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 third
quarter ended September 30, 2020.
Highlights – Third Quarter 2020
- Total revenue was 40,785 kEUR for the third quarter of 2020
compared to 50,449 kEUR for the 2019 period.
- Total deferred revenues from annual software sales and
maintenance fees were 26,833 kEUR compared to 27,667 kEUR at
December 31, 2019.
- Adjusted EBITDA amounted to 6,023 kEUR for the third quarter of
2020, with an Adjusted EBITDA margin of 14.8%, driven mainly by the
Materialise Medical segment’s strong 32% EBITDA margin. The EBITDA
margins of the Materialise Software and Materialise Manufacturing
segments were 33% and (2%), respectively.
- Net result for the third quarter of 2020 was (366) kEUR, or
(0.01) EUR per diluted share, compared to 1,001 kEUR, or 0.02 EUR
per diluted share, for the 2019 period.
- Total cash was 110,691 kEUR at the end of the quarter.
Third Quarter 2020 Results
Executive Chairman Peter Leys commented, “Given the challenging
environment, Materialise performed well this quarter, thanks to the
continued hard work and inspiring contributions of our entire
workforce. While the revenues of our Materialise Manufacturing and,
to a lesser extent, Materialise Software segments decreased in the
midst of the COVID-19 pandemic, our Materialise Medical segment
grew its revenues by an impressive 11% and posted a record EBITDA
margin of 32%. Further building on the success we had with some of
our medical applications, we made a strategic investment in our
eyewear initiative, in connection with our previously announced
collaboration with Ditto, and, on October 29, 2020, we announced an
increased investment in our footwear platform through the
acquisition of RS Print and RS Scan. In the third quarter, we also
increased our overall ongoing R&D efforts by more than 4% and
began implementing an internal digital transformation program,
including a new e-commerce portal and new customer relationship
management (CRM) and enterprise resource planning (ERP)
systems.”
Total revenue for the third quarter of 2020 decreased 19.2% to
40,785 kEUR compared to 50,449 kEUR for the third quarter of 2019.
Adjusted EBITDA decreased to 6,023 kEUR from 8,022 kEUR. The
Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue)
for the third quarter of 2020 was 14.8% compared to 15.9% for the
third quarter of 2019.
Revenue from our Materialise Software segment decreased 12.7% to
9,478 kEUR for the third quarter of 2020 from 10,860 kEUR for the
same quarter last year. Recurring revenue of Materialise Software
increased by 15.9%. Segment EBITDA decreased to 3,114 kEUR from
3,769 kEUR while the segment EBITDA margin was 32.9% compared to
34.7% for the prior-year period.
Revenue from our Materialise Medical segment increased 10.8% to
17,161 kEUR for the third quarter of 2020 compared to 15,488 kEUR
for the same period in 2019. Compared to the third quarter of 2019,
revenues from our medical software grew 3.1% and revenues from
medical devices and services increased 14.5%. Segment EBITDA
increased to 5,477 kEUR compared to 2,795 kEUR while the segment
EBITDA margin was 31.9% compared to 18.0% for the third quarter of
2019.
Revenue from our Materialise Manufacturing segment decreased
41.3% to 14,154 kEUR for the third quarter of 2020 from 24,127 kEUR
for the third quarter of 2019. Segment EBITDA decreased to (293)
kEUR from 3,862 kEUR while the segment EBITDA margin was (2.1)%
compared to 16.0% for the third quarter of 2019.
Gross profit was 23,220 kEUR, or 56.9% of total revenue, for the
third quarter of 2020 compared to 29,023 kEUR, or 57.5% of total
revenue, for the third quarter of 2019.
Research and development (“R&D”), sales and marketing
(“S&M”) and general and administrative (“G&A”) expenses
decreased, in the aggregate, 11.9% to 24,176 kEUR for the third
quarter of 2020 from 27,439 kEUR for the third quarter of 2019. In
the third quarter of 2020, we increased our R&D expenses by
4.2%, while our cost reduction initiatives in S&M and G&A
resulted in decreases of 18.7% and 11.7%, respectively, compared to
the third quarter of 2019.
Net other operating income was 1,157 kEUR compared to 1,332 kEUR
for the third quarter of 2019.
Operating result decreased to 201 kEUR from 2,916 kEUR for the
third quarter of 2019.
Net financial result was (1,331) kEUR compared to (966) kEUR for
the third quarter of 2019. The share in result of joint venture
amounted to 0 kEUR compared to (41) kEUR for the same period in
2019. Subsequent to the end of the third quarter, we agreed to
acquire substantially all assets of RS Scan, our joint venture
partner in RS Print, and thereby acquire the remaining 50% interest
in RS Print.
The third quarter of 2020 contained income tax income of 764
kEUR, compared to an income tax expense of (908) kEUR in the third
quarter of 2019.
As a result of the above, net loss for the third quarter of 2020
was (366) kEUR, compared to 1,001 kEUR for the same period in 2019.
Total comprehensive loss for the third quarter of 2020, which
includes exchange differences on translation of foreign operations,
was (1,744) kEUR compared to 1,067 kEUR for the 2019 period.
At September 30, 2020, we had cash and equivalents of 110,691
kEUR compared to 128,897 kEUR at December 31, 2019. Gross debt
amounted to 117,884 kEUR at September 30, 2020, compared to 127,939
kEUR at December 31, 2019. As a result, our net cash position
decreased 8,151 kEUR during the first three quarters of 2020.
Cash flow from operating activities during the first three
quarters of 2020 was 14,752 kEUR compared to 22,737 kEUR for the
same period in 2019. Total capital expenditures for the third
quarter of 2020 were funded with cash flow from operations and
available cash, and amounted to 7,536 kEUR. This amount included
capital expenditures of 1,846 kEUR related to our internal digital
transformation program.
Net shareholders’ equity at September 30, 2020 was 131,399 kEUR
compared to 142,675 kEUR at December 31, 2019.
2020 Outlook
Mr. Leys concluded, “As we move through the fourth quarter,
traditionally an important period for our business, the COVID-19
pandemic continues to disrupt everyday life, the markets in which
we operate, and macroeconomic conditions in general. Accordingly,
the outlook for the short term remains unclear. We are being
disciplined in managing our business, but, just as importantly, are
dedicated to pursuing our vital R&D programs and our strategic
investment initiatives, which we believe will position Materialise
very well for the coming years. Our balance sheet and liquidity are
particular areas of strength.”
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 share-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 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 1.1708, the reference rate
of the European Central Bank on September 30, 2020.
Conference Call and Webcast
Materialise will hold a conference call and simultaneous webcast
to discuss its financial results for the third quarter of 2020 on
Thursday, October 29, 2020, at 8:30 a.m. ET/1:30 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 #6946774.
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 the
largest groups of software developers in the industry with one of
the largest and most complete 3D printing facilities in the
world.
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 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
COVID-19 pandemic and related public health measures, as well as
the related actions we are taking in response), 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
September 30,
For the nine months
ended September 30,
In 000
2020
2020
2019
2020
2019
U.S.$
€
€
€
€
Revenue
47,751
40,785
50,449
125,148
145,968
Cost of sales
(20,566)
(17,566)
(21,426)
(57,310)
(64,838)
Gross profit
27,186
23,220
29,023
67,838
81,129
Gross profit as % of revenue
56.9%
56.9%
57.5%
54.2%
55.6%
Research and development expenses
(6,862)
(5,861)
(5,626)
(18,434)
(17,411)
Sales and marketing expenses
(12,896)
(11,015)
(13,545)
(33,700)
(38,797)
General and administrative expenses
(8,547)
(7,300)
(8,269)
(21,100)
(24,453)
Net other operating income (expenses)
1,355
1,157
1,332
2,733
3,959
Operating (loss) profit
235
201
2,916
(2,663)
4,427
Financial expenses
(2,883)
(2,462)
(1,138)
(4,923)
(2,647)
Financial income
1.324
1,131
172
1,976
900
Share in loss of joint venture
-
-
(41)
(39)
(245)
(Loss) profit before taxes
(1,323)
(1,130)
1,909
(5,649)
2,434
Income taxes
894
764
(908)
497
(2,037)
Net (loss) profit for the
period
(429)
(366)
1,001
(5,152)
397
Net (loss) profit attributable to:
The owners of the parent
(359)
(307)
929
(4,989)
325
Non-controlling interest
(69)
(59)
72
(163)
72
Earnings per share attributable to
owners of the parent
Basic
(0.01)
(0.01)
0.02
(0.01)
0.01
Diluted
(0.01)
(0.01)
0.02
(0.01)
0.01
Weighted average basic shares
outstanding
53,194
53,194
52,891
53,194
52,891
Weighted average diluted shares
outstanding
53,194
53,194
52,970
53,194
52,930
Consolidated statements of comprehensive income
(Unaudited)
For the three months ended
September 30,
For the nine months
ended September 30,
In 000
2020
2020
2019
2020
2019
U.S.$
€
€
€
€
Net profit (loss) for the
period
(429)
(366)
1,001
(5,152)
397
Other comprehensive income
Exchange difference on translation of
foreign operations
(1,612)
(1,377)
67
(8,165)
225
Other comprehensive income (loss), net of
taxes
(1,612)
(1,377)
67
(8,165)
225
Total comprehensive income (loss) for
the year, net of taxes
(2,042)
(1,744)
1,067
(13,318)
623
Total comprehensive income (loss)
attributable to:
The owners of the parent
(1,754)
(1,498)
1,077
(11,969)
623
Non-controlling interest
(288)
(246)
(10)
(1,349)
–
Consolidated statement of financial position
(Unaudited)
As of September
30,
As of December
31,
In 000
2020
2019
€
€
Assets
Non-current assets
Goodwill
18,653
20,174
Intangible assets
28,790
27,395
Property, plant & equipment
88,228
90,331
Right-of-Use assets
9,473
10,586
Investments in joint ventures
-
39
Deferred tax assets
875
192
Other non-current assets
12,418
9,391
Total non-current assets
158,437
158,108
Current assets
Inventories
10,046
12,696
Trade receivables
30,526
40,322
Other current assets
11,087
9,271
Cash and cash equivalents
110,691
128,897
Total current assets
162,350
191,186
Total assets
320,787
349,294
As of September
30,
As of December
31,
In 000
2020
2019
€
€
Equity and liabilities
Equity
Share capital
3,068
3,066
Share premium
138,391
138,090
Consolidated reserves
(5,185)
(195)
Other comprehensive income
(6,979)
(1.394)
Equity attributable to the owners of
the parent
129,295
139,567
Non-controlling interest
2,104
3,107
Total equity
131,399
142,675
Non-current liabilities
Loans & borrowings
93,630
104,673
Lease liabilities
5,767
6,427
Deferred tax liabilities
5,548
5,747
Deferred income
5,236
5,031
Other non-current liabilities
672
696
Total non-current liabilities
110,853
122,575
Current liabilities
Loans & borrowings
15,106
13,389
Lease liabilities
3,381
3,449
Trade payables
15,637
18,516
Tax payables
1,392
3,363
Deferred income
25,379
27,641
Other current liabilities
17,640
17,686
Total current liabilities
78,535
84,044
Total equity and liabilities
320,787
349,294
Consolidated statement of cash flows (Unaudited)
For the nine months ended
September 30,
in 000
2020
2019
€
€
Operating activities
Net (loss) profit for the period
(5,153)
398
Non-cash and operational adjustments
Depreciation of property, plant &
equipment
11,266
10,722
Amortization of intangible assets
3,349
3,360
Share-based payment expense
-
258
Loss (gain) on disposal of property, plant
& equipment
(16)
141
Movement in provisions
-
66
Movement reserve for bad debt
36
(135)
Financial income
(1.977)
(900)
Financial expense
4.922
2,647
Impact of foreign currencies
18
(432)
Share in loss of a joint venture (equity
method)
39
245
(Deferred) income taxes
(836)
2,012
Other
-
4
Working capital adjustment & income
tax paid
Decrease (increase) in trade receivables
and other receivables
6,765
3,593
Decrease (increase) in inventories
2,757
8
Increase (decrease) in trade payables and
other payables
(4,301)
2,263
Income tax paid & interest
received
(2,457)
(1,514)
Net cash flow from operating
activities
14,752
22,737
For the nine months ended
September 30,
in 000
2020
2019
€
€
Investing activities
Purchase of property, plant &
equipment
(8,196)
(10,325)
Purchase of intangible assets
(5,783)
(1,588)
Proceeds from the sale of property, plant
& equipment & intangible assets (net)
150
(3)
Available for sale investments
Advances on capital increases
-
(875)
Convertible loan to third party
(2,428)
(2,500)
Investments in subsidiary, net of cash
acquired
-
(7,765)
Interest received
-
-
Net cash flow used in investing
activities
(16,258)
(23,066)
Financing activities
Proceeds from loans & borrowings
-
29,000
Repayment of loans & borrowings
(8,909)
(8,608)
Repayment of finance leases
(2,997)
(2,288)
Capital increase
140
–
Direct attributable expense of capital
increase
–
–
Interest paid
(1,626)
(1,713)
Other financial income (expense)
(1,034)
(451)
Net cash flow from (used in) financing
activities
(14,425)
15,941
Net increase of cash & cash
equivalents
(15,931)
15,611
Cash & cash equivalents at beginning
of the year
128,897
115,506
Exchange rate differences on cash &
cash equivalents
(2,275)
162
Cash & cash equivalents at end of
the period
110,691
131,279
Reconciliation of Net Profit (Loss) to EBITDA and Adjusted
EBITDA (Unaudited)
For the three months
ended September 30,
For the nine months
ended September 30,
In 000
2020
2019
2020
2019
€
€
€
€
Net profit (loss) for the
period
(366)
1,001
(5,152)
397
Income taxes
(764)
908
(497)
2,037
Financial expenses
2,462
1,138
4,923
2,647
Financial income
(1,131
)
(172
)
(1,976)
(900)
Share in loss of joint venture
-
41
39
245
Depreciation and amortization
4,922
4,904
14,616
14,082
EBITDA
5,123
7,820
11,952
18,512
Share-based compensation expense (1)
900
60
1,057
256
Acquisition-related expenses of business
combinations (2)
-
140
-
140
ADJUSTED EBITDA
6,023
8,022
13,009
18,908
(1)
Share-based compensation expenses
represent the cost of equity-settled and cash-settled share-based
payments to employees.
(2)
Acquisition-related expenses of business
combinations represent expenses incurred in connection with the
Engimplan acquisition.
Segment P&L
(Unaudited)
In 000
Materialise Software
Materialise Medical
Materialise Manu-
facturing
Total segments
Unallocated (1)(2)
Consoli- dated
€
€
€
€
€
€
For the three months ended September
30, 2020
Revenues
9,478
17,161
14,154
40,793
22
40,785
Segment (adj) EBITDA
3,114
5,477
(293)
8,298
(2,275)
6,023
Segment (adj) EBITDA %
32.9%
31.9%
(2.1%)
20.3%
14.8%
For the three months ended September
30, 2019
Revenues
10,860
15,488
24,127
50,474
(26)
50,449
Segment EBITDA
3,769
2,795
3,862
10,426
(2,404)
8,022
Segment EBITDA %
34.7%
18.0%
16.0%
20.7%
15.9%
In 000
Materialise Software
Materialise Medical
Materialise Manu-
facturing
Total segments
Unallocated (1)(2)
Consoli- dated
€
€
€
€
€
€
For the nine months ended September 30,
2020
Revenues
28,839
44,541
51,746
125,126
22
125,148
Segment (adj) EBITDA
9,516
9,072
1,474
20,063
(7,053)
13,009
Segment (adj) EBITDA %
33.0%
20.4%
2.8%
16.0%
10.4%
For the nine months ended September 30,
2019
Revenues
29,529
43,600
72,861
145,990
(22)
145,968
Segment (adj) EBITDA
8,785
7,306
10,393
26,484
(7,576)
18,908
Segment (adj) EBITDA %
29.8%
16.8%
14.3%
18.1%
13.0%
(1)
Unallocated Revenues consist of
occasional one-off sales in our core competencies not
allocated to any of our segments.
(2)
Unallocated segment EBITDA consists of
corporate research and development, corporate headquarter costs and
other operating income (expense), and the added share-based
compensation expenses and acquisition-related expenses of business
combinations that are included in Adjusted EBITDA.
Reconciliation of Net Profit (Loss) to Segment EBITDA
(Unaudited)
For the three months
ended September 30,
For the nine months
ended September 30,
In 000
2020
2019
2020
2019
€
€
€
€
Net profit (loss) for the
period
(366)
1,001
(5,152)
397
Income taxes
(764)
908
(497)
2,037
Financial cost
2,462
1,138
4,923
2,647
Financial income
(1,131
)
(172)
(1,976)
(900)
Share in loss of joint venture
41
39
245
Operating profit
201
2,916
(2,663)
4,427
Depreciation and amortization
4,922
4,904
14,616
14,082
Corporate research and development
668
497
2,052
1,510
Corporate headquarter costs
3,271
2,978
8,360
8,753
Other operating income (expense)
(764)
(726)
(2,303)
(1,833)
Segment EBITDA
8,298
10,426
20,063
26,484
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201029005067/en/
Investor Relations Harriet Fried LHA 212.838.3777
hfried@lhai.com
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