MTLS Materialise NV

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, 2023.

Highlights – Second Quarter 2023

• Total revenue increased 11.6% to 64,810 kEUR compared to 58,070 kEUR for the second quarter of 2022.
• Total deferred revenue from annual software sales and maintenance fees amounted to 41,740 kEUR compared to 42,780 kEUR at December 31, 2022.
• Adjusted EBITDA increased 12.2% to 4,755 kEUR compared to 4,240 kEUR for the corresponding 2022 period.
• Excluding an unexpected adverse arbitration award for (5,189) kEUR, the Adjusted EBITDA margin for the quarter would have been 15.3%.
• Net profit for the second quarter of 2023 was (494) kEUR, or (0.01) EUR per diluted share, compared to 896 kEUR, or 0.02 EUR per diluted share, for the corresponding 2022 period.

Executive Chairman Peter Leys commented, “Materialise delivered another strong operational performance in the second quarter of 2023. Our consolidated revenues of 64,810 kEUR rose almost 12% compared to the same period last year, with increased revenues in all three of our segments. Materialise Medical had an especially robust performance with revenue increasing 20%. Our Q2 2023 consolidated Adjusted EBITDA of 4,755 kEUR represents an increase of more than 12% compared to last year's corresponding period despite the (5,189) kEUR negative impact resulting from an unexpected adverse resolution of an arbitration proceeding in May 2023. Given the strength of our fundamental operations, we are able to maintain the guidance previously provided for both our 2023 revenue and our Adjusted EBITDA.”

Second Quarter 2023 Results

Total revenue for the second quarter of 2023 increased 11.6% to 64,810 kEUR from 58,070 kEUR for the second quarter of 2022. Adjusted EBITDA amounted to 4,755 kEUR for the second quarter of 2023 compared to 4,240 kEUR for the corresponding 2022 period. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) for the second quarter of 2023 was 7.3%, equal to the second quarter of 2022. Excluding the (5,189) kEUR negative impact resulting from the unexpected adverse resolution of an arbitration proceeding, our Adjusted EBITDA margin for the quarter would have been 15.3%.

Revenue from our Materialise Software segment increased 3.6% to 11,030 kEUR for the second quarter of 2023 from 10,642 kEUR for the same quarter last year. Segment EBITDA increased to 1,973 kEUR from 821 kEUR while the segment EBITDA margin was 17.9% compared to 7.7% for the corresponding prior-year period.

Revenue from our Materialise Medical segment increased 19.6% to 24,945 kEUR for the second quarter of 2023 compared to 20,855 kEUR for the same period in 2022. Segment EBITDA amounted to 2,683 kEUR for the second quarter of 2023 compared to 4,474 kEUR while the segment EBITDA margin was 10.8% compared to 21.5% for the second quarter of 2022. The Medical segment EBITDA for the second quarter of 2023 includes the (5,189) kEUR negative effect from an arbitration award granted against us in our previously disclosed indemnification dispute with Zimmer Biomet related to certain joint replacement devices. Excluding the (5,189) kEUR negative impact, the Adjusted EBITDA margin of our Medical segment for the quarter would have been 31.6%.

Revenue from our Materialise Manufacturing segment increased 8.5% to 28,835 kEUR for the second quarter of 2023 from 26,574 kEUR for the second quarter of 2022. Segment EBITDA amounted to 2,708 kEUR compared to 1,581 kEUR for the same period last year, while the segment EBITDA margin was 9.4% compared to 5.9% for the second quarter of 2022.

Gross profit was 37,047 kEUR for the second quarter of 2023 compared to 32,030 kEUR for the same period last year, while gross profit as a percentage of revenue increased to 57.2% compared to 55.2% for the second quarter of 2022.

Research and development (“R&D”), sales and marketing (“S&M”) and general and administrative (“G&A”) expenses decreased in the aggregate by 1.3% to 33,176 kEUR for the second quarter of 2023 from 33,613 kEUR for the second quarter of 2022, with disciplined cost containment in S&M and G&A fully offsetting the increased costs of our continued R&D efforts.

Net other operating income, which includes the negative impact from the adverse arbitration award, was (4,468) kEUR compared to 498 kEUR for the second quarter of 2022.

Operating result amounted to (597) kEUR compared to (1,084) kEUR for the second quarter of 2022.

Net financial result was 635 kEUR compared to 2,580 kEUR for the second quarter of 2022.

The second quarter of 2023 contained income tax expenses of (532) kEUR, compared to (600) kEUR in the second quarter of 2022.

As a result of the above, net result for the second quarter of 2023 was (494) kEUR, compared to 896 kEUR for the same period in 2022. Total comprehensive income for the second quarter of 2023, which includes exchange differences on translation of foreign operations, was 140 kEUR compared to 771 kEUR for the corresponding 2022 period.

At June 30, 2023, after payment of the 5,189 kEUR arbitration award, we had cash and cash equivalents of 136,285 kEUR compared to 140,867 kEUR at December 31, 2022. Gross debt amounted to 72,412 kEUR, compared to 80,980 kEUR at December 31, 2022. As a result, our net cash position (cash and cash equivalents less gross debt) was 63,873 kEUR, an increase of 3,986 kEUR compared to December 31, 2022

Cash flow from operating activities for the second quarter of the year 2023 was 775 kEUR compared to 8,636 kEUR for the same period in 2022. Total capital expenditures for the second quarter of 2023 amounted to 2,119 kEUR.

Net shareholders’ equity at June 30, 2023 was 233,393 kEUR compared to 228,928 kEUR at December 31, 2022.

2023 Guidance

Mr. Leys concluded, “Seven months into 2023, Materialise continues to expect to report consolidated revenue towards the high end of the 255,000 kEUR to 260,000 kEUR range we previously provided. We are also maintaining, despite the unexpected arbitration award granted against us in May 2023 for a total amount of (5,189) kEUR, our Adjusted EBITDA guidance between 28,000 kEUR and 33,000 kEUR for fiscal year 2023”.

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 profit or loss in a joint venture and depreciation and amortization. Adjusted EBITDA is determined by adding share-based compensation expenses, acquisition-related expenses of business combinations, impairments and revaluation of fair value due to 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 document 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 document were made at a rate of EUR 1.00 to USD 1.0866, the reference rate of the European Central Bank on June 30, 2023.

Conference Call and Webcast

Materialise will hold a conference call and simultaneous webcast to discuss its financial results for the second quarter of 2023 on Wednesday, July 26, 2023, 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 Koen Berges, Chief Financial Officer. A question-and-answer session will follow management’s remarks.

• To access the conference call by phone, please click the link below at least 15 minutes prior to the scheduled start time and you will be provided with dial-in details. Participants can choose to dial in or to receive a call to connect to Materialise’s conference call.
  • https://register.vevent.com/register/BI53606bb1a4de423d813eba83e6ecd558

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 30 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, our estimates for the current fiscal year’s revenue and Adjusted EBITDA, our results of operations, cash needs, capital expenditures, expenses, financial condition, liquidity, prospects, growth and strategies (including how our business, results of operations and financial condition could be impacted by the ongoing military conflict between Ukraine and Russia and economic sanctions thereto as well as by inflation and increased labor, energy and materials costs), 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 most recent annual report on Form 20-F filed with the U.S. Securities and Exchange Commission. 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 statements (Unaudited)

for the three months ended June 30,

 

for the six months ended June 30,

In '000

2023

 

2023

 

2022

 

2023

 

2022

U.S.$ € € € € Revenue

70,423

64,810

58,070

130,702

111,032

Cost of Sales

(30,168)

(27,764)

(26,040)

(56,814)

(50,118)

Gross Profit

40,255

37,047

32,030

73,888

60,914

Gross profit as % of revenue

57.2%

57.2%

55.2%

56.5%

54.9%

  Research and development expenses

(10,311)

(9,489)

(8,955)

(18,506)

(16,770)

Sales and marketing expenses

(15,385)

(14,159)

(14,954)

(28,459)

(28,469)

General and administrative expenses

(10,353)

(9,528)

(9,704)

(18,573)

(18,148)

Net other operating income (expenses)

(4,855)

(4,468)

498

(3,948)

1,436

Operating (loss) profit

(649)

(597)

(1,084)

4,402

(1,036)

  Financial expenses

(728)

(670)

(1,320)

(2,045)

(2,561)

Financial income

1,419

1,305

3,901

2,114

5,517

Share in loss of joint venture

-

-

-

-

-

(Loss) profit before taxes

42

38

1,496

4,471

1,921

  Income Taxes

(578)

(532)

(600)

(1,249)

(898)

Net (loss) profit for the period

(536)

(494)

896

3,221

1,023

Net (loss) profit attributable to:

-

The owners of the parent

(530)

(488)

903

3,234

1,036

Non-controlling interest

(7)

(6)

(7)

(13)

(13)

  Earning per share attributable to owners of the parent Basic

(0.01)

(0.01)

0.02

0.05

0.02

Diluted

(0.01)

(0.01)

0.02

0.05

0.02

  Weighted average basic shares outstanding

59,067

59,067

59,064

59,067

59,064

Weighted average diluted shares outstanding

59,067

59,067

59,095

59,070

59,100

Consolidated statements of comprehensive income (Unaudited)

for the three months ended June 30,

 

for the six months ended June 30,

In 000€

2023

 

2023

 

2022

 

2023

 

2022

U.S.$ € € € € Net profit (loss) for the period

(536)

(494)

896

3,221

1,023

Other comprehensive income Recycling Exchange difference on translation of foreign operations

689

634

(125)

1,242

1,291

Non-recycling Fair value adjustments through OCI - Equity instruments

-

-

-

-

-

Other comprehensive income (loss), net of taxes

689

634

(125)

1,242

1,291

Total comprehensive income (loss) for the year, net of taxes

152

140

771

4,463

2,314

Total comprehensive income (loss) attributable to: The owners of the parent

157

144

778

4,473

2,327

Non-controlling interests

(4)

(4)

(7)

(10)

(13)

Consolidated statement of financial position (Unaudited)

As of June 30,

 

As of December 31,

In 000€

2023

 

2022

Assets Non-current assets Goodwill

44,345

44,155

Intangible assets

35,780

37,875

Property, plant & equipment

94,599

94,276

Right-of-Use assets

8,277

8,420

Investments in joint ventures

-

-

Deferred tax assets

1,251

1,186

Investments in convertible loans

3,618

3,494

Investments in non-listed equity instruments

307

307

Other non-current assets

4,997

5,136

Total non-current assets

193,173

194,847

Current assets Inventories

16,007

16,081

Trade receivables

45,859

51,043

Other current assets

8,935

8,424

Cash and cash equivalents

136,285

140,867

Total current assets

207,085

216,414

Total assets

400,259

411,262

As of June 30,

 

As of December 31,

In 000€

2023

 

2022

Equity and liabilities Equity Share capital

4,487

4,487

Share premium

233,895

233,895

Retained earnings and other reserves

(4,951)

(9,427)

Equity attributable to the owners of the parent

233,431

228,955

Non-controlling interest

(38)

(28)

Total equity

233,393

228,928

Non-current liabilities Loans & borrowings

49,823

55,873

Lease liabilities

5,123

5,147

Deferred tax liabilities

3,947

4,312

Deferred income

8,633

9,277

Other non-current liabilities

1,006

1,611

Total non-current liabilities

68,532

76,220

Current liabilities Loans & borrowings

14,631

17,058

Lease liabilities

2,835

2,902

Trade payables

22,790

23,230

Tax payables

2,129

1,246

Deferred income

40,579

41,721

Other current liabilities

15,370

19,957

Total current liabilities

98,334

106,114

Total equity and liabilities

400,259

411,262

Consolidated statement of cash flows (Unaudited)

for the six months ended June 30,

In 000€

2023

 

2022

Operating activities Net (loss) profit for the period

3,221

1,023

Non-cash and operational adjustments Depreciation of property plant & equipment

7,364

7,630

Amortization of intangible assets

3,334

3,186

Impairment of goodwill and intangible assets

-

-

Share-based payment expense

-

(97)

Loss (gain) on disposal of intangible assets and property, plant & equipment

(106)

31

Movement in provisions

(591)

5

Movement reserve for bad debt and slow moving inventory

272

136

Financial income

(2,095)

(5,509)

Financial expense

2,055

2,564

Impact of foreign currencies

(84)

(61)

(Deferred) income taxes

1,254

885

Working capital adjustments

(3,336)

10,154

Decrease (increase) in trade receivables and other receivables

4,269

1,450

Decrease (increase) in inventories and contracts in progress

81

(2,839)

Increase (decrease) in deferred revenue

(1,772)

3,658

Increase (decrease) in trade payables and other payables

(5,914)

7,884

Income tax paid & Interest received

531

(201)

Net cash flow from operating activities

11,819

19,747

for the six months ended June 30,

In 000€

2023

 

2022

Investing activities Purchase of property, plant & equipment

(4,333)

(7,494)

Purchase of intangible assets

(1,056)

(2,553)

Proceeds from the sale of property, plant & equipment & intangible assets (net)

218

184

Acquisition of subsidiary (net of cash)

-

(25,610)

Net cash flow used in investing activities

(5,172)

(35,473)

Financing activities Repayment of loans & borrowings

(8,617)

(9,018)

Repayment of leases

(1,744)

(1,668)

Capital increase

-

-

Interest paid

(891)

(1,155)

Other financial income (expense)

(33)

604

Net cash flow from (used in) financing activities

(11,285)

(11,236)

Net increase/(decrease) of cash & cash equivalents

(4,638)

(26,964)

Cash & Cash equivalents at the beginning of the year

140,867

196,028

Exchange rate differences on cash & cash equivalents

57

(930)

Cash & cash equivalents at end of the period

136,285

168,133

Reconciliation of Net Profit (Loss) to EBITDA and Adjusted EBITDA (Unaudited)

for the three months ended June 30,

 

for the six months ended June 30,

In 000€

2023

 

2022

 

2023

 

2022

Net profit (loss) for the period

(494)

896

3,221

1,023

Income taxes

532

600

1,249

898

Financial expenses

670

1,320

2,045

2,561

Financial income

(1,305)

(3,901)

(2,114)

(5,517)

Depreciation and amortization

5,353

5,374

10,664

10,816

EBITDA

4,755

4,289

15,066

9,780

Share-based compensation expense (1)

-

(49)

-

(97)

Adjusted EBITDA

4,755

4,240

15,066

9,683

(1) Share-based compensation expense represents the cost of equity-settled and share-based payments to employees.

Segment P&L (Unaudited)

In 000€ MaterialiseSoftware MaterialiseMedical MaterialiseManufacturing Totalsegments Unallocated (1) Consolidated For the three months ended June 30, 2023 Revenues

11,030

24,945

28,835

64,810

0

64,810

Segment (adj) EBITDA

1,973

2,683

2,708

7,364

(2,608)

4,755

Segment (adj) EBITDA %

17.9%

10.8%

9.4%

11.4%

7.3%

For the three months ended June 30, 2022 Revenues

10,642

20,855

26,574

58,070

0

58,070

Segment (adj) EBITDA

821

4,474

1,581

6,876

(2,636)

4,240

Segment (adj) EBITDA %

7.7%

21.5%

5.9%

11.8%

7.3%

  In 000€ MaterialiseSoftware MaterialiseMedical MaterialiseManufacturing Totalsegments Unallocated(1) Consolidated For the six months ended June 30, 2023 Revenues

22,381

49,265

59,056

130,702

0

130,702

Segment (adj) EBITDA

4,409

10,035

5,906

20,350

(5,285)

15,066

Segment (adj) EBITDA %

19.7%

20.4%

10.0%

15.6%

11.5%

For the six months ended June 30, 2022 Revenues

21,125

39,201

50,705

111,032

0

111,032

Segment (adj) EBITDA

2,753

7,701

4,192

14,647

(4,963)

9,683

Segment (adj) EBITDA %

13.0%

19.6%

8.3%

13.2%

8.7%

(1) Unallocated segment adjusted EBITDA consists of corporate research and development and corporate other operating income (expense), and the added share-based compensation expenses, acquisition related expenses of business combinations, impairments and fair value of business combinations that are included in Adjusted EBITDA.

Reconciliation of Net Profit (Loss) to Segment adjusted EBITDA (Unaudited)

for the three months ended June 30,

 

for the six months ended June 30,

In 000€

2023

 

2022

 

2023

 

2022

Net profit (loss) for the period

(494)

896

3,221

1,023

Income taxes

532

600

1,249

898

Financial cost

670

1,320

2,045

2,561

Financial income

(1,305)

(3,901)

(2,114)

(5,517)

Operating (loss) profit

(597)

(1,084)

4,402

(1,036)

Depreciation and amortization

5,353

5,374

10,664

10,816

Corporate research and development

737

816

1,459

1,465

Corporate headquarter costs

2,576

2,104

5,238

4,612

Other operating income (expense)

(705)

(640)

(1,412)

(1,211)

Segment adjusted EBITDA

7,364

6,568

20,350

14,647

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230724765653/en/

Investor Relations Harriet Fried LHA 212.838.3777 hfried@lhai.com