AL3’s New Sale to a US Utility

Today, our 3D printing Investment, AML3D (ASX: AL3) made its first sale into a new industry, by making a ~$2.3M sale to US utility provider, the Tennessee Valley Authority (TVA).

The TVA is the largest public utility in the United States, and the Arcemy X system will be installed at TVA's Muscle Shoals, Alabama service facility.

This ARCEMY X system will be the first built at AML3D's new US Technology Centre in Ohio.

The contract includes two years of service and maintenance, with an option to extend - part of AL3’s recurring revenue model.

We see this is a big win for AL3 because the material sale:

• Diversifies AL3’s customer base - to now include major US utilities
• Represents roughly a quarter of last year’s revenue numbers - we are hoping AL3 can continue this sales momentum
• Flow on effects - it could trigger other US utilities to follow suit, increasing the already brimming sales pipeline

We think this is just the beginning for AL3, which had previously signalled its intention to enter new industries.

The TVA has a rich history - it was initially established by US President Franklin Delanor Roosevelt in 1933 as a federal agency to promote the development of the US heartland’s economy.

Since then it has evolved into an public utility company, which provides services over 10M residents

States or portions of the following states all rely on the TVA for power: Tennessee, Alabama, Mississippi, Kentucky, Georgia, North Carolina and Virginia.

So we see this deal as capable of expanding if it goes well.

As a federal agency, we also like the optics here, as AL3 continues to secure big blue chip customers.

Proof that AL3 is highly effective at navigating sometimes complex tendering processes that are part of working with large organisations.

How does this impact our AL3 Investment Memo?

This news advances our #2 objective for more sales of the Arcemy system

Objective #2: More sales of ARCEMY

We want to see AL3 sign more large contracts via sales of their ARCEMY system (3D printing system).

AL3 already has good traction with the US Navy via the US Department of Defence and we alos want to see an expansion in jurisdictions and industries.

It also has a value added reseller agreement with ~$35BN capped Philips Corporation which has a large reach in the US

Milestones
🔄total 8x new ARCEMY contracts
🔲New ~$1M contract (New customer in US defense industry)
🔲New ~$1M contract (Aerospace)
🔲New ~$1M contract (O & G)
🔲New ~$1M contract (New customer in non-US jurisdiction)

What’s next for AL3?

More sales out of the US

Now it’s all about the US scale up.

Now that AL3 will be more than doubling capacity at its US facility we want to see AL3 come out with big new contracts to fulfil (and hopefully big $ revenue amounts attached to those deals).

We are also hoping to see some of those lucrative ITAR contracts that AL3 have mentioned get converted into sales.

UK/European expansion on the cards?

In today’s announcement AL3 also flagged the opportunity of expanding into the UK.

The majority of AL3’s sales are out of the US, so expansion into a new market is completely new upside from a revenues perspective.

We are looking forward to newsflow from the company’s push into the UK/European market.