Titomic Limited (T04.F) Earnings Call Transcript & Summary

[Audio Gap] at the bottom of your screen to Q&A, I'll get you to write those in, and we'll go through them in turn at the end of the formal part of the presentation. So without further ado, let me pass over to Herbert. Over to you, Herbert.

Thank you, Adrian, and thank you for taking the time today to join the Titomic results call for the 6 months, which ended on the 31st of December 2021. I'm Herbert Koeck. I'm the Managing Director of Titomic. And with me today, next to me is Jon Nield, Titomic CFO. Today, we want to present the company's results for the first half and an overview on our renewed focus going forward. I can tell you, we have worked really hard in the last 6 months to evolve our business model and to create revenue streams while focusing mainly on the defense and aerospace markets. These results show that the strategy is working, and we expect that this bears fruit in the subsequent reporting periods significantly more than the company and [ disaster ] just only a short period ago. Now I assume that you all have read the details of this disclaimer statement. And from an agenda standpoint, let me share with you what we would like to share out to you today, okay? Just briefly, from an agenda standpoint, I will walk you through the fiscal year H1 highlights we have in place, and recap on our business. Then I will hand over to Jon Nield to share with you some of the financial results we have. And then at the end of the day, I will come back and to close with an operational update, trying to highlight on the very big things that [indiscernible]. [Technical Difficulty] We will need [indiscernible] and we will need to shut off the microphone of this PC. Okay. Now let me go immediately into the highlights. So we still have the... [Technical Difficulty] So I think the echo should be gone by now. [Technical Difficulty] Adrian, can you still hear me? Just to check on the technology.

Yes. All good, Herbert. You can continue on now.

Okay. Awesome. Thank you very much. Now I'm very pleased to be able to share out to you a selective list of significant achievements, which you see on that slide, which represents the beginning of our strategies driving business results. That's what we really have achieved in the last 6 months. Starting with the highlights for the first half on Slide #4, we did the following. What you see is we achieved a revenue at $2.3 million, which was up 497% ((sic)) [ 479% ] versus the comparable period last year, okay? We had a confirmed -- we have already today confirmed purchase orders of additional $2.4 million as of 31st December 2021. We welcome Repkon as a strategic investor. We completed the strategic acquisition of Dycomet in Europe and Tri-D Dynamics in the USA. We were awarded with a great grant of $2.3 million Modern Manufacturing Initiative Grant from the Government in Australia which allowed us also to collaborate with Boeing to create parts with green titanium. We signed a couple of nonbinding agreements, one specifically with Triton Systems, to develop applications in the U.S. market. And result, as you have heard already during the investor conference and the capital raise process we did earlier this year, TKF1000 Systems to a leading research organization, TKF -- to TWI in the U.K. And we completed successfully a capital raise process raising $9.9 million in November earlier this year. Now Titomic at the plants, for those of you who haven't been with us, let me ground us once again and what is Titomic all about, okay? What you see here is a little bit of a history, and I'm sure many of you have seen that one. So I'm sorry that I'm repeating this, but it's important to understand where we are coming from because it's important -- because it's key for all of us that we all know where we are going to, Okay? We are working off a couple of patents, which we have the exclusive rights to commercialize from CSIRO, and the company started in 2014, okay? Our process is called Titomic Kinetic Fusion. It's straight marked and it gives us a competitive edge across the globe. And just with the acquisition of Dycomet, we are complementing our product portfolio on top of it. We aim to be a global leader which is an important element of our strategy. We aim to be a global leader, to providing cutting-edge technology in cold spray and cold spray solutions. It's important to understand that we don't try to compete with other players in the industry and to mimic what they have been doing already for a long time. We are providing an additional tool in the toolbox of manufacturing customers. We are helping them to get basically additive manufacturing as an element into their overall portfolio, and this is also what these customers and this joint venture partners today are interested in. Now cold spray, as the next step, is an interesting technology as of today. I hope you can see that slide, which I have shared already during the investor conferences earlier last year. It's important to understand that all these technologies, which exist out there, in the metal additive manufacturing world are at different maturity levels. Actually, it is the company, AMPOWER, a German research company, which surveys all these technologies every year and releases this kind of a maturity index. It gives an idea on which of these technologies are how far advanced in terms of being ready for industrial use. The interesting part, and I can't highlight this enough again and again, is that AMPOWER clearly states that cold spray technology is within, in less than 2 years, be ready for commercial use. We are seeing this starting already, okay? I can tell you, I'm very pleased from some of the results, which you're going to see later on. And just an hour ago, here at our office in Melbourne, the team came forward with a tool which we produced, which took us exactly 4 weeks to produce the tool, while the current provider of the tool at a lead time just off a half a year to get the billet of the titanium material to produce the tool. So it's a significant improvement, which we can manage, and we are getting this proof points going right now. And that's -- chart which you see here is just a proof that our technology is ready to commercialize business in less than 2 years, and it has started already. Now the whole technology -- and I'm sorry, once again, if I repeat it, it's all about a superior speed, size and sustainability. I've told some of you who have been with me on previous calls, the big thing which affected me also personally to try at the helm of Titomic was the ability to go for speed and size at the same time while having a process which has so many opportunities and advantages versus, for example, the Laser Beam Power Bed Fusion process where they are really struggling in getting into larger size parts. Now over the course of the last month, I can tell you, as we have been focusing on a handful of key applications, we learned a lot about applying our technology. We are well on track to move -- to be less of a mile-wide and an inch-deep. We are reversing right now. We have selected a few application and use cases, and we are getting a mile-deep, and this is giving us all the insights we need to become attractive to the specific customers we are going for in this space. Now it's one thing to see the technology as a drawing and what we are doing. And as you may know is, we are taking basically a metal powder. We are accelerating this metal powder in the gas stream to supersonic speed, and literally supersonic speed, actually mach 2.3 to 2.6, and then pushing this gas stream, which is enriched with the metal powder out of a nozzle. And when this goes against the scaffold or against the substrate, it starts the bond with each other. And that's the theory. The reality is this turns into machinery. And as you can see on these pictures, these are actually the 2 big machines which have been in place at our office already for the last 2 years. On the right-hand side, you see that TKF9000, on the left-hand side, you see the TKF1000. And as you can easily imagine, the numbering of the machinery talks about the maximum size of the parts we can produce in there, okay? So 1,000 would mean the maximum size of the part is a square meter. The TKF9000 allows us to produce part up to 9 meters. Actually, we are talking about 9 times 6 meters in theory up there. Now this is a reality. These are the machines which we have here at our Melbourne Bureau. I don't want to highlight with you something very, very new. And I think none of you have seen this so far. We have a new member in our machine portfolio, a new member of a machine family. What you see here behind the circle is actually a machine which has become available to us now as part of the Dycomet, which is now Titomic Europe acquisition. This machine right now, exactly right now, stand at the AusRAIL exhibit in Sydney, where our team is out there, and showcasing the solutions we have on repair services to transportation companies. AusRAIL is a very well-established trade show happens every year, and we are looking forward. And even last day yesterday on Monday, we had already very, very interested customers, and created a couple of leads because they immediately saw what this machine, which is a mobile unit, which is a manual spray gun, which -- that can do for the repair of their machine bucks in the future. You also need to know is that almost half, technically 48% of all the cold spray applications today are already in transportation. And this machine from Dycomet, now Titomic Europe, is opening up these opportunities to us also at Titomic. Now the difference of cold spray as what you see here as summarized. I don't want to go into the details because as you can read faster than I can talk. But you need to remember this cold spray technology allows us to go for speed. It allows us to go for size. It allows us to scale systems depending on the customer needs, an important element as we are in the middle of discussions with joint venture partners out there across the globe. There will be a TKF1200. There will be a TKF2500 without making any forecast here on what that specifically means, but obviously, the machine design has the flexibility so that we can build machinery in line with the expectations and the needs of specific customers out there. And on top of it, we can produce stronger materials we have less waste, and we can operate this machine with -- in a sustainable way. That's again a highlight. It's more important than ever, Okay? Sustainability in manufacturing is going to go get key, especially now, okay? We are just experiencing another turmoil in the geopolitical scene worldwide, which is a challenge on its own. But besides that, it's going to get -- going to give major disruptions to supply chains across the world. To get a metal billet or a titanium billet at the moment for a tool builders is a challenge. And this challenge is just getting bigger as we speak. As I told you, the team here showed me that getting a billet of this kind of a carbon fiber tool, which we have produced within the month, actually, the spray time was less than a week. At this point in time, you would need to wait more than 24 weeks to get such a billet on the global market, okay? We got the product. We get it produced in a week. We got -- he treated and finalized in the next 3 weeks so, 4 weeks versus half a year. That's a significant improvement out there. Now let me also share with you, and this is the business model, okay? From the very beginning, my approach was always to focus on a few applications and use cases, okay? We were challenged in the past by going for too many things and trying do a lot of things in the industries because of the technology allows it in the long run to do so, but that doesn't move us forward, okay? We spent a significant amount of time and very hard work in the last couple of months. We zoom in on a couple of use cases and applications. I can share many of them with you, and you see here, some of the focus areas we are definitely, okay? Space -- even so space, obviously, is an industry, and it's not a specific application or use case because tooling, for example, plays a roll in space, okay? Tooling plays a role in civil aerospace. Tooling plays a role in defense. We are talking about repair services. We are talking about radiation shielding. We are talking about barrels. We are talking about ballistic barrels, okay? For all these application use cases, we have now a very good understanding -- we know exactly where the sweet spot of the technology is where we are closer to implementation versus others. And you're also going to hear from us, as I said at the very beginning, in the weeks ahead, and I'm saying weeks, not months. In weeks ahead, more details on which use cases we are going to focus on overall. Now the important part is, besides us, obviously going and trying to sell machines for these use cases and support customers to produce these parts, the important element of our commercial strategy is also to go for joint venture partnerships. Joint ventures, as you know, is more than a machine. The reason, once again, why we are going into joint ventures is because it wouldn't be prudent from us to go for and become the expert in all these industries where we can apply the technology. We simply can't be copy and get to the level of expertise, than some of these players are out there. Neos is in the tooling world is out there for 20 years. They have a lot of existing customer relationships. And we don't want to compete with that. We want to provide a tool, as I said, for their toolbox. And we want to ride on the shoulders of the giants, and with that one becoming attractive to their customers. And the way to do it is to create joint venture partnerships, okay? And joint venture partnerships at the end of the day, it means to get something going faster than each of us could do it on our own at a significant reduction of cost. Because we go into a joint venture, usually, you share the cost, you share the benefits later on. On the long run for our business, that also means that we are not only having a commercial benefit and the business coming out that these joint ventures are buying machines they're consuming materials, services, maintenance and all the other elements, but also that we have a financial return of the output of these joint ventures. Now you could ask the question saying is, hey, you haven't even announced the joint venture yet. But as you know, we are talking in the final talks with some of these partners like Neos, like Repkon in the U.K. and some of the others. It's a kind of a thing you don't want to rush. First of all, the Ts and Cs of these joint ventures are also in negotiation. We want to get the best deal because you want to have a construction, which is legally binding, which is to the best of both companies. And yes, there are some elements where at the end of the day, you want to get the best deal out of it. So do these joint venture partners, okay? And these negotiations are going on because we just want to achieve the maximum for Titomic. At the same time, we want to achieve a win-win situation for the joint venture, overall, going forward. And it's always in these 3 phases, but I can tell you we are pretty close on a few on -- in the design phase. And we are going -- already have made steps forward to go into the assembly effects. And as I said to you, this is nothing which has started now. This started already 1.5 years ago. And you're going to see -- you can expect something closing in the weeks ahead. Now the logos up here, that list is growing bigger every other day, okay? And I'm very proud of it. And what you can see here is there is a lot of logos coming on top of it. It doesn't fit anymore on the scale. So you're going to see very big names out there. If you think about the aerospace world and Boeing, we are talking with Ascent Aerospace, Lockheed Martin and some others. Same on the defense world, the most prominent and most engaged partner at this point in time with us is certainly Repkon, which I will comment at a certain stage later on. And then when it comes to TWI as a research institute, this is the company which has given us the first machine order which we are building right now, okay, which we are completing in the weeks ahead, and which is supposed to look to go operational in May time frame in the U.K. Now we want to take our technology to the world, okay? Part of the strategy, which I outlined is -- and which we are following right now from the very beginning is where I said, hey, while we are Australian company, which has an important foothold, and its roots in Australia, we definitely need to get closer to where our large customers are in the world, okay? And this is by no doubt the United States of America, and this is Europe. And so a very important element of our strategy to create a strong foothold was get engaged so that we have a foothold in the U.S. and in Europe. And I'm very glad that I can report out to you that both of that one has completed. We completed the acquisition of Tri-D Dynamics in the U.S. in July already last year at the very beginning of my start leadership of Titomic. And we closed out on the acquisition of Dycomet in Europe, which has now become Titomic Europe. Both are bringing significant value add to us even so that, for example, Dycomet is bringing us additional revenue an existing customer installed base and the machine portfolio, which is very complementary, as you could see before with the machine, which is at the AusRAIL exhibition right now to what Titomic already had. Dycomet is already also involved in the completion of the TKF1000 machine, which goes to the U.K. because this is something which we rearranged given the supply chain challenges out of Australia, and the length of the supply chain. So this really works out well. So a key strategy, getting a foothold in the U.S. and in Europe has been completed in the last 6 months, and we are seeing the benefits already coming through. Now with that one, I would like to stop here on the strategic outlook once again. And before going to the operational highlights, I would like to hand over now to Jon that he gives you an update on the financials of the first half of fiscal year '22. Jon?

Good morning, everyone, and thank you very much, Herbert. As Herbert has mentioned, the momentum from our updated business strategy is certainly increasing, and it's already reflected in some of the financial numbers with revenue increased to $2.3 million in this half year as compared to a lot smaller number. We've increased 479% on the prior period. Now the key element of that, that I'd like to focus on is the customer revenue. So revenue from actual customer contracts is at $647,000, which is a 194% increase on the same period last year. As well as that, there's $1.7 million, which is made up of government grants and other revenue adjustments. Moving to the operating loss. We are still in a loss position, but it's better than last year. On an operating basis, we're showing a 10% improvement on last year's numbers. So we're controlling our costs and gradually seeing some benefit coming through from the increased revenue. So last year was a $7 million loss. This year, we've got a $6.2 million loss. So it's looking -- it's reflecting that of those improvements, primarily through acquisitions, but also some improvement in revenues as well. The overall reported net loss of $7.5 million is due to the recognition of future acquisition costs related to one of our acquisitions, and that amount is $1.3 million. Turning to the cash flow now. The company is funded well to execute its future growth strategy. We've got $13.8 million in reserves in cash at the moment, and that follows completion of the $9.9 million successful capital raise through a share placement and a share purchase plan, and a $2.5 million strategic investment from Repkon. The key elements in some of the cash movements were a $4.5 million outflow from operations. Investing cash outflows of $1.1 million, again primarily related to acquisitions, and noting that we also are retaining about $1.5 million in deferred consideration as a noncurrent provision related to acquisitions. A quick look down there at the statement of financial position. We've got a clean balance sheet. We're not retaining any debt at all, and we've got adequate funding for future activities. So overall, a healthy position considering where we're at in the state of the business with its start-up at the moment. I'd like to hand over to Herbert now for an update on the operational review.

Back to myself. Thank you very much, Jon. Now as mentioned at the outset, this half has been us to -- has seen us evolve further the business model, and create multiple revenue streams while we are focusing on a few selected application and use cases, okay? Most of them are steadily in aerospace and defense. From the key operational achievements, and let me start on the upper left here, okay? It's the strategic investment from Repkon, which was great to see that the customer who we have been engaged with for a while, who believes in the technology, who sees the applicability also for their own business and manufacturing business, and has taken the opportunity to invest $2.5 million into Titomic, okay? At this point in time, we are in the negotiations together with Repkon on the creation of a joint venture, and you will see the future further announcements or when it is ready. It's important that whenever I give this outlook and whenever we talk about specific achievements that we have achieved material things, okay? I'm not speculating, I'm not giving you an outlook. Maybe I'm telling you the facts of what we have achieved here. At the same time, we also have -- and you could see that all the one, we have completed the strategic acquisitions, both in the U.S. and also in Europe with Dycomet Europe, which is now Titomic Europe. I'll share with you some more details about that acquisition in a minute. We are completing the building of the TKF1000 machine for TWI in the U.K., which will give us a very nice entry in this market as TWI as a research institute is going to help us, first of all, not only to promote cold spray as a technology, but they're also going to help us make cold spray known to customers like Rolls-Royce, like Airbus like others in the U.K. as they have a membership in place where a lot of customers are looking at them and what they are doing and which technologies they are using. So this is going to be a huge step forward. At the same time, I can tell you, we signed up a heads of agreement with Triton Systems. From the very beginning was a very difficult situation because Triton Systems per se is involved in a lot of work with the U.S. customers, and a lot of that work also has been export -- or is export controlled. Now that's, I say, a difficulty, if you act -- trying to act and engage with them as an Australian company if you do not have a foothold in the U.S. Now with Titomic U.S. being created last year and starting to become operational with the employees we have there. We can engage now with Triton. We can discuss export control work. And we are building right now the manufacturing capabilities in the U.S. for the U.S. Last but not least, the overall Modern Manufacturing Initiative Grant, which we got from the Australian government with $2.3 million earlier this year is also helping us a lot, okay? One of the key topics of that manufacturing grant is to talk about "green" titanium, specific applications, which can be used to commercialize a space vehicles. And as space is commercializing as we speak in parallel to what we are doing at Titomic, the outlook is awesome, and that also got us engaged with Boeing, who is very much engaged in this space, too. Now let me share a few thoughts about and a few details about the Dycomet Europe B.V, a company we acquired and with -- where the acquisition was closed in the beginning of December. Now Dycomet, as I said to you, gives us an immediate entry into the European market and also complementing the product portfolio of Titomic, okay? While Titomic traditionally has been focusing on the high-end side of the machinery, on the hot metals like titanium and invar and inconel and some steels. Dycomet has been, if you will, of the implication in machinery of the softer materials on the lower pressure cold spray technology. They have existing customers with Rolls-Royce, Mercedes, Siemens and many more customers, and they also have an existing installed revenue base, which is already giving us an advantage even so, as you can imagine, as we closed the acquisition in December, the rolling in revenue is only 1 month in our numbers right now coming from Dycomet, but we definitely can show this in the months ahead, and will give us a solid foundation of revenue. On the product portfolio, they also have a specific application and use case with customer in the manufacturing world, of glass. And we are talking about -- with them to expand this to other application and use sites. Culturally, and operationally, we have spent a lot of time over the last 3 months to align. We have regular engagement processes to exchange the know-how of the interior team here in Melbourne, and the engineering team they have in Holland, which is bearing already a lot of fruit. We are learning a lot from each other. And we are using already one of the machines, as you saw on the picture on Slide #10 for the AusRail exhibition here in Sydney right now. Now this completes the formal presentation. And Adrian, I'd like to hand back to you. And I'm available, we can open up for questions. Thank you.

Thanks for your presentation. Not unexpectedly, we have a number of questions. So let me -- the first one, it's actually -- there are 3 questions. So hopefully, it's pretty simple to give answers to these from a long-term investor. Do you expect more capital raisings in the future 6 to 12 months? When do you expect revenue from the Boeing projects? And any update on Composite Technology?

Yes. Let me just note them down because actually there were 3 questions. Capital raises, Boeing and Composite Technology, okay? So let me start with the capital raise process first. Now we are in the situation as Titomic, where at this point in time, as you could see from the financial update, we are still not cash flow positive, okay? That's a reality, like with many other start-up companies we're in a situation that we [Audio Gap] our capital investors. So while nothing has been decided right now, it for a capital raise later this year. Second question on the Boeing business as such. The engagement with Boeing is one out of many, okay? It's an important one. There are multiple conversations happening with Boeing right now. As I said before, Boeing is highly interested also on this "green" titanium solutions, and this is something which we are working on and where we are intensively engaged as part of the overall space grant, okay? There is nothing specifically I can disclose, but the collaboration with Boeing is going into both directions on one side, on the manufacturing of specific parts they need in our Melbourne office and also elsewhere. At the same time, there's also conversations going on potentially about the machine sales, but this is also -- this is future projects, and there isn't anything else I can disclose at this point in time. Important so to say is that Boeing is just one out of many. There is a couple of other providers in the defense market in the U.S. Unfortunately, I can't disclose at this point in time, given that it's export-controlled where our team in the U.S. is working on and which will -- we will see an opportunity for revenue as seen as the operational capabilities in the U.S. are up and running, so in Europe. On the last question on the Composite. Nothing has changed what I have said already in the past. Titomic and Composite, we continue to work on developing the commercial relationship. We have developed testing plans on the materials to be used for the specific defense part, which was part of the agreement. And at this point in time, we are doing extensive testing. The truth is also that COVID obviously wasn't helpful in the engagement overall. But despite COVID, despite certain supply chain challenges around materials, which are related to this project, we are investigating also other solutions which potentially are going into oil and gas industry. So that's the latest and greatest I can share at this point in time regarding Composite.

Thanks, Herbert. Next question, what is the delivery schedule for the new $2.4 million contract, which was referred to in the highlights slide?

The $2.4 million, if you go into further details, would be a breakdown of operational revenue where we have confirmed orders for customers for our parts, but it's also mainly the TWI machine, which we have sold earlier. So the revenue you saw so far is completely aside from the big revenue, which is going to come going forward from the TWI machine, which is planned for later this fiscal year.

Thanks. Next question. What stage are you at with plans for a powder plant Australia?

I'm sorry that I gave it a smile right now is because we are having quite intensive conversations overall, okay? And the situation with the powder plant has become a more actual -- with the geopolitical situation right now than ever before, okay? We all have to understand that a powder plant as such is a solution which, I would say, the whole world is looking for because at this point in time, as you may that the majority of the powder, which is produced, a titanium powder specifically, in this world that's coming either from Russia or from China. So from a geopolitical situation, overall, not really 2 locations which prefer -- get preferred treatment in the world right now. At the same time, we also know that Australia fits on the largest, I think, mineral sands on titanium, for example, in terms of raw materials as a resource in the world. Now that's a great combination as such. The only point is that if we go for a powder plant, and we have made the plans, we also have the financials behind. At this point in time, it isn't part of the financial envelope and the scale we have, okay? This is something which you're going to hear from myself in the weeks ahead on what we want to do here. Because it has 2 elements. One, it's a very big investment, which is on and beyond the scale, we can afford right now, even so strategically, it's very important for us going forward. And second, if you have a powder plant, you also need to make sure that the powder which is then produced by that plant is consumed elsewhere, okay? You need to find the right timing and the right balance between the two, the amount of powder you produce in your own power plant and when you go out there and produce enough parts so that you consume the production capacity which you have in the power plant. It's a balanced system, but it's more important than ever. And you're going to hear more conversations from my side with you, as investors, what we want to do here. Strategically, it's very clear. Having an independent powder supply for the future is an important element of our strategy. It's actually an important element for anyone in the world to consume titanium powder.

Thanks, Herbert. Very useful answer. As you just sticking to the similar theme and it's time for this question to be asked with respect to geopolitical risks. So what does the Russia-Ukraine war make for Titomic? Will it change any defense-oriented work?

Yes. So first of all -- by thinking the story which is happening right now is a human tragedy on its own, and it's not on me to comment on that one. What we are seeing already are some challenges in supply chains, okay? Even so, we have been proactive and make sure that we are sufficiently stocked on certain powders, which we need for our production right now. So the impact, a, we see is that supply chains are getting longer, supply chains are getting disrupted. At the same time, also, we are checking right now to what extent we are using, for example, components in machinery, and this relates more so to Dycomet than to Titomic originally, which are coming potentially off from either China or from Russia, specifically. The work which we are undertaking right now is also doing a complete reverse engineering on the machinery, which we inherited from Dycomet so that we are becoming independent of these 2 key regions in the world as it is foreseeable that the situation will not ease going forward, okay? So we clearly strive independence, but short term, there could be a word or the other timing challenge imposed on us coming, a, from supply chain or, b, coming potentially from components which will not be immediately available before we are finding alternative sources.

Thanks, Herbert. Next question, and with respect to Triton. So what applications are involved with the Triton agreements in the U.S.? And what are the next steps for leveraging this agreement?

So first of all, you need to be clear on that one. The primary goal of going with that acquisition was to have a foothold in the U.S., okay? And I would say mission achieved from that perspective. The second big goal is that we can engage with customers in the U.S. based on the team we have now in the U.S., even it was so that in the last 6 months, to give you an idea, this team also helped Titomic to overcome some of the challenges we have around COVID, okay? Because there were several trade shows in the U.S. There was a trade show like Formnext in November in Europe. And at that point in time, nobody from Australia could attend these trade shows because of the COVID regulations and the lockdowns we had in Australia. So these teams stepped up and stepped in and helped us to participate in these trade shows generating leads and customer interest for Titomic while otherwise, we couldn't have done so, okay? The specific use cases and applications is the entire portfolio we have as Titomic, okay? It wasn't so that we went IT dynamics in the past for a specific use case. Yes, we have one, with these intelligent pipes, which we are working and continue to work with a big manufacturer in Japan for which they have originally designed that solution that's ongoing, okay? And that's completing. And we are discussing here the next level of agreement with these guys. But the Titomic U.S. guys now immediately took on all the solutions, the entire portfolio, which we have as Titomic, on top of it, now what we got in from Dycomet, and presenting this day in, day out to U.S. customers, okay? And contrary to the situation which we had before, where we only could engage a couple of hours a day with the U.S. customers, we now have a full day, okay? And technically, even so we had a great Board meeting recently, and that was personally in the U.S. 3 weeks ago. It's just great to see the level of engagement and the amount of customer engagements we have now because we also handed over basically from the Australian team to our U.S. team, the customer engagement, answering their questions, doing the presentations out there, and it's really starting very, very nice, has given us big progress with some of the potential joint venture partners there, also in the tooling world, and we are making great progress here.

Thanks, Herbert. A couple of questions on Dycomet. So are we getting traction from local or Europe prospects on the combined offer from Dycomet, Titomic JV? And also as part of the acquisition, is it expected that the TKF machine will be built at the Titomic Europe facility?

Yes. Actually, that's happening already. Not necessarily, the original thought for the detailed TWI machine was that we assembled here in Melbourne. We put it on a ship, on a cargo and then get it unpacked in the U.K., installed and commissioned by the customer later this fiscal year. Now the reality is that supply chain disruptions has forced us to come out with a plan B. And plan B is that we are having now a mix of the assembly and of the installation activities. Some of them still happens right now here in Melbourne. We are closing out on that one. That thing is going to get on a boat anytime soon, will be then completed in Holland and also the installation overall in the U.K. will be performed by engineers from Dycomet and out of Australia, okay? A kind of a [indiscernible]. We couldn't have done in the past because we simply would have seen the situation that we would have been late in the installation, and potentially being delayed also in the commissioning of the machine by many, many months. Now the ability which Dycomet brings in now because we have people there who really understand cold spray, because of the facility they have in Holland, because of the supply chain they have in Holland. We are coming out with a solution, which is very beneficiary also for TWI as a customer. For example, we are making immediate improvements on cabinets because they have a great supplier there in Holland. We have one in Australia. So it's a great combination of both worlds. From the machine and the solution perspective, overall, it's extremely well complementing what we have already at Titomic, okay? But then, they're learning from us on all the applications on the hot metals, dealing with titanium, dealing with inconel thelium, dealing with invar on the tooling side of the house, something which they haven't done in the past. And where they're going to build also a TKF1000 system in Holland for their own use. At the same time, in Australia, we are learning a lot about their low-pressure system, which they have developed over time, and which becomes available to them and to us also in Australia, like, for example, the exhibition, which happens just this week.

Thanks, Herbert. Next question goes to Slide 7. I think that's the one that has the industrialization index against the technology maturity index. So referring to that chart. What's changed in these sectors? And why are customers only getting to see AM is a good option now? Is it to do with supply chains or education or something else?

It's an interesting aspect, okay? We may look at it at the bigger scheme of additive manufacturing because there was a lot of disputes out in the industry is additive manufacturing, is 3D printing a successful business as such? And I know there are still investors out there we believe it's still not the case. It's still an immature industry overall. And to a certain extent, that's correct, okay? You need to think about it. Well, the first 3D printer, that's developed by Chuck Hull, who is with 3D Systems, my previous company, was developed by him in 1984. Because we always need to understand is that when other additive manufacturing makes inroads into a manufacturing customer, it's a big change project actually. It's more so that convincing somebody about the technology. I think that's what we tried for a long period of time, and we get excited about the technology. But unless we can find the commercial benefit of that solution, it's not going to make with any inroads, okay? And today, we have -- we are changing -- we are progressing on our way to highlight basically the technical features and benefits, which is one thing. But at the same time, we are gaining experience and we are getting much better now to find a commercial articulation of the solution, okay? We are finding the commercial benefits. Why is it that the customers can take the solution and this tool in their toolbox. And this is a process -- this is a process. And still, the 3D printing industry is it now $15 billion or $20 billion, whatever the latest numbers from Wall Street report are saying. The manufacturing industry is $12 trillion, okay? So is this immature versus the manufacturing industry? Absolutely. But at the same time, I can tell you for our Laser Beam Power Bed Fusion technology, which is basically one of the first technologies which was developed 10, 15 years ago on the metal side of the house, there are specific use cases where there is literally dozens of machines working day in, day out, producing metal parts out of it, okay? If you go to Ireland and you go to Johnson and Johnson or 3D systems in Colorado, they have literally dozens of machines, which are producing specific parts. So us creating these capabilities and this capacity is an absolutely necessity going forward. Because if one comes to you and saying, hey, can you produce that part for me? That's one question. If the same customer comes to us and can I say, can you produce 1,000 of these parts for me in the next 6 months? It's another question, okay? And this is what we are working right now to find that solution in the sense of that, first, we prove that we can do one part. And then immediately, the next question is how can we build capacity to scale production for literally hundreds of products the customers may need?

Thanks, Herbert. So final question here. You mentioned the diversification of revenue streams. Can you give us a sense of the transition away from machine sales and consumables to partnerships and JVs? And what's the ideal revenue split?

A good one. So first of all, just to be clear on that one, I don't want to transition away from these 2 things. We want to create it on top of it, okay? To articulate our commercial strategy once again is, we continue to drive machine sales as such. Because machine sales at this point in time is going to help us to promote the technology as such, give us nice revenue streams by the selling of the machines and also nice revenue streams, which come in consequence of these machine installations, which means powder, consumption, service and maintenance, and the potential for us to consult the customer on the specific geometries of the path. So this is something we want to continue. We want to grow, okay? On top of it, while this usually machine sales are related to one-off customers. One-off customers, by any means, I want to mean this in a negative way. These are customers which have a need for 1 machine or maybe 2 going from it, like TWI. What we also want to go into it are customers where we're going into a joint venture, which are using these machines on an ongoing production and manufacturing capability. Think about that we have the ability to produce barrels, and that's actually the specific use case, we are engaged with Repkon. And Repkon would produce barrels every day. It's 360 times a year, okay? Do they use a machine at the first round? Absolutely. Would they use more than one machine in the future? Yes. So we want to build on top of it, these use cases and these joint ventures with these partners. The same on the tooling side with Neos, the same on radiation fields and some other stuff we are working on right now. And as I said to you, I really want to come back, and I'm more than happy to share out to you in the weeks ahead. We have down selected these many use cases, and there are literally hundreds. We have done the exercise, and I'm going to come back to you in the weeks ahead.

So Herbert, we just have one late question, just popped in. You've got time for this one. So simply, how is the door you supplied to the Royal Australian Navy testing going?

That's interesting enough. I've given a laugh right now is because this was the first project which I was engaged with, okay? And in reality, it was picked up, I think, 2 or 2.5 years ago, if I got it right. Jon can correct me on that one. So it's a project a long, long ago, which has started. The story somehow got -- was put a little bit to sleep over many, many months because the initial interest by the Navy wasn't that big. At the end of the day, it's a combination of a couple of a application and use cases, which we are warming up right now, again. Actually, we started the engagement with the Navy again on that topic because it's the combination of -- and I could say so metal door. And on the back of the door, we are booking a kind of an isogrid, okay? And isogrid stiffening structures established in the industry. And that's very important because they have the best ratio between weight and stiffness. And the ability to produce an isogrid on something which is curved like a door is something which we are having a lot of focus recently because the same thing applies to airplane doors, the same thing would apply to stiffening structures on missiles. The same thing would apply to any kind of stiffening structures and pipes in the oil and gas industry, okay? What we are experiencing, what we are seeing and where we are getting a lot better in understanding how can we apply the same learning which we have on a door in a ship, to a door in a plane, to a pipe in the oil and gas industry because at the end of the day, we are talking isogrids, okay? And isogrid specifically is one of the solutions we -- which is among the focus areas we look at it right now. So work in progress has gone down. It's coming up now, and it's very actual on the engagement with the Navy on that part.

Thanks, Herbert. We've exhausted the group. So let me hand back to you for some closing remarks.

Yes. You know, I really would like to start to thank you first of having spent the time today with us. As you saw, and the things we have reported out to you is we are making progress, okay? Is it fast enough? Never. I think there's many things we're going to further improve, and we are working. The only thing what I would like to leave you with is the strategy which we have developed, okay? To go for these distinct revenue streams, a; b, to have a global foothold in place; and c, also, to be clear and to narrow our work on a few use cases and applications is really working. We are seeing the first fruits already coming back. And the one thing is we continue on that path, okay? We have a stronger-than-ever team in place, okay? The engineering teams, both with the people coming in with IT dynamics in the U.S. The team in Holland that team here in Melbourne, these are real experts, okay? Going forward, you're going to see a couple of more announcements in regards to our repair services, and what we can do here to simply repair surface on metal components. Is this around the surface of a ship? Is this around the surface of an airplane? Is this around simply the surface of any machinery, which is built out of metal in oil and gas or in the mining industry, okay? Sometimes very small things, very small things like the repair of aluminum frames, which we are doing right now, for example, a transportation company here in Melbourne. But the strategy is working. And I look forward to work with you and to share out to you in the future about all these cases. And as we progress on the business, I look forward to a successful next meeting. Thank you very much. Thanks for joining.