Form 6-K

 

 

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 March 2018

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).

 

 

 


Fourth 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.

ACTech Acquistion

On October 4, 2017, we acquired ACTech, a full-service manufacturer of complex metal parts. As described in more detail below, the acquistion increased the scope of our Materialise Manufacturing segment’s operations and had a significant impact on our results of operations for the fourth quarter of 2017 as well as the year ended December 31, 2017, resulting in increases to our revenues and operating expenses, among other items.

Fourth Quarter 2017 Results

Total revenue for the fourth quarter of 2017 increased 42.1% to 44,733 kEUR compared to 31,477 kEUR for the fourth quarter of 2016. Excluding the impact of the ACTech acquisition, revenue increased 10.5% to 34,768 kEUR. Total deferred revenue from annual software sales and maintenance contracts amounted to 18,723 kEUR at the end of the fourth quarter of 2017 compared 16,799 kEUR at the end of the fourth quarter of 2016.

Revenue from our Materialise Software segment increased 29.6% to 10,468 kEUR for the fourth quarter of 2017 from 8,078 kEUR for the same quarter last year, boosted by original equipment manufacturer (“OEM”) sales growth of 46.7%.

Revenue from our Materialise Medical segment increased 17.7% to 11,842 kEUR for the fourth quarter of 2017 compared to 10,061 kEUR for the same period in 2016. Compared to the same quarter in 2016, revenues from our medical software grew 9.9%, and revenues from medical devices and services grew 22.9%.

Revenue from our Materialise Manufacturing segment increased 68.0% to 22,394 kEUR for the fourth quarter of 2017 from 13,326 kEUR for the fourth quarter of 2016. In particular, ACTech contributed revenue of 9,965 kEUR. Excluding the impact of the ACTech acquisition, revenue decreased 6.7% to 12,429 kEUR.

Gross profit was 24,048 kEUR, or 53.8% of total revenue, for the fourth quarter of 2017. Excluding the impact of the ACTech acquisition, gross profit was 21,421 kEUR, or 61.6% of total revenue, compared to 18,619 kEUR, or 59.2% of total revenue, for the fourth quarter of 2016.

Research and development (“R&D”), sales and marketing (“S&M”) and general and administrative (“G&A”) expenses increased, in the aggregate, 32.8% to 24,553 kEUR for the fourth quarter of 2017 from 18,483 kEUR for the fourth quarter of 2016. Excluding the impact of the ACTech acquisition, operating expenses increased, in the aggregate, 19.1% to 22,017 kEUR. R&D expenses increased from 4,161 kEUR to 5,535 kEUR while S&M expenses increased from 9,506 kEUR to 9,711 kEUR, and G&A expenses increased from 4,816 kEUR to 6,771 kEUR, primarily representing non-recurring expenses, including 343 kEUR related to the acquisition of ACTech.

Net other operating income increased by 192 kEUR to 1,971 kEUR compared to 1,779 kEUR for the fourth quarter of 2016. Excluding the impact of the ACTech acquisition, net other operating income decreased by 193 kEUR. 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 result decreased to 1,466 kEUR from 1,915 kEUR for the same period in the prior year. Excluding the impact of the ACTech acquisition, operating result amounted to 990 kEUR. This decrease was the result of the 19.1% increase in operating expenses, which was offset in part by the 15.0% increase in gross profit. The operating result was also negatively affected by depreciation expenses, which increased to 4,488 kEUR (2,894 kEUR excluding the impact of the ACTech acquisition) from 2,280 kEUR for the fourth quarter of 2016, and by 343 kEUR of expenses related to the acquisition of ACTech.

Net financial result was (356) kEUR compared to 253 kEUR for the prior-year period. The financial result included (269) kEUR net financial expenses related to ACTech. Excluding the impact of the ACTech acquistion, the variances primarily reflected increases in interest expense on the Company’s financial debt and variances in the currency exchange rates, primarily on the portion of the Company’s IPO proceeds held in U.S. dollars versus the euro.

 

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Net profit for the fourth quarter of 2017 was 1,528 kEUR (1,253 kEUR excluding the impact of the ACTech acquisition) compared to net profit of 620 kEUR for the same period in 2016. The decrease in operating profit of 449 kEUR was offset by an increase of 777 kEUR in the Company’s share in the result of a joint venture, and an increase of 1,189 kEUR in income tax. Total comprehensive income for the fourth quarter of 2017, which includes exchange differences on translation of foreign operations, was 1,319 kEUR compared to 685 kEUR for the same period in 2016.

Adjusted EBITDA (a non-IFRS financial measure defined below), which in the fourth quarter of 2017 excluded 343 kEUR of expenses related to the ACTech acquisition, increased to 6,334 kEUR from 4,455 kEUR, primarily as a result of the revenue contributed by ACTech. Excluding the impact of the ACTech acquisition, Adjusted EBITDA decreased slightly to 4,263 kEUR. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) in the fourth quarter of 2017 was 14.2% (12.3% excluding the impact of the ACTech acquisition) compared to 14.2% in the fourth quarter of 2016.

Our Materialise Software segment EBITDA increased to 4,619 kEUR from 2,949 kEUR while the segment EBITDA margin (the segment’s EBITDA divided by the segment’s revenue) was 44.1% compared to 36.5% in the prior-year period.

Our Materialise Medical segment EBITDA was 2,158 kEUR compared to 656 kEUR while the segment EBITDA margin increased to 18.2% from 6.5 % in the fourth quarter of 2016.

Our Materialise Manufacturing segment EBITDA increased to 1,905 kEUR from 1,438 kEUR while the segment EBITDA margin decreased to 8.5% from 10.8% for the same quarter in 2016. In particular, ACTech contributed segment EBITDA of 2,071 kEUR and segment EBITDA margin of 20.8%. Excluding the impact of the ACTech acquisition, segment EBITDA decreased to (166) kEUR.

At December 31, 2017, we had cash and equivalents of 43,175 kEUR compared to 55,912 kEUR at December 31, 2016. Cash flow from operating activities in the fourth quarter of 2017 was 7,368 kEUR compared to 4,180 kEUR in the same period in 2016.

Net shareholders’ equity at December 31, 2017 was 77,515 kEUR compared to 79,033 kEUR at December 31, 2016.

Full Year 2017 Results

Total revenues for the year ended December 31, 2017 increased 24.5% to 142,573 kEUR compared to 114,477 kEUR for the year ended December 31, 2016. Excluding the impact of the ACTech acquistion, revenues increased 15.8% to 132,608 kEUR. This increase was primarily the result of the combination of a 24.5% revenue growth (of which 8.7% was from ACTech), a 17.7% improvement in gross profit (of which 3.9% was from ACTech) and an increase of 14.5% (of which 3.4% was from ACTech) in operational costs in R&D, S&M and G&A, and a decrease in net other operating income of 581 kEUR.

Revenues from our Materialise Software segment increased 18.8% to 35,770 kEUR for the year ended December 31, 2017 compared to 30,122 kEUR for the year ended December 31, 2016. This growth was driven by a 23.8% increase in OEM sales and 15.1% increase in recurrent revenues from annual and renewed licenses and maintenance fees.

Revenues from our Materialise Medical segment grew by 13.0% for the year ended December 31, 2017 to 42,841 kEUR from 37,910 kEUR for the year ended December 31, 2016. Medical software growth was 16.5%, and revenues from medical devices and services increased 11.1%.

Revenues from our Materialise Manufacturing segment increased 37.3% to 63,712 kEUR (15.8% to 53,747 kEUR excluding the impact of the ACTech acquisition) for the year ended December 31, 2017 from 46,406 kEUR for the year ended December 31, 2016. Revenue from end parts increased by 34.4%.

Net loss improved from (3,019) kEUR for 2016 to a net loss of (1,656) kEUR for 2017.

 

3


Adjusted EBITDA for the year ended December 31, 2017 was 15,138 kEUR, an increase of 60.1% compared to 9,458 kEUR for the year ended December 31, 2016 (an increase of 38.2% to 13,067 kEUR excluding the impact of the ACTech acquisition). The Adjusted EBITDA margin increased to 10.6% (9.9% excluding the impact of the ACTech acquisition) for the year ended December 31, 2017 from 8.3% for the year ended December 31, 2016.

Our Materialise Software segment EBITDA margin was 38.9% in 2017, compared to 33.6% in 2016.

Our Materialise Medical segment EBITDA margin increased to 10.3% from 2.4%, primarily as a result of the combination of revenue growth and limited increases in operating expenses, as well as increased other operating income.

Our Materialise Manufacturing segment EBITDA margin decreased from 8.3% in 2016 to 7.8% in 2017. Excluding the impact of the ACTech acquisition, the segment EBITDA margin decreased to 5.4%, primarily as a result of the lower gross margin and the increase in operating expenses.

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 1.1993, the reference rate of the European Central Bank on December 31, 2017.

About Materialise

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

 

4


Consolidated income statements (Unaudited)

 

     For the three months ended
December 31
    For the twelve months
ended December 31
 
(in thousands, except per share amounts)    2017     2017     2016     2017     2016  
     U.S.$                  

Revenue

     53,648       44,733       31,477       142,573       114,477  

Cost of sales

     (24,808     (20,685     (12,858     (62,787     (46,706

Gross profit

     28,840       24,048       18,619       79,786       67,771  

Gross profit as % of revenue

     53.8     53.8     59.2     56.0     59.2

Research and development expenses

     (6,638     (5,535     (4,161     (19,959     (17,682

Sales and marketing expenses

     (12,879     (10,739     (9,506     (39,109     (36,153

General and administrative expenses

     (9,929     (8,279     (4,816     (25,484     (20,041

Net other operating income (expenses)

     2,364       1,971       1,779       5,631       6,212  

Operating (loss) profit

     1,758       1,466       1,915       865       107  

Financial expenses

     (1,720     (1,434     (749     (4,728     (2,437

Financial income

     1,293       1,078       1,002       3,210       2,039  

Share in loss of joint venture

     152       127       (650     (469     (1,018

(Loss) profit before taxes

     1,483       1,237       1,518       (1,122     (1,309

Income taxes

     349       291       (898     (534     (1,710

Net (loss) profit of the period

     1,832       1,528       620       (1,656     (3,019

Net (loss) profit attributable to:

          

The owners of the parent

     1,832       1,528       620       (1,656     (3,019

Non-controlling interest

     —         —         —         —         —    

Earnings per share attributable to the owners of the parent

 

       

Basic

     0.04       0.03       0.01       (0.03     (0.06

Diluted

     0.04       0.03       0.01       (0.03     (0.06

Weighted average basic shares outstanding

     47,325       47,325       47,325       47,325       47,325  

Weighted average diluted shares outstanding

     48,467       48,467       47,325       47,325       47,325  

 

5


Consolidated statements of comprehensive income (Unaudited)

 

     For the three months ended
December 31
     For the twelve months
ended December 31
 
(in thousands)    2017     2017     2016      2017     2016  
     U.S.$                   

Net profit (loss) for the period

     1,832       1,528       620        (1,656     (3,019

Other comprehensive income

           

Exchange difference on translation of foreign operations

     (252     (210     65        (691     (1,833

Other comprehensive income (loss), net of taxes

     (252     (210     65        (691     (1,833

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

     1,580       1,319       685        (2,347     (4,852

Total comprehensive income (loss) attributable to:

           

The owners of the parent

     1,580       1,319       685        (2,347     (4,852

Non-controlling interest

     —         —         —          —         —    

 

6


Consolidated statements of financial position (Unaudited)

 

     As of December 31  
(in thousands)    2017      2016  
           

Assets

     

Non-current assets

     

Goodwill

     18,447        8,860  

Intangible assets

     28,646        9,765  

Property, plant & equipment

     86,881        45,063  

Investments in joint ventures

     31        —    

Deferred tax assets

     304        336  

Other non-current assets

     3,667        2,154  

Total non-current assets

     137,976        66,178  

Current assets

     

Inventories and contracts in progress

     11,594        7,870  

Trade receivables

     35,582        27,479  

Other current assets

     9,212        4,481  

Cash and cash equivalents

     43,175        55,912  

Total current assets

     99,563        95,742  

Total assets

     237,539        161,920  

 

7


     As of December 31  
(in thousands)    2017     2016  
          

Equity and liabilities

    

Equity

    

Share capital

     2,729       2,729  

Share premium

     79,839       79,019  

Consolidated reserves

     (3,250     (1,603

Other comprehensive income

     (1,803     (1,112

Equity attributable to the owners of the parent

     77,515       79,033  

Non-controlling interest

     —         —    

Total equity

     77,515       79,033  

Non-current liabilities

    

Loans & borrowings

     81,788       28,267  

Deferred tax liabilities

     7,006       1,325  

Deferred income

     5,040       3,588  

Other non-current liabilities

     1,904       1,873  

Total non-current liabilities

     95,738       35,053  

Current liabilities

    

Loans & borrowings

     12,769       5,539  

Trade payables

     15,670       13,400  

Tax payables

     3,560       926  

Deferred income

     18,791       17,822  

Other current liabilities

     13,496       10,147  

Total current liabilities

     64,286       47,834  

Total equity and liabilities

     237,539       161,920  

 

8


Consolidated statements of cash flows (Unaudited)

 

     For the twelve months
ended December 31
 
(in thousands)    2017     2016  
          

Operating activities

    

Net (loss) profit of the period

     (1,656     (3,019

Non-cash and operational adjustments

    

Depreciation of property, plant & equipment

     8,630       6,420  

Amortization of intangible assets

     4,001       1,954  

Share-based payment expense

     1,033       977  

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

     25       (149

Fair value contingent liabilities

     —         (455

Movement in provisions

     61       18  

Movement reserve for bad debt

     502       77  

Financial income

     (381     (172

Financial expense

     1,597       983  

Impact of foreign currencies

     302       (400

Share in loss of a joint venture (equity method)

     469       1,018  

(Deferred) Income taxes

     534       1,712  

Other

     (22     (78

Working capital adjustment & income tax paid

    

Increase in trade receivables and other receivables

     (6,510     (6,465

Decrease (increase) in inventories

     (984     (2,482

Increase in trade payables and other payables

     3,854       9,086  

Income tax paid

     (1,569     (530

Net cash flow from operating activities

     (9,886     8,495  

 

9


     For the twelve months
ended December 31
 
(in thousands)    2017     2016  
          

Investing activities

    

Purchase of property, plant & equipment

     (27,668     (12,237

Purchase of intangible assets

     (4,345     (2,342

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

     221       1,928  

Acquisition of subsidiary

     (27,173     —    

Investments in joint-ventures

     (500     —    

Interest received

     281       11  

Net cash flow used in investing activities

     (59,184     (12,640

Financing activities

    

Proceeds from loans & borrowings

     54,319       14,669  

Repayment of loans & borrowings

     (11,904     (2,796

Repayment of finance leases

     (2,947     (1,898

Interest paid

     (955     (630

Other financial income (expense)

     (472     (79

Net cash flow from (used in) financing activities

     38,041       9,266  

Net increase of cash & cash equivalents

     (11,257     5,121  

Cash & cash equivalents at beginning of the year

     55,912       50,726  

Exchange rate differences on cash & cash equivalents

     (1,480     65  

Cash & cash equivalents at end of the year

     43,175       55,912  

 

10


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

 

     For the three months
ended December 31
    For the twelve months
ended December 31
 
(in thousands)    2017     2016     2017     2016  
                  

Net profit (loss) for the period

     1,528       620       (1,656     (3,019

Income taxes

     (291     898       534       1,710  

Financial expenses

     1,434       749       4,728       2,437  

Financial income

     (1,078     (1,002     (3,210     (2,039

Share in loss of joint venture

     (127     650       469       1,018  

Depreciation and amortization

     4,489       2,280       12,631       8,374  

EBITDA

     5,955       4,195       13,496       8,481  

Non-cash stock-based compensation expense (1)

     36       260       1,033       977  

Acquisition-related expenses of business combinations

     343       —         609       —    

ADJUSTED EBITDA

     6,334       4,455       15,138       9,458  

 

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

 

11


Segment P&L (Unaudited)

 

(in thousands)    Materialise
Software
    Materialise
Medical
    Materialise
Manufacturing
    Total
segments
    Unallocated     Consolidated  
                          

For the three months ended December 31, 2017

            

Revenues

     10,468       11,842       22,394       44,704       29       44,733  

Segment EBITDA

     4,619       2,158       1,905       8,682       (2,727     5,955  

Segment EBITDA %

     44.1     18.2     8.5     19.4       13.3

For the three months ended December 31, 2016

            

Revenues

     8,078       10,061       13,326       31,465       12       31,477  

Segment EBITDA

     2,949       656       1,438       5,043       (848     4,195  

Segment EBITDA %

     36.5     6.5     10.8     16.0       13.3

 

12


(in thousands)    Materialise
Software
    Materialise
Medical
    Materialise
Manufacturing
    Total
segments
    Unallocated     Consolidated  
                          

For the twelve months ended December 31, 2017

            

Revenues

     35,770       42,841       63,712       142,323       250       142,573  

Segment EBITDA

     13,926       4,400       4,967       23,293       (9,797     13,496  

Segment EBITDA %

     38.9     10.3     7.8     16.4       9.5

For the twelve months ended December 31, 2016

            

Revenues

     30,122       37,910       46,406       114,438       39       114,477  

Segment EBITDA

     10,130       894       3,848       14,872       (6,391     8,481  

Segment EBITDA %

     33.6     2.4     8.3     13.0       7.4

 

13


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

 

     For the three months
ended December 31
    For the twelve months
ended December 31
 
(in thousands)    2017     2016     2017     2016  
                  

Net profit (loss) for the period

     1,528       620       (1,656     (3,019

Income taxes

     (291     898       534       1,710  

Finance cost

     1,434       749       4,728       2,437  

Finance income

     (1,078     (1,002     (3,210     (2,039

Share in loss of joint venture

     (127     650       469       1,018  

Operating profit

     1,466       1,915       865       107  

Depreciation and amortization

     4,489       2,280       12,631       8,374  

Corporate research and development

     490       472       2,017       1,673  

Corporate headquarter costs

     2,706       1,781       9,690       8,646  

Other operating income (expense)

     (469     (1,405     (1,910     (3,928

Segment EBITDA

     8,682       5,043       23,293       14,872  

 

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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.

 

MATERIALISE NV
By:  

/s/ Wilfried Vancraen

Name:   Wilfried Vancraen
Title:   Chief Executive Officer

Date: March 6, 2018