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AML3D LIMITED Investor Presentation 2020

Jun 4, 2020

64357_rns_2020-06-04_b1e8f01d-d115-46a8-803e-1a827f6531d6.pdf

Investor Presentation

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ASX Release 5 June 2020

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ASX CODE: AL3

CAPITAL STRUCTURE

Share Price $0.16 Shares on Issue 132m Market Capitalisation $21m

AML3D INVESTOR PRESENTATION

AML3D Limited (ASX: AL3) (“AML3D” or “the Company”) is pleased to provide an updated investor presentation.

MAJOR SHAREHOLDERS

Andrew Sales 30.0% Perennial Value Mgmt 9.2% Global Asset Solutions 5.3%

Christine Manuel Company Secretary

BOARD & MANAGEMENT

Stephen Gerlach AM Non-Executive Chairman

Andrew Sales

Managing Director

This announcement has been authorised for release by the Board of AML3D.

Sean Ebert

Executive Director

Kevin Reid

For further information, please contact:

Non-Executive Director

Len Piro Non-Executive Director

Christine Manuel Company Secretary

CONTACT

T: +61 8 8258 2658 E: [email protected]

Andrew Sales

Duncan Gordon

Managing Director Executive Director AML3D Limited Adelaide Equity Partners T: +61 8 8258 2658 T: +61 404 006 444 E: [email protected] E: [email protected]

Simon Hinsley Director NWR Communications T: +61(0) 401 809 653

  • E: [email protected]

  • W: www.aml3d.com

  • A: 12-14 Pentland Road Salisbury South SA 5016

  • P: PO BOX 4101 Tranmere SA 5073

About AML3D Limited

AML3D Limited is an Australian public company incorporated on 14 November 2014 and currently operates out of its Adelaide Manufacturing Centre. The Company specialises in providing commercial large-scale “Additive Metal Layering” 3D printing services to Defence, Maritime, Automotive and Resources customers. The Company has commercialised its technology under the trademark WAM® and proprietary software WAMSoft® which combines metallurgical science and engineering design to fully automate the 3D printing process utilising advanced robotics technology.

ABN: 55 602 857 983

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ASX : AL3

INVESTOR PRESENTATION & CORPORATE UPDATE

JUNE 2020

DISCLAIMER

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  • AML3D Limited (“AML3D” or “the Company”) does not take responsibility for any information, statement or representation contained in this presentation or any omission from it. AML3D has not carried out an audit or verified any of the information contained herein. Any projections and forecasts contained in this presentation represent best estimates only and involve significant elements of subjective judgement and analysis which may or may not be accurate. No representation or warranty is given as to the achievement or reasonableness of any plans, future projections, management targets, prospects or returns and nothing in this presentation is or should be relied upon as a promise or representation as to the future.

  • AML3D disclaim all liability for any loss or damage of whatsoever kind (whether foreseeable or not) which may arise from any person acting on any information and opinions contained in this presentation, notwithstanding negligence, default or lack of care. No responsibility is accepted to inform the recipient of this presentation of any matter arising or coming to AML3D’s notice in relation to this opportunity. In providing this presentation, no obligation is undertaken to provide the recipient with access to any additional information.

  • The recipient should not rely on any material contained in this presentation as a statement or representation of fact. No recipient should expect AML3D to owe it any duties or responsibilities in connection with any transaction. To the maximum extent permitted by law, AML3D expressly disclaim any and all liability (including without limitation for negligence) for representations or warranties or in relation to the accuracy or completeness of the information, statements, opinions or matters - expressed or implied, contained in, arising out of, derived from or for omissions from this presentation or any other written or oral communications transmitted or made available including, without limitation, any historical financial information, any estimates or projections and any other financial information derived therefrom. This presentation is not and does not constitute an offer to sell or the solicitation, invitation or recommendation to purchase any securities and neither this presentation nor anything contained in it forms the basis of any contract or commitment.

JUNE 2020

1

CORPORATE SNAPSHOT

CORPORATE SNAPSHOT – 02.06.2020 CORPORATE SNAPSHOT – 02.06.2020
ASX Code ASX:AL3
Share Price $0.17
Shares on Issue 132.4m
Options on Issue 17.1m
Market Capitalisation A$22.5m
Cash c.A$9.0m
Enterprise Value c.A$13.5m

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REGISTER BREAKDOWN
30% Board & Management
40%
Institutional
Retail
30%
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BOARD OF DIRECTORS

Stephen Gerlach AM
Non-Executive
Chairman
Stephen is
an experienced corporate professional.
He was
formerly the Chairman of Santos Ltd, Elders Ltd, Equatorial Mining
Ltd, Challenger Listed Investments, AMDEL Ltd and Penrice Ltd
Andrew Sales
Managing Director
Andrew
Sales
is
a Chartered Engineer
with a Masters
of
Engineering and Masters of Science and is a renowned expert in
welding technology with over 27 years of global experience in
varying senior leadership roles. Andrew is a Standards Australia
committee member for Additive Manufacturing / 3D printing
Sean Ebert
Executive Director
Sean has 25 years of executive experience. He was previously the
CEO of Beston Pacific Asset Management, Camms Pty Ltd, Profit
Impact Pty Ltd and Global Director, M&A at Worley Parsons
Kevin Reid
Non-Executive
Director
Kevin is a Chartered Accountant with 24 years’ experience as a
partner with PwC and BDO.
Kevin is currently a Non-Executive
Director for a range of businesses and not for-profit entities
Leonard Piro
Non-Executive
Director
Len is the former Deputy Chief Exec. of the SA - Department of
Trade
and
Economic
Development,
Exec.
Director
of
Manufacturing
and
Chief
Exec.
of
the
Automotive Industry
Transformation Taskforce. Len has had exposure to manufacturing
trends and strategies in Europe and the US
Christine Manuel
Company Secretary
Christine is an experienced Company Secretary and corporate
governance professional. Christine was formerly Company Sec. of
Santos Group companies and People’s Choice Credit Union and is
currently Company Sec. of ASX listed Angel Seafood Holdings Ltd

JUNE 2020

2

INVESTMENT HIGHLIGHTS

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Commercialisation Commenced

Contracts executed across various sectors and a growing late stage opportunity pipeline. Customers include multiple global conglomerates

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Globally Certified

First wire feedstock additive manufacturing facility globally to receive qualification from Lloyds Register. In 2018, AML3D became ISO 9001 certified. Accreditation provides direct exposure to commercial opportunities

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Strategic Manufacturing Facilities

Facility established in Adelaide houses ‘state of the art’ robotic production cells. Second facility to be established in Singapore to fulfil growing demand from Asia

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Highly Experienced Board and Management AML3D employs industry specialists that have demonstrated their ability to execute contracts with multi-national companies

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Capitalised for Growth

Strong cash position combined with a lean operating structure positions AML3D well to service strong domestic and international customer interest

Highly Disruptive Technology

WAM® disrupts ‘subtractive’ metal technologies including casting, forging and machining. Provides up to 70% cost savings, 75% increase in manufacturing speed and 80% reduction in waste

Developed proprietary software, WAMSoft®

The software enables a highly tailored approach to the needs of each client by enabling different pathways and welding operations for different products and materials

Enormous Market Opportunity

Additive Manufacturing Industry is currently valued over US$10bn and is expected to grow to US$35.6bn by 2024

JUNE 2020

3

CORPORATE TIMELINE

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June 2017 02 August 2018
Awarded a $495,000 AML3D’s Adelaide Contract
Commonwealth Manufacturing Centre received
qualification from Lloyds Register
Government Accelerating
International
Commercialisation Grant
Executed contract with major
Shipbuilder
14 November 2014 10 July 2017
AML3D incorporated Established initial
operations in Adelaide 2 June 2020
December 2019 16 April 2020
Printed 1.4 tonne Delivered first
Undertook c.A$2m Admission to ASX
Panama Chock for ARCEMY® module
seed raise official list
Shipbuilder to ST Engineering
February 2019 February 2020
Executed ARCEMY® 24 April 2020
Established a Singaporean Undertook IPO,
‘Rent to Buy’ contract AML3D WAM® steel
wholly owned subsidiary, AML raising A$9m
with ST Engineering products tested stronger
Technologies (Asia) Pte Ltd
than forged equivalents
March 2018
Completed first commercially
January 2018 funded contract – printing a
Commissioned first part for defense application
commercial 3D printing on jet engine trials
machine at the Adelaide
Contract Manufacturing
Centre
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JUNE 2020

4

MARKET OUTLOOK

Additive Manufacturing Market Outlook

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40
35
30
25
20
15
10
5
0
1993 1999 2005 2011 2017 2023
Market Size (US$ Billions)
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The highly disruptive additive manufacturing market is estimated to grow at a CAGR of 17.7% during the forecast period 2019 – 2027

  • Additive manufacturing market grew to US$1 billion over the first 20 years then doubled over the next 5 years

  • Current market size is estimated to be >US$10 billion

  • Significant growth to continue as major industry participants adopt newly innovated technologies

  • Market estimated to reach US$35.6 billion by 2024

  • COVID-19 further highlights the need for high-quality, cost effective advanced manufacturing solutions that are not reliant on long lead supply chains from overseas

Figures and forecasts from Terry Walters et al, Wolhers Report 2019 (Wohlers Associates, 24th ed, 2019)

JUNE 2020

5

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WHAT IS WAM®?

WIRE ADDITIVE MANUFACTURING (WAM®)

  • Brings together welding science, metallurgy, CAD software design and robotics technology

  • Builds objects via welding sequential layers of metal

  • Disrupts ‘subtractive’ metal technologies such as casting, forging and machining, providing cost-effective production of large, high performance metal components and structures or complex items

The integration of metallurgy, WAM ® and proprietary software WAMSoft® with welding robotics enables AML3D to overcome traditional manufacturing constraints and leverage on additive manufacturing efficiencies

JUNE 2020

6

WAM® ADVANTAGES

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CERTIFIED ▪STRONGER ▪FASTER ▪RESOURCE EFFICIENT ▪ SUSTAINABLE

WAM® VS. TYPICAL SUBTRACTIVE TECH:

  • Globally certified by Lloyd’s Register

  • Stronger than cast or forged parts

  • Faster customisation without tooling investments

  • Resource – efficient with part consolidation to save weight, time and logistics costs

  • Sustainable generating 80% less material waste

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WAM® VS. POWDER ADDITIVE TECH:

  • Certified AM process

  • Stronger / less

  • porosity

  • Faster builds

  • Resource-efficient

  • Sustainable, less

  • material waste

JUNE 2020

7

WAM® VS. TRADITIONAL FABRICATION

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TRADITIONAL METAL FABRICATION PROCESS

Large production, warehouse and logistics footprint

Raw materials Roll into rod, tube, Cut, sawed Hammered Assembled, welded,
melted in a furnace sheet or ingot and sheared and bent glued and/or riveted
CONSIDERABLE
INEFFICIENCIES
AND COSTS
SUBSTANTIAL
ORDER LEAD
TIME INVOLVED
CONSIDERABLE
ENERGY
RESOURCES
WASTED
MATERIAL
LABOUR AND
TIME INTENSIVE TO
CONSTRUCT

VS.

WAM® PROCESS

Part consolidation = smaller warehouse and logistics footprint.

Low cost, highly Local feedstock – 80% less Certified Energy efficient with few not dependent on material waste and patented efficient process steps overseas supply with near net shape process

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JUNE 2020

8

CERTIFICATIONS

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LLOYD’S REGISTER

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  • Maritime classification society established in 1760

  • Consists of engineers and technical experts dedicated to assurance

  • One of the world’s leading providers of professional services for engineering and technology

  • An industry body introducing new technologies directly to commercial partners

  • In 2018, AML3D became the first wire arc manufacturing facility globally to receive an “Additive Manufacturing Facility Qualification” from Lloyds Register

  • Certification by Lloyd’s Register not only provides validation to AML3D’s technology but also provides direct exposure to commercial opportunities

CERTIFIED SYSTEM

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  • In 2018, AML3D became ISO 9001 compliant

  • ISO accreditation validates AML3D’s technology in the highest order for this sector and allows it to engage commercially within the Aerospace industry

AMERICAN WELDING SOCIETY

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 AML3D complies with the globally accepted American Welding  In compliance with this standard, AML3D issues Society Standard that articulates specifications for fabrication of certificates of compliance to its customers in metal components using additive manufacturing relation to manufactured parts

JUNE 2020

9

9

WAM® TESTING RESULTS

‘WAM®’ COMPONENTS STRONGER THAN FORGED EQUIVALENTS

  • Independent testing found WAM ® printed high strength steel presents:

  • c.30% higher ultimate tensile strength (UTS) than the applicable global standard; and

  • c. 10% higher UTS than the same steel components made using conventional forging techniques

  • Testing was driven by inbound interest with results provided to existing and new potential customers

  • Demonstrates ‘ready for market’ nature of AML3D’s technology

  • Results highlight AML3D’s ability to disrupt conventional manufacturing within the global and domestic defence, resources and automotive sectors

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UTS: 1101 Mpa
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ASME II A5.28 Standard
c.30% ↑ UTS : 850 MPa
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WAM Forged
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For more information, see ASX release “WAM PRINTED STEEL PRODUCT TESTING” published on 24 April 2020.

JUNE 2020

10

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ARCEMY ® METAL 3D PRINTERS AML3D provides certified, portable systems integrated with WAM®, welding robotics and patented software, WAMSoft®, to print complex metal products more efficiently. Available for sale or lease in small, standard and large sizes with single or multi robots to suit customer productivity needs

11

CUSTOMER JOURNEY

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Repeat sales with contract manufacturing at AML3D contract manufacturing centres

  1. Contract manufacturing $ stream : direct to customer on AML3D approved vendor list

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4. Consumables $ revenue : AML3D
certified wire and ancillaries direct to
customer and via distributors
Agreed scope CAD design Prototype Customer Product
+ Purchase optimised for manufacture + evaluation + certification
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Agreed scope CAD design Prototype Customer Product + Purchase optimised for manufacture + evaluation + certification order WAM Internal testing testing

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2. Arcemy® printers $ stream : direct to customer on AML3D approved vendor list
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  1. Licensing, service, maintenance $ stream : direct to customer and via global distributors

Purchase ARCEMY® printer, AML3D provides training + support, sells consumables and software upgrades to scale production

12

JUNE 2020

TARGET MARKETS

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MARINE AERO & DEFENCE GENERAL MANUFACTURING MINING, OIL & GAS
Housings
Propellers
Shafts
Bulkhead structures
Galley and bearing
components
Valve part
Short-term replacement items
Pump castings
Seat frames
Cabin frames
Shields
Connectors
Brackets
Cargo frame structures
Bulkheads and support frames
Machine tool dies
Rail rolling stock
Wheels and wear components
Pump castings and impellors
Shafts and valves
Food machinery components
Agricultural equipment parts
Mining hardware
Valves and connectors
In-situ repairs
Replacement cast and forged
components for underground /
drilling equipment

JUNE 2020

13

WAM® INDUSTRY APPLICATIONS

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Lighter & stronger marine
components
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Oil & Gas Industry

Corrosion resistance

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High temp & aggressive environments

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Reduced buy-to-fly
ratio
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Defence

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High strength and wear resistance

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Near net shape versus billet

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JUNE 2020

14

BUSINESS MODEL

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LICENSING, SERVICE & CONTRACT MANUFACTURING ARCEMY ® SALES CONSUMABLES SUPPLY MAINTENANCE OPTIMISATION

  • Fee for Service manufacturing  Ongoing annual service fee,  Mobile 3D Printing Modules  Key agreements with major for customers including training, software available for sale global producers for wire feed

    • updates and staffing  stock Significant markets Targeting High demand from Marine, Singapore (Asia) first  Optimisation services to Mining and Oil & Gas industries  Consumable wire feed stock
  • continually improve the quality to have capability in-house provides ancillary revenue Design optimisation service for of the welding technology  stream

  • WAM® Additive Manufacturing Services remote locations

  • generating significant cost and Customised production of time savings

  • specialist parts saving time and money MODEL TO MARKET MODEL TO MARKET MODEL TO MARKET MODEL TO MARKET Module sales via appointed

  • Direct to customer via AML3D on Long term support contracts post Direct to customer and indirect global distributors, 2 appointed to

  • Approved Vendor list sale of ARCEMY® units through distributors date

✓ AML3D HAS A COMPLEMENTARY, MULTIPLE REVENUE STREAM BUSINESS MODEL

Where customers look to establish in-house 3D print capability, the ARCEMY® solution provides the technical solution together with structured service and support. For customers requiring a cost effective contract manufacturing service with short lead times, the bureau model provides an efficient service with a centre in Australia and another to be established in Singapore.

JUNE 2020

15

CASE STUDY 1: DEFENCE INDUSTRY

ADVANCED DEFENCE COMPONENTS

  • Ongoing discussions with prominent manufacturers in the defence industry

  • Performance testing on custom WAM® printed components taking place following excellent testing results with high strength steel

  • WAM® possesses the ability to rapidly produce variable components, a function not possible by traditional subtractive techniques (forging, casting)

  • WAM® produced components have the potential to provide enhanced strength and reduced weight, resulting in the highest degree of performance

ABOUT THE CUSTOMER

  • Potential customers are developers and manufacturers of defence solutions with facilites in Australia and overseas

  • Commercialisation may result in significant contract manufacturing revenues for AML3D

INVESTOR PRESENTATION

16 16

MAY 2020 JUNE 2020

CASE STUDY 2: INDUSTRIAL PUMPS

MARTENSITIC STAINLESS-STEEL PUMP WEAR RINGS

  • US Industrial Pump Manufacturer required a faster and more sustainable method of manufacturing critical components to their equipment:  Martensitic stainless steel has a 6-month lead time for billet orders and is difficult to machine due to its strength

  • AML3D printed the large pump wear rings in 6 hours using WAM®

  • c.80% material waste was saved versus traditional subtractive manufacturing methods

MARTENSITIC STAINLESS STEEL (400 SERIES)

  • Comprises c.30% of US$111.4bn global stainless-steel market

  • Commonly used in oil & gas, power, chemical, marine and automotive industries

  • Presents significant future commercialisation opportunity for AML3D

ABOUT THE CUSTOMER

  • Operating in 56 countries, this US Industrial Pump Manufacturer produces industrial pumps, seals, valves and operating systems. FY19 revenue of c.US$4.0bn

MAY 2020 INVESTOR PRESENTATION JUNE 2020

17 17

CASE STUDY 3: TRANSPORT/LOGISTICS

RAIL PISTON DELIVERED TO SPARE PARTS SUPPLY CHAIN

  • Global spare parts group selected AML3D to manufacture rail components that are not longer being produced due to:

  • original manufacturers no longer in business; and/or

  • rail components are obsolete and no longer produced

  • Rail companies have difficulty sourcing spare parts due to a assets long-life cycle, sometimes waiting up to two years

  • WAM® printed piston is one continuous complex part, eliminating weak spots and providing superior strength

ABOUT THE CUSTOMER

  • Customer is a global supplier of 3D printed spare parts across various industries

  • AML3D identified as a potential partner to satisfy manufacturing requirements of spare parts for various applications and industries

  • New route to market for AML3D that presents an exciting opportunity

INVESTOR PRESENTATION

MAY 2020 JUNE 2020

18 18

CASE STUDY 4: CRITICAL WEAR COMPONENTS

CRITICAL COMPONENTS DELIVERED TO MULTINATIONAL CONGLOMERATE

  • Multinational conglomerate has engaged AML3D to produce custom critical components

  • Components produced as capability prototype pieces for operational assessment

  • Testing to commence post delivery (mid-June)

  • Program may be expanded to include a wide scope of custom components upon successful results

ABOUT THE CUSTOMER

  • EU based multinational with FY19 revenues of >€42bn

  • One of the worlds largest steel producers

  • Hosts numerous subsidiaries focused on industrial engineering across sectors currently targeted by AML3D

INVESTOR PRESENTATION

MAY 2020 JUNE 2020

19 19

FIRST ARCEMY® MODULE DELIVERED

AML3D INITIATES SINGAPOREAN OPERATIONS

  • First ARCEMY® module delivered to ST Engineering under a “rent to buy” agreement

  • AML3D retains the right to use 50% of the ARCEMY® module’s capacity through the ‘rent’ period

  • Access to the module is of great benefit to AML3D, providing the capability to manufacture components for customers throughout Asia before the establishment of its planned Singapore facility.

ST ENGINEERING – A SUBSTANTIAL PARTNER

  • ST Engineering is one of Asia’s leading defence and engineering groups, providing AML3D with a strong foundation to establish and grow operations within the region

INVESTOR PRESENTATION

MAY 2020 JUNE 2020

20 20

ARCEMY® MODULE SALES PIPELINE

AML3D IS BUILDING ITS ARCEMY ® MODULE SALES PIPELINE

CUSTOMER STATUS
ST Engineering
First module delivered under ‘rent to
buy’ agreement

Expected to buy module in Dec 2020

Potential for additional module sales
Defence Group 1
Entered discussions early 2020

Global group - Automotive

Quote issued for 1 module
Defence Group 2
Entered discussions in May 2020

Customer based in EU/Middle East

Quote issued for 1 module
University
Entered discussions in May 2020

Quote issued for 1 module

MAY 2020 INVESTOR PRESENTATION JUNE 2020

21 21

KEY GROWTH OBJECTIVES

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PHASE 1 PHASE 2 PHASE 3 2018/2019 2020 2021 - - COMPLETED

  • Manufacturing facilities offering services to  Expand Australian 3D printing Bureau  Commission office in Singapore to supply global and domestic market key Marine markets  Establish sales of ARCEMY® units via

  • –  ISO9001 & Lloyd’s Register certification appointed distributors Scale ARCEMY® 3D Printer sales via Secured distribution arrangements  Secure long term service and support

  • Completed design of ARCEMY® modular contracts for ARCEMY® units  Identify integrated strategic partner to scale 3D printing solution up the bureau business  Convert prototype projects with Marine,

  • Secured order with Singapore customer Defence, Oil and Gas and other  Further extend AML3D’s bureau via and prototype contracts with Tier 1 industries into regular orders franchise or JV arrangements in Asia aerospace firm  Further increase capacity via additional  Maximise margin growth from long term service and support agreements

  • 3D printing equipment

  • Commission office in Singapore to supply key Marine markets

JUNE 2020

22

FACILITIES

AUSTRALIAN FACILITY (ADELAIDE)

AML3D is relocating to a newly leased facility to accommodate planned growth and consolidate manufacturing operations:

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SINGAPORE FACILITY (TO BE ESTABLISHED)

AML3D to establish a Singapore contract manufacturing centre in order to provide a rapid response to growing customers base located within the Asia-Pacific region.

  • Commenced relocation to Edinburgh in June 2020

  • Approximately 100m[2] of office space

  • Approximately 1,250m[2] Warehouse & Manufacturing

  • Benefits of Adelaide operations:

  • central location to service Australian customers

  • commercial property in Adelaide is affordable

  • skilled and affordable labour

  • Once a lease is finalised the Company anticipates the facility will be commissioned within six months.

  • In the event COVID-19 delays the leasing process the Company will seek to meet capacity demands for contract manufacturing in Singapore by utilising:

    • the ST Engineering ARCEMY® unit as a demonstration model
  • capacity at the expanded Adelaide Contract Manufacturing Centre

JUNE 2020

23

INVESTMENT SUMMARY

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INVESTMENT SUMMARY

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AML3D is the first wire arc manufacturing facility globally to receive an “Additive Manufacturing Facility Qualification” from Lloyds Register

Focused on servicing Tier 1 Marine, Defence, Aerospace and general manufacturing industries

Proceeds of IPO (A$9M) to deliver sustainable revenue growth and underlying earnings

Focus on leveraging opportunities out of manufacturing facilities and product sales model

STRATEGIC GOALS

  • Establish underlying earnings model from sales and licensing

  • Accelerate sales of ARCEMY™ small scale prototyping units to customers

  • Capitalise on Tier 1 Singapore/Asian Customers

  • Improve margins through being closer to end customer

JUNE 2020

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THANKYOU

CONTACT: Andrew Sales Managing Director AML3D Limited T: +61 8 8258 2658 E: [email protected]

INVESTOR PRESENTATION & CORPORATE UPDATE JUNE 2020

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