasys of $22m, the company reported a net loss of $54.6m for the year, compared to a loss of $227.4m in FY22.
Targeting substantial reduction in cash burn
The company’s Reshaping Nano initiative is targeting a reduction in costs of $25–30m per annum, with the first benefits expected in Q124. Combined with revenue growth and margin expansion, the company expects to reduce cash burn from $84m in FY23 (excluding share buybacks) to more like $12–20m in FY24, before turning cash flow positive in FY25.
Sector consolidation key to future profitability
Management highlighted the need for consolidation in the 3D printing industry, with high levels of cash burn a risk to several competitors with less robust balance sheets. Stratasys continues to consider Nano Dimension’s bid for the company. If agreement is not forthcoming, Nano Dimension has other opportunities in the pipeline.
Valuation: Well-funded for M&A strategy
Nano Dimension has $842m in net cash on the balance sheet. The shares are currently trading at a significant discount (c 37%) to Nano Dimension’s net cash balance plus the current value of its stake in Stratasys ($115m as at 21 March). As Nano Dimension makes progress with its cost reduction strategy and reduces cash burn, we would expect this discount to reduce.
Review of FY23 results
In the table below, we summarise the performance of Nano Dimension in FY23.
Exhibit 1: Nano Dimension Q423 and FY23 results
$m |
Q423 |
Q422 |
FY23 |
FY22 |
|
Revenue |
$m |
14.5 |
12.1 |
56.3 |
43.6 |
Gross profit |
$m |
7.0 |
7.7 |
25.5 |
14.1 |
Adj. gross profit |
$m |
7.4 |
8.8 |
27.3 |
20.3 |
EBITDA |
$m |
(10.5) |
(95.1) |
(95.0) |
(239.2) |
Adj. EBITDA |
$m |
(22.6) |
(25.1) |
(99.9) |
(91.3) |
Operating loss |
$m |
(27.3) |
(72.7) |
(124.9) |
(171.5) |
Profit/(loss) before tax |
$m |
(1.2) |
(86.9) |
(55.6) |
(228.0) |
Profit/(loss) after tax |
$m |
(1.3) |
(87.9) |
(55.7) |
(228.3) |
Net income after minority interest |
$m |
(1.0) |
(87.7) |
(54.6) |
(227.4) |
Net cash |
$m |
842.2 |
1018.9 |
842.2 |
1018.9 |
Revenue growth y-o-y |
19.4% |
60.7% |
29.1% |
315.8% |
|
Revenue growth q-o-q |
18.9% |
21.1% |
N/A |
N/A |
|
Gross margin |
48.6% |
63.4% |
45.2% |
32.2% |
|
Adj. gross margin |
51.1% |
72.6% |
48.4% |
46.5% |
Source: Nano Dimension
Nano Dimension reported revenue of $56.3m for FY23, up 29% y-o-y. Q423 revenue of $14.5m was 19.4% higher y-o-y. In FY23, adjusted gross margin increased 1.9pp to 48.4%. Adjusted EBITDA strips out the income from revaluation of assets and liabilities (mainly the movement in Nano’s stake in Stratasys) of $21.9m, share based payments of $20.1m, exchange rate differences of $1.6m and one-off income of $1.6m from the Israeli government relating to items damaged in the war. The company generated net interest income of $45.9m in the year, benefiting from higher interest rates on its cash balances.
Nano Dimension’s 14% stake in Stratasys was worth $138.4m at year-end, based on a share price of $14.28. The share price has since declined to $11.86.
Net cash, including leases of $8.7m, was $842m at year-end, down from $1,019m at the end of FY22. The main moves in the year were:
■
Cash flow from operating activities: -$105.0m
■
Cash flow from investing activities: +$22.5m
■
Cash flow from financing activities: -$100.0m. This includes share buybacks totalling $96.4m ($10.7m in Q423).
■
FX: +$1.3m
Excluding share buybacks, cash burn for the year was c $84m.
Outlook for 2024
The Reshaping Nano programme is well underway, with the target of reducing annual costs by $25–30m. The company continues to expect effect to start to be seen in Q124 results and is targeting a reduction in cash burn from $84m in FY23 to more like $12–20m in FY24. We estimate this would be from a combination of factors:
■
Revenue growth: management expects FY24 growth of at least 15% but less than the 29% achieved in FY23.
■
Gross margin expansion: targeting growth in adjusted margins towards 60%.
■
Opex reductions from the Reshaping Nano programme. Adjusted opex before depreciation and amortisation was $127m in FY23 and we note that this included a high level of costs related to the tender offer for Stratasys in the summer and activist shareholders (c $19m).
■
Interest income: continued benefit from the cash position – monthly income is c $4m.
Capital allocation update
Consolidating the sector
While Stratasys continues to consider the bid Nano Dimension made for it at the end of 2023, management notes that this is just one of several options that the company is considering and emphasised the need for industry consolidation. With a much stronger cash position than its peers, Nano expects to lead this consolidation rather than be a target.
The table below shows the financial performance of four listed peers in FY23 and Q423 – all four saw revenue declines in Q423 and FY23. The table also includes their current financial position, which highlights the necessity for reduced cash burn and improved profitability.
Exhibit 2: Peer financial performance and outlook
$m |
Year-end |
Revenue |
Revenue growth |
Non-GAAP gross margin |
|||
Company |
FY23 |
Q423 |
FY23 |
Q423 |
FY23 |
Q423 |
|
Stratasys |
31-Dec |
627.6 |
156.3 |
-3.7% |
-1.9% |
48.2% |
48.8% |
3D Systems |
31-Dec |
488.1 |
114.8 |
-9.3% |
-13.5% |
41.1% |
41.9% |
Desktop Metal |
31-Dec |
189.7 |
52.3 |
-9.2% |
-13.7% |
27.0% |
34.0% |
Markforged |
31-Dec |
93.8 |
24.2 |
-7.1% |
-18.5% |
47.4% |
49.5% |
Adj. EBITDA |
Net cash used in operating activities plus capex |
Cash & cash equivalents |
Net cash/(debt)** |
||||
FY23 |
FY24 outlook |
FY23 |
end FY23 |
end FY23 |
|||
Stratasys |
35.0 |
40–45 |
(78.3) |
162.6 |
143.9 |
||
3D Systems |
(24.5) |
b/e or better |
(107.9) |
331.5 |
(54.6) |
||
Desktop Metal |
(69.1) |
(30) to (10) |
(117.8) |
84.5 |
(59.5) |
||
Markforged |
(45.8) |
(47) to (42.5)* |
(52.5) |
116.9 |
73.8 |
||
Source: Company websites. Note: *Guidance is for operating profit **Includes lease liabilities.
Share buybacks ongoing
In FY23, the company bought back 32.0m shares for a total of $96.4m, all of which are held in treasury. It has authority under a new facility for an additional $200m of buybacks and so far this year, has bought back a further 17.1m shares at a cost of $46.2m.
Business update
The company highlighted sales to key customers in 2023:
■
NASA: an Admaflex machine to 3D print ceramics and metal for sodium ion batteries.
■
US Department of Defense (DoD): a DragonFly machine for 3D printing of electronics. This is one of many deliveries to a branch of the US DoD.
■
Fraunhofer Institute (German research group): a DragonFly machine for 3D printing of electronics, one of several sold to the group.
■
Unnamed industrial company: largest order ever, for Additive Electronics for robotic assembly.
■
Large Western computer manufacturer: DragonFly machine for 3D printing of electronics, one the larger orders in the year.
■
A Western nuclear research group: a DragonFly machine for 3D printing of electronics
The company noted that R&D and product development during FY23 achieved the following:
■
DeepCube industrial AI: implemented in DragonFly IV, made available to third parties for use with their own machines, and a patent filed for large language model analysis of data generated by industrial machines.
■
INSU 200 – new dielectric material for AME (additively manufactured electronics). With better thermal and mechanical properties than previous materials, it can support more demanding applications in the defence and commercial markets and widens the addressable market for Nano’s DragonFly IV system. The material will be made available to customers in April 2024.
■
Fabrica GIGA series – launch of a new Micro AM (additive manufacturing) system.
■
Admaflex 130 Entry – launch of a new entry level machine for printing of advanced ceramics.
■
Flight Hub – improved software for AME design to manufacturing capabilities.
Exhibit 3: Financial summary
$m |
2019 |
2020 |
2021 |
2022 |
2023 |
|
Year-end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
|
PROFIT & LOSS |
|
|
|
|
|
|
Revenue |
|
7.1 |
3.4 |
10.5 |
43.6 |
56.3 |
Cost of Sales (including amortisation of capitalised IP) |
(5.1) |
(2.3) |
(9.4) |
(29.6) |
(30.9) |
|
Gross Profit |
2.0 |
1.1 |
1.1 |
14.1 |
25.5 |
|
EBITDA |
|
(11.7) |
(12.6) |
(38.4) |
(91.3) |
(99.9) |
Operating profit (before amort. and excepts.) |
|
(14.4) |
(15.2) |
(48.3) |
(98.5) |
(106.4) |
Intangible Amortisation |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Exceptionals |
0.0 |
0.0 |
(145.2) |
(40.4) |
1.6 |
|
Share-based payments |
(0.4) |
(20.5) |
(29.8) |
(32.6) |
(20.1) |
|
Operating Profit |
(14.8) |
(35.7) |
(223.2) |
(171.5) |
(124.9) |
|
Net Interest |
6.5 |
0.2 |
3.8 |
2.2 |
47.4 |
|
Exceptionals |
0.0 |
(13.0) |
13.7 |
(58.7) |
21.9 |
|
Profit Before Tax (norm) |
|
(7.9) |
(15.0) |
(44.5) |
(96.4) |
(59.0) |
Profit Before Tax (FRS 3) |
|
(8.4) |
(48.5) |
(205.7) |
(228.0) |
(55.6) |
Tax |
0.0 |
0.0 |
4.9 |
(0.3) |
(0.1) |
|
Profit After Tax (norm) |
(7.9) |
(15.0) |
(44.5) |
(96.4) |
(59.0) |
|
Profit After Tax (FRS 3) |
(8.4) |
(48.5) |
(200.8) |
(228.3) |
(55.7) |
|
|
|
|
|
|
||
Average Number of Shares Outstanding (m) |
3.5* |
42.9* |
247.3 |
257.8 |
248.0 |
|
EPS - normalised ($) |
|
(2.25) |
(0.35) |
(0.18) |
(0.37) |
(0.23) |
EPS (normalised, fully diluted ($) |
|
(2.25) |
(0.35) |
(0.18) |
(0.37) |
(0.23) |
EPS - (IFRS) ($) |
|
(2.38) |
(1.13) |
(0.81) |
(0.88) |
(0.22) |
Dividend per share ($) |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
|
|
|
|
|
|
||
Gross margin (%) |
28.1% |
31.3% |
10.7% |
32.2% |
45.2% |
|
EBITDA margin (%) |
N/A |
N/A |
N/A |
N/A |
N/A |
|
|
|
|
|
|
||
BALANCE SHEET |
|
|
|
|
|
|
Fixed Assets |
|
13.0 |
13.1 |
78.1 |
139.1 |
170.4 |
Intangible Assets |
5.2 |
4.4 |
0.0 |
0.0 |
2.2 |
|
Tangible Assets |
7.4 |
8.3 |
12.2 |
22.4 |
28.8 |
|
Deferred tax and other |
0.0 |
0.0 |
1.0 |
0.9 |
0.0 |
|
Bank deposits/securities |
0.0 |
0.0 |
64.4 |
115.0 |
138.4 |
|
Restricted deposits |
0.4 |
0.4 |
0.5 |
0.9 |
0.9 |
|
Current Assets |
|
9.9 |
676.1 |
1,311.9 |
1,064.3 |
894.0 |
Stocks |
3.5 |
3.3 |
11.2 |
19.4 |
18.4 |
|
Debtors |
2.4 |
1.8 |
9.3 |
12.8 |
24.0 |
|
Cash |
3.9 |
585.3 |
853.6 |
685.4 |
309.6 |
|
Bank deposits |
0.0 |
85.6 |
437.6 |
346.7 |
542.0 |
|
Restricted deposits |
0.0 |
0.1 |
0.1 |
0.1 |
0.1 |
|
Current Liabilities |
|
(4.4) |
(6.7) |
(32.0) |
(37.0) |
(34.5) |
Creditors |
(4.4) |
(6.7) |
(16.7) |
(27.9) |
(34.4) |
|
Short-term borrowings |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Other |
0.0 |
0.0 |
(15.3) |
(9.2) |
(0.0) |
|
Long-Term Liabilities |
|
(6.8) |
(15.5) |
(13.7) |
(16.1) |
(14.1) |
Long-term borrowings |
(2.1) |
(2.6) |
(4.4) |
(13.1) |
(9.3) |
|
Other liabilities |
(4.7) |
(12.8) |
(9.3) |
(3.0) |
(4.7) |
|
Net Assets |
|
11.6 |
667.1 |
1,344.2 |
1,150.3 |
1,015.8 |
|
|
|
|
|
||
CASH FLOW |
|
|
|
|
|
|
Operating Cash Flow |
(11.7) |
(12.6) |
(38.4) |
(91.3) |
(99.9) |
|
Working capital |
(0.8) |
2.9 |
2.7 |
(1.2) |
(7.3) |
|
Exceptionals and other |
(0.2) |
(0.0) |
(7.0) |
0.4 |
2.0 |
|
Tax |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Net Operating Cash Flow |
|
(12.7) |
(9.6) |
(42.6) |
(92.1) |
(105.1) |
Net Interest |
0.0 |
0.2 |
3.7 |
17.5 |
41.5 |
|
Investment in intangible & tangible assets |
(0.6) |
(1.4) |
(9.8) |
(9.4) |
(10.6) |
|
Acquisitions/disposals |
0.0 |
0.0 |
(74.6) |
(219.5) |
(9.3) |
|
Equity financing |
14.6 |
679.0 |
805.7 |
0.0 |
(96.4) |
|
Dividends |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Other |
0.0 |
0.0 |
0.0 |
(1.7) |
(1.6) |
|
Net Cash Flow |
1.4 |
668.1 |
682.4 |
(305.3) |
(181.4) |
|
Opening net debt/(cash) |
|
(3.8) |
(1.8) |
(668.3) |
(1,351.2) |
(1,018.9) |
HP finance leases initiated |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Other |
(3.3) |
(1.6) |
0.4 |
(15.0) |
5.9 |
|
Closing net debt/(cash) |
|
(1.8) |
(668.3) |
(1,351.2) |
(1,018.9) |
(842.2) |
Source: Company data. Note: *Adjusted for 1:50 reverse split effective June 2020.
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Research: TMT
Northern Data Group released its FY22 results as scheduled, reflecting delays due to its transformation into a diversified high-performance computing (HPC) infrastructure solutions provider. Despite significant crypto price declines, the group achieved year-on-year revenue growth and adjusted EBITDA positivity, driven by investments in mining compute power and a small inaugural cloud computing contribution. Ethereum’s shift to proof-of-stake led to substantial impairment, driving an operating loss. That said, Northern Data was able to repurpose a share of the graphic processing units (GPUs) from Ethereum mining for cloud computing, enabling expected FY23 revenue growth of over 10x in the recently formed Taiga Cloud division. Investments in NVIDIA H100 hardware and requisite data centres, alongside unmet demand from target customers, underpin management’s expectations for at least a further 10x Taiga revenue growth in FY24. Buoyed by bitcoin’s FY23 and FY24 appreciation, Northern Data is well-positioned for strong diversified revenue and profit growth.