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 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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Third 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.

Third Quarter 2017 Results

Total revenue for the third quarter of 2017 increased 12.4% to 32,307 kEUR compared to 28,736 kEUR for the third quarter of 2016, with gains in all three of our segments. Total deferred revenue from annual software sales and maintenance contracts amounted to 16,607 kEUR at the end of the third quarter of 2017 compared 16,799 kEUR at the end of the fourth quarter of 2016. Revenue from our Materialise Software segment increased 10.4% to 8,422 kEUR for the third quarter of 2017 from 7,632 kEUR for the same quarter last year.

Revenue from our Materialise Medical segment increased 9.3% to 10,421 kEUR for the third quarter of 2017 compared to 9,537 kEUR for the same period in 2016. Compared to the same quarter in 2016, revenues from our medical software grew 24.6%, and revenues from medical devices and services grew 2.1%.

Revenue from our Materialise Manufacturing segment increased 16.3% to 13,456 kEUR for the third quarter of 2017 from 11,567 kEUR for the third quarter of 2016.

Gross profit was 17,873 kEUR, or 55.3% of total revenue, for the third quarter of 2017 compared to 16,937 kEUR, or 58.9% of total revenue, for the third quarter of 2016.

Research and development (“R&D”), sales and marketing (“S&M”) and general and administrative (“G&A”) expenses increased, in the aggregate, 8.5% to 19,509 kEUR for the third quarter of 2017 from 17,974 kEUR for the third quarter of 2016. R&D expenses increased from 4,389 kEUR to 4,701 kEUR while S&M expenses increased from 8,299 kEUR to 8,753 kEUR. G&A expenses increased from 5,286 kEUR to 6,055 kEUR. The G&A expenses for the third quarter of 2017 included a portion of the expenses related to the acquisition of ACTech, which are excluded from Adjusted EBITDA.

Net other operating income increased by 45 kEUR to 1,414 kEUR compared to 1,369 kEUR for the third quarter of 2016.

Operating result decreased to (222) kEUR from 332 kEUR for the same period in the prior year. This decrease was the result of the increase of 8.5% in R&D, S&M and G&A expenses, which was offset in part by the increase in gross profit of 5.5%. The operating result was also negatively affected by depreciation cost, which increased to 2,918 kEUR from 2,144 kEUR for the third quarter of 2016, and by the 266 kEUR of expenses related to the acquisition of ACTech.

Net financial result was (593) kEUR compared to (124) kEUR for the prior-year period, reflecting variances in 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 third quarter of 2017 was (1,413) kEUR compared to net loss of (52) kEUR for the same period in 2016. The 2016 period contained income tax expense of (191) kEUR compared to (433) kEUR this quarter. The variance of (242) kEUR in income tax, the decrease in the net financial result of 469 kEUR, a decrease of (96) kEUR in the share in the loss of a joint venture and the decrease of the operating result by (554) kEUR explain the increase in the net loss for the third quarter of 2017. Total comprehensive loss for the third quarter of 2017, which includes exchange differences on translation of foreign operations, was (1,568) kEUR compared to (511) kEUR for the same period in 2016.

 

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Adjusted EBITDA (a non-IFRS financial measure defined below), which in the third quarter of 2017 excludes 266 kEUR of expenses related to the acquisition of ACTech, increased to 3,259 kEUR from 2,833 kEUR as a result of the combination of continued revenue growth (12.4%) and a lower increase in operational expenses compared to the third quarter of 2016. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) in the third quarter of 2017 was 10.1% compared to 9.9% in the third quarter of 2016.

Our Materialise Software segment’s EBITDA rose to 3,362 kEUR from 2,814 kEUR while the segment EBITDA margin (the segment’s EBITDA divided by the segment’s revenue) was 39.9% compared to 36.9% for the prior-year period.

Our Materialise Medical segment’s EBITDA was 1,170 kEUR compared to 754 kEUR while the segment EBITDA margin increased to 11.2% from 7.9% in the third quarter of 2016.

Our Materialise Manufacturing segment’s decreased to 499 kEUR from 1,723 kEUR while the segment EBITDA margin decreased to 3.7% from 14.9% for the same quarter in 2016. While last year’s third quarter segment EBITDA included 460 kEUR related to an updated accounting valuation of resin materials stock, in the 2017 period, segment EBITDA was affected by higher cost of sales from the sales of eyewear scanners.

At September 30, 2017, we had cash and equivalents of 48,099 kEUR compared to 55,912 kEUR at December 31, 2016. Cash flow from operating activities in the third quarter of 2017 was 2,518 kEUR compared to 4,315 kEUR in the same period in 2016.

Net shareholders’ equity at September 30, 2017 was 76,060 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 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.

 

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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 1.1806, the reference rate of the European Central Bank on September 30, 2017.

About Materialise

Materialise incorporates 27 years of 3D printing experience into a range of software solutions and 3D printing services, which together 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 September 30												For the nine months ended September 30
(in thousands, except per share amounts)		2017				2017				2016				2017				2016
		U.S.$				€				€				€				€
Revenue			38,142				32,307				28,736				97,840				83,000
Cost of sales			(17,041	)			(14,434	)			(11,799	)			(42,102	)			(33,848	)
Gross profit			21,101				17,873				16,937				55,738				49,152
Gross profit as % of revenue			55.3%				55.3%				58.9%				57.0%				59.2%
Research and development expenses			(5,550	)			(4,701	)			(4,389	)			(14,424	)			(13,521	)
Sales and marketing expenses			(10,334	)			(8,753	)			(8,299	)			(28,370	)			(26,647	)
General and administrative expenses			(7,149	)			(6,055	)			(5,286	)			(17,205	)			(15,225	)
Net other operating income (expenses)			1,669				1,414				1,369				3,660				4,433
Operating (loss) profit			(263	)			(222	)			332				(601	)			(1,808	)
Financial expenses			(1,249	)			(1,058	)			(182	)			(3,294	)			(1,688	)
Financial income			549				465				58				2,132				1,037
Share in loss of joint venture			(195	)			(165	)			(69	)			(596	)			(368	)
(Loss) profit before taxes			(1,158	)			(980	)			139				(2,359	)			(2,827	)
Income taxes			(511	)			(433	)			(191	)			(825	)			(812	)
Net (loss) profit of the period			(1,669	)			(1,413	)			(52	)			(3,184	)			(3,639	)
Net (loss) profit attributable to:
The owners of the parent			(1,669	)			(1,413	)			(52	)			(3,184	)			(3,639	)
Non-controlling interest			—				—				—				—				—
Earnings per share attributable to ordinary owners of the parent
Basic			(0.04	)			(0.03	)			(0.00	)			(0.07	)			(0.08	)
Diluted			(0.04	)			(0.03	)			(0.00	)			(0.07	)			(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

 

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Consolidated statements of comprehensive income (Unaudited)

 

		For the three months ended September 30												For the nine months ended September 30
(in thousands)		2017				2017				2016				2017				2016
		U.S.$				€				€				€				€
Net profit (loss) for the period			(1,669	)			(1,413	)			(52	)			(3,184	)			(3,639	)
Other comprehensive income
Exchange difference on translation of foreign operations			(183	)			(155	)			(459	)			(481	)			(1,898	)
Other comprehensive income (loss), net of taxes			(183	)			(155	)			(459	)			(481	)			(1,898	)
Total comprehensive income (loss) for the year, net of taxes			(1,852	)			(1,568	)			(511	)			(3,665	)			(5,537	)
Total comprehensive income (loss) attributable to:
The owners of the parent			(1,852	)			(1,568	)			(511	)			(3,665	)			(5,537	)
Non-controlling interest			—				—				—				—				—

 

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Consolidated statement of financial position (Unaudited)

 

		As of September 30				As of December 31
(in thousands)		2017				2016
		€				€
Assets
Non-current assets
Goodwill			8,743				8,860
Intangible assets			11,219				9,765
Property, plant & equipment			62,643				45,063
Investments in joint ventures			—				—
Deferred tax assets			408				336
Other non-current assets			2,740				2,154
Total non-current assets			85,753				66,178
Current assets
Inventories			8,642				7,870
Trade receivables			30,656				27,479
Held to maturity investments			—				—
Other current assets			6,991				4,481
Cash and cash equivalents			48,099				55,912
Total current assets			94,388				95,742
Total assets			180,141				161,920

 

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		As of September 30				As of December 31
(in thousands)		2017				2016
		€				€
Equity and liabilities
Equity
Share capital			2,729				2,729
Share premium			79,703				79,019
Consolidated reserves			(4,779	)			(1,603	)
Other comprehensive income			(1,593	)			(1,112	)
Equity attributable to the owners of the parent			76,060				79,033
Non-controlling interest			—				—
Total equity			76,060				79,033
Non-current liabilities
Loans & borrowings			46,532				28,267
Deferred tax liabilities			932				1,325
Deferred income			3,728				3,588
Other non-current liabilities			2,220				1,873
Total non-current liabilities			53,412				35,053
Current liabilities
Loans & borrowings			7,033				5,539
Trade payables			14,171				13,400
Tax payables			967				926
Deferred income			18,130				17,822
Other current liabilities			10,368				10,147
Total current liabilities			50,669				47,834
Total equity and liabilities			180,141				161,920

 

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Consolidated statement of cash flows (Unaudited)

 

		For the nine months ended September 30
(in thousands)		2017				2016
		€				€
Operating activities
Net (loss) profit of the period			(3,184	)			(3,639	)
Non-cash and operational adjustments
Depreciation of property, plant & equipment			6,008				4,669
Amortization of intangible assets			2,134				1,425
Share-based payment expense			997				718
Loss (gain) on disposal of property, plant & equipment			(7	)			(147	)
Fair value contingent liabilities			—				54
Movement in provisions			21				—
Movement reserve for bad debt			191				(2	)
Financial income			(416	)			(126	)
Financial expense			957				668
Impact of foreign currencies			621				55
Share in loss of a joint venture (equity method)			596				368
Deferred tax expense (income)			(395	)			225
Income taxes			1,219				587
Other			(42	)			7
Working capital adjustment & income tax paid
Increase in trade receivables and other receivables			(5,916	)			(2,394	)
Decrease (increase) in inventories			(804	)			(828	)
Increase in trade payables and other payables			1,789				3,203
Income tax paid			(1,251	)			(528	)
Net cash flow from operating activities			2,518				4,315

 

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		For the nine months ended September 30
(in thousands)		2017				2016
		€				€
Investing activities
Purchase of property, plant & equipment			(22,245	)			(6,816	)
Purchase of intangible assets			(3,739	)			(871	)
Proceeds from the sale of property, plant & equipment (net)			54				192
Proceeds from the sale of intangible assets (net)			36				—
Acquisition of subsidiary			—				—
Investments in joint-ventures			(500	)			—
Interest received			267				7
Net cash flow used in investing activities			(26,127	)			(7,488	)
Financing activities
Proceeds from loans & borrowings			22,794				7,004
Repayment of loans & borrowings			(2,827	)			(2,116	)
Repayment of finance leases			(2,081	)			(1,293	)
Interest paid			(502	)			(406	)
Other financial income (expense)			(251	)			(7	)
Net cash flow from (used in) financing activities			17,133				3,182
Net increase of cash & cash equivalents			(6,476	)			9
Cash & cash equivalents at beginning of the year			55,912				50,726
Exchange rate differences on cash & cash equivalents			(1,337	)			(245	)
Cash & cash equivalents at end of the year			48,099				50,490

 

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

 

		For the three months ended September 30								For the nine months ended September 30
(in thousands)		2017				2016				2017				2016
		€				€				€				€
Net profit (loss) for the period			(1,413	)			(52	)			(3,184	)			(3,639	)
Income taxes			433				191				825				812
Financial expenses			1,058				181				3,294				1,688
Financial income			(465	)			(58	)			(2,132	)			(1,037	)
Share in loss of joint venture			165				69				596				368
Depreciation and amortization			2,918				2,144				8,142				6,094
EBITDA			2,696				2,475				7,541				4,286
Non-cash stock-based compensation expense (1)			297				358				997				717
Acquisition-related expenses (2)			266				—				266				—
ADJUSTED EBITDA			3,259				2,833				8,804				5,003

 

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

 

(2)	Acquisition-related expenses of business combinations represent expenses incurred in connection with the ACTech acquisition.

 

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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 September 30, 2017
Revenues			8,422				10,421				13,456				32,299				8				32,307
Segment EBITDA			3,362				1,170				499				5,031				(2,335	)			2,696
Segment EBITDA %			39.9%				11.2%				3.7%				15.6%								8.3%
For the three months ended September 30, 2016
Revenues			7,632				9,537				11,567				28,736				—				28,736
Segment EBITDA			2,814				754				1,723				5,291				(2,816	)			2,475
Segment EBITDA %			36.9%				7.9%				14.9%				18.4%								8.6%

 

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(in thousands)		Materialise Software				Materialise Medical				Materialise Manufact- uring				Total segments				Unallocated				Consoli- dated
		€				€				€				€				€				€
For the nine months ended September 30, 2017
Revenues			25,302				30,999				41,318				97,619				221				97,840
Segment EBITDA			9,307				2,242				3,062				14,611				(7,070	)			7,541
Segment EBITDA %			36.8%				7.2%				7.4%				15.0%								7.7%
For the nine months ended September 30, 2016
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
Segment EBITDA %			32.6%				0.9%				7.3%				11.8%								5.2%

 

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

 

		For the three months ended September 30								For the nine months ended September 30
(in thousands)		2017				2016				2017				2016
		€				€				€				€
Net profit (loss) for the period			(1,413	)			(52	)			(3,184	)			(3,639	)
Income taxes			433				191				825				812
Financial expenses			1,058				182				3,294				1,688
Financial income			(465	)			(58	)			(2,132	)			(1,037	)
Share in loss of joint venture			165				69				596				368
Operating profit			(222	)			332				(601	)			(1,808	)
Depreciation and amortization			2,918				2,144				8,142				6,094
Corporate research and development			502				242				1,527				1,201
Corporate headquarter costs			2,447				3,326				6,984				6,865
Other operating income (expense)			(614	)			(753	)			(1,441	)			(2,523	)
Segment EBITDA			5,031				5,291				14,611				9,829

 

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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: November 9, 2017

 

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