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 August 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).

 

 

 


Second 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.

Second Quarter 2017 Results

Total revenue for the second quarter of 2017 increased 21.8% to 33,612 kEUR compared to 27,597 kEUR for the second 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 19.0% to 8,305 kEUR for the second quarter of 2017 from 6,981 kEUR for the same quarter last year. Recurrent revenues from annual and renewed licenses and maintenance fees grew 25.2% 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 9.7% to 10,646 kEUR for the second quarter of 2017 compared to 9,706 kEUR for the same period in 2016. Compared to the same quarter in 2016, revenue from our medical software grew 15.5%, and revenue from medical devices and services grew 6.6%.

Revenue from our Materialise Manufacturing segment, which offers an integrated suite of 3D printing and engineering services to industrial and commercial customers, increased 32.5% to 14,455 kEUR for the second quarter of 2017 from 10,907 kEUR for the second quarter of 2016. End part manufacturing revenues increased 89.7% compared to the same quarter in 2016.

Gross profit was 19,388 kEUR, or 57.7% of total revenue, for the second quarter of 2017 compared to 16,253 kEUR, or 58.9% of total revenue, for the second quarter of 2016.

Research and development (“R&D”), sales and marketing (“S&M”) and general and administrative (“G&A”) expenses increased, in the aggregate, 9.0% to 20,911 kEUR for the second quarter of 2017 from 19,182 kEUR for the second quarter of 2016. R&D expenses increased from 4,760 kEUR to 5,131 kEUR while S&M expenses increased from 9,533 kEUR to 10,009 kEUR. G&A expenses increased from 4,889 kEUR to 5,771 kEUR.

Net other operating income decreased by 550 kEUR to 1,228 kEUR compared to 1,778 kEUR for the second 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 (295) kEUR from (1,151) kEUR for the same period prior year. This improvement was the result of a combination of an increase in gross profit of 19.3% and an increase of only 9.0% in R&D, S&M and G&A expenses, partially offset by a slight decrease of 550 kEUR of net other operating income compared to the same quarter in 2016.

Net financial result was (427) kEUR compared to 207 kEUR for the prior-year period, reflecting 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 second quarter of 2017 was (955) kEUR compared to net loss of (436) kEUR for the same period in 2016. The 2016 period contained income tax income of 639 kEUR primarily from deferred taxes compared to an expense of (191) kEUR in the 2017 period. This variance of (830) kEUR in income tax and the decrease in the net financial result of 634 kEUR, which were offset in part by a decrease of 89 kEUR in the share in the loss of a joint venture and the improvement of the operating loss by 856 kEUR, explain the increase of the net loss by (519) kEUR for the second quarter of 2017. Total comprehensive loss for the second quarter of 2017, which includes exchange differences on translation of foreign operations, was (1,403) kEUR compared to (911) kEUR for the same period in 2016.

Adjusted EBITDA (a non-IFRS financial measure defined below) increased to 2,732 kEUR from 1,034 kEUR as a result of the combination of continued revenue growth (21.8%) and a significantly lower increase in operational expenses (9.0%) as compared to the second quarter of 2016. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) in the second quarter of 2017 was 8.1% compared to 3.7% for the second quarter of 2016.

Our Materialise Software segment’s EBITDA rose to 2,952 kEUR from 1,602 kEUR while the segment EBITDA margin (the segment’s EBITDA divided by the segment’s revenue) was 35.5% compared to 22.9% for the prior-year period.

Our Materialise Medical segment’s EBITDA was 758 kEUR compared to 14 kEUR while the segment EBITDA margin increased to 7.1% from 0.1% for the second quarter of 2016.

Our Materialise Manufacturing segment’s EBITDA rose to 1,241 kEUR from 430 kEUR while the segment EBITDA margin increased to 8.6% from 3.9% for the same quarter in 2016.

At June 30, 2017, we had cash and equivalents of 53,832 kEUR compared to 55,912 kEUR at December 31, 2016. Cash flow from operating activities in the first six months of 2017 was 5,188 kEUR compared to 5,781 kEUR for the same period in 2016, mainly due to working capital evolution.

Net shareholders’ equity at June 30, 2017 was 77,419 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 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 1.1412, the reference rate of the European Central Bank on June 30, 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.


Consolidated income statement (Unaudited)

 

     For the three months
ended 30 June
    For the six
months ended 30
June
 
(in thousands, except per share amounts)    2017     2017     2016     2017     2016  
     U.S.$                  

Revenue

     38,358       33,612       27,597       65,533       54,264  

Cost of sales

     (16,232     (14,224     (11,344     (27,668     (22,049

Gross profit

     22,126       19,388       16,253       37,865       32,215  

Gross profit as % of revenue

     57.7     57.7     58.9     57.8     59.4

Research and development expenses

     (5,855     (5,131     (4,760     (9,723     (9,132

Sales and marketing expenses

     (11,422     (10,009     (9,533     (19,617     (18,348

General and administrative expenses

     (6,586     (5,771     (4,889     (11,150     (9,939

Net other operating income (expenses)

     1,401       1,228       1,778       2,246       3,064  

Operating (loss) profit

     (336     (295     (1,151     (379     (2,140

Financial expenses

     (1,503     (1,317     (609     (2,236     (1,506

Financial income

     1,016       890       816       1,667       979  

Share in loss of joint venture

     (48     (42     (131     (431     (299

(Loss) profit before taxes

     (871     (764     (1,075     (1,379     (2,966

Income taxes

     (218     (191     639       (392     (621

Net (loss) profit of the period

     (1,089     (955     (436     (1,771     (3,587

Net (loss) profit attributable to:

          

The owners of the parent

     (1,089     (955     (436     (1,771     (3,587

Non-controlling interest

     —         —         —         —         —    

Earnings per share attributable to ordinary owners of the parent

          

Basic

     (0.02     (0.02     (0.01     (0.04     (0.08

Diluted

     (0.02     (0.02     (0.01     (0.04     (0.08

Weighted average basic shares outstanding

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

Weighted average diluted shares outstanding

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


Consolidated statements of comprehensive income (Unaudited)

 

     For the three months
ended 30 June
    For the six
months ended 30

June
 
(in thousands)    2017     2017     2016     2017     2016  
     U.S.$                  

Net profit (loss) for the period

     (1,089     (955     (436     (1,771     (3,587

Other comprehensive income

          

Exchange difference on translation of foreign operations

     (511     (448     (475     (326     (1,439

Other comprehensive income (loss), net of taxes

     (511     (448     (475     (326     (1,439

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

     (1,600     (1,403     (911     (2,097     (5,026

Total comprehensive income (loss) attributable to:

          

The owners of the parent

     (1,600     (1,403     (911     (2,097     (5,026

Non-controlling interest

     —         —         —         —         —    


Consolidated statement of financial position (Unaudited)

 

     As of June 30      As of
December 31
 
(in thousands)    2017      2016  
           

Assets

     

Non-current assets

     

Goodwill

     8,771        8,860  

Intangible assets

     9,385        9,765  

Property, plant & equipment

     58,327        45,063  

Investments in joint ventures

     69        —    

Deferred tax assets

     246        336  

Other non-current assets

     2,485        2,154  

Total non-current assets

     79,283        66,178  

Current assets

     

Inventories

     8,356        7,870  

Trade receivables

     29,383        27,479  

Held to maturity investments

     —          —    

Other current assets

     6,121        4,481  

Cash and cash equivalents

     53,832        55,912  

Total current assets

     97,692        95,742  

Total assets

     176,975        161,920  


     As of June 30     As of
December 31
 
(in thousands)    2017     2016  
          

Equity and liabilities

    

Equity

    

Share capital

     2,729       2,729  

Share premium

     79,497       79,019  

Consolidated reserves

     (3,369     (1,603

Other comprehensive income

     (1,438     (1,112

Equity attributable to the owners of the parent

     77,419       79,033  

Non-controlling interest

     —         —    

Total equity

     77,419       79,033  

Non-current liabilities

    

Loans & borrowings

     40,146       28,267  

Deferred tax liabilities

     1,078       1,325  

Deferred income

     2,869       3,588  

Other non-current liabilities

     2,122       1,873  

Total non-current liabilities

     46,215       35,053  

Current liabilities

    

Loans & borrowings

     6,587       5,539  

Trade payables

     16,009       13,400  

Tax payables

     748       926  

Deferred income

     20,164       17,822  

Other current liabilities

     9,833       10,147  

Total current liabilities

     53,341       47,834  

Total equity and liabilities

     176,975       161,920  


Consolidated statement of cash flows (Unaudited)

 

     For the six months
ended June 30
 
(in thousands)    2017     2016  
          

Operating activities

    

Net (loss) profit of the period

     (1,771     (3,587

Non-cash and operational adjustments

    

Depreciation of property, plant & equipment

     3,954       3,012  

Amortization of intangible assets

     1,269       938  

Share-based payment expense

     700       360  

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

     28       (62

Fair value contingent liabilities

     —         54  

Movement in provisions

     14       —    

Movement reserve for bad debt

     139       111  

Financial income

     (318     (87

Financial expense

     585       483  

Impact of foreign currencies

     302       131  

Share in loss of a joint venture (equity method)

     431       299  

Deferred tax expense (income)

     (150     (159

Income taxes

     542       781  

Other

     (58     (40

Working capital adjustment & income tax paid

    

Increase in trade receivables and other receivables

     (3,580     1,654  

Decrease (increase) in inventories

     (509     (5

Increase in trade payables and other payables

     4,207       2,442  

Income tax paid

     (597     (544

Net cash flow from operating activities

     5,188       5,781  


     For the six months
ended June 30
 
(in thousands)    2017     2016  
          

Investing activities

    

Purchase of property, plant & equipment

     (15,770     (5,831

Purchase of intangible assets

     (1,027     (526

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

     104       708  

Proceeds from the sale of intangible assets (net)

     —         19  

Acquisition of subsidiary

     —         —    

Investments in joint-ventures

     (500     —    

Interest received

     241       6  

Net cash flow used in investing activities

     (16,952     (5,624

Financing activities

    

Proceeds from loans & borrowings

     14,203       2,812  

Repayment of loans & borrowings

     (1,634     (1,346

Repayment of finance leases

     (1,405     (843

Interest paid

     (302     (328

Other financial income (expense)

     (154     (32

Net cash flow from (used in) financing activities

     10,708       263  

Net increase of cash & cash equivalents

     (1,056     420  

Cash & cash equivalents at beginning of the year

     55,912       50,726  

Exchange rate differences on cash & cash equivalents

     (1,024     158  

Cash & cash equivalents at end of the year

     53,832       51,304  


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

 

     For the three
months ended 30

June
    For the six
months ended 30

June
 
(in thousands)    2017     2016     2017     2016  
                  

Net profit (loss) for the period

     (955     (436     (1,771     (3,587

Income taxes

     191       (639     392       621  

Finance expenses

     1,317       609       2,236       1,506  

Finance income

     (890     (816     (1,667     (979

Share in loss of joint venture

     42       131       431       299  

Depreciation and amortization

     2,656       2,040       5,224       3,950  

EBITDA

     2,361       889       4,845       1,810  

Non-cash stock-based compensation expense (1)

     371       145       700       359  

ADJUSTED EBITDA

     2,732       1,034       5,545       2,169  

 

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

For the six months ended June 30, 2017

            

Revenues

     16,880       20,578       27,862       65,320       213       65,533  

Segment EBITDA

     5,945       1,072       2,563       9,580       (4,735     4,845  

Segment EBITDA %

     35.2     5.2     9.2     14.7       7.4

For the six months ended June 30, 2016

            

Revenues

     14,412       18,312       21,513       54,237       27       54,264  

Segment EBITDA

     4,367       (516     687       4,538       (2,728     1,810  

Segment EBITDA %

     30.3     -2.8     3.2     8.4       3.3


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

For the three months ended June 30, 2017

            

Revenues

     8,305       10,646       14,455       33,406       206       33,612  

Segment EBITDA

     2,952       758       1,241       4,951       (2,590     2,361  

Segment EBITDA %

     35.5     7.1     8.6     14.8       7.0

For the three months ended June 30, 2016

            

Revenues

     6,981       9,706       10,907       27,594       3       27,597  

Segment EBITDA

     1,602       14       430       2,046       (1,157     889  

Segment EBITDA %

     22.9     0.1     3.9     7.4       3.2


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

 

     For the three months
ended 30 June
    For the six months
ended 30 June
 
(in thousands)    2017     2016     2017     2016  
                  

Net profit (loss) for the period

     (955     (436     (1,771     (3,587

Income taxes

     191       (639     392       621  

Finance cost

     1,317       609       2,236       1,506  

Finance income

     (890     (816     (1,667     (979

Share in loss of joint venture

     42       131       431       299  

Operating profit

     (295     (1,151     (379     (2,140

Depreciation and amortization

     2,656       2,040       5,224       3,950  

Corporate research and development

     516       392       1,025       959  

Corporate headquarter costs

     2,464       1,801       4,537       3,539  

Other operating income (expense)

     (390     (1,036     (827     (1,770

Segment EBITDA

     4,951       2,046       9,580       4,538  


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: August 8, 2017