Nano Dimension — Leading manufacturing into the future

Nano Dimension (NASDAQ: NNDM)

Last close As at 20/06/2024

USD2.25

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Market capitalisation

USD499m

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Research: TMT

Nano Dimension — Leading manufacturing into the future

Nano Dimension has built up a uniquely broad portfolio of complementary additive manufacturing capabilities through a sequence of acquisitions starting in April 2021. Revenues have grown from US$3.4m in FY20 to US$43.6m in FY22. At the end of December 2022 the group had US$1.0bn in cash and equivalents to accelerate this strategy.

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TMT

Nano Dimension

Company overview: Building a broad additive manufacturing portfolio through acquisition and in-house investment

Tech hardware and equipment

Spotlight – Initiation

9 March 2023

Price

US$3.02

Market cap

US$782m

Share price graph

Share details

Code

NNDM

Listing

NASDAQ

Shares in issue

259m

Net cash at end September 2022 (excluding US$10.5m lease liability)

US$1.0bn

Business description

Nano Dimension offers equipment for additive manufacture of high-performance electronic devices, complex 3D ceramic and metal objects as well as miniature parts requiring a resolution of only one micron. It also offers complementary equipment for automated assembly of electronic devices and PCBs.

Bull

Additive manufacturing enables creation of more complex parts.

Additive manufacturing is more efficient for smaller volume production runs.

Sequence of acquisitions gives Nano Dimension a broad additive manufacturing portfolio.

Bear

Difficult to predict market growth for disruptive technologies.

DeepCube AI capability yet to be integrated across portfolio.

Uncertainty over what Nano Dimension will invest US$1.0bn cash pile in.

Analyst

Anne Margaret Crow

+44 (0)20 3077 5700

Nano Dimension is a research client of Edison Investment Research Limited

Nano Dimension has built up a uniquely broad portfolio of complementary additive manufacturing capabilities through a sequence of acquisitions starting in April 2021. Revenues have grown from US$3.4m in FY20 to US$43.6m in FY22. At the end of December 2022 the group had US$1.0bn in cash and equivalents to accelerate this strategy.

Historical performance

Year
end

Revenue
(US$m)

EBITDA
(US$m)

PBT*
(US$m)

PAT*
(US$m)

DPS
(US$)

P/E
(x)

12/18

5.1

(12.3)

(15.1)

(15.1)

0.0

N/A

12/19

7.1

(11.7)

(7.9)

(7.9)

0.0

N/A

12/20

3.4

(12.6)

(15.0)

(15.0)

0.0

N/A

12/21

10.5

(38.4)

(44.5)

(44.5)

0.0

N/A

Source: Company data. Note: *PBT and PAT are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Manufacturing on demand, anytime, anywhere

Additive manufacturing is a key element in the change to the global production and supply network referred to as Industry 4.0. Recent advances in additive manufacturing enable the creation of metal, ceramic, polymer and electronic parts with the same physical attributes as conventionally made parts and offer opportunities to make more complex parts than can be achieved using conventional manufacturing processes.

Electrifying additive manufacturing

Nano Dimension’s strategy is to create a portfolio of complementary additive manufacturing technologies that are of service to its base of over 2,000 customers in the aerospace and defence, automotive, electronics and industrial markets as well as in academia and at research institutes. It is unique in being able to manufacture metal, ceramic and composite parts, as well as printed electronics and parts with micron resolution. This strategy is intended to create cross-selling opportunities. Nano Dimension is also acquiring companies with technology that can enhance the performance of existing products, for example DeepCube’s propriety algorithms increase the speed of AI data analysis tenfold.

Valuation: US$1.0bn cash on the balance sheet

Nano Dimension has US$1.0bn cash on the balance sheet, over half of which is allocated for making further acquisitions. Consequently, it is not valid to carry out a valuation based on a comparison of market capitalisation/historical sales multiples because Nano Dimension’s revenues are likely to grow much faster than those of its listed peers, particularly as less inflated valuations indicate that the scale and rate of acquisitions should increase. The shares are currently trading at a significant discount (c 32%) to Nano Dimension’s cash balance plus the value of its stake in Stratasys.

Nano Dimension was founded in 2012 with the aim of using additive manufacturing techniques to revolutionise the way in which high-performance electronic devices are made. It amassed c US$1.5bn cash through a sequence of fund-raisings completed in early 2021, a period during which shares of other 3D printing stocks including Stratasys (NASDAQ: SSYS, Voxeljet (NASDAQ: VJET), Desktop Metal (NYSE: DM) and 3D Systems (NYSE: DDD) were also unusually high. Nano Dimension is using the cash to build up a portfolio of complementary additive manufacturing technologies. It is focusing on technologies that are of interest to its base of over 2,000 customers in the aerospace and defence, automotive, electronics and industrial markets as well as in academia and at research institutes to create opportunities for cross selling. Customers and partners include global security and defence electronics firms L3 Harris Technologies (NYSE: LHX) and HENSOLDT (XETRA:HAG), electronics contract manufacturer Lacroix Electronics, a European army, a Western intelligence agency, global printed circuit board (PCB) manufacturer TTM Technologies, supplier of lighting systems and electronics to the automotive industry ZKW Group, a manufacturer of multi-spectral cameras for mobile phones, NASA’s Marshall Space Flight Center, research institute Fraunhofer Institute for Manufacturing Engineering and Automation IPA and the Istituto Italiano di Tecnologia.

Exhibit 1: Interview with Yoav Stern, CEO and chairman, and Julien Lederman, director of corporate development

Source: Edison Investment Research

The group is building up the portfolio through a combination of in-house development and acquisitions which are summarised in Exhibit 2. We note that valuations in the sector are falling (see Exhibit 16), making vendor expectations more realistic, while Nano Dimension has plenty of cash to complete transactions so we believe the pace and scale of acquisitions should accelerate. In the interview above, management discusses the acquisition strategy and why it believes the time is right for the company to make a transformative acquisition. The company has hired Lazard as an advisor for strategic mergers and acquisitions, which highlights the importance of this activity.

This strategy has enabled the group to grow its revenues from US$3.4m in FY20 to US$43.6m in FY22 (see Exhibit 6). Revenues are derived from the sales of individual systems, which retail at c US$200–400k each, and associated consumables generating several tens of thousands of dollars per unit in sales annually. For a unit retailing at US$340k, this represents revenues of US$740k and gross profit of US$400k per unit over a 10-year period. At the end of December 2022, the group had US$1.0bn cash (gross) to further progress this strategy. We see continued growth in revenue and improvement in EBITDA margin as well as the completion of acquisitions with the potential to drive meaningful revenue and profit growth, both in their own right and in combination with the rest of the group, as key catalysts of share price improvement.

Nano Dimension is listed on Nasdaq because its main commercial activities are in the United States. The company’s headquarters are in Israel, with locations in the United States, Germany, Switzerland, Australia, the Netherlands and the UK. It employs over 500 people, around half of whom are engaged in R&D activities. This includes 35 AI specialists.

Exhibit 2: Timeline of acquisitions and other notable events

Date

Event

2012

Nano Dimension founded by directors Amit Dror, Sharon Fima and Simon Fried

August 2014

Listed on the Tel Aviv Stock Exchange

March 2016

Listed on Nasdaq

Q417

Launch of DragonFly system

October 2019

50th DragonFly system sold

January 2020

Yoav Stern joins as president and CEO

February 2020

$3.5m (gross) raised through public offer of American depositary shares (ADSs) at US$1.30/ADS. Voluntary delisting from Tel Aviv stock exchange and relocation of main commercial activity to the United States

April 2020

$13.3m (gross) raised through public offer of ADSs at US$0.70/ADS

May 2020

$35.9m (gross) raised through registered direct offer of ADSs at US$2.00/ADS

October 2020

C US$16.9m (gross) raised through registered direct offer of ADSs at US$2.30/ADS and c US$50m (gross) raised at US$3.00/ADS

November 2020

C US$100m (gross) raised through registered direct offer of ADSs at US$4.00/ADS

December 2020

C US$60m (gross) raised through registered direct offer of ADSs at US$5.00/ADS, c US$180m (gross) raised at US$6.00/ADS and c US$250m (gross) raised at US$7.50/ADS

January 2021

$332.5m (gross) raised through registered direct offering of ADSs at US$9.50/ADS

February 2021

C US$500m (gross) raised through issue of ADSs at US$12.80/ADS

April 2021

Acquisition of machine learning/deep learning expert DeepCube for c US$40m cash and US$30m Nano Dimension ADSs

April 2021

Acquisition of micro mechanics 3D-printing specialist NanoFabrica for up to US$59.4m, of which up to US$27.5m is in cash and c US$32m in Nano Dimension ADSs

November 2021

Acquisition of surface mount pick-and-place systems supplier Essemtec for US$15.1m initial consideration and up to US$9.7m deferred consideration, both payable in cash

November 2021

Launch of DragonFly IV and FLIGHT software package

January 2022

Acquisition of Global Inkjet Systems for an initial consideration of US$18.1m and deferred consideration of up to US$10.7m, both payable in cash

July 2022

Acquisition of Admatec and Formatec for US$12.9m net cash

July 2022

Purchase of 12.1% stake in Stratasys

Source: Edison Investment Research, company data

The revolution in manufacturing methodology

Additive manufacturing requires expertise in materials, hardware and software

In additive manufacturing many ultra-thin layers of material, each of a precisely defined shape, are deposited on top of each other and each layer is bonded to the preceding one to create a three-dimensional object. The shape of the object in three dimensions is defined either using computer-aided-design (CAD) software or by putting an existing object to be replicated into a 3D scanner. Specialist software processes the 3D information into multiple ultra-thin slices and then combines this geometrical data with the specification of the additive manufacturing equipment to create a set of instructions for making the object. So for 3D printing, which is the most common additive manufacturing technique, the software will use information such as print head capability, material viscosity and number of print heads and nozzles to determine the path of each print head as it precisely deposits material on the preceding layer.

The quality of the finished part and the speed with which it can be manufactured depend on the material used, the additive manufacturing hardware and the associated software. Companies offering additive manufacturing systems therefore need to be proficient in all three disciplines.

Additive manufacturing techniques were pioneered during the 1980s, so the basic technology is not new. However, recent advances in the materials used, for example Nano Dimension’s development of conductive and dielectric inks for printing electronic circuits, mean that the techniques can now be used for making parts with similar characteristics to conventionally made parts that can be used for aircraft spares for example, rather than just plastic representations of parts used to see what an object will look like.

Exhibit 3: Additive manufacturing of parts with very high levels of resolution

Exhibit 4: Video showing additive manufacturing of electronics

Source: Nano Dimension

Source: Nano Dimension

Exhibit 3: Additive manufacturing of parts with very high levels of resolution

Source: Nano Dimension

Exhibit 4: Video showing additive manufacturing of electronics

Source: Nano Dimension

Additive manufacturing improves flexibility and efficiency

The conventional approach to making a low-volume item or prototype in a hard material, such as stainless steel or ceramic, uses computer-controlled drills to remove surplus material from a block of material. Machining is not suitable for parts with complex internal cavities, such as jet engine components, when investment casting techniques are required. Low volumes and prototypes of parts in soft materials such as plastics that cannot be machined need to made using moulds. The moulds themselves need to be created using machining or investment casting techniques. Creating a mould is expensive and time consuming and is typically carried out by specialist outsourced toolmakers. Moreover, complex shapes cannot be made using a mould, meaning that some objects need to be assembled from multiple simple parts, each manufactured using a separate mould.

Additive manufacturing technologies therefore have the following advantages over conventional ones:

Improved economics for lower-volume production runs and prototyping: for some applications the cost of getting tooling made is eliminated entirely. This is significant for prototypes or low volume runs where the cost of making tooling cannot be spread out over many thousands of parts. In addition, printing investment casting tooling from ceramic slurry is less expensive than the traditional technique of building shells over a pattern.

Faster time-to-market: the delay associated with getting moulds made is eliminated. Voxeljet estimates that this shortens the manufacturing times of components by up to 75%. This has the additional benefit of encouraging engineers to go through more iterations of a design, potentially resulting in improved performance of the final part. If tooling is preferred, it can be made more quickly using additive manufacturing techniques. Nano Dimension estimates that time savings of around 75% are achievable in this case as well. In addition, additive manufacturing machines are sufficiently small, typically the size of a photocopier or domestic freezer, and can be operated by relatively inexperienced personnel (see below) so it is possible to co-locate the equipment with design teams. This means that prototype manufacture can be done by a member of the design team, eliminating delays caused by outsourcing manufacture to another department or another company entirely.

Customisation: changing the economics of production means that it is now financially viable to make fully customised parts to meet an individual’s requirements. This is particularly useful for medical implants.

IP security: as designers can manufacture their own prototypes, the risk of valuable design data being stolen when manufacturing is outsourced is eliminated.

Immediate availability of parts addresses supply chain dislocation: since the instructions for making parts can be sent digitally to a remote location, customers do not need to wait for them to be dispatched from a warehouse on another continent. This is particularly useful for items such as aircraft spares. We note that in May 2022, President Biden launched the Additive Manufacturing Forward initiative, in which large US manufacturers including Boeing, GE Aviation, Honeywell, Lockheed Martin, Northrop Grumman, Raytheon Technologies and Siemens Energy made commitments to help smaller US-based suppliers increase their use of additive manufacturing to improve supply chain resilience. 

Greater design flexibility: the technology enables companies to print complex structures that cannot be achieved using machining techniques and to create parts that would need to be assembled from multiple moulded parts in a single print. It also enables more complex investment casting moulds to be made (Exhibit 5). Although beyond the scope of this report, additive manufacturing also enables engineers to create biological objects such as hair follicles and synthetic meat that cannot be made using conventional manufacturing methods.

Greater precision: since additive manufacturing techniques are based on the creation of multiple thin layers of material, they are inherently good at creating parts where dimensions are very tightly controlled such as the tiny precision parts needed for miniature connectors and implantable medical device components For example, Nano Dimension’s customer MultiVu wanted to manufacture a small plastic part less than 4mm across for a prototype 3D imaging camera. It was not possible to make a part using traditional processing technologies such as computer-controlled machining because of technical manufacturing limitations. While it would have been possible to produce the part using a small mould, several moulds would have been needed for the different design variants required to reach the best optical outcome, making this a very expensive option. Nano Dimension’s micro additive manufacturing business made a sequence of prototype parts using its proprietary 3D printing technology. An initial part was produced in just a few days, followed by an additional three adjustments to the design to get a perfect fit with the other components.

Skilled labour shortages addressed: additive manufacturing reduces the reliance on skilled precision machinists and toolmakers, who are in very short supply.

Efficient material use: there is less wastage of material during the production of an individual part as in additive techniques material is only deposited where required. Where powders or support materials are used, they can often be recycled at source back into the system. In addition, since parts are manufactured on demand, there is no overproduction based on estimated demand.

Exhibit 5: Ceramic investment casting mould made by Aristo-Cast using additive manufacturing equipment from Nano Dimension subsidiary Admatec together with part cast from mould

Source: Nano Dimension

Conventional techniques have been optimised over time to make multiple copies of parts very efficiently so the biggest drawback of additive manufacturing techniques is the time it takes to create each part compared with conventional processes. It is unlikely, in our opinion, that additive manufacturing techniques will ever become as efficient or economic as conventional techniques for high volumes of parts. However, designers of additive manufacturing equipment including Nano Dimension are constantly investigating ways of improving how quickly the equipment can make parts, raising the volume cut-off point when conventional manufacture becomes more cost-effective. Another drawback is the performance of parts manufactured using additive techniques. In the early days of additive manufacturing the parts produced were not strong enough to be used as replacements for conventionally made parts. The materials used have progressed significantly since then, so it commonplace to use additive techniques to make structural parts in metals, ceramics and rigid plastics. However, the range of materials available, for example speciality steels, is still not as extensive as those used in conventional manufacturing.

Market size and growth potential

Emergen Research predicts that the global 3D printing market will grow from US$16.9bn in 2021 to US$99.7bn in 2030. This represents a CAGR of 21.8%. It notes that revenue growth is being driven primarily by the healthcare and aerospace industries. 3D printing technology deployment across various industries has been increasing because of technological improvements, which have resulted in more accurate manufacturing.

Additively manufactured electronics

Additively manufactured electronics is a highly specialised form of additive manufacturing. In its most basic form (Nano Dimension’s technology is more advanced, see below), a 3D printer is modified to use conductive ink so that it can deposit conductive tracks on a thin sheet of insulating substrate to create a PCB. The conductive ink is cured using UV light. The insulating substrate provides a support for the electronic components such as sensors, microprocessor chips, capacitors and resistors and the conductive tracks connect the components up to make a fully functional circuit.

In conventional PCB manufacture, the design of conductive tracks is typically created using chemical etches to selectively remove copper from a thin layer of copper bonded to an insulating substrate. Alternatively, areas of copper are selectively deposited on the substrate. Photo-lithography is used to define the areas where copper is either etched away or deposited with around 15 different steps required to pattern each layer. The manufacturing process is highly specialised, requiring significant capital investment and manufacturing know-how. It is almost always outsourced, often to manufacturers in East Asia. Outsourcing adds delay to the process, which used to be between one day and three weeks depending on the location of the supplier, but can now be longer given supply chain and logistics issues. The potential IP risk inherent in outsourcing prototype production to a third party discussed above is of particular concern in the defence industry and for designers of advanced consumer devices such as mobile phones. Companies involved in both of these industrial segments are consequently among the early adopters of additive electronics equipment.

3D printers for additive electronics manufacturing are typically the size of a fridge, do not use acid etches and do not require specialist operators so they can be installed within an electronics design department. They work well for prototyping, low-volume production runs and customised devices, but are not suitable at present for high-volume manufacture of PCBs because of the time it takes to manufacture each PCB (between six and 20 hours depending on circuit complexity for Nano Dimension’s DragonFly printer, Exhibit 4).

Market size and growth potential

According to a report updated by DataM Intelligence in September 2022, the global 3D printed electronics market is expected to grow at a CAGR of 30.4% to US$2.5bn during the forecast period 2022–29. The report notes that the electronics industry has been an early adopter of 3D technology in design and production activities. The global printed electronics market is typically regarded as distinct from the additive manufacturing market. The potential addressable market for Nano Dimension may be larger than that predicted in Emergen’s 3D printed electronic report, which assumes that adoption of the technology will be restricted to low-volume applications, if the speed at which Nano Dimension’s equipment can manufacture circuits enables it to be deployed for larger volume requirements.

Building an additive manufacturing portfolio through acquisition and in-house investment

Exhibit 6: Analysis of revenues, Q118–Q322

Source: Edison Investment Research, company data

Having listed in 2014, Nano Dimension amassed c US$1.5bn in cash through a sequence of secondary offerings during 2020 and early 2021. It is using this cash to build up a portfolio of complementary additive manufacturing technologies (Exhibit 7), which is broader than most other companies in the sector. The strategy has also resulted in accelerated revenue growth (see Exhibit 6). As we discuss in the valuation section below, market dynamics indicate that the scale and rate of acquisitions are very likely to increase because vendor expectations are now more realistic.

While the range of potential applications is very broad, Nano Dimension’s first product to be launched was the DragonFly printer for making high-performance electronic devices, so it is deliberately focusing on applications that are of interest to companies involved in this sector, thus creating cross-selling and up-selling opportunities. It can now offer equipment for additively manufacturing parts made out of metal and ceramics and manufacturing parts with a resolution of only one micron, as well as equipment for automatically populating PCBs. It is also acquiring companies with technology that can enhance the performance of existing products. For example, DeepCube’s AI functionality (see below) will be incorporated across the group’s equipment portfolio to enhance yield. Global Inkjet Systems’ (GIS’s) expertise is being used to enhance the performance of the additive manufacturing equipment in the portfolio. In addition, management is selecting acquisitions to strengthen direct sales capability in particular regions. For example, Essemtec and Admatec enhanced the group’s presence in mainland Europe. Nano Dimension has created an organisational structure that encourages cross-selling, as demonstrated by Essemtec’s sales in the United States growing by 45% year-on-year during the nine months ended September 2022 (9M22). In addition, during the Q322 results call in early December, the CEO noted that the group had made the first sales of Admatec’s equipment in North America. Management is also integrating manufacturing across the group, and intends to make its additively manufactured electronics systems in Switzerland rather than Israel.

In July 2022 Nano Dimension acquired a 12% stake in Stratasys for an undisclosed sum because it gives shareholders exposure to ‘large, stable, more mature, mostly polymer-based additive manufacturing technologies.’ Management notes that it may increase or reduce the size of the Stratasys stake and stated at the Q322 results that it does not intend to make other investments of this type.

Nano Dimension complements its product portfolio with additive manufacturing services. Following the acquisition of Formatec in July 2022, Nano Dimension can make high-precision moulds, filters and mechanical parts for industrial customers, as well as designing and manufacturing multi-layer, high-performance electronic devices such as high-pass filters, RF antennae and amplifiers and multi-chip modules. Other companies offering prototyping services based on additive manufacturing technology include Beta Lab, Materialise (NASDAQ: MTLS) and Proto Labs (NASDAQ: PRLB).

Exhibit 7: Additive manufacturing portfolio

Polymers

Ceramics

Metals

Micro

Electronics

Sand

Composites

Wood

3D Systems Corp

BotFactory

Ceradrop (part of MGI Group)

ChemCubed

Desktop Metal

Markforged (NYSE: MKFG)

Massivit 3D Printing Technologies (TLV:MSVT)

Nano Dimension

*

Neotech AMT

Notion Systems

nScrypt

Optomec

Pulse (part of Yageo Group)

SLM Solutions (XETRA:AM3D)

Stratasys*

Velo3D (NYSE: VLD)

Voltera

Voxeljet

Xerox

Zortrax

Source: Edison Investment Research. Note: *Strategic stake in Stratasys.

Additive manufacture of high-performance electronic devices

Creation of more complex multi-layer PCBs

Nano Dimension’s DragonFly printer is highly unusual because it can simultaneously print both proprietary conductive inks containing silver nanoparticles, which form PCB tracks, and patented dielectric inks, which form the insulating regions of PCBs. The inks are heated to remove surplus solvent and then cured using strong infra-red (IR) or UV light sources prior to the deposition of the next layer. Being able to print both the conductive tracks and the insulating areas means that the equipment can be used to make multi-layer (up to 17 layers) PCBs in a single pass. Most other 3D printers would have to create each layer of the PCB separately. Multi-layer boards are essential for complex devices such as mobile phones. This is because the only way to connect up components that are placed close together and have large numbers of inputs and outputs is to distribute the connectors across multiple layers and get the connectors to jump from one layer to another so they can cross over each other without touching. Importantly Nano Dimension’s proprietary silver inks show high levels of conductivity, meaning that they can be used to print the very fine conductive traces required for high-density boards.

Creation of PCBs with irregular shapes

The DragonFly printer can deposit the patented dielectric ink to create PCBs with holes in them and with curved edges (see Exhibit 8). This is very difficult using conventional manufacturing techniques where a panel of substrate, which is brittle, would need to be cut mechanically to create this sort of shape.

Moving to a new generation of high-performance electronic devices – structural electronics

Exhibit 8: 3D printed inductor for wireless charger

Exhibit 9: Sphere phased array antenna

Source: Nano Dimension

Source: Nano Dimension

Exhibit 8: 3D printed inductor for wireless charger

Source: Nano Dimension

Exhibit 9: Sphere phased array antenna

Source: Nano Dimension

Nano Dimension’s DragonFly printer can also deposit the dielectric ink to form 3D structures such as pyramids. In the case of Exhibit 9, the equipment has printed tiny metal coils within the dielectric pyramids so the coils are pointing in specific orientations. The coils are printed using the conductive inks, which can also be used to print other passive components including resistors and capacitators. It would be extremely difficult to create the sphere phased array antenna using conventional manufacturing techniques because of the challenges associated with aligning the coils correctly. Embedding electrical components, whether these are printed components or conventional components inserted during the printing process, is beneficial because it improves reliability by protecting components from the external environment and eliminating the soldering process for attaching components to the board, which is a major source of device failure. It also results in PCBs with significantly reduced surface area, The dielectric can also be used to create rigid circuits connected with flexible sections. This enables PCBs to be bent so that they fit inside curved and complex geometrical products.

Proprietary, patented technology

Although the printer itself is built out of standard components, Nano Dimension has submitted several patent applications regarding how these are deployed. The printer is integrated with a proprietary software package, which converts the information from different brands of CAD software used by electronic designers for specifying the topology of each layer into instructions for controlling the movement of the DragonFly printer heads and deposition of the inks. Nano Dimension has patents covering algorithms used in the software that result in substantial savings in inks and time.

Future development areas

The maximum size of circuit that may currently be deposited by Nano Dimension’s printers is 160×160×3mm. This does not cover all PCB applications, although management intends future generations of additive electronics printers to be able to output larger dimension boards. At present a single circuit takes between six and 20 hours to print, depending on its complexity. The length of time will be reduced in the next generation of printers, which are scheduled for release in 2023. Future generations of equipment will incorporate DeepCube functionality (see below) to further enhance yield and throughput and reduce calibration time. The next-generation printer will also include the ability to insert components while a PCB is being built up or after it has been completed. This new functionality is based on capability acquired with Essemtec (see below).

Exhibit 10: Competitive additive electronics equipment

Company and product

Number of PCB layers

Maximum height

Minimum line width*

Comment

Nano Dimension DragonFly

< 17 layer PCB

3mm

75 micron

Two inks – one conductive, one insulating.

BotFactory SV2

4 layer PCB

N/A

200 micron

Combination of a printer with dielectric and conductive inks, solder paste extruder, pick-and-place and solder reflow into a single product.

Ceradrop CeraPrinter (part of MGI Group)

single-sided

10mm

N/A

Optomec integrator. Can deposit up to 4 different materials. Used to print displays, RF antennae, fuel cells, memories and biological objects rather than PCBs. Does not make own inks.

ChemCubed ElectroJet

multiple

150mm

100 micron

Offer conductive, dielectric and solder mask inks as well as water soluble inks for creating supports and ink for watermarks.

Notion Systems

double-sided

80mm

Developer of a modular inkjet platform that is used with many types of functional inks including conductive and dielectric inks from third parties. Used to make displays, PCBs, semiconductor packaging, sensors and optical parts.

nScrypt

single-sided

200mm

N/A

Prints conductive elements. System can be equipped with pick-and-place tools, micro-milling tool heads, lasers, scanners and vision. Can print onto non-planar substrates.

Optomec Aerosol Jet

single-sided

300mm

N/A

Prints conductive inks plus dielectric where tracks cross over each other. Can print onto non-planar substrates. Can be integrated into automation platforms for high-volume assembly.

Pulse FluidANT (part of Yageo Group)

multiple

350mm

N/A

Prints conductive and dielectric inks but application areas – antennae, sensors, printed electronics – emphasise conductive inks.

Voltera V-One

Double sided PCB

3mm

200 micron

Prints conductive ink and solder paste on substrate. Drills holes for vias. Also solder reflow capability.

Source: Edison Investment Research, company websites. Note: *1,000 micron = 1mm.

Our analysis of the competitive environment (Exhibit 10) indicates that ChemCubed and Nano Dimension are the only companies manufacturing equipment suitable for creating PCBs with multiple layers and very fine connective traces. The other companies in the sample are either developing equipment that can create and populate fairly simple PCBs using a single machine (BotFactory, nScrypt, Optomec, Voltera) or are developing equipment that be used for other printed electronic products such as displays. Voxel8 originally developed a system suitable for manufacturing a 3D object with embedded wiring, but changed to printing elastomeric materials and has been acquired by digital textile technologies firm Kornit Digital (NASDAQ: KRNT).

Using AI to improve additive manufacturing performance

Following the acquisition of DeepCube in April 2021, Nano Dimension intends to integrate DeepCube functionality into its own additive manufacturing equipment to enhance performance. DeepCube’s pioneering inference accelerator improves the performance of additive manufacturing hardware. The software applies the same neural network training behind photo and speech recognition advancements to the manufacturing of parts. Multiple sensors detect defects that are too small for the human eye to notice and feed that information into an AI-driven decision-making algorithm, which corrects printing errors in real time. Importantly, DeepCube’s proprietary algorithms increase the speed of data analysis tenfold. As a result, the amount of computer memory required is substantially reduced, so the analysis can take place in real time within the print system rather than being transferred to a datacentre for processing. For example, embedding DeepCube functionality in next-generation equipment for printing circuit boards would allow a potential issue with the quality of conductive tracks to be identified immediately, automatically triggering corrective action, ensuring that the circuit board was usable rather than waiting until the complete circuit board had been manufactured and tested, at which point the faulty product would have to be scrapped. DeepCube enables print nodes to be connected to each other, so that machines are not only co-ordinated across a lab or across a global manufacturing footprint but they can also share learning inferences from each other for immediate adjustments to production flow. In February 2023, Nano Dimension was granted a patent relating to the neural network that supports its cloud-based manufacturing platform, taking the number of patents associated with DeepCube to 20 granted and 25 pending.

Additive manufacturing of parts with micron scale features

Exhibit 11: Industrial impellers for use in industrial MEMS* and micro-mechanical mechanisms

Exhibit 12: Fibre-optic adapter component

Source: Fabrica Group. Note: *Micro-electromechanical systems.

Source: Fabrica Group

Exhibit 11: Industrial impellers for use in industrial MEMS* and micro-mechanical mechanisms

Source: Fabrica Group. Note: *Micro-electromechanical systems.

Exhibit 12: Fibre-optic adapter component

Source: Fabrica Group

Nano Dimension’s Tera 250 equipment from the acquisition of NanoFabrica in April 2021 uses a projected laser source to cure an entire layer at once. Using light to define each layer gives better resolution than depositing material from a print head. Moreover, the laser beam’s shape and size is controlled with an adaptive optics system that is linked to an array of sensors creating a closed feedback loop, enabling its customers to create parts with a feature resolution of one micron. The equipment uses two proprietary materials. Its standard thermoplastic material is strong enough to be used for structural applications in the electronics, optics, automotive and aerospace industries and for micro-injection moulds. It also offers a composite reinforced with ceramic particles that is designed for use in harsh environments and for parts exposed to high levels of wear. It would be very difficult to create the complex curves and sharp edges on the impellers shown in Exhibit 11 and the internal cavities of the fibre-optic components in Exhibit 12 using conventional moulding techniques. The software associated with the equipment analyses the part to be made so that areas with less detail are built up more quickly than areas with fine detail. Nano Dimension claims that this technique results in print speeds that are five to a hundred times faster than other micro-manufacturing processes. For example, medical device start-up AntiShock created a working prototype of an electro-optical sensing medical device for preventing intravenous fluid overload that was built out of several small mechanical moving components that needed to be strong and accurate. The delivery time for five 3D printed parts was one day. Nano Dimension notes that using computer-controlled precision machining, making five parts would have taken three to four days. Machining a small dimension/highly precise part would have cost several hundreds of dollars, while using micro 3D printing cost 80% less. Future generations of equipment will incorporate DeepCube functionality to further enhance yield and throughput.

Nano Dimension’s main competitor in micro-additive manufacturing is venture capital backed Boston Micro Fabrication. Like Nano Dimension, it offers both photopolymers and ceramic materials. It can achieve a resolution of 2 microns.

Equipment for automated assembly of PCBs

Through the acquisition of Essemtec in November 2021, Nano Dimension designs, manufactures and sells production equipment for electronic assembly. Its product range includes modular surface mount technology (SMT) pick-and-place equipment, which puts electronic components into the correct place on PCBs and associated software; and high-speed dispensers that deposit tiny dots of materials such as solder paste, SMT glue and LED encapsulant onto the correct place on PCBs, reflow ovens and smart storage systems. These storage systems hold reels of surface mount devices and, on receiving an automatic alert from an assembly line that a reel of a particular component is running low, will locate a reel of replacement components and transfer it to an operator. Nano Dimension notes that over 60% of production line stops are attributable to logistics issues when the correct material is not in the right place when required. It claims that its smart storage system reduces these stoppages by 95%. The software associated with the SMT equipment calculates routines that will optimise the time taken to populate each circuit. Future iterations will incorporate DeepCube functionality to further enhance yield and throughput.

Exhibit 13: Video of Nano Dimension’s pick-and-place component feeder concept

Source: Nano Dimension

Market size and growth potential

A report from Transparency Market Research published in April 2022 noted that the global market for SMT equipment was worth over US$5.6bn in 2020 and predicted that it would grow at a CAGR of 4.9% during the forecast period of 2021–31, reaching over US$9.1bn by 2031. Nano Dimension’s principal competitors in automatic electronic assembly equipment are Europlacer and Mycronic (STO: MYCR). Management notes that key differentiators for Nano Dimension’s SMT equipment are its small footprint, competitive specification and ability to provide a modular solution for low-volume customers that can be upgraded if required.

Enhancing the performance of industrial print systems

Nano Dimension is using the expertise acquired through the acquisition of GIS in January 2022 to enhance the performance of the additive manufacturing equipment offered by each of its subsidiaries. GIS develops high-performance industrial inkjet software, ink delivery systems and printhead drive electronics for industrial print systems. As one example of building on this expertise, Nano Dimension’s next-generation additive electronics printer will have multiple print heads, not just two, to speed up PCB manufacture.

GIS’s customer base includes original equipment manufacturers (OEMs), system integrators, ink/fluid manufacturers, large end users, research institutes and universities. Application areas include 3D printing and additive manufacturing, particularly bio-medical objects, bio-printing, flat panel displays, printed electronics and semi-conductors; direct-to-shape coating and graphics printing for customised decoration of automotive components; carton board; ceramic floor tiles; printing onto complex shapes such as bottles; corrugated print board; and short runs of wall coverings, furniture laminates and textiles. It is an expert in depositing the functional fluids required for additive manufacturing precisely and at speed. GIS will continue to sell to Nano Dimension’s competitors and to customers in sectors other than those served by Nano Dimension’s other businesses, because the skills involved are potentially transferable to Nano Dimension’s own additive manufacturing equipment. For example, techniques for printing onto the curved surface of a bottle efficiently can be used for printing conductive inks onto a curved surface.

Additive manufacturing of ceramic and metal parts

Following the acquisition of Admatec in July 2022, Nano Dimension can offer technology for printing ceramic and metal parts layer by layer from ceramic or metal slurries. During the printing process, the individual layers are deposited using a patented feedstock system and cured using UV light. After the printing, the parts are cleaned and go through debinding and sintering steps. During the sintering step, the material consolidates under heat so it has very similar density to a part created from a block of ceramic or metal. Labour-intensive post-processing steps like grinding, lapping or polishing are not required. The technology is suitable for markets requiring high-performance parts such as medical, aviation, investment casting and scientific research.

Nano Dimension’s principal competitors in this sector are 3D Ceram and Lithoz. Both 3D Ceram and Lithoz offer equipment that is able to print multi-material components, which combine different ceramics, ceramic with metal and ceramic with polymer. Nano Dimension’s equipment can print three times more layers per hour than Lithoz’s equipment: up to 300/hour versus up to 100/hour. Management notes that Nano Dimension’s equipment is less expensive (US$200–400k/system) than equipment from its competitors. GE and Xerox both offer equipment that can print 3D metal parts. A report from 3dpbm Research published in October 2021 predicted that the global ceramic additive manufacturing market would grow from US$154m in 2020 to US$3.4bn by 2030, a CAGR of 36.5%.

Management and shareholders

Chairman and CEO Yoav Stern has served as CEO since January 2020 and chairman since May 2021. Mr Stern has spent most of his business career in the United States, running both public and private companies with global operations including in the UK, Germany, Australia, India and Singapore. For example, from 2011 to 2016, he was the president and CEO of US-headquartered video-surveillance systems developer DVTEL (now Teledyne FLIR), between1994 and 2002 he was executive chairman of aircraft parts distributor Kellstrom Aerospace and between 1989 and 1992 he was VP business development and M&A for Israeli technology holding company Elron Electronic Industries (TLV:ELRN). He is the owner of Doubleshore, which provides turnaround management, M&A and investment management services, and since 1997 has served as the co-chairman of Bogen Corporation, which is involved in audio and voice over IP electronics.

President Zivi Nedivi took up this role in April 2021. Mr Nedivi has been the chief executive officer of several technology companies, including Skypath, which provides a real-time solution for pilots for sensing and avoiding turbulence; Cyalume Technologies, which makes chemical-lighting solutions used by US and NATO military forces; Axiom Investment Advisors and Kellstrom Aerospace. He was also the chief operating officer of Lumenis, which provides minimally invasive clinical solutions for the surgical, ophthalmology and aesthetic markets.

Chief Product Officer and Head of Strategic M&A Hanan Gino took up this role in April 2021. Prior to joining Nano Dimension he was CEO of Kitov Systems, which provides smart 3D inspection systems, and president of Verint Systems’ (NASDAQ:VRNT) global security intelligence business. Prior to joining Verint, he spent 23 years at Orbotech where he was successively president of the assembly division, the PCB division and the flat panel display division.

President of Nano Dimension EMEA Zvi Peled joined Nano Dimension in May 2020. Prior to this, he was VP sales-Americas of FLIR’s security business unit. He has also served as president and CEO of Apollo Network Services, a private company that manages large projects in the field of defence, energy and transportation for Finmeccanica, and CEO of Flash Networks, which offers mobile data access gateways. Earlier in his career he spent 20 years with international defence company Elbit Systems.

Chief Financial Officer Yael Sandler took up this role in June 2015. Between 2014 and 2015 she was group controller of RealMatch. From 2011 to 2014 she was a senior associate at KPMG Israel where she gained valuable experience working with public companies and companies pursuing initial public offerings.

Shareholders

Exhibit 14: Principal shareholders

Name

Shareholding

Murchinson and related parties*

5.1%

Yoav Stern

2.7%

BlackRock Institutional Trust Company

2.0%

State Street Global Advisors

1.8%

Morgan Stanley & Co

1.6%

Clearline Capital

1.5%

Source: Refinitiv. Note: *As per SEC filing dated 12 January 2023.

As a result of a sequence of purchases between 27 December 2022 and 19 January 2023, Murchinson and its related parties has become the largest shareholder with a 5.1% stake. We note that in early November, Bloomberg reported that in September 2022 Nano Dimension’s largest shareholder Murchinson made a non-binding proposal to acquire the rest of the 3D printing company in a transaction that would value the company at roughly US$995m. This is less than the value of the cash balance plus the Stratasys stake. Having completed the sequence of purchases, Murchinson and the associated parties delivered a letter to Nano Dimension’s board requesting a special general meeting of shareholders in which agenda items were to include the removal of Yoav Stern and three other directors and the appointment of two new directors nominated by Murchinson. Nano Dimension rejected this request on the basis that it failed to comply with the requirements set forth under the Israeli Companies Law for calling such a meeting. At the same time, Nano Dimension’s board unanimously adopted a limited duration shareholder rights plan under which it will issue one special purchase right for every one ADS outstanding at the close of business on 6 February 2023. Each right will allow its holder to purchase from Nano Dimension one-half of one ADS (ie 0.5 ADS), at a purchase price of US$0.01/ADS, once the rights become exercisable. The rights will become exercisable only if an entity, person or group acquires beneficial ownership of 10% or more of Nano Dimension’s outstanding ordinary shares in a transaction not approved by the company’s board. The rights will expire on 27 January 2024. On 13 February, Murchinson announced a special general meeting of shareholders to be held on 20 March, a move which Nano Dimension states is not compliant with Israeli companies law and should be disregarded by shareholders. The company has engaged Lazard to serve as a corporate defence advisor in relation to Murchinson’s recent statements and actions. It has filed a lawsuit in the courts in Israel seeking a declaratory judgment that the Murchinson meeting is illegal and seeking damages in relation to Murchinson’s actions.

The second-largest shareholding is Yoav Stern’s stake which, should he exercise the final tranche of his Series A warrants, would give him a 2.7% share. Mr Stern also has 27,742,103 Series B warrants, which are exercisable at US$6.16/share and can be vested and exercised at any time. We estimate that Mr Stern would have a 12.1% share if all of his Series B warrants were exercised. In December 2022, the board held a special general meeting for shareholders to approve, among other agenda items, a change in the Series B warrants exercise price to US$2.46. The proposal was rejected. None of the other directors has a substantial equity stake in the company.

Share buyback programme initiated

On 15 February 2023, Nano Dimension announced that it was putting into action its previously announced share repurchase plan. This allows it to invest up to $100m to repurchase its ADSs.

Financials

9M22 revenue growth driven by acquisitions

Revenues increased sharply in the first nine months of FY22 (9M22) compared with 9M21. This was the result of several acquisitions: NanoFabrica (now Fabrica) in April 2021, Essemtec in November 2021, GIS in January 2022 and Admatec/Formatec in July 2022. Management has not provided a breakdown of revenues.

Stripping out amortisation, gross margin reduced by 20.5pp in 9M22 compared to 9M21, reflecting the increasing proportion of revenues attributable to Essemtec, as well as lower quarter-on-quarter revenues during Q322 (see below) generated from a relatively unchanged fixed manufacturing overhead. Gross margin (excluding amortisation) was unusually low in Q322 at 25.7%. Management expects that gross margin will return to normal in Q422 or Q123. All categories of costs increased because of the acquisitions, although management notes that cash consumed in operations during Q322 was more than US$10m lower than the original budget as a result of careful cost control. We note that DeepCube, Fabrica and Essemtec generated pro forma losses for the year of US$66,200k, US$66,467k and US$65,691k respectively in FY21. Group pre-exceptional operating losses widened from US$28.3m in 9M21 to US$69.6m in 9M22. R&D expenses were a significant element of the losses, increasing from US$12.8m to US$38.1m.

Ample cash to transact transformative acquisition

Net cash (including bank deposits and loans from banks but excluding investment in securities and US$10.5m lease liability at end Q322) reduced from US$1,354.5m at end FY21 to US$1,047.9m at end Q322. The principal factors contributing to this drop were the operating loss, the payment of US$18.2m (net) for GIS and US$12.9m for Admatec/Formatec, payment of deferred consideration related to Essemtec and GIS of US$10.7m and US$6.1m invested in capital equipment, primarily office equipment. All R&D was expensed and the net increase in working capital was minimal at US$0.3m.

Exhibit 15: 9M21 and 9M22 performances compared

Metric

9M21

9M22

Notes

Group revenues (US$k)

2,962

31,529

Cost of revenues (US$k)

(1,380)

(21,159)

Cost of revenues – amortisation of assets recognised in business combination and technology (US$k)

(772)

(3,990)

Gross profit (US$k)

810

6,380

Gross margin (including amortisation)

27.3%

20.2%

Gross margin (excluding amortisation)

53.4%

32.9%

R&D expenses - net (US$k)

(12,769)

(38,144)

Sales and marketing expenses (US$k)

(7,706)

(21,392)

General and administrative expenses (US$k)

(8,612)

(16,405)

Pre-exceptional operating loss (US$k)

(28,277)

(69,561)

Depreciation (US$k)

(5,831)

(3,627)

Share-based payments (US$k)

(19,866)

(25,643)

Reported operating loss (US$k)

(53,974)

(98,831)

Finance income/(expense) - cash (US$k)

2,710

8,864

Finance income/(expense) – non-cash (US$k)

9,445

(51,170)

Reported loss before tax (US$k)

(41,819)

(141,137)

Tax income (US$k)

648

742

Tax credits

Reported loss after tax (US$k)

(41,171)

(140,395)

Source: Nano Dimension data

Record order book at end Q322

Q322 revenues were US$10.0m compared with US$11.1m in Q222 and US$10.4m in Q122. While revenues will have benefited from the acquisition of Admatec and Formatec in July, which collectively generated US$5.3m revenues in FY21, the third quarter was weaker because of the war in Ukraine, which resulted in a reduction in 9M22 revenues from sales of additive manufacturing electronics equipment to Russia and Poland of around US$1.5m compared with the corresponding prior year period. In addition, while Nano Dimension has had sufficient components to complete and deliver systems as required, continued component supply shortages globally have meant that some customers have requested delays in deliveries of the pick-and-place equipment used to mount electronic components on circuit boards. Nevertheless, demand for the group’s products was high, resulting in a record backlog of over US$9m at the quarter end.

Highest quarterly revenue in Q422

On a preliminary basis, Q422 revenues were US$12.1m, which is 61% higher than Q421 and 21% more than Q322. It is the highest quarterly revenue in Nano Dimension’s history, contributing to a full year total of US$43.6m.

Valuation

Nano Dimension has US$1.0bn cash on the balance sheet (excluding the stake in Stratasys, with a current value of c US$117m), over half of which is allocated for further acquisitions. Consequently, it is not valid to carry out a valuation based on a comparison of market capitalisation/historical sales multiples because Nano Dimension’s revenues are likely to grow much faster than those of its listed peers if it continues to complete acquisitions at a rapid rate. If we consider the existing revenue base, the calculation in the financials section gives pro-forma FY21 revenues of US$43.5m collectively from Essemtec, Fabrica, DeepCube and the original additive manufacturing of electronics devices activity. Adding in c US$10m for GIS (actual revenues for the year ending March 2021) and US$5.3m for Admatec and Formatec (actual revenues for the year ending December 2021) gives historical annual revenues of US$58.8m. Clearly the level of revenues that could be realised through management investing a substantial proportion of the US$1.0bn cash pile in acquisitions depends on what choices are made. Nano Dimensions paid 2.4x historical revenues for the Admatec/Formatec combination, 1.8x historical revenues for GIS and 1.5x historical revenues for Essemtec. Neither DeepCube nor Fabrica were generating revenues at the time of acquisition. (If the total consideration is included, these multiples become 2.4x for Admatec/Formatec, 2.9x for GIS and 1.4x for Essemtec, which are modest compared with the 3.2x CELLINK paid for Nanoscribe in May 2021 and 10.3x Desktop Metal paid for ExOne in August 2021.) Investing all of the current cash pile in acquisitions with a valuation of 2.4x historical revenues would create an additional revenue base of US$425m.

Exhibit 16: Peer share-based multiples

Name

Performance vs 31 December 2021

Market cap
(US$m)

Historical revenues (US$m)

EV/sales last
(x)

Last reported cash and equivalents

Last reported cash and equivalents/annualised net cash used in operating activities

Nano Dimension

-21%

782

44*

-5.8

US$1,030m*

11.7x***

3D Systems Corp

-51%

1,403

538

2.4

US$569m*

8.3x

Desktop Metal

-50%

791

209

3.4

US$185m

1.0x

Markforged Holding Corp

-77%

243

101

0.7

US$168m

1.9x

SLM Solutions Group

+20%

534

80

7.1

US$80m

4.4x

Stratasys

-42%

963

652

1.0

US$328m

Cash generative

Velo3D

-60%

544

81

5.8

US$80m

0.6 x

Voxeljet

-65%

18

26

1.3

US$14.0m**

1.4x

Source: Refinitiv. Note: Prices as at 9 March 2023. *Unaudited at end December 2022 including short-term investments or bank deposits **Pro forma 9/30/2022: taking the equity offering in October 2022 into account. ***Excluding Stratasys investment.

Management notes that purchase multiples were unusually high during 2021 because of special purpose acquisition company (SPAC) activity and have since come down to a level where vendor expectations are more realistic, so it is reasonable to expect a meaningful proportion of the cash pile to be spent on acquisitions and the pace of acquisitions to accelerate. Exhibit 16 shows that Nano Dimension has substantially more cash and equivalents available to complete transactions than its listed peers.

We note from our analysis of listed peers (Exhibit 16) that the range of historical EV/sales multiples for 3D printing companies is fairly large. In addition, the share prices of most companies in the sector have fallen substantially since the beginning of 2022, reinforcing management’s view that acquisition multiples are becoming more reasonable.

Based on reports from Emergen Research and DataM Intelligence, we calculate that the combined global additive manufacturing and 3D printed electronics addressed by Nano Dimension’s product portfolio will collectively be worth over US$102bn in 2030. A 1% share of this market would represent US$1.0bn revenues, while a 5% share would be US$5.1bn revenues.

We see continued growth in revenue and improvement in EBITDA margin as well as the completion of acquisitions with the potential to drive meaningful revenue and profit growth as key catalysts of share price improvement.

Sensitivities

Disruptive technology: as most of Nano Dimension’s subsidiaries are involved in the development and sale of disruptive technology, there is significant risk surrounding potential new market entrants, customer adoption and assessment of future market demand.

Revenue and cash flow visibility: as Nano Dimension has grown rapidly through a sequence of acquisitions, five since April 2021, it is difficult to predict future revenues and cash flows. This issue is exacerbated by the likelihood that over half of the US$1.0bn cash and cash equivalents at end- December 2022 will be used to make further acquisitions, as yet unknown.

Acquisition risk: there is no guarantee that management will continue to identify targets at satisfactory acquisition multiples, be able to conclude any transaction or integrate any additional companies into the group in a way that benefits existing companies by either creating cross-selling opportunities or securing key technology.

IP protection: Nano Dimension has protected its IP through patents. As of early February 2023 the group had over 81 granted patents and 194 pending.

Component availability: like other electronics companies, Nano Dimension has been adversely affected by shortages of certain electronic components, although for Nano Dimension the issue has manifested itself as customers asking for equipment deliveries to be delayed, rather than reduced ability to deliver product. Supply chain issues may ultimately be of benefit to Nano Dimension because they are encouraging electronics OEMs to bring prototyping in house rather than outsourcing it to companies on another continent.

Exhibit 17: Financial summary

US$'000s

2018

2019

2020

2021

9M22

Year-end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

5,100

7,070

3,399

10,493

31,529

Cost of Sales (including amortisation of capitalised IP)

(4,366)

(5,084)

(2,334)

(9,371)

(25,149)

Gross Profit

734

1,986

1,065

1,122

6,380

EBITDA

 

 

(12,267)

(11,704)

(12,566)

(38,392)

(64,672)

Operating Profit (before amort. and except.)

 

 

(14,748)

(14,396)

(15,224)

(48,256)

(72,289)

Intangible Amortisation

0

0

0

0

0

Exceptionals

0

0

28

(145,173)

95

Share-based payments

(402)

(439)

(20,501)

(29,782)

(26,637)

Operating Profit

(15,150)

(14,835)

(35,697)

(223,211)

(98,831)

Net Interest

(338)

6,482

248

3,768

8,867

Exceptionals

0

0

(13,045)

13,713

(51,173)

Profit Before Tax (norm)

 

 

(15,086)

(7,914)

(14,976)

(44,488)

(63,422)

Profit Before Tax (FRS 3)

 

 

(15,488)

(8,353)

(48,494)

(205,730)

(141,137)

Tax

0

0

0

4,906

742

Profit After Tax (norm)

(15,086)

(7,914)

(14,976)

(44,488)

(63,422)

Profit After Tax (FRS 3)

(15,488)

(8,353)

(48,494)

(200,824)

(140,395)

Average Number of Shares Outstanding (m)

1.8*

3.5*

42.9*

247.3

N/A

EPS - normalised (US$)

 

 

(8.22)

(2.25)

(0.35)

(0.18)

N/A

EPS - (IFRS) (US$)

 

 

(8.44)

(2.38)

(1.13)

(0.81)

(0.54)

Dividend per share (c)

0.0

0.0

0.0

0.0

0.0

Gross Margin (%)

14.4

28.1

31.3

10.7

20.2

EBITDA Margin (%)

N/A

N/A

N/A

N/A

N/A

Operating Margin (before GW and except.) (%)

N/A

N/A

N/A

N/A

N/A

BALANCE SHEET

Fixed Assets

 

 

11,530

13,004

13,107

78,060

228,851

Intangible Assets

5,983

5,211

4,440

0

31,799

Tangible Assets

5,200

7,416

8,261

12,181

27,138

Deferred tax

0

0

0

1,007

1,282

Bank deposits

0

0

0

64,371

28,404

Investment in securities

0

0

0

0

139,707

Restricted deposits

347

377

406

501

521

Current Assets

 

 

8,773

9,854

676,149

1,311,895

1,047,076

Stocks

3,116

3,543

3,314

11,199

17,837

Debtors

1,883

2,386

1,839

9,324

8,854

Cash

3,753

3,894

585,338

853,626

370,197

Bank deposits

0

0

85,596

437,598

650,111

Restricted deposits

21

31

62

148

77

Current Liabilities

 

 

(3,592)

(4,425)

(6,686)

(31,996)

(30,348)

Creditors

(3,592)

(4,425)

(6,686)

(16,669)

(21,789)

Short-term borrowings

0

0

0

0

0

Other

0

0

0

(15,327)

(8,559)

Long-Term Liabilities

 

 

(1,139)

(6,831)

(15,454)

(13,728)

(13,998)

Long-term borrowings

0

(2,089)

(2,618)

(4,440)

(11,304)

Other liabilities

(1,139)

(4,742)

(12,836)

(9,288)

(2,694)

Net Assets

 

 

15,572

11,602

667,116

1,344,231

1,231,581

CASH FLOW

Operating cash flow before working capital and tax

(12,267)

(11,704)

(12,566)

(43,298)

(64,672)

Working capital

(1,253)

(782)

2,924

2,717

821

Exceptionals and other

73

(198)

(4)

(6,904)

(2,572)

Tax

0

0

0

4,906

742

Net Operating Cash Flow

 

 

(13,447)

(12,684)

(9,646)

(42,579)

(65,681)

Net Interest

0

0

152

3,636

4,539

Investment in intangible & tangible assets

(1,318)

(601)

(1,355)

(9,761)

(6,059)

Acquisitions/disposals

0

0

0

(74,574)

(219,541)

Financing

12,471

14,649

678,970

805,709

0

Dividends

0

0

0

0

0

Net Cash Flow

(2,294)

1,364

668,121

682,431

(286,742)

Opening net debt/(cash)

 

 

(6,103)

(3,753)

(1,805)

(668,316)

(1,351,155)

Other

(56)

(3,312)

(1,610)

408

(27,005)

Closing net debt/(cash)

 

 

(3,753)

(1,805)

(668,316)

(1,351,155)

(1,037,408)

Source: Nano Dimension data. Note: *Adjusted for 1:50 reverse split effective June 2020.


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Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by Nano Dimension and prepared and issued by Edison, in consideration of a fee payable by Nano Dimension. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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