In the following video, 3D printing specialist Steve Heller reports from the floor of EuroMold 2014, the world's largest 3D printing conference held in Frankfurt, Germany, last month, and uncovered that Germany-based EOS is the No. 1 metal 3D printing company in terms of installed base and units shipped. During its fiscal year ended in September, EOS shipped approximately 150 metal 3D printers.
These data points are particularly notable for 3D Systems (NYSE:DDD) investors, because 3D Systems has placed a major strategic emphasis on metal 3D printing in recent years, but despite its efforts to expand its portfolio and manufacturing capacity, it lags behind EOS. In the coming years, EOS intends to introduce a four-laser system that could potentially make 3D Systems' upcoming large-format, dual-laser ProX 400 metal 3D printer not as compelling a product for large-scale metal part production.
Going forward, 3D Systems investors should continue monitoring EOS' future product announcements to determine if they could have a material impact on 3D Systems' metal 3D printing portfolio.
A full transcript follows the video.
Editor's note: During the segment, Steve mistakenly refers to 3D Systems' newest metal 3D printer, the ProX 400, as the "ProX 4000." It has been corrected in the transcript.
Steve Heller: Steve Heller here. We're wrapping up day one of EuroMold. I'm currently in front of the EOS booth. EOS is a German 3D printing company, earlier today got done with a press event -- the biggest takeaway from that event is that EOS is No. 1 in metals.
That means that, the competitive landscape being what it is -- 3D Systems being also a big metal player, they're emphasizing metal, they just introduced the ProX 400 which is the largest industrial-scale direct-manufacturing metal 3D printer [coming] on the market; it's huge -- but still we've got some really interesting insights and takeaways from EOS.
I spoke with Dr. Hans Langer. He is the CEO, and he explained to me [about] micro selective laser sintering technology, which is able to build metal parts layer by layer, one micron in thickness, which is an incredible resolution. I'll post some pictures for you guys to see. It's unbelievable.
In terms of EOS and how they're No. 1, let's talk about their revenues here. Revenue increased 36% year over year, to 177 million euros for their fiscal year, which ended in September. They sold approximately 300 machines, split 50/50 between its plastic and nylon, and metal 3D printers.
The company's been around for 25 years, but they have an installed base of 1,500 printers worldwide. Of that, about 60% currently are plastics, 40% are metals. They believe in the future that scale is going to tip more in favor of metals because they're No. 1 in metals.
Why are they number one in metals? It's because they have a huge focus on quality. During the press event an analyst asked a question: "What makes your product different than, say, 3D Systems?" The answer was simple: They just focus on quality.
They've been in business for 25 years. They've been doing it the longest. Maybe they don't release a product every year, but instead they release products that are really great, and that have continuity.
What that means is, let's say you buy a previous-generation metal 3D printer from EOS. The new generation is going to work exactly the same as the old, so you have no learning curve, and your parts are going to be uniform between the two products. If you're doing a direct manufacturing run on two different systems, basically you're going to be able to know that your parts are consistent between both of them.
Next year, in terms of going forward with EOS, I think this is really interesting. They're having a four-laser system coming out next year. 3D Systems' new ProX 400, which is that massive 3D printer I talked about earlier, has a dual-laser system, so this four-laser system is actually going to increase throughput.
When you increase throughput, what it allows you to do is two things. First, it lowers cost of operation. Second, it allows you to iterate more quickly so you can reach deadlines, have more product iterations, which means fundamentally better products at the end of the day. A fourfold increase in throughput from EOS will be a significant development for the 3D printing world.
With General Electric ramping up their commitment to 3D printing and additive manufacturing with their [3D-printed jet engine] fuel nozzles that are taking to the sky in coming years, this printer will probably be something that General Electric will be looking closely at. EOS wouldn't comment on specifics, but they said that GE has made an initial commitment with EOS. That's all that we know for now.
In terms of the overall drivers of demand for EOS, the biggest [driver is that] the original equipment manufacturers are looking for part production. It's a huge focus for EOS, and that's really what's going to be driving their business going forward. That's why they believe that they're going to continue to stay No. 1 in metals.
Again, they cannot emphasize enough: quality is first. That's really their guiding force. That's their North Star. All in all, I would say I'm pretty impressed with what EOS had to bring.
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Steve Heller owns shares of 3D Systems. The Motley Fool recommends 3D Systems and Apple. The Motley Fool owns shares of 3D Systems, Apple, and General Electric Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.