AL3 signs expansion deal into EU market

Our 3D printing Investment AML3D (ASX: AL3) Just added a second European distributor, this time in Germany.

This two-year, non-exclusive distribution deal follows last week's announcement of a UK based distributor, Arc Additive.

We think these distribution agreements are a key step in AL3's broader European expansion strategy.

A strategy that also includes a planned $5 million investment to build a European technology centre.

AL3 has made strong progress cracking into the US Defence manufacturing market with the aim to then expand broader into areas such as Utilities, Aerospace, Nuclear and Oil & Gas and marine sectors.

We have seen earlier in the week this playing out with the completion of the $2.27m contract with the Tennessee Valley Authority - the largest public utility in the USA.

AL3 is now trying to replicate its US strategy in the EU/UK markets.

AL3 is targeting the rising demand in large-scale additive manufacturing, especially in defence and other advanced industrial sectors, so it is great to see the company gaining traction outside of the defence space.

We’re watching to see if AL3 can continue to sign more customers to build its European footprint, hopefully landing some major contracts on the back of these recent partnerships.

How big could the EU/UK markets be for AL3?

So far a big part of the AL3 expansion story has been focussed on the US (for good reason).

BUT back in June at the 2025 NATO summit, allies agreed to increase defence related spending between now and 2035.

The target set was to increase spending to 5% of Gross Domestic Product (GDP) annually...

(Source)

And there was a specific commitment to “innovate, and strengthen the defence industrial base”.

(Source)

We think that a wave of ramped-up defence spending across Europe, the UK and the Middle East could eventually flow in AL3’s direction too.

Back in April AL3 signed an alloy testing contract with $118BN BAE Systems “in support of a material feasibility study” for expansion into the UK defence market - this could be a precursor for more deals…

(Source)

Our view is that big sales contracts and growth opportunities from outside of the US is a real possibility for AL3.

Once AL3 establishes itself in the US, and expands globally, it could be the next stepchange for material re-rate in the company.

There are still a lot of hurdles for AL3 to overcome, and execution risk is a real challenge for AL3 at this important juncture, and just because there is an increase in defence spending does not guarantee success for AL3.

To get a view of the upside case, take a look at what happened with another ASX-listed company leveraged to the defence thematic recently - Droneshield.

A few weeks ago Droneshield signed a $61.6M european military contract and hit a NEW all time high market cap north of ~A$2BN.

The past performance is not and should not be taken as an indication of future performance for this or any stock. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

What does AL3 do?

AL3’s technology combines robotics, welding, automation and software.

AL3 tech “3D prints” complex industrial parts for the defence, oil & gas and aerospace industries, and sells these 3D printers to industries looking for on-site custom solutions.

We have been to AL3’s Australian facility in Adelaide to check the systems out and it's genuinely amazing to see these things in motion.

We saw the largest ever custom AL3 ARCEMY 3D printing system ever built, before it was to be shipped off to the USA:

As well as some of what the product software looks like:

To see our full site visit write up read: Our AL3 site visit and what we learnt.