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, 2020.
Highlights – Second Quarter 2020
- Total revenue decreased 21.3% to 38,117 kEUR for the second
quarter of 2020 compared to the 2019 period.
- Total deferred revenues from annual software sales and
maintenance fees were 28,240 kEUR compared to 27,667 kEUR at
December 31, 2019.
- Adjusted EBITDA decreased 33.1% to 3,382 kEUR for the second
quarter of 2020 compared to the 2019 period.
- Net loss for the second quarter of 2020 was (1,932) kEUR, or
(0.04) EUR per diluted share, compared to (297) kEUR, or (0.01) EUR
per diluted share, for the 2019 period.
- Total cash was 125,454 kEUR at the end of the quarter; net cash
was 3,905 kEUR, an increase of 2,947 kEUR compared to December 31,
2019.
Executive Chairman Peter Leys commented, “In the second quarter,
our business suffered materially from the COVID-19 pandemic, with
revenues decreasing more than 21% compared to last year’s period.
We were able to realize cost savings in both sales and marketing
and general administrative expense at a higher percentage rate than
the revenue decline but maintained our strategically important
research and development programs. These programs will position us
to leverage interest in additive manufacturing, which is increasing
in part due to the many 3D printed solutions that have addressed
new market needs so expeditiously during the pandemic. Our balance
sheet remains strong, with total cash of 125,454 kEUR and
short-term debt of only 17,827 kEUR as of June 30, 2020. While our
R&D programs and financial strength give us a solid platform
from which to expand our existing business and take advantage of
new growth opportunities when conditions improve, we draw equal
confidence from the many examples of resilience, creativity and
discipline that our workforce has shown worldwide throughout this
difficult period.”
Second Quarter 2020 Results
Total revenue for the second quarter of 2020 decreased 21.3% to
38,117 kEUR compared to 48,404 kEUR for the second quarter of 2019.
Adjusted EBITDA decreased to 3,382 kEUR from 5,059 kEUR. The
Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue)
for the second quarter of 2020 was 8.9% compared to 10.5% for the
second quarter of 2019.
Revenue from our Materialise Software segment increased 2.4% to
9,540 kEUR for the second quarter of 2020 from 9,320 kEUR for the
same quarter last year. Segment EBITDA increased to 3,756 kEUR from
2,055 kEUR while the segment EBITDA margin was 39.4% compared to
22.1% for the prior-year period.
Revenue from our Materialise Medical segment decreased 19.3% to
11,735 kEUR for the second quarter of 2020 compared to 14,546 kEUR
for the same period in 2019. Compared to the second quarter of
2019, revenues from our medical software grew 6.7% and revenues
from medical devices and services decreased 31.8%. Segment EBITDA
decreased to 1,139 kEUR compared to 2,738 kEUR while the segment
EBITDA margin was 9.7% compared to 18.8% for the second quarter of
2019.
Revenue from our Materialise Manufacturing segment decreased
31.7% to 16,777 kEUR for the second quarter of 2020 from 24,550
kEUR for the second quarter of 2019. Segment EBITDA decreased to
650 kEUR from 2,835 kEUR while the segment EBITDA margin was 3.9%
compared to 11.5% for the second quarter of 2019.
Gross profit was 19,986 kEUR, or 52.4% of total revenue, for the
second quarter of 2020 compared to 26,527 kEUR, or 54.8% of total
revenue, for the second quarter of 2019.
Research and development (“R&D”), sales and marketing
(“S&M”) and general and administrative (“G&A”) expenses
decreased, in the aggregate, 18.5% to 22,705 kEUR for the second
quarter of 2020 from 27,861 kEUR for the second quarter of 2019.
Specific cost reduction initiatives in S&M and G&A resulted
in decreases compared to the second quarter of 2019 of 22.9% and
24.3% respectively, while R&D expenses decreased only 0.9%.
Net other operating income was 892 kEUR compared to 1,370 kEUR
for the second quarter of 2019.
Operating result decreased to (1,827) kEUR from 36 kEUR for the
second quarter of 2019.
Net financial result was (295) kEUR compared to (190) kEUR for
the second quarter of 2019. The share in result of joint venture
amounted to 0 kEUR compared to (82) kEUR for the same period in
2019.
The second quarter of 2020 contained income tax income of 191
kEUR, compared to an income tax expense of (61) kEUR in the second
quarter of 2019.
As a result of the above, net loss for the second quarter of
2020 was (1,932) kEUR, compared to (297) kEUR for the same period
in 2019. Total comprehensive loss for the second quarter of 2020,
which includes exchange differences on translation of foreign
operations, was (2,977) kEUR compared to (727) kEUR for the 2019
period.
At June 30, 2020, we had cash and equivalents of 125,454 kEUR
compared to 128,897 kEUR at December 31, 2019. Gross debt amounted
to 121,549 kEUR, compared to 127,939 kEUR at December 31, 2019. As
a result, our net cash position increased 2,947 kEUR during the
first half year of 2020.
Cash flow from operating activities for the second quarter of
2020 was 7,053 kEUR compared to 4,760 kEUR for the same period in
2019. Total capital expenditures for the second quarter of 2020
amounted to 3,398 kEUR.
Net shareholders’ equity at June 30, 2020 was 132,847 kEUR
compared to 142,675 kEUR at December 31, 2019.
2020 Guidance
Mr. Leys concluded, “With the continued spread of COVID-19 in
many parts of the world and the increased disruption to the global
economy, we expect the pandemic’s impact on our operations to be
even more pronounced in the third quarter and to continue
throughout the entire second half of the year. While we anticipate
today that Materialise Medical will gradually pick up in the third
quarter of the year, we expect that our Materialise Software and
Materialise Manufacturing businesses will continue to be
significantly impacted. Our overall goal remains to limit the
impact of the COVID-19 crisis, including the associated cost-saving
measures we take, on our long-term plans, in particular on our
ongoing research and business development programs. Accordingly, we
expect the third quarter impact of the crisis on our Adjusted
EBITDA will be significant.”
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 non-cash stock-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 1.1198, the reference rate of the European Central Bank on June
30, 2020.
Conference Call and Webcast
Materialise will hold a conference call and simultaneous webcast
to discuss its financial results for the second quarter of 2020 on
Thursday, July 30, 2020, 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, please dial 844-469-2530 (U.S.)
or 765-507-2679 (international), passcode 8963105#.
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
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
June 30,
For the six months ended June
30,
In 000
2020
2020
2019
2020
2019
U.S.$
€
€
€
€
Revenue
42,684
38,117
48,404
84,362
95,519
Cost of sales
(20,303)
(18,131)
(21,877)
(39,744)
(43,413)
Gross profit
22,380
19,986
26,527
44,618
52,106
Gross profit as % of revenue
52,4%
52.4%
54,8%
52,9%
54,6%
Research and development expenses
(6,769)
(6,045)
(6,100)
(12,572)
(11,786)
Sales and marketing expenses
(11,379)
(10,161)
(13,173)
(22,789)
(25,252)
General and administrative expenses
(7,277)
(6,499)
(8,588)
(13,696)
(16,184)
Net other operating income (expenses)
999
892
1,370
1,575
2,627
Operating (loss) profit
(2.046)
(1,827)
36
(2,864)
1,511
Financial expenses
(717)
(640)
(313)
(2,461)
(1,509)
Financial income
386
345
123
845
728
Share in loss of joint venture
(82)
(39)
(205)
(Loss) profit before taxes
(2,377)
(2,123)
(236)
(4,519)
524
Income taxes
214
191
(61)
(267)
(1,126)
Net (loss) profit for the
period
(2,163)
(1,932)
(297)
(4,786)
(601)
Net (loss) profit attributable to:
The owners of the parent
(2,098)
(1,874)
(297)
(4,681)
(601)
Non-controlling interest
(65)
(58)
–
(104)
–
Earnings per share attributable to
owners of the parent
Basic
(0.04)
(0.04)
(0.01)
(0.09)
(0.01)
Diluted
(0.04)
(0.04)
(0.01)
(0.09)
(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
52,891
53,194
52,891
Consolidated statements of
comprehensive income (Unaudited)
For the three months ended
June 30,
For the six months ended June
30,
In 000
2020
2020
2019
2020
2019
U.S.$
€
€
€
€
Net profit (loss) for the
period
(2,163)
(1,932)
(297)
(4,786)
(602)
Other comprehensive income
Exchange difference on translation of
foreign operations
(1,170)
(1,045)
(430)
(6,787)
157
Other comprehensive income (loss), net of
taxes
(1,170)
(1,045)
(430)
(6,787)
157
Total comprehensive income (loss) for
the year, net of taxes
(3.333)
(2,977)
(727)
(11.573)
(445)
Total comprehensive income (loss)
attributable to:
The owners of the parent
(3,074)
(2,745)
(727)
(10,470)
(445)
Non-controlling interest
(260)
(232)
–
(1,103)
–
Consolidated statement of financial
position (Unaudited)
As of June 30,
As of December 31,
In 000
2020
2019
€
€
Assets
Non-current assets
Goodwill
19,222
20,174
Intangible assets
24,964
27,395
Property, plant & equipment
88,683
90,331
Right-of-Use assets
9,883
10,586
Investments in joint ventures
-
39
Deferred tax assets
234
192
Other non-current assets
10,244
9,391
Total non-current assets
153,410
158,108
Current assets
Inventories
11,682
12,696
Trade receivables
30,253
40,322
Other current assets
9,631
9,271
Cash and cash equivalents
125,454
128,897
Total current assets
177,021
191,186
Total assets
330,431
349,294
As of June 30,
As of December 31,
In 000
2020
2019
€
€
Equity and liabilities
Equity
Share capital
3,068
3,066
Share premium
138,229
138,090
Consolidated reserves
(4,876)
(195)
Other comprehensive income
(5,789)
(1.394)
Equity attributable to the owners of
the parent
130,632
139,567
Non-controlling interest
2,216
3,107
Total equity
132,847
142,675
Non-current liabilities
Loans & borrowings
97,590
104,673
Lease liabilities
6,132
6,427
Deferred tax liabilities
5,687
5,747
Deferred income
4,970
5,031
Other non-current liabilities
671
696
Total non-current liabilities
115,051
122,575
Current liabilities
Loans & borrowings
14,331
13,389
Lease liabilities
3,496
3,449
Trade payables
15,641
18,516
Tax payables
2,560
3,363
Deferred income
28,157
27,641
Other current liabilities
18,348
17,686
Total current liabilities
82,533
84,044
Total equity and liabilities
330,431
349,294
Consolidated statement of cash flows
(Unaudited)
For the six months ended June
30,
in 000
2020
2019
€
€
Operating activities
Net (loss) profit for the period
(4,786)
(602)
Non-cash and operational adjustments
Depreciation of property, plant &
equipment
7,410
6,950
Amortization of intangible assets
2,284
2,229
Share-based payment expense
0
197
Loss (gain) on disposal of property, plant
& equipment
46
134
Movement in provisions
4
20
Movement reserve for bad debt
181
(116)
Financial income
(845)
(171)
Financial expense
2,453
1,232
Impact of foreign currencies
0
(288)
Share in loss of a joint venture (equity
method)
39
205
(Deferred) income taxes
266
1,126
Other
36
(196)
Working capital adjustment & income
tax paid
Decrease (increase) in trade receivables
and other receivables
8,962
(4,466)
Decrease (increase) in inventories
1,220
(43)
Increase (decrease) in trade payables and
other payables
(1,843)
3,737
Income tax paid
(1,102)
(1,108)
Net cash flow from operating
activities
14,326
8,840
For the six months ended June
30,
in 000
2020
2019
€
€
Investing activities
Purchase of property, plant &
equipment
(5,756)
(4,827)
Purchase of intangible assets
(687)
(1,457)
Proceeds from the sale of property, plant
& equipment & intangible assets (net)
72
(3)
Convertible loan to third party
(300)
(2,500)
Investments in joint-ventures
–
–
Interest received
-
-
Net cash flow used in investing
activities
(6,671)
(8,787)
Financing activities
Proceeds from loans & borrowings
15
3,000
Repayment of loans & borrowings
(5,813)
(5,818)
Repayment of finance leases
(1,823)
(2,765)
Capital increase
140
–
Interest paid
(1,178)
(934)
Other financial income (expense)
(617)
(292)
Net cash flow from (used in) financing
activities
(9,276)
(6,809)
Net increase of cash & cash
equivalents
(1,621)
(6,756)
Cash & cash equivalents at beginning
of the year
128,897
115,506
Exchange rate differences on cash &
cash equivalents
(1.822)
115
Cash & cash equivalents at end of
the year
125,454
108,865
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
2020
2019
2020
2019
€
€
€
€
Net profit (loss) for the
period
(1,932)
(297)
(4,786)
(601)
Income taxes
(191)
61
266
1,126
Financial expenses
640
313
2,461
1,509
Financial income
(345
)
(123
)
(845)
(728)
Share in loss of joint venture
82
39
205
Depreciation and amortization
4,979
4,649
9,694
9,178
EBITDA
3,152
4,685
6,829
10,691
Non-cash stock-based compensation expense
(1)
(231)
(374)
)
(156)
(196)
Acquisition-related expenses business
combinations
–
–
–
–
ADJUSTED EBITDA
3,382
5,059
6,985
10,888
(1)
Non-cash stock-based compensation expenses
represent the cost of equity-settled and cash-settled share-based
payments to employees.
Segment P&L
(Unaudited)
In 000
Materialise Software
Materialise Medical
Materialise Manufacturing
Total segments
Unallocated (1)(2)
Consoli- dated
€
€
€
€
€
€
For the three months ended June 30,
2020
Revenues
9,540
11,735
16,777
38,052
29
38,117
Segment (adj) EBITDA
3,756
1,139
650
5,546
(2,164)
3,382
Segment (adj) EBITDA %
39.4%
9.7%
3.9%
11.6%
For the three months ended June 30,
2019
Revenues
9,320
14,546
24,550
48,415
(11)
48,404
Segment (adj) EBITDA
2,055
2,738
2,835
7,629
(2,570)
5,059
Segment (adj) EBITDA %
22.1%
18.8%
11.5%
15.8%
In 000
Materialise Software
Materialise Medical
Materialise Manufacturing
Total segments
Unallocated (1)(2)
Consoli- dated
€
€
€
€
€
€
For the six months ended June 30,
2020
Revenues
19,361
27,380
37,592
84,333
29
84,362
Segment (adj) EBITDA
6,401
3,595
1,768
11,765
(4,779)
6,985
Segment (adj) EBITDA %
33.1%
13.1%
4.7%
14.0%
For the six months ended June 30,
2019
Revenues
18,670
28,112
48,734
95,515
4
95,519
Segment (adj) EBITDA
5,016
4,511
6,530
16,058
(5,170)
10,888
Segment (adj) EBITDA %
26.9%
16.0%
13.4%
16.8%
(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 non-cash share-based compensation expenses
that acquisition expenses of business combinations that are
included in Adjusted EBITDA.
Reconciliation of Net Profit (Loss) to
Segment EBITDA (Unaudited)
For the three months ended
June 30,
For the six months ended June
30,
In 000
2020
2019
2020
2019
€
€
€
€
Net profit (loss) for the
period
(1,932)
(297)
(4,786)
(601)
Income taxes
(191)
61
266
1,126
Financial cost
640
313
2,461
1,509
Financial income
(345)
(123)
(845
)
(728)
Share in loss of joint venture
82
39
205
Operating profit
(1,827)
36
(2,864)
1,511
Depreciation and amortization
4,979
4,649
9,694
9,178
Corporate research and development
687
502
1,478
1,014
Corporate headquarter costs
2,781
3,108
5,173
5,777
Other operating income (expense)
(1.074)
(501)
(1,716)
(1,107)
Segment EBITDA
5,546
7,629
11,765
16,058
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200730005045/en/
Investor Relations Harriet Fried LHA 212.838.3777
hfried@lhai.com
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