UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2017

Commission File Number: 001-36515

 

 

Materialise NV

 

 

Technologielaan 15

3001 Leuven

Belgium

(Address of principal executive office)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒             Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

This Form 6-K is incorporated by reference into the registrant’s Registration Statement on Form F-3 (File No. 333-213649).

 

 

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First Quarter 2017 Financial Results

Except as otherwise required by the context, references to “Materialise,” “Company,” “we,” “us” and “our” are to Materialise NV and its subsidiaries.

First Quarter 2017 Results

Total revenue for the first quarter of 2017 increased 19.7% to 31,921 kEUR compared to 26,667 kEUR for the first quarter of 2016, with gains in all three of our segments, particularly Materialise Manufacturing.

Revenue from our Materialise Software segment, which offers a proprietary software backbone that enables and enhances the functionality of 3D printers and 3D printing operations worldwide, increased 15.4% to 8,575 kEUR for the first quarter of 2017 from 7,431 kEUR for the same quarter last year. Recurrent revenues from annual and renewed licenses and maintenance fees grew 22.3% from the same period in the prior year.

Revenue from our Materialise Medical segment, which offers a unique platform consisting of medical planning and design software, clinical engineering services and patient specific devices, increased 15.4% to 9,932 kEUR for the first quarter of 2017 compared to 8,606 kEUR for the same period in 2016. Compared to the same quarter in 2016, revenues from our medical software grew 16.0%, and revenues from our collaborated medical device business and from direct sales of complex surgery solutions each grew 15.0%.

Revenue from our Materialise Manufacturing segment, which offers an integrated suite of 3D printing and engineering services to industrial and commercial customers, increased 26.4% to 13,407 kEUR for the first quarter of 2017 from 10,606 kEUR for the first quarter of 2016. End part manufacturing revenues increased 35.0% compared to the first quarter of 2016.

Gross profit was 18,477 kEUR, or 57.9 % of total revenue, for the first quarter of 2017 compared to 15,962 kEUR, or 59.9 % of total revenue, for the first quarter of 2016. The decrease in the gross profit margin was primarily a result of increased production of medical devices and implants, involving higher cost of production.

Research and development (“R&D”), sales and marketing (“S&M”) and general and administrative (“G&A”) expenses increased, in the aggregate, 7.4% to 19,579 kEUR for the first quarter of 2017 from 18,237 kEUR for the first quarter of 2016. R&D expenses increased from 4,372 kEUR to 4,592 kEUR while S&M expenses increased from 8,815 kEUR to 9,608 kEUR. G&A expenses increased from 5,050 kEUR to 5,379 kEUR.

Net other operating income decreased by (268) kEUR to 1,018 kEUR compared to 1,286 kEUR for the first quarter of 2016. Net other operating income consists primarily of withholding tax exemptions for qualifying researchers, development grants, partial funding of R&D projects and currency exchange results on purchase and sales transactions.

Operating loss improved to (84) kEUR from (989) kEUR for the same period in the prior year. This improvement was the result of a combination of an increase in gross profit of 15.8% and an increase of only 7.4% in R&D, S&M and G&A expenses, which were partially offset by a slight decrease of (268) kEUR of net other operating income compared to the same quarter in 2016.

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Net financial result was (142) kEUR compared to (734) kEUR for the prior-year period, reflecting smaller variances in the currency exchange rates, primarily on the portion of the Company’s IPO proceeds held in U.S. dollars versus the euro.

Net loss for the first quarter of 2017 was (816) kEUR compared to net loss of (3,151) kEUR for the same period in 2016. The 2016 period contained income tax expense of 1,260 kEUR primarily from deferred taxes compared to income tax expense of 201 kEUR this quarter. The decrease in the net loss for the first quarter of 2017 was primarily attributable to this variance of 1,059 kEUR in income tax, as well as an increase in the financial result of 592 kEUR and the decrease in operating loss by 905 kEUR, which were partially offset by an increase of 221 kEUR in the share in the loss of a joint venture. Total comprehensive loss for the first quarter of 2017, which includes exchange differences on translation of foreign operations, was 694 kEUR compared to 4,115 kEUR for the same period in 2016.

Adjusted EBITDA (a non-IFRS financial measure defined below) increased to 2,813 kEUR from 1,135 kEUR as a result of the combination of continued revenue growth (19.7%) and a significantly lower increase in operational expenses (7.4%) as compared to the first quarter in 2016. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) in the first quarter was 8.8% compared to 4.3% in the first quarter of 2016.

Our Materialise Software segment’s EBITDA rose to 2,993 kEUR from 2,765 kEUR while the segment EBITDA margin (the segment’s EBITDA divided by the segment’s revenue) was 34.9% compared to 37.2% in the prior-year period.

Our Materialise Medical segment’s EBITDA was 314 kEUR compared to (530) kEUR while the segment EBITDA margin increased to 3.2% from (6.2)% in the first quarter of 2016.

Our Materialise Manufacturing segment’s EBITDA rose to 1,322 kEUR from 257 kEUR while the segment EBITDA margin increased to 9.9% from 2.4% for the same quarter in 2016.

At March 31, 2017, we had cash and equivalents of 55,071 kEUR compared to 55,912 kEUR at December 31, 2016. Cash flow from operating activities in the first quarter of 2017 was 1,603 kEUR compared to 1,376 kEUR in the same period in 2016.

Net shareholders’ equity at March 31, 2017 was 78,585 kEUR compared to 79,033 kEUR at December 31, 2016.

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 to EBITDA. Management believes these non-IFRS measures to be important measures as they exclude the effects of items that 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

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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 1.0691, the reference rate of the European Central Bank on March 31, 2017.

About Materialise

Materialise incorporates more than 25 years of 3D printing experience into a range of software solutions and 3D printing services, through which Materialise seeks to 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.

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Consolidated income statement (Unaudited)

 

		For the three months ended 31 March
(in thousands, except per share amounts)		2017				2017				2016
		U.S.$				€				€
Revenue			34,127				31,921				26,667
Cost of sales			(14,373)				(13,444)				(10,705)
Gross profit			19,754				18,477				15,962
Gross profit as % of revenue			58%				58%				60%
Research and development expenses			(4,909)				(4,592)				(4,372)
Sales and marketing expenses			(10,272)				(9,608)				(8,815)
General and administrative expenses			(5,751)				(5,379)				(5,050)
Net other operating income (expenses)			1,088				1,018				1,286
Operating (loss) profit			(90)				(84)				(989)
Financial expenses			(983)				(919)				(897)
Financial income			831				777				163
Share in loss of joint venture			(416)				(389)				(168)
(Loss) profit before taxes			(658)				(615)				(1,891)
Income taxes			(215)				(201)				(1,260)
Net (loss) profit of the period			(873)				(816)				(3,151)
Net (loss) profit attributable to:
The owners of the parent			(873)				(816)				(3,151)
Non-controlling interest			–				–				–
Earnings per share attributable to ordinary owners of the parent
Basic			(0.02)				(0.02)				(0.07)
Diluted			(0.02)				(0.02)				(0.07)
Weighted average basic shares outstanding			47,325				47,325				47,325
Weighted average diluted shares outstanding			47,325				47,325				47,325

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Consolidated statements of comprehensive income (Unaudited)

 

		For the three months ended 31 March
(in thousands)		2017				2017				2016
		U.S.$				€				€
Net profit (loss) for the period			(873)				(816)				(3,151)
Other comprehensive income
Exchange difference on translation of foreign operations			130				122				(964)
Other comprehensive income (loss), net of taxes			130				122				(964)
Total comprehensive income (loss) for the period, net of taxes			(743)				(694)				(4,115)
Total comprehensive income (loss) attributable to:
The owners of the parent			(743)				(694)				(4,115)
Non-controlling interest			–				–				–

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Consolidated statement of financial position (Unaudited)

 

		As of March 31				As of December 31
(in thousands)		2017				2016
		€				€
Assets
Non-current assets
Goodwill			8,897				8,860
Intangible assets			9,468				9,765
Property, plant & equipment			52,238				45,063
Investments in joint ventures			111				–
Deferred tax assets			276				336
Other non-current assets			2,309				2,154
Total non-current assets			73,299				66,178
Current assets
Inventories			8,267				7,870
Trade receivables			30,507				27,479
Held to maturity investments			–				–
Other current assets			4,691				4,481
Cash and cash equivalents			55,071				55,912
Total current assets			98,536				95,742
Total assets			171,835				161,920

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		As of March 31				As of December 31
(in thousands)		2017				2016
		€				€
Equity and liabilities
Equity
Share capital			2,729				2,729
Share premium			79,263				79,019
Consolidated reserves			(2,417)				(1,603)
Other comprehensive income			(990)				(1,112)
Equity attributable to the owners of the parent			78,585				79,033
Non-controlling interest			–				–
Total equity			78,585				79,033
Non-current liabilities
Loans & borrowings			34,982				28,267
Deferred tax liabilities			1,256				1,325
Deferred income			3,942				3,588
Other non-current liabilities			2,026				1,873
Total non-current liabilities			42,206				35,053
Current liabilities
Loans & borrowings			6,426				5,539
Trade payables			13,743				13,400
Tax payables			874				926
Deferred income			19,607				17,822
Other current liabilities			10,394				10,147
Total current liabilities			51,044				47,834
Total equity and liabilities			171,835				161,920

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Consolidated statement of cash flows (Unaudited)

 

		For the three months ended March 31
(in thousands)		2017				2016
		€				€
Operating activities
Net (loss) profit of the period			(816)				(3,151)
Non-cash and operational adjustments
Depreciation of property, plant & equipment			1,945				1,448
Amortization of intangible assets			623				462
Share-based payment expense			329				214
Loss (gain) on disposal of property, plant & equipment			(2)				–
Movement in provisions			4				–
Movement reserve for bad debt			122				42
Financial income			(136)				(48)
Financial expense			359				254
Impact of foreign currencies			(81)				528
Share in loss of a joint venture (equity method)			389				168
Deferred tax expense (income)			1				868
Income taxes			203				358
Other			(72)				–
Working capital adjustment & income tax paid
Increase in trade receivables and other receivables			(3,452)				(285)
Decrease (increase) in inventories			(406)				215
Increase in trade payables and other payables			2,729				421
Income tax paid			(136)				(118)
Net cash flow from operating activities			1,603				1,376

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		For the three months ended March 31
(in thousands)		2017				2016
		€				€
Investing activities
Purchase of property, plant & equipment			(7,507)				(1,325)
Purchase of intangible assets			(327)				(265)
Proceeds from the sale of property, plant & equipment (net)			70				85
Investments in joint-ventures			(500)				–
Interest received			108				3
Net cash flow used in investing activities			(8,156)				(1,502)
Financing activities
Proceeds from loans & borrowings			7,710				604
Repayment of loans & borrowings			(756)				(656)
Repayment of finance leases			(728)				(419)
Interest paid			(152)				(141)
Other financial income (expense)			(166)				(33)
Net cash flow from (used in) financing activities			5,908				(645)
Net increase of cash & cash equivalents			(645)				(771)
Cash & cash equivalents at beginning of the period			55,912				50,726
Exchange rate differences on cash & cash equivalents			(196)				(520)
Cash & cash equivalents at end of the period			55,071				49,435

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Reconciliation of Net Profit (Loss) to EBITDA and Adjusted EBITDA (Unaudited)

 

		For the three months ended 31 March
(in thousands)		2017				2016
		€				€
Net profit (loss) for the period			(816)				(3,151)
Income taxes			201				1,260
Finance expenses			919				897
Finance income			(777)				(163)
Share in loss of joint venture			389				168
Depreciation and amortization			2,568				1,910
EBITDA			2,484				921
Non-cash stock-based compensation expense (1)			329				214
ADJUSTED EBITDA			2,813				1,135

(1) Non-cash stock-based compensation expenses represent the cost of equity-settled and cash-settled share-based payments to employees.

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Segment P&L (Unaudited)

 

(in thousands)		Materialise Software				Materialise Medical				Materialise Manufact- uring				Total segments				Unallocated				Consoli- dated
		€				€				€				€				€				€
For the three months ended March 31, 2017
Revenues			8,575				9,932				13,407				31,914				8				31,922
Segment EBITDA			2,993				314				1,322				4,629				(2,145)				2,484
Segment EBITDA %			34.9%				3.2%				9.9%				14.5%								7.8%
For the three months ended March 31, 2016
Revenues			7,431				8,606				10,606				26,643				24				26,667
Segment EBITDA			2,765				(530)				257				2,492				(1,571)				921
Segment EBITDA %			37.2%				-6.2%				2.4%				9.4%								3.5%

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Reconciliation of Net Profit (Loss) to Segment EBITDA (Unaudited)

 

		For the three months ended 31 March
(in thousands)		2017				2016
		€				€
Net profit (loss) for the period			(816)				(3,151)
Income taxes			201				1,260
Finance cost			919				897
Finance income			(777)				(163)
Share in loss of joint venture			389				168
			–				–
Operating profit			(84)				(989)
Depreciation and amortization			2,568				1,910
Corporate research and development			509				567
Corporate headquarter costs			2,073				1,738
Other operating income (expense)			(437)				(734)
Segment EBITDA			4,629				2,492

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: May 9, 2017