Other operating income was kEUR 345 for the fourth quarter of 2020 compared to kEUR 675 in the fourth quarter of 2019. The decrease was mainly due to lower gains from foreign currency transactions, amounting to kEUR 360 compared to kEUR 567 in the last year’s fourth quarter.

The changes in foreign currency losses and gains were primarily driven by the valuation of the intercompany loans granted by the parent company to our UK and US subsidiaries.

Operating loss was kEUR 2,674 in the fourth quarter of 2020, compared to an operating loss of kEUR 3,247 in the comparative period in 2019. The improvement was mainly due to lower operating expenses in the functions sales and marketing, administration and research and development for the fourth quarter of 2020 compared to the fourth quarter of 2019. This was partially offset by a negative net impact of the quarter over quarter changes in other operating expenses and other operating income amounting to kEUR 648. Gross profit remained almost unchanged.

Financial result was negative kEUR 1,286 in the fourth quarter of 2020, compared to a negative financial result of kEUR 544 in the comparative period in 2019. This was mainly related to higher finance expenses related to the revaluation of derivative financial instruments, amounting to kEUR 807 in the fourth quarter of 2020, compared to a finance expense of kEUR 238 in the last year’s same period. The derivative financial instruments are related to a Performance Participation Interest (PPI) for the first and second tranche of the loan granted by the European Investment Bank (“EIB”) and are revalued on each balance sheet date, with changes in the fair value between reporting periods recorded within financial result of the consolidated statements of comprehensive loss. An increase in our share price results in a finance expense, while a decrease leads to a finance income. In addition, interest expense included interest from long term debt amounting to kEUR 508 for the fourth quarter of 2020, compared to kEUR 248 in the comparative period in 2019.

Net loss for the fourth quarter of 2020 was kEUR 3,722 or EUR 0.77 per share, as compared to net loss of kEUR 3,707, or EUR 0.77 per share, in the fourth quarter of 2019.

Effective August 14, 2020, we changed the ratio of our American Depositary Shares (“ADSs”) to ordinary shares from each ADS representing one-fifth (1/5) of one ordinary share (5:1) to each ADS representing one ordinary share (1:1). Based on a conversion rate of one ADSs per ordinary share, net loss was at EUR 0.77 per ADS for the fourth quarter of 2020, compared to a net loss of EUR 0.15 per ADS for the fourth quarter of 2019, based on a conversion rate of five ADSs per ordinary share. Earnings per share is computed by dividing net income attributable to stockholders of the parent by the weighted-average number of ordinary shares outstanding during the periods. Earnings per ADS is calculated by dividing the above earnings per share by one (before August 14, 2020: five) as each ordinary share represents one (before August 14, 2020: five) ADS(s).

Year Ended December 31, 2020 Results

Revenues for the year ended December 31, 2020 decreased by 12.3% to kEUR 21,567 compared to kEUR 24,602 in the prior year period.

Systems revenues were kEUR 12,556 for the year ended December 31, 2020 compared to kEUR 13,454 in last year’s period. The Company sold eight new and five used and refurbished 3D printers during the year ended December 31, 2020 compared to thirteen new and six used and refurbished 3D printers in the prior year period. Revenue from the sale of 3D printers slightly decreased in 2020 compared to last year, due to the lower number of transactions. As we overall sold a higher number of larger-scale printers in 2020 compared to 2019, which generate higher revenues, we recorded merely a slight decline in revenues from the sale of 3D printers. Systems revenues also include all Systems-related revenues from consumables, spare parts and maintenance. Those Systems-related revenues perceptibly decreased year over year, also significantly impacted by the COVID-19 situation, as the performance of service visits was limited in many regions of the world, which made it impossible to fulfill our maintenance schedule. Further, we experienced lower demand for consumables and spare parts in 2020, as our clients have reduced their production activities, especially in the second quarter of 2020. All those matters led to the decrease in Systems-related revenues. In the third quarter of 2020, demand for consumables and spare parts substantially recovered compared to the prior two quarters in 2020. This positive trend continued in the fourth quarter of 2020. Systems revenues represented 58.2% of total revenue for the year ended December 31, 2020 compared to 54.7% for the last year’s same period.

Services revenues were kEUR 9,011 for the year ended December 31, 2020 compared to kEUR 11,148 for the same period last year. This decrease was mainly due to a significant decrease in revenue contribution from our subsidiary voxeljet America, reflecting the slow-down of the economy related to the COVID-19 situation accompanied by a sharp drop in market demand from our clients in North America. Revenue contribution from our subsidiary voxeljet UK significantly decreased. This was related to the close down of our service center in the United Kingdom in the fourth quarter of 2019 in the course of our restructuring, which started in the third quarter of 2019. Also, revenue contribution from our service center in China slightly declined due to the subdued economy related to COVID-19. The German operation recorded slightly higher revenues from the Services segment in 2020 compared to 2019. After a weak start into fiscal year 2020 with the bottom in the second quarter, we saw a considerable market recovery from the second half of 2020 onwards including catch-up effects in the fourth quarter of 2020.

Cost of sales for the year ended December 31, 2020 was kEUR 14,812, which represents a decrease of kEUR 2,614 compared to cost of sales amounting to kEUR 17,426 for the same period in 2019.

Gross profit and gross margin for the year ended December 31, 2020 were kEUR 6,755 and 31.3%, respectively, compared to kEUR 7,176 and 29.2%, respectively, in the prior year period.

Gross profit for our Systems segment increased to kEUR 4,441 for the year ended December 31, 2020 from kEUR 4,284 in the same period of 2019. The gross profit margin for this segment slightly increased to 35.4% compared to 31.8% for the prior period. This was due to higher gross profit and gross profit margin from Systems-related goods and services, including consumables, spare parts and maintenance, reflecting cost savings from the restructuring measures, which have been implemented at the end of 2019. In contrast to this, gross profit and gross profit margin from the sale of 3D printers slightly decreased in 2020, compared to last year. In the fourth quarter of 2019 we recorded a provision for restructuring charges related to the restructuring program at the German operation resulting in a negative impact of kEUR 242. This provision has fully been used within fiscal year 2020.

Gross profit for our Services segment decreased to kEUR 2,314 for the year ended December 31, 2020 from kEUR 2,892 in the same period of 2019. The gross profit margin for this segment decreased to 25.7% for the year ended December 31, 2020 from 25.9% for the same period in 2019. This was mainly related to significantly lower gross profit as well as gross profit margin contribution from our American service center, as a result of lower utilization in line with the decrease in revenues. Gross profit as well as gross profit margin contribution from our German service center substantially improved year over year, due to cost saving measures implemented as a consequence of the COVID-19 situation. Gross profit and gross profit margin contribution from voxeljet China slightly improved year over year.

Selling expenses were kEUR 5,816 for the year ended December 31, 2020 compared to kEUR 7,118 in the same period in 2019, representing a significant decrease of kEUR 1,302, or 18.3%. This was mainly due to lower distribution expenses corresponding to the decrease in revenues. Shipping and packaging expenses as a main driver of the selling expenses could vary from quarter to quarter depending on quantity and types of products, as well as the destinations where those goods are being delivered. Further, selling expenses from voxeljet UK significantly decreased as a result of the successful restructuring, which started in the third quarter of 2019. In addition, we incurred lower expenses for travelling, trade fairs and exhibitions related to the COVID-19 situation and the associated global restrictions.

Administrative expenses decreased by kEUR 545, or 7.8% to kEUR 6,407 for the year ended December 31, 2020 from kEUR 6,952 in the prior year period. This was mainly due to significantly lower administrative expense from voxeljet UK as a result of the completed restructuring. In 2019, we faced two exceptional effects, which adversely impacted our administrative expenses. Firstly, we recorded restructuring charges at voxeljet UK and at voxeljet Germany amounting to kEUR 274 and kEUR 45, respectively. Secondly, in 2019 we incurred higher advisor fees mainly related to the previously disclosed Audit Committee Investigation.