Materialise NV (NASDAQ:MTLS), a leading provider of additive
manufacturing and medical software and of sophisticated 3D printing
services, today announced its financial results for the second
quarter ended June 30, 2018.
Highlights – Second Quarter 2018
- Total revenue increased 34.1% from the
second quarter of 2017 to 45,076 kEUR, driven by strong
performances in our Materialise Medical segment and in the ACTech
business within our Materialise Manufacturing segment, which we
acquired in October 2017.
- Total deferred revenue from annual
software sales and maintenance contracts increased by 2,419 kEUR to
21,142 kEUR from 18,723 kEUR at year-end 2017.
- Adjusted EBITDA increased 90.9% from
2,732 kEUR for the second quarter of 2017 to 5,216 kEUR.
- Net result was 369 kEUR, or 0.01 EUR
per diluted share, compared to (955) kEUR, or (0.02) EUR per
diluted share, over the same period last year.
Executive Chairman Peter Leys commented, “The past several
months have been an especially exciting period for Materialise. We
delivered another set of good results for the second quarter, with
particularly strong performances from our Materialise Medical
segment and the ACTech business we added to our Materialise
Manufacturing segment last October. This performance again
demonstrates the benefits of our company’s diversified business
model. In July, we announced a collaboration with BASF through
which this leading chemicals company has invested US$25 million in
Materialise to accelerate the advancement of the 3D printing sector
through the development of innovative applications and new
materials. We expect this collaboration to create significant new
business opportunities in new markets over time. We also raised
US$44.85 million in gross proceeds through a successful public
offering of ADSs representing our shares, which included the full
exercise of the underwriters' over-allotment option to purchase
additional ADSs.”
ACTech
On October 4, 2017, we acquired ACTech, a full-service
manufacturer of complex metal parts. As described in more detail
below, the acquired business has increased the scope of our
Materialise Manufacturing segment’s operations and had a
significant impact on our results of operations for the second
quarter of 2018, resulting in increases to our revenues, operating
expenses and net result, among other items.
Second Quarter 2018 Results
Total revenue for the second quarter of 2018 increased 34.1%
(1.5% excluding ACTech) to 45,076 kEUR (34,113 kEUR excluding
ACTech) compared to 33,612 kEUR for the second quarter of 2017.
Total deferred revenue from annual software sales and maintenance
contracts amounted to 21,142 kEUR at the end of the second quarter
of 2018 compared to 18,723 kEUR at year end 2017. Adjusted EBITDA
increased to 5,216 kEUR from 2,732 kEUR primarily as a result of
the contribution by ACTech. Excluding ACTech, Adjusted EBITDA
increased to 3,245 kEUR. The Adjusted EBITDA margin (Adjusted
EBITDA divided by total revenue) in the second quarter of 2018 was
11.6% (9.5% excluding ACTech) compared to 8.1% in the second
quarter of 2017.
Revenue from our Materialise Software segment increased 9.9% to
9,131 kEUR for the second quarter of 2018 from 8,305 kEUR for the
same quarter last year. Segment EBITDA amounted to 2,859 kEUR
compared to 2,952 kEUR in the prior-year period, while the segment
EBITDA margin (the segment’s EBITDA divided by the segment’s
revenue) was 31.3% compared to 35.5% in the prior-year period.
Revenue from our Materialise Medical segment increased 16.5% to
12,400 kEUR for the second quarter of 2018 compared to 10,646 kEUR
for the same period in 2017. Compared to the same quarter in 2017,
revenue from our medical software decreased 5.2%. Including
deferred revenues from software and maintenance fees, medical
software sales increased 8.9%. Revenue from medical devices and
services grew 28.8%. Segment EBITDA was 2,124 kEUR compared to 758
kEUR while the segment EBITDA margin increased to 17.1% from 7.1%
in the second quarter of 2017.
Revenue from our Materialise Manufacturing segment increased
61.8% to 23,387 kEUR for the second quarter of 2018 from 14,455
kEUR for the second quarter of 2017. Segment EBITDA increased to
2,264 kEUR from 1,241 kEUR while the segment EBITDA margin
increased to 9.7% from 8.6% for the same quarter in 2017. ACTech
contributed revenue of 10,958 kEUR and segment EBITDA of 1,971
kEUR, with a segment EBITDA margin of 18.0%. Excluding ACTech,
revenue decreased 14.0% to 12,429 kEUR and segment EBITDA decreased
to 293 kEUR.
Gross profit was 24,788 kEUR, or 55.0% of total revenue, for the
second quarter of 2018. Excluding ACTech, gross profit was 21,189
kEUR, or 62.1% of total revenue, compared to 19,388 kEUR, or 57.7%
of total revenue, for the second quarter of 2017.
Research and development (“R&D”), sales and marketing
(“S&M”) and general and administrative (“G&A”) expenses
increased, in the aggregate, 22.9% to 25,700 kEUR for the second
quarter of 2018 from 20,911 kEUR for the second quarter of 2017.
Excluding ACTech, operating expenses increased, in the aggregate,
10.5% to 23,096 kEUR. Excluding ACTech, R&D expenses increased
from 5,131 kEUR to 5,830 kEUR while S&M expenses increased from
10,009 kEUR to 11,038 kEUR and G&A expenses increased from
5,771 kEUR to 6,228 kEUR.
Net other operating income increased by 613 kEUR to 1,841 kEUR
compared to 1,228 kEUR for the second quarter of 2017. Excluding
ACTech, net other operating income increased by 557 kEUR. Net other
operating income consists primarily of withholding tax exemptions
for qualifying researchers, development grants, partial funding of
R&D projects, currency exchange results on purchase and sales
transactions, and the depreciation of intangible assets from
business combinations.
Operating result increased to 929 kEUR from (295) kEUR for the
same period prior year, primarily as a result of the contribution
by ACTech. Excluding ACTech, operating result amounted to (122)
kEUR.
Net financial result was (376) kEUR compared to (427) kEUR for
the prior-year period. The financial result included (414) kEUR net
financial expenses related to ACTech. The share in loss of joint
venture increased to (141) kEUR from (42) kEUR for the same period
last year.
The second quarter of 2018 contained income tax expense of 43
kEUR, of which 206 kEUR was related to ACTech, compared to 191 kEUR
in the second quarter of 2017.
As a result of the above, net profit for the second quarter of
2018 was 369 kEUR or ((62) kEUR excluding ACTech), compared to net
loss of (955) KEUR for the same period in 2017. Total comprehensive
profit for the second quarter of 2018, which includes exchange
differences on translation of foreign operations, was 422 kEUR
compared to a loss of (1,403) kEUR for the same period in 2017.
As at June 30, 2018, we had cash and equivalents of 48,719 kEUR
compared to 43,175 kEUR as at December 31, 2017. Cash flow from
operating activities over the first six months of 2018 was 11,031
kEUR compared to 5,188 kEUR in the same period in 2017. Net
shareholders’ equity as at June 30, 2018 was 77,053 kEUR compared
to 77,515 kEUR as at December 31, 2017.
2018 Guidance
As detailed in the company’s year-end fiscal 2017 earnings
announcement, in fiscal 2018, management expects to report
consolidated revenue between 180,000 - 185,000 kEUR and Adjusted
EBITDA between 22,000 - 25,000 kEUR. Management also expects the
amount of deferred revenue the company generates from annual
licenses and maintenance in 2018 to increase by an amount between
2,000 - 4,000 kEUR as compared to 2017.
Non-IFRS Measures
Materialise uses EBITDA and Adjusted EBITDA as supplemental
financial measures of its financial performance. EBITDA is
calculated as net profit plus income taxes, financial expenses
(less financial income), shares of loss in a joint venture and
depreciation and amortization. Adjusted EBITDA is determined by
adding non-cash stock-based compensation expenses and
acquisition-related expenses of business combinations to EBITDA.
Management believes these non-IFRS measures to be important
measures as they exclude the effects of items which primarily
reflect the impact of long-term investment and financing decisions,
rather than the performance of the company’s day-to-day operations.
As compared to net profit, these measures are limited in that they
do not reflect the periodic costs of certain capitalized tangible
and intangible assets used in generating revenues in the company’s
business, or the charges associated with impairments. Management
evaluates such items through other financial measures such as
capital expenditures and cash flow provided by operating
activities. The company believes that these measurements are useful
to measure a company’s ability to grow or as a valuation
measurement. The company’s calculation of EBITDA and Adjusted
EBITDA may not be comparable to similarly titled measures reported
by other companies. EBITDA and Adjusted EBITDA should not be
considered as alternatives to net profit or any other performance
measure derived in accordance with IFRS. The company’s presentation
of EBITDA and Adjusted EBITDA should not be construed to imply that
its future results will be unaffected by unusual or non-recurring
items.
Exchange Rate
This press release contains translations of certain euro amounts
into U.S. dollars at specified rates solely for the convenience of
readers. Unless otherwise noted, all translations from euros to
U.S. dollars in this press release were made at a rate of EUR 1.00
to USD 1.1658, the reference rate of the European Central Bank on
June 30, 2018.
Conference Call and Webcast
Materialise will hold a conference call and simultaneous webcast
to discuss its financial results for the first quarter of 2018 on
the same day, Tuesday, August 7, 2018, at 8:30 a.m. ET/2:30 p.m.
CET. Company participants on the call will include Wilfried
Vancraen, Founder and Chief Executive Officer; Peter Leys,
Executive Chairman; and Johan Albrecht, Chief Financial Officer. A
question-and-answer session will follow management’s remarks.
To access the conference call, please dial 844-469-2530 (U.S.)
or 765-507-2679 (international), passcode #8889356. The conference
call will also be broadcast live over the Internet with an
accompanying slide presentation, which can be accessed on the
company’s website at http://investors.materialise.com.
A webcast of the conference call will be archived on the
company’s website for one year.
About Materialise
Materialise incorporates more than 25 years of 3D printing
experience into a range of software solutions and 3D printing
services, which form the backbone of the 3D printing industry.
Materialise’s open and flexible solutions enable players in a wide
variety of industries, including healthcare, automotive, aerospace,
art and design, and consumer goods, to build innovative 3D printing
applications that aim to make the world a better and healthier
place. Headquartered in Belgium, with branches worldwide,
Materialise combines one of the largest groups of software
developers in the industry with one of the largest 3D printing
facilities in the world. For additional information, please visit:
www.materialise.com.
Cautionary Statement on Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, regarding, among other things, our intentions, beliefs,
assumptions, projections, outlook, analyses or current
expectations, plans, objectives, strategies and prospects, both
financial and business, including statements concerning, among
other things, current estimates of fiscal 2018 revenues, deferred
revenue from annual licenses and maintenance and Adjusted EBITDA,
the benefits of our collaboration with BASF and the ACTech
acquisition, results of operations, cash needs, capital
expenditures, expenses, financial condition, liquidity, prospects,
growth and strategies (including our strategic priorities for
2018), and the trends and competition that may affect the markets,
industry or us. Such statements are subject to known and unknown
uncertainties and risks. When used in this press release, the words
“estimate,” “expect,” “anticipate,” “project,” “plan,” “intend,”
“believe,” “forecast,” “will,” “may,” “could,” “might,” “aim,”
“should,” and variations of such words or similar expressions are
intended to identify forward-looking statements. These
forward-looking statements are based upon the expectations of
management under current assumptions at the time of this press
release. These expectations, beliefs and projections are expressed
in good faith and the company believes there is a reasonable basis
for them. However, the company cannot offer any assurance that our
expectations, beliefs and projections will actually be achieved. By
their nature, forward-looking statements involve risks and
uncertainties because they relate to events, competitive dynamics
and industry change, and depend on economic circumstances that may
or may not occur in the future or may occur on longer or shorter
timelines than anticipated. We caution you that forward-looking
statements are not guarantees of future performance and involve
known and unknown risks, uncertainties and other factors that are
in some cases beyond our control. All of the forward-looking
statements are subject to risks and uncertainties that may cause
the company’s actual results to differ materially from our
expectations, including risk factors described in the company’s
annual report on Form 20-F filed with the U.S. Securities and
Exchange Commission on April 30, 2018. There are a number of risks
and uncertainties that could cause the company’s actual results to
differ materially from the forward-looking statements contained in
this press release.
The company is providing this information as of the date of this
press release and does not undertake any obligation to update any
forward-looking statements contained in this press release as a
result of new information, future events or otherwise, unless it
has obligations under the federal securities laws to update and
disclose material developments related to previously disclosed
information.
Consolidated income statement
(Unaudited)
For the three months ended
For the six months
June 30,
ended June 30,
(in 000, except per share amounts)
2018 2018
2017 2018 2017
U.S.$ € € €
€ Revenue 52,550 45,076 33,612 88,975 65,533 Cost of
sales (23,652 ) (20,288 ) (14,224 ) (40,232 ) (27,668 )
Gross
profit 28,898 24,788 19,388 48,743
37,865 Gross profit as % of revenue 55.0 % 55.0 % 57.7 %
54.8 % 57.8 % Research and development expenses (6,798 )
(5,831 ) (5,131 ) (11,446 ) (9,723 ) Sales and marketing expenses
(13,805 ) (11,842 ) (10,009 ) (22,441 ) (19,617 ) General and
administrative expenses (9,358 ) (8,027 ) (5,771 ) (15,187 )
(11,150 ) Net other operating income (expenses) 2,146 1,841 1,228
2,390 2,246
Operating (loss) profit 1,083 929
(295 ) 2,059 (379 )
Financial expenses (1,127 ) (967 ) (1,317 ) (2,517 ) (2,236 )
Financial income 689 591 890 1,431 1,667 Share in loss of joint
venture (164 ) (141 ) (42 ) (244 ) (431 )
(Loss) profit before
taxes 481 412 (764 ) 729
(1,379 ) Income taxes (50 ) (43 ) (191 ) (543
) (392 )
Net (loss) profit for the period 431
369 (955 ) 186 (1,771 )
Net (loss) profit attributable to: The owners of the parent 431 369
(955 ) 186 (1,771 ) Non-controlling interest − − − − −
Earnings per share attributable to owners of the parent
Basic 0.01 0.01 (0.02 ) 0.00 (0.04 ) Diluted 0.01 0.01 (0.02 ) 0.00
(0.04 ) Weighted average basic shares outstanding 47,428
47,428 47,325 47,378 47,325 Weighted average diluted shares
outstanding 48,131 48,131 47,325 48,106 47,325
Consolidated statements of
comprehensive income (Unaudited)
For the three months ended
For the six months
June 30,
ended June 30,
(in 000)
2018
2018
2017
2018
2017
U.S.$ € € € € Net
profit (loss) for the period
431
369
(955
) 186 (1,771 ) Other
comprehensive income Exchange difference on translation of foreign
operations 62 53
(448 ) (42 ) (326 ) Other
comprehensive income (loss), net of taxes 62 53 (448 ) (42 ) (326 )
Total comprehensive income (loss) for the year, net of taxes
493 422 (1,403 ) 144
(2,097 ) Total comprehensive income (loss)
attributable to: The owners of the parent 493 422 (1,403 ) 144
(2,097 ) Non-controlling interest − − − − −
Consolidated statement of financial
position (Unaudited)
As of
As of June 30,
December 31,
(in 000)
2018
2017
€ € Assets
Non-current assets
Goodwill 18,416 18,447 Intangible assets 27,058
28,646 Property, plant & equipment 89,011 86,881 Investments in
joint ventures − 31 Deferred tax assets 288 304 Other non-current
assets 4,062 3,667
Total non-current assets 138,835
137,976
Current assets
Inventories 10,794 11,594 Trade receivables 38,408 35,582 Other
current assets 10,213 9,212 Cash and cash equivalents 48,719 43,175
Total current assets 108,134 99,563 Total
assets 246,969 237,539
As of
As of June 30,
December 31,
(in 000)
2018
2017
€ € Equity and liabilities Equity Share
capital 2,735 2,729 Share premium 80,396 79,839
Consolidated reserves (4,233 ) (3,250 ) Other comprehensive income
(1,845 ) (1,803 )
Equity attributable to the owners of the
parent 77,053 77,515 Non-controlling interest − −
Total
equity 77,053 77,515
Non-current liabilities
Loans & borrowings 85,700 81,788 Deferred tax liabilities 6,603
7,006 Deferred income 6,892 5,040 Other non-current liabilities
1,692 1,904
Total non-current liabilities 100,887
95,738
Current liabilities
Loans & borrowings 12,519 12,769 Trade payables 16,437 15,670
Tax payables 3,288 3,560 Deferred income 22,309 18,791 Other
current liabilities 14,476 13,496
Total current liabilities
69,029 64,286 Total equity and liabilities
246,969 237,539
Consolidated statement of cash flows
(Unaudited)
For the six months
ended June 30,
(in 000)
2018
2017
€ € Operating activities
Net (loss) profit for the period
186 (1,771 ) Non-cash and operational adjustments
Depreciation of property, plant & equipment 5,517 3,954
Amortization of intangible assets 2,498 1,269 Share-based payment
expense 366 700 Loss (gain) on disposal of property, plant &
equipment (90 ) 28 Movement in provisions − 14 Movement reserve for
bad debt 68 139 Financial income (58 ) (318 ) Financial expense
1,032 585 Impact of foreign currencies 111 302 Share in loss of a
joint venture (equity method) 244 431 Income taxes and deferred
taxes 543 392 Other (92 ) (58 )
Working capital adjustment &
income tax paid Increase in trade receivables and other
receivables (4,147 ) (3,580 ) Decrease (increase) in inventories
774 (509 ) Increase in trade payables and other payables 5,634
4,207 Income tax paid (1,555 ) (597 )
Net cash flow from
operating activities 11,031 5,188
For the six months ended
June 30,
(in 000)
2018
2017
€ € Investing activities Purchase of property,
plant & equipment (8,588 ) (15,770 ) Purchase of
intangible assets (583 ) (1,027 ) Proceeds from the sale of
property, plant & equipment (net) 486 104 Available for sale
investments (50 ) − Investments in joint-ventures − (500 ) Interest
received (2 ) 241
Net cash flow used in investing activities
(8,737 ) (16,952 )
Financing activities
Proceeds from loans & borrowings 18,770 14,203 Repayment of
loans & borrowings (14,074 ) (1,634 ) Repayment of finance
leases (1,366 ) (1,405 ) Direct attributable expense capital
increase 207 − Interest paid (814 ) (302 ) Other financial income
(expense) (130 ) (154 )
Net cash flow from (used in) financing
activities 2,593 10,708 Net increase of
cash & cash equivalents 4,887 (1,056 )
Cash & cash equivalents at beginning of the year 43,175 55,912
Exchange rate differences on cash & cash equivalents 657 (1,024
)
Cash & cash equivalents at end of the year
48,719 53,832
Reconciliation of Net Profit (Loss) to
EBITDA and Adjusted EBITDA (Unaudited)
For the three months
For the six months
ended June 30,
ended June 30,
(in 000)
2018
2017
2018
2017
€ € € € Net profit (loss) for
the period 369 (955 )
186 (1,771 ) Income taxes 43 191
543 392 Financial expenses 967 1,317 2,517 2,236 Financial income
(591 ) (890 ) (1,431 ) (1,667 ) Share in loss of joint venture 141
42 244 431 Depreciation and amortization 4,010 2,656 8,015 5,224
EBITDA 4,939 2,361 10,074
4,845 Non-cash stock-based compensation expense (1)
277 371 366 700 Acquisition-related expenses of business
combinations (2) − − − −
ADJUSTED EBITDA 5,216
2,732 10,440 5,545
(1)
Non-cash stock-based compensation expenses
represent the cost of equity-settled and cash-settled share-based
payments to employees
(2)
During the periods presented, we did not
incur any fees or costs in connection with acquisitions.
Segment P&L (Unaudited)
Materialise
Materialise
Materialise
Manufact-
Total
Unallocated
Consoli-
(in 000)
Software
Medical
uring
segments
(1)
dated
€ € € € € €
For the six months ended June 30, 2018 Revenues 17,457
24,346 47,019 88,822 153 88,975 Segment EBITDA 5,183 4,184 5,397
14,764 (4,690 ) 10,074
Segment EBITDA %
29.7 % 17.2 % 11.5 % 16.6 % 11.3 %
For the six months
ended June 30, 2017 Revenues 16,880 20,578 27,862 65,320 213
65,533 Segment EBITDA 5,945 1,072 2,563 9,580 (4,735 ) 4,845
Segment EBITDA %
35.2 % 5.2 % 9.2 % 14.7 % 7.4 %
Materialise
Materialise
Materialise
Manufact-
Total
Unallocated
Consoli-
(in 000)
Software
Medical
uring
segments
(1)
dated
€ € € € € €
For the three months ended June 30, 2018 Revenues 9,131
12,400 23,387 44,918 158 45,076 Segment EBITDA 2,859 2,124 2,264
7,247 (2,308 ) 4,939
Segment EBITDA %
31.3 % 17.1 % 9.7 % 16.1 % 11.0 %
For the three months
ended June 30, 2017 Revenues 8,305 10,646 14,455 33,406 206
33,612 Segment EBITDA 2,952 758 1,241 4,951 (2,590 ) 2,361
Segment EBITDA %
35.5 % 7.1 % 8.6 % 14.8 % 7.0 %
(1) Unallocated Revenues consist of
occasional one-off sales by our core competencies not allocated to
any of our segments. Unallocated Segment EBITDA consists of
corporate research and development, corporate headquarter costs and
net other operating income (expense).
Reconciliation of Net Profit (Loss) to
Segment EBITDA (Unaudited)
For the three months
For the six months
ended June 30,
ended June 30,
(in 000)
2018
2017
2018
2017
€ € € € Net profit (loss) for
the period 369 (955 )
186 (1,771 ) Income taxes 43 191 543
392 Financial expenses 967 1,317 2,517 2,236 Financial income (591
) (890 ) (1,431 ) (1,667 ) Share in loss of joint venture 141 42
244 431
Operating profit 929 (295
) 2,059 (379 ) Depreciation and
amortization 4,010 2,656 8,015 5,224 Corporate research and
development 496 516 986 1,025 Corporate headquarter costs 2,813
2,464 5,077 4,537 Net other operating income (expense) (1,001 )
(390 ) (1,373 ) (827 )
Segment EBITDA 7,247
4,951 14,764 9,580
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180807005223/en/
Investor RelationsLHAHarriet Fried,
212-838-3777hfried@lhai.com
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