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
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