LEUVEN, Belgium--(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, 2023.
Highlights – Third Quarter 2023
- Total revenue increased 3.2% to 60,130 kEUR compared to 58,288 kEUR for the third quarter of 2022.
- Total deferred revenue from annual software sales and maintenance fees amounted to 40,079 kEUR compared to 42,780 kEUR at December 31, 2022.
- Adjusted EBITDA increased 55% to 7,857 kEUR compared to 5,072 kEUR for the corresponding 2022 period.
- Net profit for the third quarter of 2023 increased 184% to 4,013 kEUR, or 0.07 EUR per diluted share, compared to 1,413 kEUR, or 0.02 EUR per diluted share, for the corresponding 2022 period.
Executive Chairman Peter Leys commented, “Once again, demand for our products and solutions remained solid throughout the third quarter of this year. While uncertain global macro-economic conditions primarily impacted our Materialise Manufacturing segment, Materialise’s consolidated revenue continued to grow, by 3% compared to the same period last year. This strong performance was mainly driven by the continued double-digit revenue increase of our Materialise Medical segment. At the same time, we grew our consolidated Adjusted EBITDA by 55% to 7,857 kEUR through our focus on leveraging scaling effects and cost control, and without compromising on our continued investments in our growth businesses.”
Third Quarter 2023 Results
Total revenue for the third quarter of 2023 increased 3.2% to 60,130 kEUR from 58,288 kEUR for the third quarter of 2022. Adjusted EBITDA amounted to 7,857 kEUR for the third quarter of 2023, a 55% increase compared to 5,072 kEUR for the corresponding 2022 period. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) for the third quarter of 2023 was 13.1% compared to 8.7% for the third quarter of 2022.
Revenue from our Materialise Software segment was 10,811 kEUR for the third quarter of 2023 compared to 10,863 kEUR for the same quarter last year. Segment EBITDA increased significantly to 1,781 kEUR from 202 kEUR while the segment EBITDA margin was 16.5% compared to 1.9% for the corresponding prior-year period.
Revenue from our Materialise Medical segment increased by 13.4% to 24,263 kEUR for the third quarter of 2023 compared to 21,391 kEUR for the same period in 2022. Segment EBITDA increased by 50% to 7,143 kEUR for the third quarter of 2023 compared to 4,765 kEUR while the segment EBITDA margin was 29.4% compared to 22.3% for the third quarter of 2022.
Revenue from our Materialise Manufacturing segment decreased 3.8% to 25,056 kEUR for the third quarter of 2023 from 26,033 kEUR for the third quarter of 2022. Segment EBITDA amounted to 1,074 kEUR compared to 2,530 kEUR for the same period last year, while the segment EBITDA margin was 4.3% compared to 9.7% for the third quarter of 2022.
Gross profit was 33,696 kEUR compared to 32,042 kEUR for the same period last year, while gross profit as a percentage of revenue increased to 56.0% compared to 55.0% for the third quarter of 2022.
Research and development (“R&D”), sales and marketing (“S&M”) and general and administrative (“G&A”) expenses decreased, in the aggregate, 4.2% to 32,076 kEUR for the third quarter of 2023 from 33,491 kEUR for the third quarter of 2022.
Net other operating income decreased to 710 kEUR from 1,166 kEUR for the third quarter of 2022.
Operating result amounted to 2,330 kEUR compared to (282) kEUR for the third quarter of 2022.
Net financial result was 1,319 kEUR compared to 2,173 kEUR for the third quarter of 2022.
The third quarter of 2023 contained income tax results of 363 kEUR compared to (478) kEUR in the third quarter of 2022.
As a result of the above, net profit for the third quarter of 2023 was 4,013 kEUR, compared to 1,413 kEUR for the same period in 2022. Total comprehensive income for the third quarter of 2023, which includes exchange differences on translation of foreign operations, was 3,242 kEUR compared to 1,638 kEUR for the corresponding 2022 period.
At September 30, 2023, we had cash and cash equivalents of 133,953 kEUR, compared to 140,867 kEUR at December 31, 2022. Gross debt amounted to 66,222 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 67,731 kEUR compared to 59,887 kEUR at December 31, 2022.
Cash flow from operating activities for the third quarter of the year 2023 was 8,143 kEUR, compared to 3,840 kEUR for the same period in 2022. Total capital expenditures for the third quarter of 2023 amounted to 3,920 kEUR.
Net shareholders’ equity at September 30, 2023 was 236,631 kEUR compared to 228,928 kEUR at December 31, 2022.
2023 Guidance
Mr. Leys concluded, “The revenue growth posted by each of our business segments during the first nine months of this year strengthens our confidence that our full-year 2023 revenues will be, in spite of the challenging macro-economic circumstances, well within our previously communicated range of 255,000 kEUR to 260,000 kEUR. At the same time, we are maintaining our Adjusted EBITDA guidance of 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 1.0594, the reference rate of the European Central Bank on September 30, 2023.
Conference Call and Webcast
Materialise will hold a conference call and simultaneous webcast to discuss its financial results for the third quarter of 2023 on Thursday, October 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/BI67b272ddef5b405d8f5d004208bd450f
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 current armed conflicts in Israel and Ukraine and governmental responses thereto, inflation, 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 September 30, |
|
for the nine months ended September 30, |
||||||||
| In '000 | 2023 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
| U.S.$ | € | € | € | € | ||||||
| Revenue | 63,702 |
60,130 |
58,288 |
190,832 |
169,319 |
|||||
| Cost of Sales | (28,005) |
(26,435) |
(26,245) |
(83,249) |
(76,236) |
|||||
| Gross Profit | 35,697 |
33,696 |
32,042 |
107,583 |
93,083 |
|||||
| Gross profit as % of revenue | 56.0% |
56.0% |
55.0% |
56.4% |
55.0% |
|||||
| Research and development expenses | (10,039) |
(9,476) |
(9,313) |
(27,982) |
(26,074) |
|||||
| Sales and marketing expenses | (14,789) |
(13,960) |
(15,198) |
(42,418) |
(44,841) |
|||||
| General and administrative expenses | (9,153) |
(8,640) |
(8,980) |
(27,213) |
(26,089) |
|||||
| Net other operating income (expenses) | 753 |
710 |
1,166 |
(3,238) |
2,603 |
|||||
| Operating (loss) profit | 2,469 |
2,330 |
(282) |
6,732 |
(1,318) |
|||||
| Financial expenses | (1,646) |
(1,554) |
(2,110) |
(3,599) |
(4,671) |
|||||
| Financial income | 3,043 |
2,873 |
4,283 |
4,987 |
9,800 |
|||||
| Share in loss of joint venture | - |
- |
- |
- |
- |
|||||
| (Loss) profit before taxes | 3,866 |
3,649 |
1,891 |
8,120 |
3,812 |
|||||
| Income Taxes | 385 |
363 |
(478) |
(886) |
(1,377) |
|||||
| Net (loss) profit for the period | 4,251 |
4,013 |
1,413 |
7,234 |
2,435 |
|||||
| Net (loss) profit attributable to: | - |
|||||||||
| The owners of the parent | 4,256 |
4,017 |
1,421 |
7,251 |
2,457 |
|||||
| Non-controlling interest | (5) |
(5) |
(8) |
(17) |
(21) |
|||||
| Earning per share attributable to owners of the parent | ||||||||||
| Basic | 0.07 |
0.07 |
0.02 |
0.12 |
0.04 |
|||||
| Diluted | 0.07 |
0.07 |
0.02 |
0.12 |
0.04 |
|||||
| Weighted average basic shares outstanding | 59,067 |
59,067 |
59,064 |
59,067 |
59,064 |
|||||
| Weighted average diluted shares outstanding | 59,068 |
59,068 |
59,089 |
59,070 |
59,099 |
|||||
Consolidated statements of comprehensive income (Unaudited) |
||||||||||
for the three months ended September 30, |
|
for the nine months ended September 30, |
||||||||
| In 000€ | 2023 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
U.S.$ |
|
€ |
|
€ |
|
€ |
|
€ |
||
| Net profit (loss) for the period | 4,251 |
4,013 |
1,413 |
7,234 |
2,435 |
|||||
| Other comprehensive income | ||||||||||
| Recycling | ||||||||||
| Exchange difference on translation of foreign operations | (816) |
(770) |
225 |
471 |
1,291 |
|||||
| Non-recycling | ||||||||||
| Fair value adjustments through OCI - Equity instruments | - |
- |
- |
- |
- |
|||||
| Other comprehensive income (loss), net of taxes | (816) |
(770) |
225 |
471 |
1,291 |
|||||
| Total comprehensive income (loss) for the year, net of taxes | 3,435 |
3,242 |
1,638 |
7,705 |
3,726 |
|||||
| Total comprehensive income (loss) attributable to: | ||||||||||
| The owners of the parent | 3,441 |
3,248 |
1,646 |
7,721 |
3,748 |
|||||
| Non-controlling interests | (6) |
(5) |
(8) |
(15) |
(21) |
|||||
Consolidated statement of financial position (Unaudited) |
||||
As of September 30, |
|
As of December 31, |
||
| In 000€ | 2023 |
|
2022 |
|
| Assets | ||||
| Non-current assets | ||||
| Goodwill | 44,280 |
44,155 |
||
| Intangible assets | 35,592 |
37,875 |
||
| Property, plant & equipment | 94,399 |
94,276 |
||
| Right-of-Use assets | 7,668 |
8,420 |
||
| Investments in joint ventures | - |
- |
||
| Deferred tax assets | 2,031 |
1,186 |
||
| Investments in convertible loans | 3,681 |
3,494 |
||
| Investments in non-listed equity instruments | 307 |
307 |
||
| Other non-current assets | 5,213 |
5,136 |
||
| Total non-current assets | 193,170 |
194,847 |
||
| Current assets | ||||
| Inventories | 16,764 |
16,081 |
||
| Trade receivables | 41,998 |
51,043 |
||
| Other current assets | 8,107 |
8,424 |
||
| Cash and cash equivalents | 133,953 |
140,867 |
||
| Total current assets | 200,821 |
216,414 |
||
| Total assets | 393,991 |
411,262 |
||
As of September 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 | (1,708) |
(9,427) |
||
| Equity attributable to the owners of the parent | 236,674 |
228,955 |
||
| Non-controlling interest | (43) |
(28) |
||
| Total equity | 236,631 |
228,928 |
||
| Non-current liabilities | ||||
| Loans & borrowings | 45,204 |
55,873 |
||
| Lease liabilities | 5,053 |
5,147 |
||
| Deferred tax liabilities | 3,786 |
4,312 |
||
| Deferred income | 8,533 |
9,277 |
||
| Other non-current liabilities | 1,185 |
1,611 |
||
| Total non-current liabilities | 63,761 |
76,220 |
||
| Current liabilities | ||||
| Loans & borrowings | 13,491 |
17,058 |
||
| Lease liabilities | 2,474 |
2,902 |
||
| Trade payables | 20,799 |
23,230 |
||
| Tax payables | 2,273 |
1,246 |
||
| Deferred income | 37,940 |
41,721 |
||
| Other current liabilities | 16,622 |
19,957 |
||
| Total current liabilities | 93,599 |
106,114 |
||
| Total equity and liabilities | 393,991 |
411,262 |
Consolidated statement of cash flows (Unaudited) |
||||
for the nine months ended September 30, |
||||
| In 000€ | 2023 |
|
2022 |
|
| Operating activities | ||||
| Net (loss) profit for the period | 7,234 |
2,435 |
||
| Non-cash and operational adjustments | ||||
| Depreciation of property plant & equipment | 11,162 |
11,335 |
||
| Amortization of intangible assets | 5,046 |
4,859 |
||
| Impairment of goodwill and intangible assets | - |
- |
||
| Share-based payment expense | - |
(121) |
||
| Loss (gain) on disposal of intangible assets and property, plant & equipment | (401) |
59 |
||
| Movement in provisions | (434) |
(506) |
||
| Movement reserve for bad debt and slow moving inventory | 445 |
(42) |
||
| Financial income | (4,811) |
(9,771) |
||
| Financial expense | 3,389 |
5,009 |
||
| Impact of foreign currencies | (152) |
98 |
||
| (Deferred) income taxes | 892 |
1,384 |
||
| Working capital adjustments | (3,601) |
9,109 |
||
| Decrease (increase) in trade receivables and other receivables | 8,965 |
(184) |
||
| Decrease (increase) in inventories and contracts in progress | (751) |
(4,356) |
||
| Increase (decrease) in deferred revenue | (4,532) |
3,815 |
||
| Increase (decrease) in trade payables and other payables | (7,283) |
9,834 |
||
| Income tax paid & Interest received | 1,194 |
(262) |
||
| Net cash flow from operating activities | 19,963 |
23,587 |
||
for the nine months ended September 30, |
||||
| In 000€ | 2023 |
|
2022 |
|
| Investing activities | ||||
| Purchase of property, plant & equipment | (6,862) |
(16,066) |
||
| Purchase of intangible assets | (2,448) |
(3,422) |
||
| Proceeds from the sale of property, plant & equipment & intangible assets (net) | 645 |
319 |
||
| Acquisition of subsidiary (net of cash) | - |
(29,355) |
||
| Net cash flow used in investing activities | (8,665) |
(48,523) |
||
| Financing activities | ||||
| Repayment of loans & borrowings | (14,334) |
(15,182) |
||
| Repayment of leases | (2,640) |
(2,566) |
||
| Capital increase | - |
- |
||
| Interest paid | (1,334) |
(1,665) |
||
| Other financial income (expense) | (25) |
1,378 |
||
| Net cash flow from (used in) financing activities | (18,334) |
(18,035) |
||
| Net increase/(decrease) of cash & cash equivalents | (7,037) |
(42,972) |
||
| Cash & Cash equivalents at the beginning of the year | 140,867 |
196,028 |
||
| Exchange rate differences on cash & cash equivalents | 123 |
(2,433) |
||
| Cash & cash equivalents at end of the period | 133,953 |
150,621 |
||
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€ | 2023 |
|
2022 |
|
2023 |
|
2022 |
|
| Net profit (loss) for the period | 4,013 |
1,413 |
7,234 |
2,435 |
||||
| Income taxes | (363) |
478 |
886 |
1,377 |
||||
| Financial expenses | 1,554 |
2,110 |
3,599 |
4,671 |
||||
| Financial income | (2,873) |
(4,283) |
(4,987) |
(9,800) |
||||
| Depreciation and amortization | 5,527 |
5,378 |
16,191 |
16,194 |
||||
| EBITDA | 7,857 |
5,096 |
22,923 |
14,876 |
||||
| Share-based compensation expense (1) | - |
(24) |
- |
(121) |
||||
| Adjusted EBITDA | 7,857 |
5,072 |
22,923 |
14,755 |
||||
| (1) Share-based compensation expense represents the cost of equity-settled and share-based payments to employees. | ||||||||
Segment P&L (Unaudited) |
||||||||||||
In 000€ |
Materialise Software |
Materialise Medical |
Materialise Manufacturing |
Total segments |
Unallocated (1) |
Consolidated |
||||||
| For the three months ended September 30, 2023 | ||||||||||||
| Revenues | 10,811 |
24,263 |
25,056 |
60,130 |
0 |
60,130 |
||||||
| Segment (adj) EBITDA | 1,781 |
7,143 |
1,074 |
9,998 |
(2,141) |
7,857 |
||||||
| Segment (adj) EBITDA % | 16.5% |
29.4% |
4.3% |
16.6% |
13.1% |
|||||||
| 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% |
|||||||
In 000€ |
Materialise Software |
Materialise Medical |
Materialise Manufacturing |
Total segments |
Unallocated (1) |
Consolidated |
||||||
| For the nine months ended September 30, 2023 | ||||||||||||
| Revenues | 33,192 |
73,528 |
84,112 |
190,832 |
0 |
190,832 |
||||||
| Segment (adj) EBITDA | 6,190 |
17,179 |
6,980 |
30,349 |
(7,426) |
22,923 |
||||||
| Segment (adj) EBITDA % | 18.7% |
23.4% |
8.3% |
15.9% |
12.0% |
|||||||
| 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% |
|||||||
| (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€ | 2023 |
|
2022 |
|
2023 |
|
2022 |
|
| Net profit (loss) for the period | 4,013 |
1,413 |
7,234 |
2,435 |
||||
| Income taxes | (363) |
478 |
886 |
1,377 |
||||
| Financial cost | 1,554 |
2,110 |
3,599 |
4,671 |
||||
| Financial income | (2,873) |
(4,283) |
(4,987) |
(9,800) |
||||
| Operating (loss) profit | 2,330 |
(282) |
6,732 |
(1,318) |
||||
| Depreciation and amortization | 5,527 |
5,378 |
16,191 |
16,194 |
||||
| Corporate research and development | 604 |
592 |
2,063 |
2,057 |
||||
| Corporate headquarter costs | 2,399 |
2,491 |
7,636 |
7,103 |
||||
| Other operating income (expense) | (862) |
(681) |
(2,274) |
(1,892) |
||||
| Segment adjusted EBITDA | 9,998 |
7,497 |
30,349 |
22,144 |
||||
