Nano Dimension interim CEO announces strategic shift and $150M share repurchase programme

Companies & MarketsNews
January 30, 2025

January 30, 2025

Nano Dimension’s interim CEO Julien Lederman is addressing concerns about the company in an open letter to shareholders (Courtesy LinkedIn)
Nano Dimension’s interim CEO Julien Lederman is addressing concerns about the company in an open letter to shareholders (Courtesy LinkedIn)

Nano Dimension’s Chief Executive Officer, Julien Lederman, has written a letter to shareholders assessing the business, identifying future opportunities, risks and challenges, and envisioning and implementing plans to immediately strengthen Nano Dimension for the long term.

In his message to shareholders, Lederman was keen to highlight the issues that he and the board recognise as having impacted the company’s substantial negative enterprise value, which has persisted for over three years. Having spoken with a number of key shareholders, Lederman reported that they not only echoed their frustration with the share price, but also voiced concerns about trust and credibility.

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Of concern, Lederman reported that the shareholders believed that the shareholder-to-management relationship had been unhealthy, with an absence of the respectful relationships one expects regardless of viewpoints. They said communications generally lacked a clear explanation of the company’s financial performance and how the company could address its persistent operating losses, while at the same time focusing on a range of other matters.

Although the company had technology vision, it did not articulate a business strategy that outlined a credible path to building sustainable shareholder value, they added. This is on top of negative returns for shareholders, where since early 2021, when the company raised $1.5 billion, the stock had declined by over 80%.

Regarding the merger agreements that the company has entered into with Desktop Metal, Inc and Markforged Holding Corporation, Lederman confirmed they remain subject to ongoing regulatory review processes. These transactions have resulted in ongoing discussions with the regulators as well as litigation initiated by Desktop Metal.

“We are actively engaged in addressing both the regulatory inquiries and the litigation, the outcome of which could impact the timing or ability to consummate either or both mergers under their current terms,” Lederman stated. “Nano Dimension continues to act in compliance with its rights and obligations under each agreement. We will provide updates on the merger agreements as well as the litigation when appropriate.”

Looking to alleviate the concerns raised by shareholders, Lederman outlined Nano Dimension’s foundational principles and drivers. These, he said, are driven by three principles in operating the business: First, the company’s directors and management are driven by shareholder interests. Second, assessment of capital allocation measured against demonstratable Return on Investment (ROI) is always top of mind. Third, prudent operating expense management. This is being aligned based on ratios to revenue of a responsible advanced manufacturing leader.

“We are committed to accelerating the business towards both growth and profitability,” continued Lederman. “This duality is vital to building a digital manufacturing business that can both be disruptive and sustain itself long into the future. Our growth and profitability orientation is guided by focusing on where we have technological expertise to drive distinguishing innovation, healthy gross margins, while targeting advanced manufacturing segments centered on high performance applications.”

Lederman stated that the board is instituting measures aimed at restoring good governance that will demonstrate that the company’s directors and management are ultimately here to serve the shareholders. One of those first steps is that the board decided to let a Shareholder Rights Plan (reported as a ‘poison pill’), which was put in place and renewed by previous directors, lapse on January 25th, 2025.

“With this renewed degree of ROI oriented decision making and organisational prudence, the company believes it can accelerate the improvement of its financials, specifically a reduction in operating expenses. Nano Dimension’s core business (pre-2025 mergers) is expected to be cash flow positive on an adjusted basis beginning in the fourth quarter of 2025. The adjustments account for one-off transformation and legal expenses.”

Additionally, the board has authorised the company to commence the procedures under the Israeli Companies Law for a $150 million share repurchase programme. Lederman said that the company believes this repurchase programme is a capital alternative that the company should have at its disposal, depending on market conditions and other relevant considerations.

“In closing, myself and the board recognise change is required, and it is already underway. For next steps, we will continue to diligently work to sharpen a renewed vision and strategy in our dynamic environment, ever mindful of our responsibilities to create value for shareholders, concluded Lederman.

The full letter to shareholders is available to read here.

www.nano-di.com

Companies & MarketsNews
January 30, 2025

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