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Materialise Reports Third Quarter 2022 Results

LEUVEN, Belgium, October 27, 2022--(BUSINESS WIRE)--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, 2022.

Highlights – Third Quarter 2022

  • Total revenue increased 11.7% to 58,288 kEUR compared to 52,195 kEUR for the third quarter of 2021.

  • Total deferred revenue from annual software sales and maintenance fees increased by 3,214 kEUR to 38,359 kEUR compared to December 31, 2021.

  • Adjusted EBITDA was 5,072 kEUR, compared to 9,739 kEUR for the 2021 period.

  • Net profit for the third quarter of 2022 was 1,413 kEUR, or 0.02 EUR per diluted share, compared to 8,657 kEUR, or 0.15 EUR per diluted share, for the 2021 period.

Executive Chairman Peter Leys commented, "Demand for the products and solutions of each of our three segments remained solid even in these uncertain macro-economic times. Materialise’s revenue increased by almost 12% compared to the same period last year and our deferred revenue from annual software sales and maintenance fees increased by almost 10% compared to December 31, 2021. As a result of our continued investment in our growth businesses, but also because of inflation and, in particular our increased labor costs, our Adjusted EBITDA for the quarter was 5,072 kEUR compared to 9,739 kEUR for the third quarter of 2021. Our results included operational investments in Identify3D, a developer of AM cloud security systems that we acquired on September 1, 2022."

Third Quarter 2022 Results

Total revenue for the third quarter of 2022 increased 11.7% to 58,288 kEUR from 52,195 kEUR for the third quarter of 2021. Adjusted EBITDA amounted to 5,072 kEUR for the third quarter of 2022 compared to 9,739 kEUR for the 2021 period. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) for the third quarter of 2022 was 8.7%, compared to 18.7% for the third quarter of 2021.

Revenue from our Materialise Software segment increased 3.8% to 10,863 kEUR for the third quarter of 2022 from 10,468 kEUR for the same quarter last year. Segment EBITDA decreased, including the effect of ongoing investments in Link3D and Identify3D, to 202 kEUR from 3,708 kEUR while the segment EBITDA margin was 1.9% compared to 35.4% for the prior-year period.

Revenue from our Materialise Medical segment increased 13.1% to 21,391 kEUR for the third quarter of 2022 compared to 18,910 kEUR for the same period in 2021. Segment EBITDA amounted to 4,765 kEUR for the third quarter of 2022 compared to 5,251 kEUR while the segment EBITDA margin was 22.3% compared to 27.8% for the third quarter of 2021.

Revenue from our Materialise Manufacturing segment increased 14.1% to 26,033 kEUR for the third quarter of 2022 from 22,817 kEUR for the third quarter of 2021. Segment EBITDA amounted to 2,530 kEUR compared to 3,546 kEUR for the same period last year, while the segment EBITDA margin was 9.7% compared to 15.5% for the third quarter of 2021.

Gross profit was 32,042 kEUR compared to 31,076 kEUR for the same period last year, while gross profit as a percentage of revenue decreased to 55.0% compared to 59.5% for the third quarter of 2021.

Research and development ("R&D"), sales and marketing ("S&M") and general and administrative ("G&A") expenses increased, in the aggregate, 24.5% to 33,491 kEUR for the third quarter of 2022 from 26,900 kEUR for the third quarter of 2021.

Net other operating income increased to 1,166 kEUR from 355 kEUR for the third quarter of 2021.

Operating result amounted to (282) kEUR compared to 4,529 kEUR for the third quarter of 2021.

Net financial result was 2,173 kEUR compared to 4,203 kEUR for the third quarter of 2021.

The third quarter of 2022 contained income tax expenses of (478) kEUR, compared to (75) kEUR in the third quarter of 2021.

As a result of the above, net profit for the third quarter of 2022 was 1,413 kEUR, compared to 8,657 kEUR for the same period in 2021. Total comprehensive income for the third quarter of 2022, which includes exchange differences on translation of foreign operations, was 1,638 kEUR compared to 8,272 kEUR for the 2021 period.

At September 30, 2022, we had cash and cash equivalents of 150,621 kEUR compared to 196,028 kEUR at December 31, 2021. Gross debt amounted to 83,925 kEUR, compared to 99,107 kEUR at December 31, 2021. As a result, our net cash position (cash and cash equivalents less gross debt) was 66,696 kEUR, a decrease of 30,225 kEUR, and included the effect of our call option exercise to acquire 100% of the shares of Link3D, and of our acquisition of Identify3D.

Cash flow from operating activities for the third quarter of the year 2022 was 3,840 kEUR compared to 4,388 kEUR for the same period in 2021. Total capital expenditures for the third quarter of 2022 amounted to 9,441 kEUR.

Net shareholders’ equity at September 30, 2022 was 236,559 kEUR compared to 232,577 kEUR at December 31, 2021.

2022 Guidance

Mr. Leys concluded, "The revenue growth posted by each of our segments during the first nine months of this year strengthens our confidence that our full year 2022 revenues will be at least 10% higher than in 2021. While inflation and pressure on the labor market, which are higher and more persistent than we expected at the beginning of 2022, weigh on our results, we continue to make prudent investments in select growth businesses. As a result, we continue to expect that our consolidated EBITDA for the full year 2022 will be in the range of 20 mEUR to 25 mEUR."

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 0.9748, the reference rate of the European Central Bank on September 30, 2022.

Conference Call and Webcast

Materialise will hold a conference call and simultaneous webcast to discuss its financial results for the third quarter of 2022 on Thursday, October 27, 2022, 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 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.

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 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 current armed conflict in Ukraine and 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 most recent 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

2022

2022

2021(*)

2022

2021(*)

U.S.$

Revenue

56,819

58,288

52,195

169,319

148,461

Cost of Sales

(25,584

)

(26,245

)

(21,119

)

(76,236

)

(64,378

)

Gross Profit

31,235

32,042

31,076

93,083

84,084

Gross profit as % of revenue

55.0

%

55.0

%

59.5

%

55.0

%

56.6

%

Research and development expenses

(9,078

)

(9,313

)

(6,602

)

(26,074

)

(19,982

)

Sales and marketing expenses

(14,815

)

(15,198

)

(12,413

)

(44,841

)

(35,730

)

General and administrative expenses

(8,754

)

(8,980

)

(7,885

)

(26,089

)

(23,449

)

Net other operating income (expenses)

1,137

1,166

355

2,603

2,318

Operating (loss) profit

(275

)

(282

)

4,529

(1,318

)

7,239

Financial expenses

(2,057

)

(2,110

)

2,334

(4,671

)

(3,182

)

Financial income

4,175

4,283

1,869

9,800

4,426

Share in loss of joint venture

-

-

-

-

-

(Loss) profit before taxes

1,843

1,891

8,732

3,812

8,483

Income Taxes (*)

(466

)

(478

)

(75

)

(1,377

)

(101

)

Net (loss) profit for the period (*)

1,377

1,413

8,657

2,435

8,382

Net (loss) profit attributable to:

-

The owners of the parent

1,385

1,421

8,660

2,457

8,386

Non-controlling interest

(8

)

(8

)

(3

)

(21

)

(4

)

Earning per share attributable to owners of the parent

Basic (*)

0.02

0.02

0.15

0.04

0.15

Diluted (*)

0.02

0.02

0.15

0.04

0.15

Weighted average basic shares outstanding

59,064

59,064

58,731

59,064

55,935

Weighted average diluted shares outstanding

59,089

59,089

58,944

59,099

56,206

(*)

The year 2021 has been restated to reflect the final accounting of the business combination with RS Print.

Impact on the nine months ended September 30 income taxes and net profit is (46)k€.

The year 2021 has been restated to reflect the final accounting of the business combination with RS Print.

Impact on the three months ended September 30 income taxes and net profit is 5 k€.

Consolidated statements of comprehensive income (Unaudited)

for the three months ended

September 30,

for the nine months ended

September 30,

In 000€

2022

2022

2021(*)

2022

2021(*)

U.S.$

Net profit (loss) for the period (*)

1,377

1,413

8,657

2,435

8,382

Other comprehensive income

Recycling

Exchange difference on translation of foreign operations

219

225

(385

)

1,291

1,590

Non-recycling

Fair value adjustments through OCI - Equity instruments

-

-

-

(0

)

48

Other comprehensive income (loss), net of taxes

219

225

(385

)

1,291

1,638

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

1,596

1,638

8,272

3,726

10,020

Total comprehensive income (loss) attributable to:

The owners of the parent

1,604

1,646

8,275

3,748

10,023

Non-controlling interests

(8

)

(8

)

(3

)

(21

)

(3

)

(*)

The year 2021 has been restated to reflect the final accounting of the business combination with RS Print.

Impact on the nine months ended September 30 income taxes and net profit is (46)k€.

The year 2021 has been restated to reflect the final accounting of the business combination with RS Print.

Impact on the three months ended September 30 income taxes and net profit is 5 k€.

Consolidated statement of financial position (Unaudited)

As of

September 30,

As of

December 31,

In 000€

2022

2021

Assets

Non-current assets

Goodwill

50,190

18,726

Intangible assets

38,710

31,668

Property, plant & equipment

92,335

84,451

Right-of-Use assets

8,520

9,054

Investments in joint ventures

-

-

Deferred tax assets

217

227

Investments in convertible loans

3,431

3,560

Investments in non-listed equity instruments

399

399

Other non-current assets

4,948

7,520

Total non-current assets

198,750

155,605

Current assets

Inventories

15,532

11,295

Trade receivables

42,329

41,541

Other current assets

8,374

8,940

Cash and cash equivalents

150,621

196,028

Total current assets

216,856

257,803

Total assets

415,606

413,408

As of

September 30,

As of

December 31,

In 000€

2022

2021

Equity and liabilities

Equity

Share capital

4,487

4,489

Share premium

233,869

233,872

Retained earnings and other reserves

(1,797

)

(5,784

)

Equity attributable to the owners of the parent

236,559

232,577

Non-controlling interest

(21

)

1

Total equity

236,538

232,578

Non-current liabilities

Loans & borrowings

58,126

72,637

Lease liabilities

5,004

5,268

Deferred tax liabilities

4,239

4,371

Deferred income

6,932

4,952

Other non-current liabilities

1,027

2,168

Total non-current liabilities

75,328

89,396

Current liabilities

Loans & borrowings

17,593

17,849

Lease liabilities

3,202

3,353

Trade payables

25,038

20,171

Tax payables

1,128

783

Deferred income

36,112

33,306

Other current liabilities

20,667

15,972

Total current liabilities

103,740

91,434

Total equity and liabilities

415,606

413,408

Consolidated statement of cash flows (Unaudited)

for the nine months ended

September 30,

In 000€

2022

2021*

Operating activities

Net (loss) profit for the period (*)

2,435

8,382

Non-cash and operational adjustments

Depreciation of property plant & equipment

11,335

11,460

Amortization of intangible assets

4,859

3,780

Impairment of goodwill and intangible assets

-

-

Share-based payment expense

(121

)

(878

)

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

59

43

Movement in provisions

(506

)

7

Movement reserve for bad debt and slow moving inventory

(42

)

154

Financial income

(9,771

)

(4,426

)

Financial expense

5,009

3,182

Impact of foreign currencies

98

107

Share in loss (gain) of a joint venture (equity method)

-

-

(Deferred) income taxes (*)

1,384

101

Other non-current liabilities

-

-

Working capital adjustments

9,109

(4,531

)

Decrease (increase) in trade receivables and other receivables

(184

)

(7,553

)

Decrease (increase) in inventories and contracts in progress

(4,356

)

(1,770

)

Increase (decrease) in deferred revenue

3,815

(56

)

Increase (decrease) in trade payables and other payables

9,834

4,848

Income tax paid & Interest received

(262

)

108

Net cash flow from operating activities

23,587

17,490

(*)

The year 2021 has been restated to reflect the final accounting of the business combination with RS Print.

Impact on Net profit for the period and on (Deferred) income taxes is (46) k€.

for the nine months ended

September 30,

In 000€

2022

2021

Investing activities

Purchase of property, plant & equipment

(16,066

)

(4,827

)

Purchase of intangible assets

(3,422

)

(2,439

)

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

319

295

Acquisition of subsidiary (net of cash)

(29,355

)

-

(Convertible) Loans granted

-

1,239

Investment in subsidiary, net of cash acquired

-

(1,680

)

Net cash flow used in investing activities

(48,523

)

(7,412

)

Financing activities

Repayment of loans & borrowings

(15,182

)

(11,169

)

Repayment of leases

(2,566

)

(2,841

)

Capital increase

-

85,787

Interest paid

(1,665

)

(1,652

)

Other financial income (expense)

1,378

2,740

Net cash flow from (used in) financing activities

(18,035

)

72,865

Net increase/(decrease) of cash & cash equivalents

(42,972

)

82,943

Cash & Cash equivalents at the beginning of the year

196,028

111,538

Exchange rate differences on cash & cash equivalents

(2,433

)

465

Cash & cash equivalents at end of the period

150,621

194,946

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€

2022

2021 (*)

2022

2021 (*)

Net profit (loss) for the period (*)

1,413

8,657

2,435

8,382

Income taxes (*)

478

75

1,377

101

Financial expenses

2,110

(2,334

)

4,671

3,182

Financial income

(4,283

)

(1,869

)

(9,800

)

(4,426

)

Depreciation and amortization

5,378

5,314

16,194

15,240

Share in loss of joint venture

-

-

-

-

EBITDA

5,096

9,843

14,876

22,480

Share-based compensation expense (1)

(24

)

(104

)

(121

)

(878

)

Acquisition-related expenses of business combinations (2)

-

-

-

405

Adjusted EBITDA

5,072

9,739

14,755

22,007

(1)

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

(2)

Acquisition-related expenses of business combinations represents expenses incurred in connection with the acquisition of our option to buy Link3D.

(*)

The year 2021 has been restated to reflect the final accounting of the business combination with RS Print.

Impact on the nine months ended September 30 income taxes and net profit is (46)k€.

The year 2021 has been restated to reflect the final accounting of the business combination with RS Print.

Impact on the three months ended September 30 income taxes and net profit is 5 k€.

Segment P&L (Unaudited)

In 000€

Materialise

Software

Materialise

Medical

Materialise

Manufacturing

Total

segments

Unallocated (1)

Consolidated

For the three months ended September 30, 2022

Revenues

10,863

21,391

26,033

58,288

0

58,288

Segment (adj) EBITDA

202

4,765

2,530

7,497

(2,425

)

5,072

Segment (adj) EBITDA %

1.9

%

22.3

%

9.7

%

12.9

%

8.7

%

For the three months ended September 30, 2021

Revenues

10,468

18,910

22,817

52,196

(0

)

52,195

Segment (adj) EBITDA

3,708

5,251

3,546

12,506

(2,767

)

9,739

Segment (adj) EBITDA %

35.4

%

27.8

%

15.5

%

24.0

%

18.7

%

In 000€

Materialise

Software

Materialise

Medical

Materialise

Manufacturing

Total

segments

Unallocated (1)

Consolidated

For the nine months ended September 30, 2022

Revenues

31,989

60,592

76,739

169,319

0

169,319

Segment (adj) EBITDA

2,955

12,466

6,722

22,144

(7,388

)

14,755

Segment (adj) EBITDA %

9.2

%

20.6

%

8.8

%

13.1

%

8.7

%

For the nine months ended September 30, 2021

Revenues

30,719

52,686

65,199

148,604

(142

)

148,461

Segment (adj) EBITDA

10,266

14,313

5,252

29,831

(7,826

)

22,004

Segment (adj) EBITDA %

33.4

%

27.2

%

8.1

%

20.1

%

14.8

%

(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

September 30,

for the nine months ended

September 30,

In 000€

2022

2021 (*)

2022

2021 (*)

Net profit (loss) for the period (*)

1,413

8,657

2,435

8,382

Income taxes (*)

478

75

1,377

101

Financial cost

2,110

(2,334

)

4,671

3,182

Financial income

(4,283

)

(1,869

)

(9,800

)

(4,426

)

Share in loss of joint venture

-

-

-

-

Operating (loss) profit

(282

)

4,529

(1,318

)

7,239

Depreciation and amortization

5,378

5,314

16,194

15,240

Corporate research and development

592

710

2,057

2,191

Corporate headquarter costs

2,491

2,463

7,103

6,907

Other operating income (expense)

(681

)

(511

)

(1,892

)

(1,745

)

Segment adjusted EBITDA

7,497

12,506

22,144

29,831

(*)

The year 2021 has been restated to reflect the final accounting of the business combination with RS Print.

Impact on the nine months ended September 30 income taxes and net profit is (46)k€.

The year 2021 has been restated to reflect the final accounting of the business combination with RS Print.

Impact on the three months ended September 30 income taxes and net profit is 5 k€.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221027005075/en/

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Investor Relations
Harriet Fried
LHA
212.838.3777
hfried@lhai.com