Groupe Gorgé (Euronext Paris: GOE) today announces its revenue for the third quarter of 2017.
|(In € millions)||9M 2017(1)||9M 2016||Change||Q3 2017(1)||Q3 2016||Change|
|Smart Safety Systems||76.4||75.6||1.1%||22.0||22.6||-2.3%|
|Protection of High-Risk Installations||98.8||110.4||-10.5%||30.5||33.3||-8.4%|
|Structure & disposals||(1.0)||(1.1)||n/a||(0.4)||(0.5)||n/a|
(1) Unaudited figures
In the third quarter of 2017, Groupe Gorgé's consolidated revenue was €59.3 million, down 2.3% compared with the third quarter of 2016. This contraction is due to lower level of activity in the Protection of High-Risk Installations division, which was not fully offset by the very strong performance of the 3D Printing division.
Over the first nine months of 2017, consolidated revenue for the Smart Safety Systems division totalled €76.4 million, up 1.1%. The growth in revenue reflects the strong momentum enjoyed by the Aerospace division, up 35.8% over the period, together with the recovery of the Simulation business, up 4.1% in the third quarter following the decline recorded in the first half of the year. Robotics and Integrated Systems was down 3.4% over the first nine months of the year, due to long project cycles and delays registered in the first half of the year. Several material contracts, some of which should be finalized soon, are under negotiation.
Revenue for the Protection of High-Risk Installations division amounted to €30.5 million in the first nine months of 2017, down 10.5% compared with the first nine months of 2016, which enjoyed excellent performance. This decline is the combined result of weak progress in major international nuclear projects, and of dwindling activity in the Oil & Gas for several months now.
In the third quarter of 2017, consolidated revenue for the 3D Printing division came to €7.1 million, up sharply by 33.4% compared with the third quarter of 2016, driven by the strong performance of its two activities. The Systems activity recorded growth of 24.0% compared with the third quarter of 2016. The Products activity enjoyed strong growth of 42.6%, driven by strong sales of on-demand parts and the growing contribution of medical sector activities, in particular podiatry.
During the quarter, the division announced the acquisition of AvenAo Industrie, an expert in integrating 3D design and development applications (1 August 2017 press release). This acquisition, which is expected to be finalised by mid-November, did not contribute any revenue to the Systems activity this quarter. The consolidation as from 1 August of Interson Protac, a French leader in custom earmolds (6 September 2017 press release), has strengthened the Products activity's strong momentum.
The Smart Safety Systems division should continue to grow through the marketing of products developed during recent years, and is pursuing initiatives to improve profitability. The division is participating in several significant calls for tender, in particular in the Robotics & Integrated Systems division. Although these contracts have been pending for several months, some of them could be awarded in the fourth quarter. The Group expects a very high level of business in the fourth quarter, which should enable it to achieve the targeted revenue of €120 million for 2017.
Annual revenue for the Protection of High-Risk Installations will be down, affected by delays and lower margins for nuclear and Oil & Gas projects. This drop in activity will have a significant negative impact on the division's profitability for the FINANCIAL year. In the nuclear sector, the signature of the contract for the two Hinkley Point EPRsTM in the United Kingdom (15 May 2017 press release) increases visibility for nuclear activity for the coming years, and new nuclear projects are expected in the coming months. This will contribute to the activity's rebound in the medium term. This rebound will also be bolstered by the gradual recovery of investments in the Oil & Gas sector.
Thanks to its successful IPO, the 3D Printing division has the financial resources necessary to ramp up its R&D investments and commercial development, and to finance its targeted acquisitions in the 3D printing sector. The integration of Interson Protac and AvenAo Industrie reinforces the Group's ability to reach its target of balanced ebitda in the fourth quarter of 2017. Furthermore, solid organic growth combined with the integration of acquisitions should guarantee very strong revenue growth for the division in 2018.
The target of consolidated revenue nearing €300 million in 2017 is maintained, but subject to achieving very high revenue in the Smart Safety Systems division during the fourth quarter, and to resilience in the Protection of High-Risk Installations division. While this trend will not extend to the Protection of High-Risk Installations division, the Group's improved profitability in the second half of the year compared with the first half is confirmed.
Acceleration of the development of Rapid Additive Forging technology for metal 3D printing
Following the launch of a new metal 3D printing technology for large parts, announced on 15 June 2017, Prodways Group, Groupe Gorgé's 3D Printing division, announces the acceleration of the development of Rapid Additive Forging technology (RAF Technology).
This programme, launched nearly two years ago by Prodways Group in collaboration with Commercy Robotique, a Groupe Gorgé subsidiary, recently entered its industrial phase.
After approving the technology's productivity and capabilities, Prodways Group had two independent laboratories perform two series of tests to approve the metal quality of the 3D-printed parts. These tests revealed a high quality level, meeting the most stringent market requirements, especially in the aeronautical sector. Accordingly, the tests highlight the quality of the material: there is almost no porosity (<0.02%), i.e. much better than the porosity obtained through standard metal 3D printing. The mechanical resistance is greater than that of standard metal 3D printing, and under certain conditions greater than that of a foundry and comparable to forged metal.
Bolstered by these very positive results, Prodways Group has accelerated the development of Rapid Additive Forging technology, for which Prodways Group filed a patent in June 2017. As such, the teams have been strengthened and more resources have been allocated.
The acceleration of this programme should support the introduction of an industrial machine in February 2018. This printer, whose selling price will be much higher than that of the current Prodways Group range, will be able to produce titanium parts of 1,200x800x500mm. This machine operates in a controlled atmosphere and is intended to produce series parts, particularly for the aeronautical sector. Several aircraft and engine manufacturers have already ordered test parts and specimens to approve the relevance of this technology.
Contrary to what had been announced during the IPO, Prodways Group now believes the acceleration of this programme could generate revenue as from 2018 for both the Systems division (machine sale or rental) and the Products division (sale of parts manufactured with Rapid Additive Forging technology).
About Groupe Gorgé
Groupe Gorgé is an independent group that specializes in high-tech industries. Today, the Group is active in the fields of security and protection in extreme environments, as well as in the 3D printing sector. It employs around 1,700 people, is located in eight countries and directly exports around 40% of its activity. In its more than twenty-five year history, Groupe Gorgé has always developed and driven the latest technological and industrial innovations.
Smart Safety Systems: Developing complete, innovative technological solutions for complex missions in hostile and confined environments.
Protection of High-Risk Installations: Protecting people and ensuring the active and passive protection of installations for energy markets and industrial and tertiary sectors in France. Ensuring the maintenance of these protection systems.
3D Printing: Enabling major industry players to find new routes to successful innovation and production processes by providing systems, 3D printers and new premium material.
In 2016, the Group reported revenue of €281.2 million. It is backed by 1,800 employees and operations in over ten countries.
More information available on www.groupe-gorge.com
Groupe Gorgé is listed on Euronext Paris and on the US OTC market in the form of ADR.
ISIN code: FR0000062671
Ticker code: GOE
|US OTC market:
CUSIP NUMBER: 399451 103
ISIN NUMBER: US3994511034
Ticker Code: GGRGY / GGRGF
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