Christopher O'Dea Bronze Age 2.0

THE BRONZE AGE 2.0Rationalizing the 3D UniversePolicy, Context and Strategy

in an Emerging Industrial Sector

Christopher R. O’DeaInside 3D Printing, April 23, 2013

Photo: “Molten Bronze in DMSE Foundry“ Massachusetts Institute of Technology, School of Engineering, Department of Materials Science and Engineering

O'Dea & Associates 2

Industrial Opportunity Driving Rationalization

• Companies:• Ex One• Arcam• ProtoLabs

• Information providers/analysts• Lux Capital• MIT Technology Review


The Digital Blacksmith


3D and Industrial Manufacturing

…”A key cause of death”

Daniel Holland, Morningstar

In Investors Business Daily online, February 7, 2013


Fundamental Questions• Why Metal?• Industrial or Consumer?• Complement or Substitute?• Material or Machine?• Customer Service or Customer Capture?• Innovation or Disruption?• Can National Policy Influence Global Trends?


How Investors Look at Opportunity• It has to be a business

• End-user clearly defined• Value proposition defined and sustainable• Revenue and profit models clear

• Excitement is expected – hype is a red flag• Core requirements:

• Addressable markets:• Industrials• Professionals• Consumers

• Company offerings:• Printers• Services• Materials


Downstream from Technology


Business Model Innovation


XONE Spotlights Metal• Shines the spotlight on industrial metals• Increases transparency and focus in AM sector• Manufacturing/OEM base: Ford, Boeing, BMW, Cat• EXMAL

• Leading edge materials lab• Certify one new material every six months/ 9-24 mo. pipeline• 12 industrial materials in process

• Delivery system:• M-Flex machine; unveiled at IMTS 2012 Chicago• Industrial-grade metal/ceramics; 10X speed increase

• Increasing PSC from 4Q goal; 45% of revenue


Arcam’s Leg Up – Titanium Hips

Business

• Access medical contract manufacturing expertise:• Feb. 2013 alliance• Option to acquire DiSanto

• 2012 MDF, Oak Ridge• Application development• Aerospace exclusives• Fraunhofer Dresden• Tapping US markets:

• OMTEC Chicago, June 2013

Science

• Fully-dense metal• Electron beams vs. Laser• Orthopedic implants• 30,000+ implanted• EU 2007, USA 2010• Serves Ortho and Spinal

implant clients• Validated powder supply chains• Powder handling/safety


Why is this man not smiling?

Manufacturer: 3D printers

Founded: 1997

CEO: Magnus René

Headquarters: Mölndal

Number of employees: 53

Turnover: 139 million (2012)

Profit: 15 million (2012)

Largest single shareholder: Industrial Development Fund, owns 25 percent

(Data & Photo: it24.idg.se)

“Duktiga människor och uthållighet”


Engineering Tool-Neutral Value

BDTG.DE Bertrandt

• Digital engineering unit• Strong Auto and Aero• Breaks out 3D printing• Near 30% ROE• 30% institutional owned• Increasing institutional base:

• Net new holders• Net increased positions

PRLB Proto Labs

• Machined and IM parts• $80 billion global market

• Can 3D players challenge?

• Big Market: 3 mil. CAD• 30% Revenue, 50% ROIC,

60% GM• Speed thru Software• Tool Neutral• Brand power:

• Integrated, reliable service• Speed, pricing, convenience


Consumers: “Odds are against You”• Will consumers care that products are made by 3D printing?

• Most will not• People care about good value• People care that the product performs as advertised

• Will consumers really print a refrigerator handle?

“Even if you have a 3D printer at home, it will not offer the right material, color, surface finish, texture, strength properties, and build volume to meet your needs.”

• More likely outcome: service bureaus, online outlets

• Other issues:• Lack of user-friendly design software• Increasing competition• Potential commoditization

Terry Wohlers, Seeking Alpha, February 26, 2013/Morningstar


Policy Drivers - EU• Additive Manufacturing Alliance integrates the research of

Germany's 11 scientific and engineering institutes• Engineering, materials, technology and quality

• Industrial applications and projects• Focus Industries:

• Automotive, aerospace, bio-medicine and microsystems.

• National and international research projects• The Alliance in Action:


Policy Drivers - US• NAMII – can the U.S. catch up?

• POTUS highlighted AM in State of the Union

• NAMII Progress• First Project Call in November; Defense Manufacturing Conference• $4.5 million awarded to initial 7 projects across AM spectrum;

winners responsible for $5 million matching funds.• Still a “pilot” for Manufacturing Institute Network; short-term focus

on market impact within several months.

• NCDMM• Driving NAMII, blueprinting the Institutes with defense focus?


“AAM” – A New Industrial Sector• Auto

• Aero• Medical

• Combined $8.4 billion by 2025 (Lux Capital projection) tracks Wohlers forecast of $6.5 billion by 2019.

• Dental revolution rolling along• Surgical applications increasing

• Organ research underway• Lighter, stronger materials – cabins, airframes, seating


3D Market Segmentation


What’s Ahead? Creative Disruption

• Production in 12 plants in 8 countries

• Sales in 83 countries• Net sales MSEK 7,081

(2011)• >110 employees

dedicated to R&D• 700 patents

• Output devices• Technology platform• Knowledge network• DirectSpare links to EU• Leverage powder lead• Expand offering/service


Creative Disruption• Sweden’s industrial elite shake up AM

• Höganäs - fcubic deal reverses the “razor blades” play

• Powder maker’s challenge to 3D machines raises stakes

• Lindengruppen bid creates strategic threat in metals

• Private capital funds long-term approach and R&D


Scandinavian Designs

THANK YOU

Christopher O'Dea Bronze Age 2.0

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