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