Tale of this digital manufacturing solutions player– Titomic

Australian digital manufacturing solutions player engaged in industrial scale metal additive manufacturing using its patented technology, Titomic Limited (ASX:TTT) is making great strides post announcing the signing of an agreement with global technology company – Thales.

The agreement is aimed to develop advanced additive manufacturing methods to support Thales’s development of advanced soldier weapons techniques for the Defence Force.

Subsequently, the stock witnessed two-day price surge; recorded an increase of 6.173% to $0.860 during the day’s trade on 10 February 2020. Today, on 11 February 2020, the stock opened at $0.940 and touched the day’s high of $1.030, before closing at $0.855.

The stock has generated a return of 10.26% during the last five days.

Moreover, the performance of the overall material sector was good during the day’s trade. The S&P/ASX 200 Materials (Sector) surged by 72.8 points (0.52%) and settled at 13,936.9 by AEST 02:26.

With its proprietary Titomic Kinetic Fusion™ (TKF) technology platform, the Company engages to unlock innovative applications and free opportunities for Titanium that are currently technically and economically viable.

Contributing towards a more sustainable future; TKF offers production run capability to companies, which supports top-quality products; Lower production inputs and Speed-to-market.

Agreement Details

Under the agreement, Titomic shall employ its Titomic Kinetic Fusion® (TKF) additive manufacturing process to manufacture lighter, stronger and better performing soldier system components, thus, delivering a decisive capability advantage for the next generation Australian soldiers.

Titomic is utilising its TKF process to fast become a leader in advanced manufacturing technologies for Titanium and other super alloys, alongside the Australian Government which is aiming to be one of the top 10 defence exporters globally.

The Company has started to commercialise the extensive R&D previously undertaken by Titomic for soldier systems with defence primes such as Thales. This further provides validation to:

  • The unique capabilities of TKF and
  • The potential value chain of titanium from Australian resources;

Thales is a global technology leader shaping the world, while offering solutions to clients across different markets including space, digital identity and security, aeronautics, transport and defence.

Currently, Thales is seeking to invest in digital innovations like connectivity, Big Data, artificial intelligence and cybersecurity technologies that support businesses, organisations and governments in their decisive moments.

Management Commentary

Minister for Defence Industry, the Hon Melissa Price MP, said:

“It’s great to see Australian businesses like Titomic making the most of opportunities created through our record investment in defence industry”;

“It proves we are developing world-leading capability right here in Australia – which has tremendous export potential in global markets.

Titomic Managing Director, Mr. Jeff Lang feels proud to be collaborating with world’s leading technology player, in the critical designing of military products for AU and UK Defence Forces.

He further added:

“This next generation of soldier system products will ensure our armed forces have the latest cutting-edge equipment that is lighter, stronger and higher performing enabling them to deliver mission success in demanding and dangerous environments”

Mr. Graham Evenden, Director Soldier Weapons Systems, Thales, commented:

“Partnering with Titomic, to industrialise research outcomes in the development and manufacture of lighter and stronger soldier systems equipment, continues to demonstrate Thales’s commitment to deliver capability advantage to the Australian soldier;”

Titomic’s December Quarter Results

During the quarter ended December 2019, the Company remained cash flow positive with Cash and Cash Equivalents at end of Quarter being $4,462,000.

The Company’s cash flow used in operating activities amounted to $882,000 during the quarter and the total cash outflows estimated for the next quarter are $3,868,000.

Major highlights from the quarterly activities of the Company:

  • Titomic Additive Manufactured metal parts showcased at USA Defence Manufacturing Tradeshow highlights the capability of TKF technology to US Army, Department of Defence and Defence Primes;
  • Negotiations regarding 5 new Defence projects in USA for supply of parts to major Defence Primes were in pipeline along with 4 new Space Rocket and Satellite projects for supply of parts to global Space Industry Primes;
  • Showcased TKF technology at USA Space Industry Conference further validating the affordability of TKF process for lightweight, high strength titanium parts;
  • Finalised distribution agreement for TKF machines and consumables in Turkey with BTech;
  • TKF Machines sales was on track for $3 million to $5 million in sales orders;

TTT’s Market Opportunity

TTT is believed to have entered a fresh chapter of its strategic expansion through evolution of its commercial opportunities coming from the huge US market across the three large industries of Space, Aerospace and Defence.

The Company’s products and services include:

  • Machines- Titomic has 3D printers to meet the rapid prototyping, modelling to manufacturing needs;
  • Powders- powders are tested to meet rigorous performance standards;
  • Rapid Prototyping- Trial and test of the product designs is done before launch without expensive tooling costs;

Moreover, the company taps into various sectors of the economy including Resource, Defence, Marine, Aviation & Space, Building & Construction, etc.and helps in creating superior products with advanced materials that were earlier economically unviable, through its expertise in material science and advanced manufacturing.

Australia is abundant in titanium mineral sands deposit which further meaningfully translates to a sizeable titanium production industry developed over the period. One of the most crucial sectors in terms of value is the aerospace sector.

The aerospace sector is the most important in terms of value for titanium mill product consumption which is mostly used for the manufacture of frames and engines for commercial aircraft and in the industrial applications.

The high cost of titanium alloys is main reason usage is not more widespread; however, the trend shows increasing use of titanium in aircraft, which indicates its compatibility with the composite materials that are now being used in airframes.

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