Voxeljet AG (VJET) 2014 Q4 法說會逐字稿

Greetings and welcome to the voxeljet fourth-quarter full-year 2014 financial results conference call. At this time all participants are in a listen-only mode. A brief question-and answer session will follow the formal presentation. (Operator Instructions). As a reminder this conference is being recorded.

I would now like to turn the conference to your host, Anthony Gerstein with Investor Relations. Thank you, Mr. Gerstein, you may now begin.

Thank you, operator, and good morning, everyone. With me today are Ingo Ederer, voxeljet's Chief Executive Officer, and Rudy Franz, voxeljet's Chief Operating Officer and Chief Financial Officer.

Yesterday after the market close, voxeljet issued a press release announcing its fourth-quarter and full-year financial results for the period ended December 31, 2015. The release as well as the Company's presentation for this conference call is available on the investor relations section of the Company's website at investor.voxeljet.com.

During our call we may make certain forward-looking statements about the Company's performance. Such forward-looking statements are not guarantees of future performance and therefore one should not place undue reliance upon them. Forward-looking statements are also subject to inherent risks and uncertainties that could cause actual results to differ materially from those expressed. For additional information concerning factors that could cause actual results to differ from those discussed in our forward-looking statements you should refer to the cautionary statements contained in our press release as well as the risk factors contained in the Company's filings with the Securities and Exchange Commission.

With that I would like to now turn the call over to Ingo Ederer, Chief Executive Officer of voxeljet. Ingo?

Thank you, Anthony, and good morning, everyone. Thank you for joining us on the call today. I'm going to give a brief overview of our results for both the fourth-quarter and full-year 2014 and then update you on the progress of our strategic initiatives and the status of our Company. Rudy will provide a more detailed review of our financial results for the period and will discuss our guidance for 2015. We will then open the call up for your questions.

Turning now to slides 4 and 5 of the slide presentation, please. For the quarter, total revenues increased approximately 88% to EUR6.9 million from EUR3.7 million last year. Systems revenues increased 73% to a total of EUR4.2 million from EUR2.5 million in the fourth quarter of 2013. We sold seven printers in the quarter compared to three and in last year's same period.

Services revenues in the fourth quarter increased 118% to EUR2.7 million from EUR1.2 million in last year's same period. The increase was the result of growth at our service center in Germany and a full year's quarter's contribution from our subsidiary in the UK. Our subsidiary in the US began printing on-demand parts for customers in the first quarter of this year and consequently did not contribute any service revenue for the last year.

For the year, total revenues were EUR16.2 million, slightly higher than the revenue guidance we provided on our first-quarter conference call in November. This was an increase of nearly 40% over our revenues in 2013.

Systems revenue increased 43% to EUR9.1 million from EUR6.3 million in 2013 as we sold 14 printers in the year compared to nine printers last year. Services revenues increased 33% to EUR7.1 million from EUR5.3 million in last year's same period.

Overall, I am pleased with our performance. Customer interest and coding activity remained strong in both business segments and the outlook for printer sales is positive based on our backlog, which was approximately [EUR4.2 million] at December 31, 2014.

Recently we have been experiencing a lot of interest and activity in the US. We think because of now having our direct operating presence there through our subsidiary in Detroit as well as the strengthening dollar since we sell our printers in euros. These are very positive (inaudible).

In the next section we have included several slides from earlier presentations. We did this because we believe the market has recently taken an undifferentiated approach to evaluating individual printing companies. Therefore, I want to spend a moment to review our Company with you and clarify our mission and what we do specifically.

Looking at slides 7 through [11]. Since 1999, voxeljet has been one of the (inaudible) in additive manufacturing. We are a 3D printing company uniquely focused on industrial and commercial applications and provide solutions to substantially change traditional manufacturing processes. This means we are transitioning the 3D printing industry from one being used almost exclusively for prototyping to one being used for production.

Our printers using a powder binder process are among the industry's high-speed large format printers with the highest output rates. Key differentiators for industrial and commercial customers seeking to build either very large parts or large quantities of complex parts quickly.

Turning now to slides 12 through 16. Our portfolio includes six machines including several highly differentiated printers with respect to speed, size, and capability, which provide us with numerous ways to meet the growing demand for 3D printing in our target markets. And because we are dealing with industrial customers who are generally interested in producing either several very big or large quantities of smaller parts cost effectively, machine of build box volume absolutely matters. We explain this on slides 17 through 18.

Slide 19 shows the advantages and value proposition to our customers. The takeaway here is that by using our printers, customers can lower initial costs and avoiding other limitations associated with conventional [tooling].

Turning now to slide 21 for an overview of our business. We operate an integrated business model with two segments, systems and services. We manufacture all our printers in our facility in Friedberg, Germany and actually operate three service centers around the world.

Slide 22 and slide 23 show our sales cycle and how one technique drives the other. These refer to our service centers and flagship stores showcasing our printers and providing a cost-effective way for our customers to experience the benefits of 3D printing by offering affordable high-quality on-demand access.

Our service centers are a cash flow positive marketing tool which supports our printer sales. They are our most effective lead generated for our system sales as it gives our services customers the opportunity to see the quality and efficiency that our printers deliver. Our experience suggests that as a customer becomes more comfortable with our technology and recognize its benefits, they reach a point that they purchase a printer to support our system technique. Even after they buy a printer, they usually continue to use our service center for additional capacity and new purchases.

This leads me to the next section of the presentation and our growth strategies starting on slide 25. Our growth strategy can be defined by three distinctive initiatives. First, we will continue to establish large-scale service centers around the globe.

Second, we will continue to be a leading industry innovator through ongoing research and development with a particular focus on our printing capabilities and the introduction of new material sets to the market and for us we will grow our global sales and marketing presence, which we believe will increase our market penetration and substantiate the induction of our technology.

Turning now to slide 26, I will review the expansion of our facilities. We completed the expansion of our German headquarters including both the service center and the production hall where we assemble all of our printers back in April 2014. There are several nice pictures for you to look at in the presentation, which should give you [a glance] at the scale of operations here.

In October 2014, we established a service center in the UK with the acquisition of Propshop, which is shown on slide 32. Propshop has formerly served the film entertainment industry for 3D printing and scanning services and the integration with our organization is proceeding well.

In January 2015, we began printing on-demand parts at our service center in the US in Detroit, Michigan, which is shown on slides 33 through 35. We recently had our first customer seminar out there and had great attendance. We expect the Detroit service center to grow revenue progressively throughout the year with installation of additional printers including a VX4000, (inaudible) printer throughout the end of this year. The facility is planned to have similar printing capacity as our German facility toward the end of 2016.

Our next service center locations will be likely in Asia. Specifically we are looking at both India and China and we expect to have some announcement made later this year.

The next slide, which are our growth strategies, is our focus on continued innovation and advancement in technology through ongoing research and development. Looking at slide 36, our organization can be broken down into three categories; materials, components and [growth engines], and machines. Our focus here will strengthen our position in the industry and contribute to our long-term future growth.

You have heard us talking about how we are always in varying stages of developing new materials including various casting materials (inaudible) plastics and (iaudible).

Today I want to again focus on such example which is phenolic powder binding, or we call it PDB, because this is really a driver for our business. Let me walk you through the process beginning on slide 37.

PDB is an attractive alternative to the ceramic binding process and it is suitable for different powder materials and applications. PDB works with silica sand to [casting] surfaces as well as with ceramics powder. It can be used in the casting of almost all alloys including those that require low-temperature melts like aluminum and those requiring high temperature melts like iron and steel. In this respect it is a much more versatile process with a wider addressable market.

A significant advantage of the PDB is that there is no requirement for the treatment of the powder with an activator for the printing of [parts]. So the unused powder is fully rechargable and can be reclaimed and reused in subsequent printing jobs. This lowers the costs of the (inaudible), a key variable to printing tasks. And the finished product casted from PDB molds are of very good quality.

Slide 40 shows some of the advantages of using PDB compared to phenolic. Phenolic can basically be used on all our cast forms and is particularly helpful to selling of new machines like our VX2000. The VX2000 is one of the largest commercially available 3D printing platforms and effectively bridges the gap between our VX1000 in the VX4000 in a market uniquely suited to a variety of applications in the automotive or aviation industry, foundries, top manufacturers of equipment building industry.

As part of our ongoing innovation, we seek partnership and the licensing of suitable technology. Today we announced that voxeljet has acquired a license from Evonik Industries for a 3D printing process using polymeric materials with distinct speed and cost benefits. This powder bed fusion process allows for production of parts with thermoplastic properties. We expect the process will complete with more traditional plastic injection molding in both speed and part costs. We think we can bring this process to a marketable product within three years and it opens up new markets and opportunities for us including the ability to deliver final functional parts.

We are very excited about this opportunity and will update you periodically with our progress.

Turning now to slide 44, the third driver to our business is to continue to expand our sales and marketing presence which we believe will increase our market penetration and facilitate the adoption of our technology. We have been successful adding many new people or agents and we receive inquiries nearly every week from parties interested in working with us.

That brings me to the end of my part for the formal presentation. I will turn now the call over to Rudy. Rudy?

Thank you, Ingo. Good morning, everyone. I will now take you through the financials.

Turning to slide 46, total revenues increased 88% to EUR6.9 million in Q4 2014 compared to EUR3.7 million in Q4 2013. Gross profit and gross margin in the quarter were EUR3.0 million and 43% respectively compared to EUR1.5 million and 41% in last year's quarter.

The next slide shows our segment reporting for the quarter. Systems revenue increased 73% to EUR4.2 million in the fourth quarter of 2014 from EUR2.5 million in the fourth quarter of 2013. We sold seven printers in this year's fourth quarter compared to three machines in the last fourth quarter. Systems revenue represented 61% of total revenue in the fourth quarter of 2014 compared to 67% in the last year's quarter. Gross profit and gross margin for our system segment in the quarter was EUR1.8 million and 42% respectively compared to EUR1.2 million and 48% in the last year's same period.

Gross margin in the system segment was negatively impacted by costs related to our increased headcount as we pursue our growth strategy. However, the individual contribution to gross margin of each printer sold in the quarter was in line with our expectations. We anticipate that gross margin in the systems segment will increase as we begin to see increased segment revenue and leverage the prior investment in our business.

As our business continues to grow over the coming quarters, we expect gross margin in the system segment to be in the range of 40% to 45%, consistent with the outlook we have given in the past.

Service revenues increased 118% to EUR2.7 million for the fourth quarter of 2014 compared to EUR1.2 million in the same quarter of 2013. The increase was due to increase capacity at our service center in Friedburg, Germany and [on shipped record box volumes, percent growth and experienced strong revenue topline results]. We only experienced a full quarter's contribution of approximately EUR0.9 million from our subsidiary voxeljet UK, which was acquired on October 2, 2014. As Ingo said, we began printing on-demand parts with our subsidiary in the United States in the first quarter of 2015 and consequently, it did not contribute any services revenues to the quarter.

Gross profit for our service segment increased to EUR1.2 million in the fourth quarter of 2013 from EUR0.3 million in the fourth quarter of 2013. So our gross margin (technical difficulty).

Ladies and gentlemen, please stand by. We are experiencing technical difficulties.

Ladies and gentlemen, your conference will now resume.

Sorry but our line disconnected. I will start from the beginning of my presentation.

Again, good morning, everyone. I will now take you through the financials.

Our total revenues increased 88% to EUR6.9 million in Q4 2014 compared to EUR3.7 million in Q4 2013. Gross profit and gross margin in the quarter were EUR3.0 million and 43% respectively compared to EUR1.5 million and 41% in last year's quarter.

The next slide shows our segment reporting for the quarter. Systems revenues increased 73% to EUR4.2 million in the fourth quarter of 2014 from EUR2.5 million in the fourth quarter of 2013. We sold seven printers in this year's fourth quarter compared to three machines in the last fourth quarter. Systems revenue represented 61% of total revenue in the fourth quarter of 2014 compared to 67% in the last year's quarter.

Gross profit and gross margins for our systems segment in the quarter was EUR1.8 million and 43% respectively compared to EUR1.2 million and 48% in the last year's same period. Gross margin in the system segment was negatively impacted by costs related to our increased headcount as we pursued our growth strategy. However, the individual contribution to gross margin of each printer sold in the quarter was in line with our expectations.

We anticipate that gross margin in the system segment will improve as we begin to see increased segment revenues and leverage the prior investment in our business. As our business continues to grow over the coming quarters, we expect gross margin in the system segment to be in the range of 40% to 45% consistent with the outlook we have given in the past.

Service revenues increased 118% to EUR2.7 million in the fourth quarter of 2014 compared to EURO1.2 million in the same quarter of 2013. The increase was due to increased capacity in our service centers in Friedberg, Germany from where we shipped record box volumes for sand parts and experienced strong revenue for plastic parts. We also experienced a full quarter's contribution of approximately EUR0.9 million from our subsidiary voxeljet UK, which was acquired on October 2, 2014.

As Ingo said, we began printing on-demand parts at our facility in the United States in the first quarter of 2015 and consequently it did not contribute any service revenues to the quarter.

Gross profit for our service segment increased to EUR1.2 million in the fourth quarter of 2014 from EUR0.2 million in the fourth quarter of 2013. Our gross margin increased to 44% from 28% in last year's quarter. Actually adjusted gross margin, excluding the long-term cash incentive plan, was closer to 40%.

So you can see that we are really benefiting from scale and efficiency at our facility in Germany.

Looking now to the rest of the income statement on slide 48. SG&A expenses were in line at EUR2.5 million in the fourth quarter of 2014 and slightly higher than EUR2.4 million in last year's fourth quarter. This increase was primarily due to increase headcount and costs associated with being a publicly traded company. Our marketing efforts continue to expand as we have increased headcount and attended several shows and sales.

Research and development expenses were unchanged at EUR1.3 million in both years fourth-quarter as we continue to support a number of active projects in various stages of development.

Operating loss of EUR0.5 million in the fourth quarter of 2014 compares to an operating loss of EUR2.1 million in the prior year period. Total comprehensive loss for the quarter was EUR0.6 million or EUR0.17 per share compared to comprehensive loss of EUR2.5 million or EUR0.85 per share in the prior year quarter.

We have provided the same presentation for the full year period ended December 31, 2014 on slides 49 through 52. Slide 53 shows balance sheet items.

At December 31, 2014, the Company had cash and cash equivalents of approximately EUR8 million and short-term investments, sales and [three bond funds] of more than EUR40 million. Total debt at December 31, 2014, was approximately EUR3.5 million. Weighted average shares outstanding for the year was 3.6 million, which equates to 80 million [ADSs]. We believe that our balance sheet positions us well for the long-term.

Moving now on slide 54 and our outlook for the year. For the full-year 2015, revenue is estimated to be in a range of between EUR23 million and EUR24 million. The primary drivers of anticipated revenue growth are expected to be increased global system sales, continued services revenue growth at our facility in Friedberg, Germany, contributions from Voxeljet of America, which began operating in January 2015, and a full year's contribution from voxeljet UK.

Based on these factors, we expect service revenues growth to outpace systems revenue growth in 2015.

As Ingo stated with the first quarter of 2015 nearly complete, we think we are off to a good start for the year. Today we are also providing some color on our operating expense for the year. We expect net G&A spending in the range of EUR11 million to EUR13 million and R&D spending to be approximately EUR6 million to EUR8 million. [Cat] expanding for 2015 should be in the range of EUR5 million to EUR7 million.

This concludes my formal remarks and with that we will now open the call up for your questions. Operator?

(Operator Instructions). Rob Stone, Cowen and Company.

Ingo, I wanted to ask a little bit about PDB. The first question was, across how many of your models do you expect to deploy this material capability and how many so far are shippable?

Thank you, Rob, for this question. So as I said during my presentation, basically we can include all our six platforms with that material. For the moment we are testing this material on the VX200, VX500, VX1000 system and we start pretty soon on the VX2000. So we expect for the moment to be able to ship this material plant in the third quarter this year on the 1000, 2000 and 500 systems.

And are any of the systems currently in backlog using that option?

Exactly, so we already have system customers waiting for that material plant on their machine.

Okay. And then with respect to the license from Evonik, you said less than three years time to market. Could you just provide a little more color on what are the things you need to do to productize that technology and what milestones should investors be looking for along the way?

Okay, since this process is relatively new to us and we have to develop basically a new machine, although some of the process parts are new to develop, we will probably start building a prototype machine then go into a bigger testing before we can finally launch a product. So you will hear probably in a year's time from me what is going on on the prototyping machine and maybe in two year's timeframe we will see a first outline of the bigger machine.

Okay. Thank you very much.

Troy Jensen, Piper Jaffray.

Thank you, gentlemen. This is actually Austin and I am speaking on the behalf of Troy. First, congrats on the solid quarter and thanks for taking my question. The first one is more about the service revenue. Did you guys split up between organic and inorganic with the acquisition you guys made last year?

We did. We have shown in the 20-F a concrete number for Q4, which has been contributed from Propshop and that was over [EUR9 million].

Okay, thank you. And then regarding FX, what was the benefit of the quarter and do you guys see that being any kind of a headwind going forward?

The benefit of the quarter was very minor because we did not contribute revenues from our US facility. And for the guidance which given, we did our business plan based on the exchange rate of EUR1.15. So currently we have a slight (inaudible) currency working up and down, I think it's in line with what we planned more or less.

All right, thank you. And then the last question is dealing with this new license. I believe you said initially it is going to be for plastic parts. Would you possibly expand into metals with that platform?

This is Ingo talking about this. Basically this process is based on powders, not restricted to polymers but is not very likely that we address metals with it. So for the moment we are fine if we stay with the polymers.

All right. Thank you so much, gentlemen.

Ken Wong, Citigroup.

Rudy, maybe first off for you, as we look at the guidance for 2015, any color on maybe what the seasonality looks like? Is it going to be pretty similar to what we saw in 2014 or should that be more backend loaded? Any comments there would be great.

We believe that we have, on a quarterly basis, we see as always a little more revenue in the second half of the business year but overall I expect it to be in a range of 40%, 45%, 55% to 60%. But don't be (inaudible) we try to make it quite solid.

Got you.

First-quarter R&D looks quite promising to us and that shows a nice portion of the full year already.

Fantastic. And then in terms of spending, should we expect OpEx is going to grow faster than revenue? And just looking at the 23, 24 that something in the mid-40s to high 40s year-over-year growth. Is OpEx going to be in that similar range?

OpEx should grow slower. I think, as Ingo said, we had a transition year in 2014 and we try to be very cautious on additional OpEx spending. With increasing our service center capacity in India and China, we definitely -- that's what Ingo mentioned before -- we definitely will add some numbers to the OpEx. But as Ingo said as well, we don't know when this happens exactly. We say it will happen more likely at the end towards the year, so it will drive the OpEx earnings (inaudible).

Got you. And then the last question for me, Ingo, it sounds like you guys are getting some pretty good contribution from Propshop with EUR900,000 there. Propshop is a slightly different business than what you guys had been doing before. They cater a little bit more to the consumer as well. Can you help us understand how Propshop develops in the next year, maybe even longer-term?

So thank you for this question. So we offer a unique opportunity with Propshop to enter into the film and entertainment industry and this is what they are currently looking at their priority on. Nevertheless, we are also trying to assess the industry applications with our UK subsidiary in a better way than we did it from Germany. But as that primarily, we are looking for an expansion into film and entertainment industry with that business.

Got you. Great. Thanks a lot, guys.

Ananda Baruah, Brean Capital.

Hey, guys, Ingo, Rudy, congrats on a solid quarter and a good start to the year. Just a few from me if I could. Wondering if you guys could comment just on the mix of systems and the strong Q4. And then I have a few follow-ups. Thanks.

As always we didn't give guidance on the individual system which we sold but in total we sold seven systems and the majority of that revenue came through our bigger platforms with the VX500, VX1000.

Great. That's helpful. Thanks. And can you talk about also where you are -- how many machines you have in Detroit right now? What are the year-end goals and then should we expect I guess just anecdotally, can you talk to what you expect to maybe put in Detroit through 2016?

So the plan for the Detroit facility currently, we have two systems there. We are adding an additional two in the first half of this year and in the second half of this year, we add our VX4000 towards the end of the year for Q4. That should be in operation and another VX1000. For 2016 or by the end of 2016, we plan to have more or less the same capacity in the Canton facility like we have it here in Friedberg.

Got it. And if I remember accurately, you guys are pretty much running full capacity from the time the machines are being implemented, or at least you have orders to run full capacity per machine upon implementation. Is that accurate?

In Detroit?

In Detroit.

We ramped up the business there with good response. Don't expect full utilization of each machine when it is set up but we were quite good with the progress we are making and I think the ramp up the relatively short compared to that (inaudible) capacity we see there.

Okay, great. That's very helpful. Thanks. And do you guys have a printer unit outlook that we can kind of calibrate around or at least any sort of range that we can calibrate around for 2015? It's clear that you guys are mixing up and you're going to continue to sell the higher end systems as we go through the year.

I think we still give the market the same information as in previous quarters. The average selling price of a printer is EUR500,000 and I think that means we primarily sell our larger platforms means the VX500, 1000.

Okay, and last one for me guys, really appreciate it -- the CapEx guide for this year is kind of 2x, 2x to 3x, what you printed for 2014. You have the new Detroit facility online and you also talked about maybe adding two new geos this year for service center, India, China. So in the event you do add India, China, is India, China in that CapEx number, number one?

And then number two, if you do add new service centers this year, should we expect there to be I guess any impact to the margins as you sort of ramp that -- get that set up and begin to fill that? Thanks.

First, the additional CapEx we need for our Indian and Chinese facility are slightly included in there. Have in mind that we earlier start Q3, Q4, and we don't start it at full capacity of a full printer setup. So the main investment, CapEx investment, will be done in 2016. The prime driver in 2015 in respect of CapEx are in the Canton facility where we add the additional printers in the VX4000 here in our Friedberg facility we as well think about an additional VX4000 and then we have the UK facility.

So the CapEx spending is primarily in the current facilities and China, India is slightly included. But I said this is more towards the end of the year.

Thank you. And then maybe impact on the margins if you were to add India, China as we move through the year? And then that is it for me. Thanks.

I don't expect an impact on margin in 2015 through that increase. But honestly whenever you start a new service center, there is an impact at least for one or two quarters in margin until the service center ramps up. But I don't see an impact in 2015.

All right, great. Thanks a lot.

Ben Hearnsberger, Stephens.

First on the revenue guide, it seems like you guys have a lot of visibility given the current backlog, Propshop, which is continuing to perform well and then you've got US coming online. What in your mind is the biggest risk to you guys achieving or even outperforming this guidance in fiscal year 2015?

Thank you for the question. As you said, the visibility -- visibility always is given on our service revenue pretty good. So if markets are stable we see a good visibility there. You have on accruing revenue, powder business, maintenance business a good visibility. We have a current printer backlog that will take currently if you want to have a better [reading] on guidance, we would say that we can proceed probably 70%, 75% of the business for the full year actually.

The remaining 25% is primarily driven by our printer sales and from the hot lead list we are currently working on, we believe that there's a very high likelihood to achieve this number and to build additional backlog for Q1, Q2 2016.

In the service business we talk about Propshop and the contribution of voxeljet UK to this. Film business is a [cycle] business and what we see from there, it makes us quite happy and we believe that they are going to contribute what they plan for. As well have in mind that my colleague just spoke about, in the UK, there is a huge opportunity in the industrial market. We ship parts to the UK out of our German facility. England or the UK is an island and they lack to have access to [nodal] printing capacity and we believe by adding more sand printers and plastic printers to the UK market that we get the benefit from there as well. So overall we feel quite comfortable with the guidance we have given.

Okay, that's very helpful. Thanks. And then I know you guys need to continue to invest. You are seeing a lot of growth. But when do you see the potential for earnings profitability? Is that a fiscal year 2016 event or even beyond that given all the investments that you guys are needing to make for this growth?

Our plan is to become -- to reach profitability into 2016 means an equal and become real profitable from what we know today, we drive into profitability by 2017, but not before. I think 2015 still is a year where we invest. We have a chance to invest in India and China in service facilities that definitely will drive the 2016 number. And as well in 2017, there might be opportunities which we can't foresee. Currently Japan still is a market which is very interesting for us and Latin America as well.

So I would say as long as we have opportunities to grow the business and as long as investors are fine with what we are doing, we are prepared to spend the money, which we've got and invest it and try to grow the Company and increase the revenue numbers. I think the main driver to us if we measure our business it is headline growth and it is a strong growth gross margin. And I think so far we still show gross margins even if we invest close to EUR40 million or even above, which is a good signal to us and the SG&A spending as well we are quite cautious on this.

I believe if we want to become profitable we should be in a position to achieve this and currently we see more opportunities where we can invest in and we exercise those.

That's very helpful. Thank you.

(Operator Instructions). Jason North, Jefferies.

Can you give any color in terms of expectations for gross margins in the services business in 2015 as well as potential revenue growth in services? Thank you.

Gross margin in services, I said, we believe that we can show gross margins above 40%, that is our target and long-term in the range of 45% to 50%. 2015 is a year where we expect gross margin as I said in a range of 40% above.

And the growth rate, we believe that -- we gave a growth rate for the full business and we said we want to grow the business by 50%. We did not give a growth rate for systems and services but we believe that our service segment can grow faster than the systems segment and I would say it is probably in the range of 60% plus.

Would you expect in 2016 for services also to outperform the growth rate of the systems -- ?

We did not give guidance on that so I don't want to be more specific.

Okay. And you mentioned earlier that you said that Q1 looks quite promising. Is any other -- since we are only a couple of days from the end of the quarter, any sense you can give in terms of revenue (inaudible) even OpEx spending here in Q1?

No, we could maybe talk about Q4 and the 2014 and in a couple of weeks we will talk about Q1. We would just like to give -- we gave some color and we are very convinced that the market will like what we showed.

Okay. Last question here. You gave some color here in terms of the split of revenues is in the second half of 55% to 60% of revenues. Can you give us any sense in terms of the split first-half or second-half for OpEx?

No, we did not.

Okay. Any kind of color in terms of linearity? Is a coming out earlier, or is that going to ramp pretty much in line with the revenue ramp?

We gave you guidance on revenue growth and gross margin expectation and if you like I can repeat my SG&A spending, which I believe are in a range of EUR11 million to EUR13 million and the R&D spend is in a range of EUR6 million to EUR8 million. CapEx spending for 2015 is EUR5 to EUR7 million and we did not give guidance in what quarter, in what month, [we believe that we have] -- the CapEx spend is our SG&A spending in specific.

Okay, thank you.

Rob Stone, Cowen and Company

I guess this is a Rudy question. You had a very nice step up in systems revenues from Q3 to Q4. The inventory levels at the end of the year is pretty similar to the Q3 inventory. Does this imply that as the business grows the velocity of your raw material and working process can increase, or any color on the year and inventory would be helpful. Thanks.

Thank you, Rob, for the question. You are right we try to increase our inventory to have -- to shorten the delivery time to customers and therefore it's always our -- currently our ambition to have more inventory. And as shown in our system segment, we increased headcount and we have more capacity and more ability to build more printers. And as well as that we have to fulfill revenue guidance for 2015 and have to prepare for 2016. So that can be an expectation that inventory is growing.

So my question had more to do with the velocity through the system. Can you comment at all on lead times?

Lead time definitely -- the lead time is shrinking. But it is still between six and 12 months until we are going to get print. Three and six months.

Okay. That is helpful. Thank you.

Ben Hearnsberger, Stephens.

Is it possible that you acquire your way into the Asian markets or do you most likely build that organically like we saw in the US?

As I said during my presentation, we will come up with messages during the next quarter but we can't address them specifically for this today's call. But what we can say is those opportunities are likely. We currently are working on both opportunities and we will share toward the end of the year what we will finally do.

Okay. And then a follow-up on the average selling price of your systems in the quarter. It ticked down to roughly EUR600,000, the lowest we've seen in a little while. Is there an appropriate number to think about in terms of modeling going forward?

As I said, I would go with an average number of EUR500,000 and I believe that it's more towards EUR600,000 than EUR400,000. So I think EUR500,000 is a good number. EUR500,000.

Okay, great. Thank you very much.

Troy Jensen, Piper Jaffray.

Hey, gentlemen, thanks for taking my quick follow-up. Could you just break down geographically how sales were in Q4?

We have it provided in the 20-F that we filed with the SEC. You can take a look in the notes (inaudible).

All right, thank you.

Thank you. At this time I would like to turn the floor back to management for closing comments.

So thank you for your questions. As you have seen, 2014 was a transition year for voxeljet as we invested and positioned the business for the future. I am very pleased with our progress and the milestones we have achieved and we are off to a very good start in 2015.

Our organization now employs more than 200 people which compares to approximately 100 at the time of the IPO less than 18 months ago. I believe we are well on track to achieve what we have said and we would at the time of the IPO. So there is a great momentum in our business and we are well positioned to deliver on our results and be the leader in our technology.

I want to thank you all our colleagues and team members. Thank you again for your participation in today's call and we look forward to speaking with you again in May as we report our results for Q1 figures. Thank you very much.

Thank you very much.

This concludes today's teleconference. You may disconnect your lines at this time. We thank you for your participation.