voxeljet AG Reports Financial Results for the First Quarter Ended March 31, 2019

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voxeljet AG (NYSE: VJET) (the “Company”, or “voxeljet”), a leading
provider of high-speed, large-format 3D printers and on-demand parts
services to industrial and commercial customers, today announced
consolidated financial results for the first quarter ended March 31,
2019.

Highlights – First Quarter 2019⁽¹⁾

Total revenues for the first quarter increased 10.2% to kEUR 5,565
from kEUR 5,052
Gross profit margin decreased to 34.4% from 42.2% to kEUR 1,913 from
kEUR 2,133
Systems revenues increased 75.6% to kEUR 2,415 from kEUR 1,375
Services revenues decreased 14.3% to kEUR 3,150 from kEUR 3,677
Reaffirm full year 2019 guidance

⁽¹⁾Certain comparative figures for the 3-month
period ended March 31, 2018 were restated for immaterial
errors. For further information, see Note 9 of the Q3-2018 condensed
consolidated interim financial statements.

Dr. Ingo Ederer, Chief Executive Officer of voxeljet, commented, “We had
a strong first quarter with results that confirm why we are so excited
about our potential to establish a new manufacturing standard. Just
recently, we installed the first print engine into VJET X: This print
engine is the heart of our new additive mass manufacturing solution and
I firmly believe one of the most advanced piece of technology in the
whole additive manufacturing industry. The shifts we have made to our
business and our deeper focus on the three core areas of innovation,
integration and speed are igniting the next phase of growth and
profitability for voxeljet.”

First Quarter 2019 Results

Revenues for the first quarter of 2019 increased by 10.2% to kEUR 5,565
compared to kEUR 5,052 in the first quarter of 2018.

Revenues from our Systems segment, which focuses on the development,
production and sale of 3D printers, increased 75.6% to kEUR 2,415 in the
first quarter of 2019 from kEUR 1,375 in last year’s first quarter. The
Company delivered two new and one used and refurbished 3D printer in the
first quarter of 2019, compared to two used and refurbished printers
delivered in last year’s first quarter. Systems revenues also include
all Systems-related revenues from consumables, spare parts and
maintenance. The increase of revenues from our Systems segment was
mainly due to higher revenues from Systems-related revenues, while
revenue from the sale of 3D printers slightly increased. The increase of
Systems-related revenues reflects the higher installed base of 3D
printers in the market and the associated growth in aftersales
activities. Systems revenues represented 43.4% of total revenues in the
first quarter of 2019 compared to 27.2% in last year’s first quarter.

Revenues from our Services segment, which focuses on the printing of
on-demand parts for our customers, decreased 14.3% to kEUR 3,150 in the
first quarter of 2019 from kEUR 3,677 in the comparative period of 2018.
This was mainly due to lower revenue contributions from our German
operation. We received a lower number of orders mainly reflecting a
lower demand from the automotive industry. This was partially offset by
increased revenue contributions from our subsidiary voxeljet America
Inc. (“voxeljet America”). The increase in revenue at our American
service center was mainly attributable to a volume contract which we
entered into during the second quarter of 2018.

Cost of sales was kEUR 3,652 for the first quarter of 2019 compared to
kEUR 2,919 for the first quarter of 2018.

Gross profit and gross profit margin were kEUR 1,913 and 34.4%,
respectively, in the first quarter of 2019 compared to kEUR 2,133 and
42.2%, respectively in the first quarter of 2018.

Gross profit for our Systems segment increased to kEUR 829 in the first
quarter of 2019 from kEUR 381 in the first quarter of 2018. Gross profit
margin for this segment increased to 34.3% in the first quarter of 2019
compared to 27.7% in the first quarter of 2018. This was mainly due to
higher gross profit margin contributions from Systems-related revenues
resulting from a more favorable ratio of revenues to fixed costs
compared to last year’s first quarter.

Gross profit for our Services segment significantly decreased to
kEUR 1,084 in the first quarter of 2019 compared to kEUR 1,752 in the
first quarter of 2018. The gross profit margin for this segment
decreased to 34.4% in the first quarter of 2019 from 47.6% in the first
quarter of 2018. This was mainly related to lower gross profit margin
from the German service center as a result of lower utilization. Our
subsidiary voxeljet America also contributed lower gross profit margin
due to higher depreciation expense, as we added additional 3D printers
to our American service center during the third quarter of 2018,
including one VX4000 system.

Selling expenses remained nearly unchanged at kEUR 1,676 for the first
quarter of 2019 compared to kEUR 1,736 in the first quarter of 2018,
despite an increase in revenues. We incurred higher shipping and
packaging expenses, which vary from quarter to quarter depending on
quantity and types of products, as well as the destinations where those
goods are being delivered.

Administrative expenses were kEUR 1,439 for the first quarter of 2019
compared to kEUR 1,232 in the first quarter of 2018. This was mainly due
to an increase in headcount resulting in higher personnel expenses as
part of management’s remediation efforts on the material weakness
identified in the prior year. In addition, we incurred higher consulting
fees as part of our project to expand our Enterprise Resource Planning
(“ERP”) system. We have hired additional employees in the IT-Team for
the management of SAP ERP system related tasks.

Research and development (“R&D”) expenses increased to kEUR 1,705 in the
first quarter of 2019 from kEUR 1,597 in the first quarter of 2018. The
increase of kEUR 108 was mainly due to higher personnel expenses as a
result of a slight increase in headcount.

Other operating expenses in the first quarter of 2019 were kEUR 13
compared to kEUR 358 in the prior year period. This was mainly due to
lower losses from foreign currency transaction for the first quarter of
2019 compared to the first quarter of 2018.

Other operating income was kEUR 978 for the first quarter of 2019
compared to kEUR 402 in the first quarter of 2018. The increase was
mainly due to higher gains from foreign currency transactions.

The changes in foreign currency gains and losses 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 1,942 in the first quarter of 2019, compared to
an operating loss of kEUR 2,388 in the comparative period in 2018. The
improvement was primarily related to a significant increase of other
operating income partially offset by a lower gross profit.

Financial result was negative kEUR 858 in the first quarter of 2019,
compared to a financial result of positive kEUR 678 in the comparative
period in 2018. The significant decrease was mainly driven by the
revaluation of the derivative financial instruments in connection with
the European Investment Bank loan.

Net loss for the first quarter of 2019 was kEUR 2,788 or EUR 0.57 per
share, as compared to net loss of kEUR 1,716, or EUR 0.46 per share, in
the first quarter of 2018.

Based on a conversion rate of five American Depositary Shares (“ADSs”)
per ordinary share, net loss was at EUR 0.11 per ADS for the first
quarter of 2019, compared to a net loss of EUR 0.09 per ADS for the
first quarter of 2018. 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 five as each ordinary share represents five ADSs.

Business Outlook

Our revenue guidance for the second quarter of 2019 is expected to be in
the range of kEUR 5,000 to kEUR 5,250.

We reaffirm our guidance for the full year ending December 31, 2019:

Full year revenue is expected to be in the range of kEUR 27,000 to
kEUR 30,000
Gross margin is expected to be above 40%
Operating expenses for the full year are expected as follows: selling
and administrative expenses are expected to be in the range of
kEUR 12,000 to kEUR 12,500 and R&D expenses are projected to be
between approximately kEUR 5,500 and kEUR 6,000. Depreciation and
amortization expense is expected to be between kEUR 3,750 and
kEUR 4,000.
Adjusted EBITDA for the second half of the year ending December 31,
2019 is expected to be neutral-to-positive. Adjusted EBITDA is defined
as net income (loss), as calculated under IFRS accounting principles
before interest (income) expense, provision (benefit) for income
taxes, depreciation and amortization, and excluding other operating
(income) expense resulting from foreign exchange gains or losses on
the intercompany loans granted to the subsidiaries.
Capital expenditures are projected to be in the range of kEUR 2,000 to
kEUR 2,500, which primarily includes ongoing investments in our global
subsidiaries.

Our total backlog of 3D printer orders at March 31, 2019 was kEUR 3,422,
which represents six 3D printers. This compares to a backlog of kEUR
3,392 representing six 3D printers, at December 31, 2018. As production
and delivery of our printers is generally characterized by lead times
ranging between three to nine months, the conversion rate of order
backlog into revenue is dependent on the equipping process for the
respective 3D printer as well as the timing of customers’ requested
deliveries.

At March 31, 2019, we had cash and cash equivalents of kEUR 8,482 and
held kEUR 8,924 of investments in bond funds and kEUR 1,253 in one note
receivable, which are included in current financial assets on our
consolidated statements of financial position.

Webcast and Conference Call Details

The Company will host a conference call and webcast to review the
results for the first quarter on Friday, May 17, 2019 at 8:30 a.m.
Eastern Time. Participants from voxeljet will include its Chief
Executive Officer, Dr. Ingo Ederer, and its Chief Financial Officer,
Rudolf Franz, who will provide a general business update and respond to
investor questions.

Interested parties may access the live audio broadcast by dialing
1-877-705-6003 in the United States/Canada, or 1-201-493-6725 for
international, Conference Title “voxeljet AG First Quarter 2019
Financial Results Conference Call”. Investors are requested to access
the call at least five minutes before the scheduled start time in order
to complete a brief registration. An audio replay will be available
approximately two hours after the completion of the call at
1-844-512-2921 or 1-412-317-6671, Replay Conference ID number 13690018.
The recording will be available for replay through May 24, 2019.

A live webcast of the call will also be available on the investor
relations section of the Company’s website. Please go to the website https://event.webcasts.com/starthere.jsp?ei=1241565&tp_key=90fb6173de
at least fifteen minutes prior to the start of the call to register,
download and install any necessary audio software. A replay will also be
available as a webcast on the investor relations section of the
Company’s website.

Non-IFRS Measure

The Company uses Adjusted EBITDA as a supplemental financial measure of
its financial performance. Adjusted EBITDA is defined as net income
(loss), as calculated under IFRS accounting principles, interest
(income) expense, provision (benefit) for income taxes, depreciation and
amortization, and excluding other (income) expense resulting from
foreign exchange gains or losses on the intercompany loans granted to
the subsidiaries. Management believes Adjusted EBITDA to be an important
financial measure because it excludes the effects of fluctuating foreign
exchange gains or losses on the intercompany loans granted to its
subsidiaries. We are unable to reasonably estimate the potential
full-year financial impact of foreign currency translation because of
volatility in foreign exchange rates. Therefore, we are unable to
provide a reconciliation our forward-looking guidance for non-GAAP
Adjusted EBITDA without unreasonable effort as certain information
necessary to calculate such measure on an IFRS basis is unavailable,
dependent on future events outside of our control and cannot be
predicted without unreasonable efforts by the Company.

Management regularly uses both IFRS and non-IFRS results and
expectations internally to assess its overall performance of the
business, making operating decisions, and forecasting and planning for
future periods. Management believes that Adjusted EBITDA is a useful
financial measure to the Company’s investors as it helps investors
better understand and evaluate the projections our management board
provides. The Company’s calculation of Adjusted EBITDA may not be
comparable to similarly titled financial measures reported by other peer
companies. Adjusted EBITDA should not be considered as a substitute to
financial measures prepared in accordance with IFRS.

Exchange rate

This press release contains translations of certain U.S. dollar amounts
into euros at specified rates solely for the convenience of readers.
Unless otherwise noted, all translations from U.S. dollars to euros in
this press release were made at a rate of USD 1.1235 to EUR 1.00, the
noon buying rate of the Federal Reserve Bank of New York for the euro on
March 31, 2019.

About voxeljet

voxeljet is a leading provider of high-speed, large-format 3D
printers and on-demand parts services to industrial and commercial
customers. The Company’s 3D printers employ a powder binding, additive
manufacturing technology to produce parts using various material sets,
which consist of particulate materials and proprietary chemical binding
agents. The Company provides its 3D printers and on-demand parts
services to industrial and commercial customers serving the automotive,
aerospace, film and entertainment, art and architecture, engineering and
consumer product end markets. For more information, visit http://www.voxeljet.de/en/.

Cautionary Statement on Forward-Looking Statements

This press release contains forward-looking statements concerning our
business, operations and financial performance. Any statements that are
not of historical facts may be deemed to be forward-looking statements.
You can identify these forward-looking statements by words such as
‘‘believes,’’ ‘‘estimates,’’ ‘‘anticipates,’’ ‘‘expects,’’ ‘‘projects,’’
‘‘plans,’’ ‘‘intends,’’ ‘‘may,’’ ‘‘could,’’ ‘‘might,’’ ‘‘will,’’
‘‘should,’’ ‘‘aims,’’ or other similar expressions that convey
uncertainty of future events or outcomes. Forward-looking statements
include statements regarding our intentions, beliefs, assumptions,
projections, outlook, analyses or current expectations concerning, among
other things, our results of operations, financial condition, business
outlook, the industry in which we operate and the trends that may affect
the industry or us. Although we believe that we have a reasonable basis
for each forward-looking statement contained in this press release, we
caution you that forward-looking statements are not guarantees of future
performance. All of our forward-looking statements are subject to known
and unknown risks, uncertainties and other factors that are in some
cases beyond our control and that may cause our actual results to differ
materially from our expectations, including those risks identified under
the caption “Risk Factors” in the Company’s Annual Report on Form 20-F
and in other reports the Company files with the U.S. Securities and
Exchange Commission, as well as the risk that our revenues may fall
short of the guidance we have provided in this press release. Except as
required by law, the Company undertakes no obligation to publicly update
any forward-looking statements for any reason after the date of this
press release whether as a result of new information, future events or
otherwise.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION


	Notes	3/31/2019	12/31/2018⁽¹⁾
		(€ in thousands)
		unaudited
Current assets		36,519	37,936
Cash and cash equivalents	7	8,482	7,402
Financial assets	7	10,177	12,905
Trade receivables, net		4,857	6,030
Inventories	4	11,156	10,064
Income tax receivables		37	13
Other assets		1,810	1,522

Non-current assets		35,371	31,416
Financial assets	7	1,632	2,234
Intangible assets		1,404	1,420
Property, plant and equipment, net	2, 5	32,255	27,675
Investments in joint venture		32	33
Other assets		48	54

Total assets		71,890	69,352


	Notes	3/31/2019	12/31/2018 ⁽¹⁾

Current liabilities		6,732	6,302
Trade payables	7	2,507	2,945
Contract liabilities	7	1,027	817
Financial liabilities	2, 7	1,377	850
Other liabilities and provisions	6	1,821	1,690

Non-current liabilities		20,780	16,575
Deferred tax liabilities		63	76
Financial liabilities	2, 7	20,539	16,321
Other liabilities and provisions	6	178	178

Equity		44,378	46,475
Subscribed capital		4,836	4,836
Capital reserves		87,572	86,803
Accumulated deficit		(49,184)	(46,400)
Accumulated other comprehensive income		907	1,201
Equity attributable to the owners of the company		44,131	46,440
Non-controlling interest		247	35
Total equity and liabilities		71,890	69,352

See accompanying notes to unaudited condensed consolidated interim
financial statements.

⁽¹⁾The Company has initially applied IFRS 16 as of January 1,
2019, using the modified retrospective approach. Under this approach,
comparative information is not restated and the cumulative effect of
initially applying IFRS 16 is recognized in retained earnings at the
date of initial application. For further information, see Note 2 of the
condensed consolidated interim financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)


		Three months ended March 31,
	Notes	2019	2018 ^{(1) (2)}
		(€ in thousands except share and share data)
Revenues	9, 10	5,565	5,052
Cost of sales		(3,652)	(2,919)
Gross profit	9	1,913	2,133
Selling expenses		(1,676)	(1,736)
Administrative expenses		(1,439)	(1,232)
Research and development expenses		(1,705)	(1,597)
Other operating expenses		(13)	(358)
Other operating income		978	402
Operating loss		(1,942)	(2,388)
Finance expense	8	(917)	(268)
Finance income	8	59	946
Financial result	8	(858)	678
Loss before income taxes		(2,800)	(1,710)
Income taxes		12	(6)
Net loss		(2,788)	(1,716)

Debt investment at FVOCI – net change in fair value		106	(15)
Foreign currency translation differences		(400)	(64)
Other comprehensive income		(294)	(79)
Total comprehensive loss		(3,082)	(1,795)

Loss attributable to:
Owners of the Company		(2,784)	(1,710)
Non-controlling interests		(4)	(6)
		(2,788)	(1,716)

Total comprehensive loss attributable to:
Owners of the Company		(3,078)	(1,789)
Non-controlling interests		(4)	(6)
		(3,082)	(1,795)

Weighted average number of ordinary shares outstanding		4,836,000	3,720,000
Loss per share – basic/ diluted (EUR)		(0.58)	(0.46)

See accompanying notes to unaudited condensed consolidated interim
financial statements.

⁽²⁾Certain comparative figures for the 3-month period ended
March 31, 2018 were restated for immaterial errors. For further
information, see Note 9 of the Q3-2018 condensed consolidated interim
financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)

Attributable to the owners of the company

Accumulated

other

Subscribed

Capital

Accumulated

comprehensive

Non-controlling

(€ in thousands)

capital

reserves

deficit

gain (loss)

Total

interests

Total equity

Balance at December 31, 2017⁽²⁾

3,720

76,227

(37,480)

1,380

43,847

43,918

Adjustment on initial application of IFRS 15

—

(100)

—

(100)

—

(100)

Adjustment on initial application of IFRS 9

—

(63)

—

(63)

—

(63)

Adjusted balance at January 1, 2018⁽²⁾

3,720

76,227

(37,643)

1,380

43,684

43,755

Loss for the period

—

(1,710)

—

(1,710)

(6)

(1,716)

Net changes in fair value of debt investments at FVOCI

—

(15)

(15)

—

(15)

Foreign currency translations

—

(64)

(64)

—

(64)

Equity-settled share-based payment

—

129

—

129

—

129

Balance at March 31, 2018 ⁽²⁾

3,720

76,356

(39,353)

1,301

42,024

42,089

Attributable to the owners of the company

Accumulated

other

Subscribed

Capital

Accumulated

comprehensive

Non-controlling

(€ in thousands)

capital

reserves

deficit

gain (loss)

Total

interests

Total equity

Balance at December 31, 2018⁽¹⁾

4,836

86,803

(46,400)

1,201

46,440

46,475

Loss for the period

—

(2,784)

—

(2,784)

(4)

(2,788)

Net changes in fair value of debt investments at FVOCI

—

106

106

—

106

Foreign currency translations

—

(400)

(400)

—

(400)

Equity-settled share-based payment

—

165

—

165

—

165

Share-based payment transaction with the non-controlling shareholder
of a subsidiary

—

604

—

604

216

820

Balance at March 31, 2019

4,836

87,572

(49,184)

907

44,131

247

44,378

See accompanying notes to unaudited condensed consolidated interim
financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	Three months ended March 31,
	2019	2018^{(1) (2)}
	(€ in thousands)
Cash Flow from operating activities

Loss for the period	(2,788)	(1,716)

Depreciation and amortization	1,050	841
Foreign currency exchange differences on loans to subsidiaries	(769)	(61)
Share-based compensation expense	165	129
Change in impairment of trade receivables	(28)	10
Non-cash interest expense on long-term debt	205	189
Change in fair value of derivative equity forward	602	(941)
Change in inventory allowance	(9)	(226)
Other	—	9

Change in working capital	(265)	1,578
Trade and other receivables, inventories and current assets	61	(901)
Trade payables	(586)	(260)
Other liabilities, contract liabilities and provisions	284	2,739
Income tax payable/receivables	(24)	—
Net cash used in operating activities	(1,837)	(188)

Cash Flow from investing activities

Payments to acquire property, plant and equipment and intangible assets	(173)	(234)
Proceeds from disposal of financial assets	4,081	2,526
Payments to acquire financial assets	(1,235)	(6,170)
Proceeds from disposal of property, plant and equipment	22	—
Net cash from (used in) investing activities	2,695	(3,878)

Cash Flow from financing activities

Repayment of bank overdrafts and lines of credit	—	(58)
Repayment of sale and leaseback obligation	—	(118)
Repayment of lease liabilities (2018: Repayment of finance lease obligations)	(77)	(12)
Repayment of long-term debt	(250)	(197)
Proceeds from issuance of long-term debt	500	40
Net cash from (used in) financing activities	173	(345)

Net increase (decrease) in cash and cash equivalents	1,031	(4,411)

Cash and cash equivalents at beginning of period	7,402	7,569
Changes to cash and cash equivalents due to foreign exchanges rates	49	(18)
Cash and cash equivalents at end of period	8,482	3,140

Supplemental Cash Flow Information
Interest paid	66	47
Interest received	43	1

See accompanying notes to unaudited condensed consolidated interim
financial statements.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1. Preparation of financial statements

Our condensed consolidated interim financial statements include the
accounts of voxeljet AG, which is listed on the New York Stock
Exchange, and its wholly-owned subsidiaries voxeljet America Inc.,
voxeljet UK Ltd. and voxeljet India Pvt. Ltd., as well as voxeljet China
Co. Ltd., which are collectively referred to herein as the ‘Group’ or
the ‘Company.’

Our condensed consolidated interim financial statements were prepared in
compliance with all applicable measurement and presentation
rules contained in International Financial Reporting Standards (‘IFRS’)
as set forth by the International Accounting Standards Board (‘IASB’)
and Interpretations of the IFRS Interpretations Committee (‘IFRIC’). The
designation IFRS also includes all valid International Accounting
Standards (‘IAS’); and the designation IFRIC also includes all valid
interpretations of the Standing Interpretations Committee (‘SIC’).
Specifically, these financial statements were prepared in accordance
with the disclosure requirements and the measurement principles for
interim financial reporting purposes specified by IAS 34.

The IASB issued a number of new IFRS standards which are required to be
adopted in annual periods beginning after January 1, 2019.


Standard	Effective date	Descriptions
Others	01/2020	Amendments References to the Conceptual Framework in IFRS Standards 3
IFRS 3	01/2020	Amendment Definition of a business
IAS 1, IAS 8	01/2020	Amendment, Amendment Definition of material
IFRS 17	01/2021	Insurance Contracts
IFRS 10, IAS 28	indefinite	Amendment Sale or Contribution of Assets between Investor and its Associate or Joint Venture

The Company has not yet conclusively determined what impact the new
standards, amendments or interpretations will have on its financial
statements, but does not expect a significant impact.

The condensed consolidated interim financial statements as of and for
the three months ended March 31, 2019 and 2018 were authorized for issue
by the Management Board on May 16, 2019.

2. Summary of significant accounting policies

Except as described below, the accounting policies applied in these
condensed consolidated interim financial statements are the same as
those applied in the Company’s consolidated financial statements as of
and for the year ended December 31, 2018, which can be found in its
Annual Report on Form 20-F that was filed with the U.S. Securities and
Exchange Commission on March 28, 2019. The changes in accounting
policies are also expected to be reflected in the Company’s consolidated
financial statements as of and for the year ending December 31, 2019.

The Group has initially adopted IFRS 16 Leases from January 1,
2019. A number of other new standards are effective from January 1, 2019
but these do not have a material effect on the Company’s consolidated
financial statements.

IFRS 16 introduced a single, on-balance sheet accounting model for
lessees. As a result, the Group, as a lessee, has recognized
right-of-use assets representing its rights to use the underlying assets
and lease liabilities representing its obligation to make lease
payments. Lessor accounting remains similar to previous accounting
policies.

The Group has applied IFRS 16 using the modified retrospective approach,
under which the cumulative effect of initial application is recognized
in retained earnings as of January 1, 2019. Accordingly, the comparative
information presented for 2018 has not been restated and is therefore
presented as previously reported, under IAS 17 and related
interpretations. The details of changes in accounting are disclosed
below.

Definition of a lease

Previously, the Company determined at contract inception whether an
arrangement was or contained a lease under IFRIC 4 Determining
Whether an Arrangement contains a Lease. The Company now assesses
whether a contract is or contains a lease based on the new definition of
a lease. Under IFRS 16, a contract is, or contains, a lease if the
contract conveys a right to control the use of an identified asset for a
period of time in exchange for consideration.

On transition to IFRS 16, the Company elected to apply the practical
expedient to grandfather the assessment of which transactions are
leases. It applies IFRS 16 only to contracts that were previously
identified as leases. Contracts that were not identified as leases under
IAS 17 and IFRIC 4 were not reassessed. Therefore, the definition of a
lease under IFRS 16 has been applied only to contracts entered into or
changed on or after January 1, 2019.

At inception or on reassessment of a contract that contains a lease
component, the Company allocates the consideration in the contract to
each lease and non-lease component on the basis of their relative
stand-alone prices.

The Company as a lessee

The Company leases assets, including properties, production equipment
and vehicles. As a lessee, the Company previously classified leases as
operating or finance leases based on its assessment of whether the lease
transferred substantially all of the risks and rewards of ownership.
Under IFRS 16, the Company recognizes right-of-use assets and lease
liabilities for most leases. These leases are on-balance sheet.

However, the Company has elected not to recognize right-of-use assets
and lease liabilities for some leases of low-value assets (e.g. tools)
as well as short-term leases (leases with less than 12 months of lease
term). The Company recognizes the lease payments associated with these
leases as an expense on a straight-line basis over the lease term.

The Company presents right-of-use assets in “property, plant and
equipment”, in the same line item as it presents underlying assets of
the same nature that it owns. The carrying amounts of right-of-use
assets are as below:


	Property, plant and equipment
	Property	Production equipment	Others	Total
	(€ in thousands)
Balance at January 1, 2019	3,134	112	280	3,526
Balance at March 31, 2019	4,759	104	277	5,140

The Company presents lease liabilities within “financial liabilities” in
the condensed consolidated statements of financial position.

Leases under IFRS 16

The Company recognizes a right-of-use asset and a lease liability at the
lease commencement date. The right-of-use asset is initially measured at
an amount equal to the lease liability, and subsequently at cost less
any accumulated depreciation and impairment losses, and adjusted for
certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the
lease payments that are not paid at the commencement date, discounted
using the Company’s incremental borrowing rate.

The lease liability is subsequently increased by the interest cost on
the lease liability and decreased by lease payments made. It is
remeasured when there is a change in the future lease payments arising
from a change in an index or rate, a change in the estimate of the
amount expected to be payable under a residual value guarantee, or as
appropriate, changes in the assessment of whether a purchase or
extension option is reasonable certain not to be exercised.

The Company has applied judgement to determine the lease term for some
lease contracts in which it is a lessee that include renewal options.
The assessment of whether the Company is reasonably certain to exercise
such options impacts the lease term, which significantly affects the
amount of lease liabilities and right-of-use assets recognized.

Transition

Previously, the Company classified property plant and equipment leases
as operating leases under IAS 17. These include manufacturing
facilities. The leases typically run for a period of three to ten years.
Some leases include an option to renew the lease for an additional three
to five years after the end of the non-cancelable period.

At transition, for leases classified as operating leases under IAS 17,
lease liabilities were measured at the present value of the remaining
lease payments, discounted at the Company’s incremental borrowing rates
for similar assets as of January 1, 2019. Right-of-use assets are
measured at an amount equal to the lease liability, adjusted by the
amount of any prepaid or accrued lease payments.

The Company used the following practical expedients when applying
IFRS 16 to leases previously classified as operating leases under IAS 17:

Applied a single discount rate to a portfolio of leases with
reasonably similar characteristics.
Applied the exemption not to recognize right-of-use assets and
liabilities for leases with less than 12 months of lease term.
Used hindsight when determining the lease term if the contract
contains options to extend or terminate the lease.

The Company leases a small number of items of production equipment.
These leases were classified as finance leases under IAS 17. For these
finance leases, the carrying amount of the right-of-use asset and the
lease liability at January 1, 2019 were determined at the carrying
amount of the lease asset and lease liability under IAS 17 immediately
before that date.

The Company as a lessor

The Company leases out a small number of 3D printers. Those leases have
been classified as operating leases.

The accounting policies applicable to the Company as a lessor are not
different from those under IAS 17.

The Company is not required to make any adjustments on transition to
IFRS 16 for leases in which it acts as a lessor.

Impacts on financial statements

Impacts on transition

On transition to IFRS 16, the Company recognized additional right-of-use
assets, including property, plant and equipment and additional lease
liabilities. The impact on transition is summarized below.


		Impact on adopting IFRS 16 at January 1, 2019
		(€ in thousands)
Right-of-use assets presented in property plant and equipment		3,526
Lease liabilities as presented in financial liabilities		3,526

When measuring lease liabilities for leases that were classified as
operating lease, the Company discounted lease payments using its
incremental borrowing rates as of January 1, 2019. The weighted-average
rate applied is 4.55%.


		January 1, 2019
		(€ in thousands)
Operating lease commitment at December 31, 2018, as disclosed in the Group’s consolidated financial statements		2,584
Discounted using the incremental borrowing rate at January 1, 2019		1,973
Finance lease liability recognized as at December 31, 2018		105
Recognition exemption for leases with less than 12 months of lease term at transition		(84)
Extension options reasonably certain to be exercised		1,532
Lease liabilities recognized at January 1, 2019		3,526

Impacts for the period

As a result of initially applying IFRS 16, in relation to the leases
that were previously classified as operating leases, the Company
recognized kEUR 5,140 of right-of-use assets and kEUR 4,348 of lease
liabilities as of March 31, 2019.

Also in relation to those leases under IFRS 16, the Company has
recognized depreciation and interest costs, instead of operating lease
expenses. During the three-months ended March 31, 2019, the Company
recognized kEUR 155 of depreciation expenses and kEUR 43 of interest
expense from these leases.

3. Share based payment arrangements

On April 7, 2017, voxeljet AG established a share option plan that
entitles key management personnel and senior employees of voxeljet AG
and its subsidiaries to purchase shares of the parent company.

Total options available under the share option plan are 372,000. 279,000
options (75%, Tranche 1) were granted on April 7, 2017. 93,000 options
(25%, Tranche 2) were granted on April 12, 2018.

The vesting conditions include a service condition (the options vest
after a period of four years of continued service from the respective
grant date) and a market condition (the options may only be exercised if
the share price exceeds the exercise price over a period of 90
consecutive days by at least 20% in the period between the grant date
and the respective exercise time frame) of which both conditions must be
met.

The fair value of the employee share option plan has been measured for
Tranches 1 and 2 using a Monte Carlo simulation. The market condition
has been incorporated into the fair value at grant date.

The inputs used in the measurement of the fair value at grant date are
as follows:


	Tranche 1	Tranche 2
Parameter
Share price at grant date	USD 13.80	USD 16.15
Exercise price	USD 13.90	USD 16.15
Expected volatility	55.00%	58.40%
Expected dividends	—	—
Risk-free interest rate	2.49%	2.85%
Fair value at grant date	USD 8.00	USD 9.74

The respective expected volatility has been based on an evaluation of
the historical volatility of the Company’s share price as at the grant
date. As at March 31, 2019 no options are exercisable and 353,400
options are outstanding. The weighted-average contractual life of the
options at March 31, 2019 amounts to 8.3 years (March 31, 2018: 9.0
years).

The expenses recognized in the profit and loss statement in relation to
the share-based payment arrangements amounted to kEUR 165 in the three
months ended March 31, 2019 (three months ended March 31, 2018:
kEUR 129).

On March 1, 2019, voxeljet China moved into a new facility. The minority
shareholder of voxeljet China has increased its shareholding in the
entity from 4.175% to 30% through an in-kind capital contribution of a
lease contract on the new facility. The lease term under IFRS 16 of the
contract is six years, including a rent-free period during the first
three years. The transaction is accounted for as a share-based payment
transaction under IFRS 2 and resulted in an increase of non-controlling
interest of kEUR 216 and capital reserves of kEUR 604. The Company also
recorded a right-of-use asset and the corresponding lease liability on
the commencement date of the lease.

4. Inventories


	3/31/2019	12/31/2018
	(€ in thousands)
Raw materials and merchandise	4,218	4,628
Work in progress	6,938	5,436
Total	11,156	10,064

5. Property, plant and equipment, net


	3/31/2019	12/31/2018 ⁽¹⁾
	(€ in thousands)
Land, buildings and leasehold improvements	21,772	17,085
Plant and machinery (2018: includes assets under finance lease)	8,713	9,072
Other facilities, factory and office equipment	1,742	1,502
Assets under construction and prepayments made	28	16
Total	32,255	27,675
Thereof pledged assets of Property, Plant and Equipment	7,015	6,691
Leased assets included in Property, Plant and Equipment:	189	357
Printers leased to customers under operating lease	189	208
Other factory equipment	—	149

6. Other liabilities and provisions


	3/31/2019	12/31/2018
	(€ in thousands)
Liabilities from VAT	97	24
Employee bonus	382	413
Accruals for vacation and overtime	398	210
Accruals for licenses	40	69
Liabilities from payroll	314	298
Accruals for commissions	37	47
Accruals for compensation of Supervisory board	225	180
Accrual for warranty	184	240
Others	322	387
Total	1,999	1,868

7. Financial instruments

The following table shows the carrying amounts and fair values of
financial assets and financial liabilities, including their levels in
the fair value hierarchy. In addition, for the current year the fair
value disclosure of lease liabilities is not required.


	Carrying amount					Fair Value
			Assets at	Liabilities	Total
	FVTPL	FVOCI	amortized	at amortized	carrying
3/31/2019			cost	cost	amount	Level 1	Level 2	Level 3	Total
Financial assets measured at fair value
Non-current assets
Derivative financial instruments	1,627	—	—	—	1,627	—	1,627	—	1,627
Equity securities	—	5	—	—	5	—	—	5	5

Current assets
Bond funds	—	8,924	—	—	8,924	8,924	—	—	8,924
Note receivable	—	1,253	—	—	1,253	1,253	—	—	1,253

Financial assets not measured at fair value
Current assets
Cash and cash equivalents	—	—	8,482	—	8,482	8,482	—		8,482
Trade and other receivables	—	—	4,857	—	4,857	—	—	—	—

Financial liabilities not measured at fair value
Non-current liabilities
Long-term debt	—	—	—	16,652	16,652	—	15,641	—	15,641

Current liabilities
Long-term debt	—	—	—	916	916	—	908	—	908
Trade payables	—	—	—	2,507	2,507	—	—	—	—


	Carrying amount					Fair Value
			Assets at	Liabilities	Total
	FVTPL	FVOCI	amortized	at amortized	carrying
12/31/2018			cost	cost	amount	Level 1	Level 2	Level 3	Total
Financial assets measured at fair value
Non-current assets
Derivative financial instruments	2,229	—	—	—	2,229	—	2,229	—	2,229
Equity securities	—	5	—	—	5	—	—	5	5

Current assets
Bond funds	—	12,905	—	—	12,905	12,905	—	—	12,905

Financial assets not measured at fair value
Current assets
Cash and cash equivalents	—	—	7,402	—	7,402	7,402	—		7,402
Trade and other receivables	—	—	6,030	—	6,030	—	—	—	—

Financial liabilities not measured at fair value
Non-current liabilities
Long-term debt	—	—	—	16,250	16,250	—	15,231	—	15,231
Finance lease obligation	—	—	—	71	71	—	69	—	69

Current liabilities
Long-term debt	—	—	—	816	816	—	809	—	809
Finance lease obligation	—	—	—	34	34	—	34	—	34
Trade payables	—	—	—	2,945	2,945	—	—	—	—

The fair value of the Company’s investments in the bond funds and note
receivable was determined based on the unit prices quoted by the fund
management company.

The fair value of long-term debt was determined using discounted cash
flow models based on the relevant forward interest rate yield curves.

Due to their short maturity and the current low level of interest rates,
the carrying amounts of credit lines and bank overdrafts approximate
fair value.

8. Financial result


	Quarter Ended March 31,
	2019	2018 ⁽¹⁾
	(€ in thousands)
Interest expense	(917)	(268)
Interest expense on lease liability (2018: Finance lease obligations)	(43)	(36)
Long-term debt	(242)	(232)
Expense from revaluation of derivative financial instruments	(602)	—
Other	(30)	—
Interest income	59	946
Payout of bond funds	54	5
Income from revaluation of derivative financial instruments	—	941
Other	5	—
Financial result	(858)	678

9. Segment reporting

The following table summarizes segment reporting. The sum of the amounts
of the two segments equals the total for the Group in each of the
periods.


		Three months ended March 31,
		2019				2018 ^{(1) (2)}
	(€ in thousands)
		SYSTEMS		SERVICES		SYSTEMS		SERVICES
Revenues		2,415		3,150		1,375		3,677

Gross profit		829		1,084		381		1,752
Gross profit in %		34.3	%	34.4	%	27.7	%	47.6	%

10. Revenues


	Three months ended March 31,
	SYSTEMS		SERVICES
	2019	2018	2019	2018
	(€ in thousands)
Primary geographical markets
EMEA	928	712	1,822	2,420
Asia Pacific	613	551	218	216
Americas	874	112	1,110	1,041
	2,415	1,375	3,150	3,677

Timing of revenue recognition
Products transferred at a point in time	2,193	1,267	3,150	3,677
Products and services transferred over time	222	108	—	—
Revenue from contracts with customers	2,415	1,375	3,150	3,677


	Three months ended March 31,
	2019	2018
	(€ in thousands)
EMEA	2,750	3,132
Germany	1,351	1,517
France	373	589
Great Britain	450	274
Others	576	752
Asia Pacific	831	767
India	243	318
Others	588	449
Americas	1,984	1,153
United States	1,948	1,139
Others	36	14
Total	5,565	5,052

11. Commitments, contingent assets and liabilities

In March 2018, ExOne GmbH, a subsidiary of ExOne, notified voxeljet of
its intent not to pay its annual license fees under an existing
intellectual property-related agreement and asserted its rights to claim
damages pursuant to an alleged material breach of the agreement. At this
time, the Company cannot reasonably estimate a contingency, if any,
related to this matter.

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