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 November 2016
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 registrants Registration Statement on Form F-3 (File No. 333-213649).
Third Quarter 2016 Financial Results
Except as otherwise required by the context, references to Materialise, Company, we, us and our are to Materialise NV and its subsidiaries.
Third Quarter 2016 Results
Total revenue for the third quarter of 2016 increased by 11.0% to 28,736 kEUR compared to 25,883 kEUR for the third quarter of 2015, with gains in all three of our segments, particularly Materialise Software.
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 by 21.1% to 7,632 kEUR for the third quarter of 2016 from 6,303 kEUR for the same quarter last year, driven by the growth of OEM sales and recurring license revenue.
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 by 4.5% to 9,537 kEUR for the third quarter of 2016 compared to 9,123 kEUR for the same period in 2015. The increase was driven by direct sales of our complex surgery solutions, which increased by 28.0% from the same period in 2015. Sales from our collaborated medical device business, and our medical software sales decreased by 2.2% and 1.9%, respectively, compared to the same quarter in 2015.
Revenue from our Materialise Manufacturing segment, which offers an integrated suite of 3D printing and engineering services to industrial and commercial customers, increased 10.6% to 11,567 kEUR for the third quarter of 2016 from 10,457 kEUR for the third quarter of 2015, as a result of increased end part manufacturing.
Gross profit was 16,937 kEUR, or 58.9% of total revenue, for the third quarter of 2016 compared to 14,702 kEUR, or 56.8% of total revenue, for the third quarter of 2015. The increase was primarily a result of the improvement in the gross margin of Materialise Manufacturing.
Research and development (R&D), sales and marketing (S&M) and general and administrative (G&A) expenses increased, in the aggregate, by 4.6% to 17,974 kEUR for the third quarter of 2016 from 17,179 kEUR for the third quarter of 2015. R&D expenses decreased slightly from 4,566 kEUR to 4,389 kEUR while S&M expenses declined slightly from 8,657 kEUR to 8,299 kEUR. G&A expenses increased from 3,956 kEUR to 5,286 kEUR. As in the first two quarters of 2016, these changes compared to last year primarily reflected the managerial structure and support we have implemented within our S&M and R&D groups to support their significant growth since our initial public offering (IPO). A number of employees with mixed roles within these groups have evolved into more managerial/administrative roles, and their cost as well as certain other expenses are now categorized into G&A.
Net other operating income decreased by 274 kEUR to 1,369 kEUR, compared to 1,643 kEUR for the third quarter of 2015. 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.
Net financial result was (124) kEUR, compared to 151 kEUR for the prior-year period, reflecting smaller variances in the currency exchange rates, primarily on the portion of the companys IPO proceeds held in U.S. dollars versus the euro.
Net loss for the third quarter of 2016 was (52) kEUR, compared to a net loss of (1,104) kEUR for the same period in the prior year. The improvement of 1,052 kEUR reflected an increase of 1,166 kEUR in operating profit, a decrease of 275 kEUR in the financial result, and an improvement of 105 kEUR in income tax income. Total comprehensive loss for the third quarter of 2016, which reflects exchange differences on translation of foreign operations, was (511) kEUR compared to (1,821) kEUR for the same period in the prior year.
Adjusted EBITDA (a non-IFRS financial measure defined below) increased from 1,175 kEUR to 2,833 kEUR, as a result of the combination of continued revenue growth, an improvement in our gross margins and a modest increase in operational expenses. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) in the third quarter was 9.9% compared to 4.5% in the third quarter of last year.
Our Materialise Software segments EBITDA rose to 2,814 kEUR from 2,157 kEUR while the segment EBITDA margin (the segments EBITDA divided by the segments revenue) was 36.9% compared to 34.2% in the prior-year period.
Our Materialise Medical segments EBITDA was approximately flat at 754 kEUR compared 763 kEUR while the segment EBITDA margin decreased to 7.9% from 8.4% in the third quarter of 2015.
Our Materialise Manufacturing segments EBITDA rose to 1,723 kEUR from 799 kEUR, including 460 kEUR related to the updated accounting valuation of resin materials stock as result of steady efficiency improvements. The segment EBITDA margin increased to 14.9% from 7.6% for the 2015 quarter. Excluding our growth businesses i.materialise and RapidFit, the segment EBITDA margin for the third quarter was 21.8% compared to 17.1% for the same quarter of the prior year.
At September 30, 2016, we had cash and equivalents of 50,490 kEUR compared to 50,726 kEUR at December 31, 2015. Cash flow from operating activities in the third quarter of 2016 was (1,466) kEUR, compared to 268 kEUR in the same period last year.
Net shareholders equity at September 30, 2016 was 78,098 kEUR, compared to 82,955 kEUR at December 31, 2015.
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 which primarily reflect the impact of long-term investment and financing decisions, rather than the performance of the Companys 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 Companys 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 companys ability to grow or as a valuation measurement. The Companys 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 Companys 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 press release 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 press release were made at a rate of EUR 1.00 to USD 1.1161, the 12:00 noon ET buying rate of the Federal Reserve Bank of New York for the euro on September 30, 2016.
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. Materialises 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.
Consolidated income statements (Unaudited)
(in thousands, except EPS) | For the three months ended 30 September |
For the nine month period ended 30 September |
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2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
U.S.$ | euros | euros | euros | euros | ||||||||||||||||
Revenue |
32,072 | 28,736 | 25,883 | 83,000 | 74,003 | |||||||||||||||
Cost of sales |
(13,169 | ) | (11,799 | ) | (11,181 | ) | (33,848 | ) | (31,507 | ) | ||||||||||
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Gross profit |
18,903 | 16,937 | 14,702 | 49,152 | 42,496 | |||||||||||||||
58.9 | % | 56.8 | % | 59.2 | % | 57.4 | % | |||||||||||||
Research and development expenses |
(4,899 | ) | (4,389 | ) | (4,566 | ) | (13,521 | ) | (13,444 | ) | ||||||||||
Sales and marketing expenses |
(9,263 | ) | (8,299 | ) | (8,657 | ) | (26,647 | ) | (27,492 | ) | ||||||||||
General and administrative expenses |
(5,900 | ) | (5,286 | ) | (3,956 | ) | (15,225 | ) | (11,278 | ) | ||||||||||
Other operating income |
1,528 | 1,369 | 1,643 | 4,433 | 4,897 | |||||||||||||||
Other operating expenses |
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Operating profit |
369 | 332 | (834 | ) | (1,808 | ) | (4,821 | ) | ||||||||||||
Financial expenses |
(203 | ) | (182 | ) | (373 | ) | (1,688 | ) | (2,108 | ) | ||||||||||
Financial income |
65 | 58 | 524 | 1,037 | 2,793 | |||||||||||||||
Share in loss of joint venture |
(77 | ) | (69 | ) | (125 | ) | (368 | ) | (248 | ) | ||||||||||
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Profit (loss) before taxes |
154 | 139 | (808 | ) | (2,827 | ) | (4,384 | ) | ||||||||||||
Income taxes |
(213 | ) | (191 | ) | (296 | ) | (812 | ) | (621 | ) | ||||||||||
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Net profit (loss) |
(59 | ) | (52 | ) | (1,104 | ) | (3,639 | ) | (5,005 | ) | ||||||||||
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Net profit (loss) attributable to: |
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The owners of the parent |
(59 | ) | (52 | ) | (1,104 | ) | (3,639 | ) | (4,952 | ) | ||||||||||
Non-controlling interest |
| | | | (53 | ) | ||||||||||||||
Earnings per share attributable to ordinary owners of the parent |
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Basic |
(0.00 | ) | (0.00 | ) | (0.02 | ) | (0.08 | ) | (0.10 | ) | ||||||||||
Diluted |
(0.00 | ) | (0.00 | ) | (0.02 | ) | (0.08 | ) | (0.10 | ) | ||||||||||
Weighted average basic |
47,325 | 47,325 | 47,227 | 47,325 | 47,208 | |||||||||||||||
Weighted average with effect dilution |
47,325 | 47,325 | 47,227 | 47,325 | 47,208 |
Consolidated statements of comprehensive income (Unaudited)
(in thousands, except EPS) | ||||||||||||||||||||
For the three months ended 30 September |
For the nine month period ended 30 September |
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2016 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
U.S.$ | euros | euros | euros | euros | ||||||||||||||||
Net profit (loss) for the period |
(59 | ) | (52 | ) | (1,104 | ) | (3,639 | ) | (5,005 | ) | ||||||||||
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Other comprehensive income (loss) |
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Exchange differences on translation of foreign operations |
(512 | ) | (459 | ) | (717 | ) | (1,898 | ) | 759 | |||||||||||
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Other comprehensive income (loss), net of taxes |
(512 | ) | (459 | ) | (717 | ) | (1,898 | ) | 759 | |||||||||||
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Total comprehensive income (loss) for the period, net of taxes |
(571 | ) | (511 | ) | (1,821 | ) | (5,537 | ) | (4,246 | ) | ||||||||||
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Total comprehensive income (loss) attributable to: |
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The owners of the parent |
(571 | ) | (511 | ) | (1,821 | ) | (5,537 | ) | (4,193 | ) | ||||||||||
Non-controlling interest |
| | | | (53 | ) |
Consolidated statements of financial position (Unaudited)
30 September | 31 December | |||||||
(in thousand euros) | 2016 | 2015 | ||||||
Assets |
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Non-current assets |
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Goodwill |
8,850 | 9,664 | ||||||
Intangible assets |
8,482 | 9,657 | ||||||
Property, plant & equipment |
42,124 | 38,400 | ||||||
Investments in joint ventures |
650 | 1,018 | ||||||
Deferred tax assets |
417 | 1,092 | ||||||
Other financial assets |
411 | 356 | ||||||
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Total non-current assets |
60,934 | 60,187 | ||||||
Current assets |
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Inventory |
6,215 | 5,387 | ||||||
Trade receivables |
23,143 | 22,843 | ||||||
Held to maturity investments |
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Other current assets |
6,744 | 4,993 | ||||||
Cash and cash equivalents |
50,490 | 50,726 | ||||||
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Total current assets |
86,592 | 83,949 | ||||||
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Total assets |
147,526 | 144,136 | ||||||
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Equity and liabilities |
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Equity |
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Share capital |
2,729 | 2,729 | ||||||
Share premium |
78,770 | 78,098 | ||||||
Consolidated reserves |
(2,224 | ) | 1,407 | |||||
Treasury shares |
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Other comprehensive income |
(1,177 | ) | 721 | |||||
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Equity attributable to the owners of the parent |
78,098 | 82,955 | ||||||
Non-controlling interest |
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Total equity |
78,098 | 82,955 | ||||||
Non-current liabilities |
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Loans & borrowings |
20,682 | 16,607 | ||||||
Deferred tax liabilities |
1,284 | 2,068 | ||||||
Deferred income |
| 92 | ||||||
Other non-current liabilities |
2,374 | 2,244 | ||||||
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Total non-current liabilities |
24,340 | 21,011 | ||||||
Current liabilities |
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Loans & borrowings |
5,734 | 4,482 | ||||||
Trade payables |
9,944 | 9,712 | ||||||
Tax payables |
489 | 255 | ||||||
Deferred income |
17,963 | 16,509 | ||||||
Other current liabilities |
10,958 | 9,212 | ||||||
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Total current liabilities |
45,088 | 40,170 | ||||||
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Total equity and liabilities |
147,526 | 144,136 | ||||||
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Consolidated cash flow statements (Unaudited)
(in thousand euros) | For the nine month period ended 30 September |
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2016 | 2015 | |||||||
euros | euros | |||||||
Operating activities |
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Net profit for the period |
-3,639 | -5,005 | ||||||
Non-cash and operational adjustments |
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Depreciation of property, plant & equipment |
4,669 | 3,816 | ||||||
Amortization of intangible assets |
1,425 | 1,061 | ||||||
Share-based payment expense |
718 | 652 | ||||||
Loss (gain) on disposal of property, plant & equipment |
-147 | 1 | ||||||
Fair value adjustment contingent liabilities |
54 | | ||||||
Movement in provisions and allowance for bad debt |
-2 | 162 | ||||||
Financial income |
-126 | -2,523 | ||||||
Financial expense |
668 | 1,733 | ||||||
Impact of foreign currencies |
55 | 55 | ||||||
Share of loss of an associate or joint venture (equity method) |
368 | 248 | ||||||
Deferred tax expense (income) |
225 | 46 | ||||||
Income taxes |
587 | 575 | ||||||
Other |
7 | | ||||||
Working capital adjustments |
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Increase in trade receivables and other receivables |
-2,394 | -1,644 | ||||||
Decrease (Increase) in inventories |
-828 | -973 | ||||||
Increase in trade payables and other payables |
3,203 | 3,955 | ||||||
4,843 | 2,159 | |||||||
Income tax paid |
-528 | -530 | ||||||
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Net cash flow from operating activities |
4,315 | 1,629 | ||||||
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Investing activities |
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Purchase of property, plant & equipment |
-6,816 | -5,918 | ||||||
Purchase of intangible assets |
-871 | -1,019 | ||||||
Proceeds from the sale of property, plant & equipment, net |
192 | 13 | ||||||
Acquisition of subsidiary |
| -1,602 | ||||||
Investments in joint-ventures |
| -500 | ||||||
Proceeds from held to maturity investments |
| 10,000 | ||||||
Interest received |
7 | 8 | ||||||
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Net cash flow used in investing activities |
-7,488 | 982 | ||||||
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Financing activities |
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Proceeds from loans & borrowings and convertible debt |
7,004 | 324 | ||||||
Repayment of loans & borrowings |
-2,116 | -3,889 | ||||||
Repayment of finance leases |
-1,293 | -1,108 | ||||||
Purchase of non-controlling interest |
| -1,377 | ||||||
Capital increase in parent company |
| 580 | ||||||
Interest paid |
-406 | -399 | ||||||
Other financial income / (expense) |
-7 | -34 | ||||||
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Net cash flow from financing activities |
3,182 | -5,903 | ||||||
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Net increase of cash and cash equivalents |
9 | -3,292 | ||||||
Cash and cash equivalents at beginning of period |
50,726 | 51,019 | ||||||
Exchange rate differences on cash & cash equivalents |
-245 | 1,007 | ||||||
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Cash & cash equivalents at end of period |
50,490 | 48,734 |
Reconciliation of Net Profit/(Loss) to EBITDA and Adjusted EBITDA (Unaudited)
(in thousands) | For the three months ended 30 September |
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2016 | 2015 | |||||||
euros | euros | |||||||
Net profit / (loss) |
(52 | ) | (1,104 | ) | ||||
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Income taxes |
191 | 296 | ||||||
Financial expenses |
181 | 373 | ||||||
Financial income |
(58 | ) | (524 | ) | ||||
Share in loss of a joint venture |
69 | 125 | ||||||
Depreciation & amortization |
2,144 | 1,829 | ||||||
EBITDA |
2,475 | 995 | ||||||
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Non-cash stock-based compensation expenses (1) |
358 | 180 | ||||||
Adjusted EBITDA |
2,833 | 1,175 | ||||||
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(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 thousands euros | Materialise Software |
Materialise Medical |
Materialise Manufacturing |
Total segments | Adjustments & eliminations |
Consolidated | ||||||||||||||||||
For the three month period ended 30 September 2016 |
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Revenues |
7,632 | 9,537 | 11,567 | 28,736 | | 28,736 | ||||||||||||||||||
Segment EBITDA |
2,814 | 754 | 1,723 | 5,291 | (2,816 | ) | 2,475 | |||||||||||||||||
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Segment EBITDA % |
36.9 | % | 7.9 | % | 14.9 | % | 18.4 | % | 8.6 | % | ||||||||||||||
For the three month period ended 30 September 2015 |
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Revenues |
6,303 | 9,123 | 10,457 | 25,883 | | 25,883 | ||||||||||||||||||
Segment EBITDA |
2,157 | 763 | 799 | 3,719 | (2,724 | ) | 995 | |||||||||||||||||
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Segment EBITDA % |
34.2 | % | 8.4 | % | 7.6 | % | 14.4 | % | 3.8 | % | ||||||||||||||
For the nine month period ended 30 September 2016 |
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Revenues |
22,044 | 27,849 | 33,080 | 82,973 | 27 | 83,000 | ||||||||||||||||||
Segment EBITDA |
7,181 | 238 | 2,410 | 9,829 | (5,543 | ) | 4,286 | |||||||||||||||||
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Segment EBITDA % |
32.6 | % | 0.9 | % | 7.3 | % | 11.8 | % | 5.2 | % | ||||||||||||||
For the nine month period ended 30 September 2015 |
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Revenues |
18,497 | 25,286 | 30,220 | 74,003 | | 74,003 | ||||||||||||||||||
Segment EBITDA |
6,387 | (325 | ) | 612 | 6,674 | (6,618 | ) | 56 | ||||||||||||||||
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Segment EBITDA % |
34.5 | % | -1.3 | % | 2.0 | % | 9.0 | % | 0.1 | % |
Reconciliation of Net Profit/(Loss) to Segment EBITDA (Unaudited)
For the three months ended September 30 |
For the nine months ended September 30 |
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(in thousands of euros) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Net profit/(loss) |
(52 | ) | (1,104 | ) | (3,639 | ) | (5,005 | ) | ||||||||
Income taxes |
191 | 296 | 812 | 621 | ||||||||||||
Finance costs |
182 | 373 | 1,688 | 2,108 | ||||||||||||
Finance income |
(58 | ) | (524 | ) | (1,037 | ) | (2,793 | ) | ||||||||
Share in loss of a joint venture |
69 | 125 | 368 | 248 | ||||||||||||
Operating profit |
332 | (834 | ) | (1,808 | ) | (4,821 | ) | |||||||||
Depreciation & amortization |
2,144 | 1,829 | 6,094 | 4,877 | ||||||||||||
Corporate research and development |
242 | 564 | 1,201 | 2,171 | ||||||||||||
Corporate headquarters costs |
3,326 | 3,198 | 6,865 | 7,673 | ||||||||||||
Other operating income (expense) |
(753 | ) | (1,038 | ) | (2,523 | ) | (3,226 | ) | ||||||||
Segment EBITDA |
5,291 | 3,719 | 9,829 | 6,674 |
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: November 17, 2016