Prodways Group
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2018 ANNUAL REPORT Summary 2018 ANNUAL REPORT 1 OUR VALUES, OURdEMPLOYEES AND OUR CSR COMMITMENTS 131 5 5.1General approach and methodology 132 OVERVIEW OF THE GROUP AND ITS BUSINESSES 7 5.2 3D printing: a production method that meets the challenges of sustainable 1 1.1Key figures 8 development 135 1.2Overview of the Group and its businesses 10 5.3 Building a major player in technological 1.3 Strategy and outlook, investment and R&D innovation 135 policy 18 5.4 Medical: an area of strategic development 1.4 Analysis of consolidated performance and for PRODWAYSdGROUP 137 business sectors 20 5.5Commitments to its employees 138 1.5 Activities and results of PRODWAYS GROUP 5.6 Activities with limited impact on climate SA 23 change and the environment 142 1.6Risk factors 25 5.7 Report by the independent third-party entity on the consolidated statement of non-financial performance in the CORPORATE GOVERNANCE 35 management report 144 2.1Governance 36 2 2.2Corporate officer remuneration policy 45 INFORMATION ON THE SHAREHOLDERS’ 2.3 Company reference to a Corporate MEETING OF 7dJUNE 2019 147 Governance Code and its application by the 6 6.1 Report of the Board of Directors presenting Company 54 the resolutions submitted to the combined 2.4 Special arrangements, if any, regarding shareholders’ meeting of 7dJune 2019 148 shareholder participation in shareholders’ 6.2 Draft resolutions for the ordinary and meetings 55 extraordinary shareholders’ meeting of 2.5 Regulated agreements, related-party 7dJune 2019 152 agreements and current agreements 56 6.3 Reports of the statutory auditors presented 2.6 Internal control and risk management to the shareholders’ meeting 157 procedures 58 6.4 Other reports by the Board of Directors presented to the shareholders’ meeting of FINANCIAL AND ACCOUNTING 7dJune 2019 160 INFORMATION 61 ADDITIONAL INFORMATION 163 3 3.12018 consolidated financial statements 62 3.2Separate financial statements 2018 104 7.1 Information concerning the statutory 7 auditors 164 7.2Person responsible for the information 164 INFORMATIONdABOUT THEdCOMPANY,dITS 7.3Concordance tables 165 SHAREdCAPITALdAND SHAREHOLDERS 119 4 4.1Information about the Company 120 4.2Share capital 122 4.3Shareholding 128 4.4 Financial communication (financial agenda, share performance, dividend policy, etc.) 129 2018 ANNUAL REPORT This document describes the Company's activity during the 2018 financial year, in accordance with the provisions of article L.451-1-2 of the French Monetary and Financial Code and articles 222–3 and 222-9 of the General Regulations of the French Financial Markets Authority (AMF). It is filed with the “Autorité des Marchés Financiers” and is available on PRODWAYS GROUP website. PRODWAYS GROUP - 2018 ANNUAL REPORT 1 A MESSAGE FROM THE CHAIRMAN In 2018, PRODWAYS GROUP achieved another The acquisition of SURDIFUSE-L’EMBOUT year of solid growth, and once again posted FRANÇAIS in January 2019 is also part of this one of the highest revenue growth rates in strategy. This acquisition complements that the 3D printing market. The Group continued of INTERSON PROTAC in 2017, and enables us to improve its profitability with positive EBITDA to become the French leader in hearing aid for the first time over the financial year. This eartips and to digitalise their production. performance comes from the combination of a large number of already very profitable For 2019, PRODWAYS GROUP should continue activities and some promising, yet still loss- to benefit from the development of 3D making, activities. printing as a manufacturing method in an increasing number of markets, as well as from The acquisitions and R&D developments its positioning and differentiated technologies. since the IPO have strengthened the Group’s The Group will continue its investments in positions in its core businesses, particularly the future applications of 3D printing (Rapid in 3D printing production applications. Additive Forging technology, digitalisation of Hence, the machines and materials for the processes in the healthcare sector, etc). dental sector are well-recognised in their market. The acquisition of the US machine In a market with high growth potential, we manufacturer, SOLIDSCAPE, in 2018 allows us are ready to seize opportunities and build a to position ourselves in the jewellery market, strong, innovative Group capable of creating where a significant share of production has value for our shareholders and for all of our already shifted to 3D printing. This strategic stakeholders. acquisition also offers us strengthened access to the North American market and an enlarged Raphaël GORGÉ distribution network. Chairman of the Board of Directors 2 PRODWAYS GROUP - 2018 ANNUAL REPORT Revenue €61 M EBITDA €1.2 M HIGHLIGHTS R&D 5.4% of revenue PRODWAYS GROUP acquires the American machine manufacturer, SOLIDSCAPE 19 MARCH 2018 Partnership with NEXTEAM PRODWAYS presents its GROUP for the use of new MOVINGLight® V10 innovative RAF technology ceramic 3D printer in the 3D printing of titanium parts. 9 APRIL 2018 17 JULY 2018 3 SEPTEMBER 2018 First multiple sale of the new PRODWAYS ProMaker LD-10 3D printer 10 SEPTEMBER 2018 PRODWAYS Materials launches its online sales site for 3D printing resins Appointment of Olivier Strebelle and powders as Chief Executive Officer of PRODWAYS GROUP Commercial success 5 OCTOBER 2018 13 SEPTEMBER 2018 in series production INITIAL and L’ORÉAL join forces to accelerate the development of 13 NOVEMBER 2018 thermoplastic parts using 3D printing PRODWAYS GROUP - 2018 ANNUAL REPORT 3 PRODWAYS GROUP SPECIALIST IN INDUSTRIAL 3D PRINTING UNIQUELY POSITIONED AS AN INTEGRATED EUROPEAN PLAYER € 60.9 M RAPID GROWTH € 34.8 M € 25.2 M € 17.8 M € 5.0 M € 0.1 M The Group has OUR STRATEGY 2013 2014 2015 2016 2017 2018 rapidly developed • Become a major player in the 3D printing REVENUE across the 3D market by offering high-performance products for professional and industrial printing value uses. chain (software, 3D • Continue to develop priority markets, such printers, materials, as aerospace, healthcare and jewellery, parts & services) for which the Group’s products and expertise are well-suited, and seize growth with a high value opportunities in all other sectors. added technological industrial solution OUR OBJECTIVE to meet the digital • Help our industrial customers to be more challenges of innovative, more effective and more industry. profitable thanks to our products and 31% services. OF REVENUE GENERATED INTERNATIONALLY OUR GOVERNANCE • PRODWAYS GROUP is a subsidiary of GROUPE GORGÉ, an industrial group that specialises in high-tech industries controlled by the GORGÉ family. • GROUPE GORGÉ holds 57% of the capital of PRODWAYS GROUP. The two companies are 460 listed on EURONEXT Paris. • Our Board of Directors comprises 5 directors employees including 2 independent directors. in 8 3 countries R&D CENTRES 4 PRODWAYS GROUP - 2018 ANNUAL REPORT OUR MODEL SYSTEMS PRODUCTS • The Group targets a large number of Parts design sectors, from aerospace, to healthcare and jewellery, to support industrial companies in • PRODWAYS GROUP is today one of the their digital transformation and incorporate largest European metal and plastic parts 3D printing into their production processes. manufacturers with a sizeable fleet of 3D printers across all 3D printing technologies Machines based in Annecy, France and Austin, USA. • PRODWAYS GROUP is one of the primary Medical applications European manufacturers of industrial 3D printers, with a wide range of multi- • At the same time, PRODWAYS GROUP has technology 3D printing systems (plastic, developed activities transformed by 3D lost wax, ceramic and metal), and premium printing and digitalisation in the healthcare related materials and services. sector. • A range of 23 machines (plastic, ceramic, • The Group has a portfolio of activities lost wax). in the podiatry (orthotic insoles), dental (impression trays, mouthpieces) and • A proprietary Rapid Additive Forging audiology (custom hearing aid eartips and technology for 3D metal printing of large- custom hearing protectors) sectors, for scale parts. which a proportion of the production uses 3D printing, sold directly to healthcare Materials professionals. • A wide range of over 140 materials (liquid resins, ceramic powders and polymers, waxes). 3D software • The Group’s businesses also include the integration of DASSAULT SYSTÈMES’ SOLIDWORKS 3D design, simulation and optimisation software. 241 215 EMPLOYEES EMPLOYEES €38.4 M €22.9 M REVENUE REVENUE PRODWAYS GROUP - 2018 ANNUAL REPORT 5 6 PRODWAYS GROUP - 2018 ANNUAL REPORT OVERVIEW OF THE GROUP AND ITS BUSINESSES 1.1KEY FIGURES 8 1.4 ANALYSIS OF CONSOLIDATED PERFORMANCE AND BUSINESS SECTORS 20 1.1.1Change in revenue 8 1.1.2Change in EBITDA 8 1.4.1Analysis of Group results 20 1.1.3 Change in profit (loss) from continuing 1.4.2 Group’s financial position (cash and cash operations 8 equivalents, financing and capital) 22 1.1.4Change in net income 8 1.5 ACTIVITIES AND RESULTS OF PRODWAYS GROUP 1.1.5Key financial data 9 SA 23 1.1.6Investments 9 1.5.1PRODWAYS GROUP SA’s role in the Group 23 1.1.7Change in workforce 9 1.5.2Activities and results 23 1.2OVERVIEW OF THE GROUP AND ITS BUSINESSES 10 1.5.3Proposed appropriation of income 23 1.5.4Standard payment terms 23 1.2.1 History and development of PRODWAYS GROUP 10 1.5.5Other financial and accounting information 24 1.2.2Activities, markets and competition 11 1.2.3 Principal subsidiaries and organisational 1.6RISK FACTORS 25 chart at 31dDecember 2018 16 1.6.1Legal risks 25 1.2.4Significant events 17 1.6.2Risks associated with intellectual property 26 1.6.3Operating risks 28 1.3 STRATEGY AND OUTLOOK, INVESTMENT AND 1.6.4Risks associated with the Group’s business 29 R&D POLICY 18 1.6.5Financial risks 32 1.3.1Strategy 18 1.6.6Industrial and environmental risks 33 1.3.2Outlook 18 1.3.3Investment policy and R&D 19 1.3.4Events after the reporting period 19 PRODWAYS GROUP - 2018 ANNUAL REPORT 7 OVERVIEW OF THE GROUP AND ITS BUSINESSES 1 Key figures 1.1 KEY FIGURES The key figures have been extracted from the consolidated financial statements.