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THE BRONZE AGE 2.0 Rationalizing the 3D Universe Policy, Context and Strategy in an Emerging Industrial Sector Christopher R. O’Dea Inside 3D Printing, April 23, 2013 Photo: “Molten Bronze in DMSE Foundry“ Massachusetts Institute of Technology, School of Engineering, Department of Materials Science and Engineering

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Page 1: 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

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Industrial Opportunity Driving Rationalization

• Companies:• Ex One• Arcam• ProtoLabs

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

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The Digital Blacksmith

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3D and Industrial Manufacturing

…”A key cause of death”

Daniel Holland, Morningstar

In Investors Business Daily online, February 7, 2013

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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?

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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

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Downstream from Technology

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Business Model Innovation

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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

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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

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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”

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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

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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

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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:

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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?

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“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

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3D Market Segmentation

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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

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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

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Scandinavian Designs

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THANK YOU