SEC Filing | Materialise NV

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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 2019

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).

Full Year and Fourth Quarter Results

Except as otherwise required by the context, references to “Materialise,” “Company,” “we,” “us” and “our” are to Materialise NV and its subsidiaries.

Fourth Quarter 2018 Results

Total revenue for the fourth quarter of 2018 increased 9.6% to 49,014 kEUR compared to 44,733 kEUR for the fourth quarter of 2017.

Revenue from our Materialise Software segment decreased 4.1% to 10,044 kEUR for the fourth quarter of 2018 from 10,468 kEUR for the same quarter last year. Deferred revenue from license and maintenance fees within the segment increased by 965 kEUR compared to last year’s quarter.

Revenue from our Materialise Medical segment increased 27.4% to 15,081 kEUR for the fourth quarter of 2018 compared to 11,842 kEUR for the same period in 2017. Compared to the same quarter in 2017, revenues from medical devices and services grew 39.6%, and revenues from our medical software grew 6.9%.

Revenue from our Materialise Manufacturing segment increased 6.8% to 23,926 kEUR for the fourth quarter of 2018 from 22,394 kEUR for the fourth quarter of 2017.

Gross profit was 27,261 kEUR, or 55.6% of total revenue, for the fourth quarter of 2018 compared to 23,601 kEUR, or 52.8% of total revenue, for the fourth quarter of 2017.

Research and development (“R&D”), sales and marketing (“S&M”) and general and administrative (“G&A”) expenses increased, in the aggregate, 11.1% to 27,290 kEUR for the fourth quarter of 2018 from 24,553 kEUR for the fourth quarter of 2017.

Net other operating income decreased by 1,135 kEUR to 810 kEUR compared to 1,945 kEUR for the fourth quarter of 2017. Net other operating income this quarter was impacted by higher provisions for doubtful trade receivables, which totaled 852 kEUR, and included the application of the new IFRS9 Financial Instruments accounting standard.

Operating result decreased to 781 kEUR from 993 kEUR for the same period in the prior year.

Net financial result was (420) kEUR compared to (356) kEUR for the prior-year period.

Net profit for the fourth quarter of 2018 was 525 kEUR, compared to net profit of 1,067 kEUR for the same period in 2017. The operating profit decreased by 212 kEUR and our share in the loss of a joint venture increased by 311 kEUR. Total comprehensive income for the fourth quarter of 2018, which includes exchange differences on translation of foreign operations, was 507 kEUR compared to 857 kEUR for the same period in 2017.

Adjusted EBITDA increased to 6,052 kEUR from 5,806 kEUR. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) in the fourth quarter of 2018 was 12.3% compared to 13.0% in the fourth quarter of 2017.

Segment EBITDA from our Materialise Software segment decreased to 2,969 kEUR from 4,619 kEUR while the segment EBITDA margin (the segment’s EBITDA divided by the segment’s revenue) was 29.6% compared to 44.1% in the prior-year period.

Segment EBITDA from our Materialise Medical segment was 3,593 kEUR compared to 2,158 kEUR while the segment EBITDA margin increased to 23.8% from 18.2% in the fourth quarter of 2017.

Segment EBITDA from our Materialise Manufacturing segment increased to 1,983 kEUR from 1,377 kEUR while the segment EBITDA margin increased to 8.3% from 6.1% for the same quarter in 2017.

At December 31, 2018, we had cash and equivalents of 115,506 kEUR compared to 43,175 kEUR at December 31, 2017. Cash flow from operating activities for the full year 2018 was 28,321 kEUR compared to 9,951 kEUR in 2017.

Net shareholders’ equity at December 31, 2018 was 135,989 kEUR compared to 77,054 kEUR at December 31, 2017.

Full Year 2018 Results

Total revenues for the year ended December 31, 2018 increased 29.6% to 184,721 kEUR compared to 142,573 kEUR for the year ended December 31, 2017. Excluding the impact of our October 4, 2017 acquisition of ACTech, a full-service manufacturer of complex metal parts, revenues increased 6.6% to 141,329 kEUR.

Revenues from our Materialise Software segment increased 4.5% to 37,374 kEUR for the year ended December 31, 2018 compared to 35,770 kEUR for the year ended December 31, 2017.

Revenues from our Materialise Medical segment grew by 22.0% for the year ended December 31, 2018 to 52,252 kEUR from 42,841 kEUR for the year ended December 31, 2017. Medical software growth was 9.1%, and revenues from medical devices and services increased 29.3%.

Revenues from our Materialise Manufacturing segment increased 49.0% to 94,956 kEUR for the year ended December 31, 2018 from 63,712 kEUR for the year ended December 31, 2017. Excluding ACTech, revenues decreased 4.1% to 51,518 kEUR from 53,747 kEUR.

Net profit improved from (2,117) kEUR for 2017 to a net profit of 3,027 kEUR for 2018.

Adjusted EBITDA for the year ended December 31, 2018 was 23,526 kEUR, an increase of 61.0% compared to 14,610 kEUR for the year ended December 31, 2017. The Adjusted EBITDA margin increased to 12.7% from 10.2% last year. Excluding ACTech, Adjusted EBITDA was 14,097 kEUR for the year ended December 31, 2018 compared to 13,067 kEUR for the year ended December 31, 2017.

The segment EBITDA margin for our Materialise Software segment was 30.9% in 2018 compared to 38.9% in 2017.

The segment EBITDA margin for our Materialise Medical segment increased to 19.6% from 10.3%, primarily as a result of the combination of revenue growth and limited increases in operating expenses.

The segment EBITDA margin for our Materialise Manufacturing segment increased from 7.0% in 2017 to 11.4% in 2018. Excluding ACTech, the segment EBITDA margin decreased to 2.7%.

Business Combinations - ACTech

Our audited financial statements for the year ended December 31, 2017 appearing in our Annual Report on Form 20-F, as filed with the U.S. Securities and Exchange Commission on April 30, 2018, included a provisional accounting for the ACTech business combination. The fair value analysis with respect to the assets and liabilities acquired was not yet finalized as of the reporting date.

During September 2018, as previously reported in our Third Quarter 2018 Results release, and through October 4 2018, we completed the fair value analysis of the ACTech business combination, with corresponding adjustments to intangible assets, property, plant and equipment, inventories and contracts in progress, other current assets, investment grants and income taxes. The impact has been accounted for as retrospective adjustments to our consolidated statement of financial position as of December 31, 2017 and our consolidated income statement for the year ended December 31, 2017. Including an adjustment to the inventories valuation at ACTech, the total impact on the consolidated reserves for the year ended December 31, 2017 and our 2017 fourth quarter income statements amounted to (461) kEUR.

The adjustments are summarized as follows:


Consolidated statements of financial position

(in € 000)	For the year ended December 31, 2017
	As previously reported			Adjustments			Restated
Goodwill		18,447			(895	)		17,552
Intangible assets		28,646			(46	)		28,600
Property, plant & equipment		86,881			184			87,065
Inventories and contracts in progress (*)		11,594			(567	)		11,027
Other current assets		9,212			(1,537	)		7,675
Assets		154,780			(2,861	)		151,919
Consolidated reserves		(3,250	)		(461	)		(3,711	)
Deferred tax liabilities (non-current)		7,006			409			7,415
Deferred income (non-current)		5,040			(1,272	)		3,768
Tax payable		3,560			(1,537	)		2,023
Equity and liabilities		12,356			(2,861	)		9,495

Consolidated income statements

(in € 000)	For the year ended December 31, 2017
	As previously reported			Adjustments			Restated
Cost of sales		(62,787	)		(447	)		(63,234	)
Net other operating income (expenses)		5,631			(26	)		5,605
Income taxes		(534	)		12			(522	)
					(461	)

(*)

Relates to an adjustment to the inventories valuation

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 1.145, the reference rate of the European Central Bank on December 31, 2018.

About Materialise

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

Consolidated income statements (Unaudited)


	For the three months ended December 31									For the twelve months ended December 31
(in 000, except per share amounts)	2018			2018			2017*			2018			2017*
	U.S.$			€			€			€			€
Revenue		56,121			49,014			44,733			184,721			142,573
Cost of sales		(24,907	)		(21,753	)		(21,132	)		(82,299	)		(63,234	)
Gross profit		31,214			27,261			23,601			102,422			79,339
Gross profit as % of revenue		55.6	%		55.6	%		52.8	%		55.4	%		55.6	%
Research and development expenses		(6,109	)		(5,335	)		(5,535	)		(22,416	)		(19,959	)
Sales and marketing expenses		(14,394	)		(12,571	)		(10,739	)		(46,303	)		(39,109	)
General and administrative expenses		(10,745	)		(9,384	)		(8,279	)		(32,310	)		(25,484	)
Net other operating income (expenses)		928			810			1,945			3,771			5,605
Operating (loss) profit		894			781			993			5,164			392
Financial expenses		(1,498	)		(1,308	)		(1,434	)		(4,864	)		(4,728	)
Financial income		1,017			888			1,078			3,627			3,210
Share in loss of joint venture		(211	)		(184	)		127			(475	)		(469	)
(Loss) profit before taxes		202			177			764			3,452			(1,595	)
Income taxes		399			348			303			(425	)		(522	)
Net (loss) profit of the period		601			525			1,067			3,027			(2,117	)
Net (loss) profit attributable to:
The owners of the parent		601			525			1,067			3,027			(2,117	)
Non-controlling interest		—			—			—			—			—
Earnings per share attributable to the owners of the parent
Basic		0.01			0.01			0.02			0.06			(0.04	)
Diluted		0.01			0.01			0.02			0.06			(0.04	)
Weighted average basic shares outstanding		52,882			52,882			47,325			49,806			47,325
Weighted average diluted shares outstanding		53,761			53,761			48,467			50,609			47,325

(*):	2017 has been restated following the final accounting of the ACTech business combination and the adjustment to the ACTech inventories valuation.

Consolidated statements of comprehensive income (Unaudited)


	For the three months ended December 31									For the twelve months ended December 31
(in 000)	2018			2018			2017*			2018			2017*
	U.S.$			€			€			€			€
Net profit (loss) for the period		601			525			1,067			3,027			(2,117	)
Other comprehensive income
Exchange difference on translation of foreign operations		(21	)		(18	)		(210	)		(47	)		(691	)
Other comprehensive income (loss), net of taxes		(21	)		(18	)		(210	)		(47	)		(691	)
Total comprehensive income (loss) for the year, net of taxes		580			507			857			2,980			(2,808	)
Total comprehensive income (loss) attributable to:
The owners of the parent		580			507			857			2,980			(2,808	)
Non-controlling interest		—			—			—			—			—

(*):	2017 has been restated following the final accounting of the ACTech business combination and the adjustment to the ACTech inventories valuation.

Consolidated statements of financial position (Unaudited)


	As of December 31
(in 000)	2018		2017*
	€		€
Assets
Non-current assets
Goodwill		17,491		17,552
Intangible assets		26,326		28,600
Property, plant & equipment		92,537		87,065
Investments in joint ventures		—		31
Deferred tax assets		315		304
Other non-current assets		7,237		3,667
Total non-current assets		143,906		137,219
Current assets
Inventories and contracts in progress		9,986		11,027
Trade receivables		36,891		35,582
Other current assets		6,936		7,675
Cash and cash equivalents		115,506		43,175
Total current assets		169,319		97,459
Total assets		313,225		234,678


	As of December 31
(in 000)	2018			2017*
	€			€
Equity and liabilities
Equity
Share capital		3,050			2,729
Share premium		136,637			79,839
Consolidated reserves		(1,848	)		(3,711	)
Other comprehensive income		(1,850	)		(1,803	)
Equity attributable to the owners of the parent		135,989			77,054
Non-controlling interest		—			—
Total equity		135,989			77,054
Non-current liabilities
Loans & borrowings		92,440			81,788
Deferred tax liabilities		6,226			7,415
Deferred income		4,587			3,768
Other non-current liabilities		868			1,904
Total non-current liabilities		104,121			94,875
Current liabilities
Loans & borrowings		13,598			12,769
Trade payables		18,667			15,670
Tax payables		2,313			2,023
Deferred income		23,195			18,791
Other current liabilities		15,342			13,496
Total current liabilities		73,115			62,749
Total equity and liabilities		313,225			234,678

(*):	2017 has been restated following the final accounting of the ACTech business combination and the adjustment to the ACTech inventories valuation.

Consolidated statements of cash flows (Unaudited)


	For the twelve months ended December 31
(in 000)	2018			2017*
	€			€
Operating activities
Net (loss) profit of the period		3,027			(2,117	)
Non-cash and operational adjustments
Depreciation of property, plant & equipment		12,223			8,754
Amortization of intangible assets		5,064			3,822
Share-based payment expense		1,075			1,033
Loss (gain) on disposal of property, plant & equipment		(83	)		25
Fair value contingent liabilities		(455	)		—
Movement in provisions		5			61
Movement reserve for bad debt		1,293			502
Financial income		(581	)		(381	)
Financial expense		2,172			1,597
Impact of foreign currencies		(299	)		302
Share in loss of a joint venture (equity method)		475			469
(Deferred) Income taxes		426			522
Other		87			(22	)
Working capital adjustment & income tax paid
Increase in trade receivables and other receivables		(3,156	)		(4,973	)
Decrease (increase) in inventories		812			(417	)
Increase in trade payables and other payables		7,604			2,343
Income tax paid		(1,368	)		(1,569	)
Net cash flow from operating activities		28,321			9,951


	For the twelve months ended December 31
(in 000)	2018			2017*
	€			€
Investing activities
Purchase of property, plant & equipment		(18,270	)		(27,733	)
Purchase of intangible assets		(1,836	)		(4,345	)
Proceeds from the sale of property, plant & equipment & intangible assets (net)		281			221
Acquisition of subsidiary		—			(27,173	)
Investments in joint-ventures		—			(500	)
Other investments		(2,671	)		—
Interest received		363			281
Net cash flow used in investing activities		(22,133	)		(59,249	)
Financing activities
Proceeds from loans & borrowings		32,554			54,319
Repayment of loans & borrowings		(18,820	)		(11,904	)
Repayment of finance leases		(3,102	)		(2,947	)
Capital increase in parent		60,489			—
Direct attributable expense of capital increases		(4,003	)		—
Interest paid		(1,733	)		(955	)
Other financial income (expense)		(150	)		(472	)
Net cash flow from (used in) financing activities		65,235			38,041
Net increase of cash & cash equivalents		71,423			(11,257	)
Cash & cash equivalents at beginning of the year		43,175			55,912
Exchange rate differences on cash & cash equivalents		908			(1,480	)
Cash & cash equivalents at end of the year		115,506			43,175

(*):	2017 has been restated following the final accounting of the ACTech business combination and the adjustment to the ACTech inventories valuation.

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 000)	2018			2017*			2018			2017*
	€			€			€			€
Net profit (loss) for the period		525			1,067			3,027			(2,117	)
Income taxes		(348	)		(303	)		425			522
Financial expenses		1,308			1,434			4,864			4,728
Financial income		(888	)		(1,078	)		(3,627	)		(3,210	)
Share in loss of joint venture		184			(127	)		475			469
Depreciation and amortization		4,753			4,434			17,287			12,576
EBITDA		5,534			5,427			22,451			12,968
Non-cash stock-based compensation expense (1)		518			36			1,075			1,033
Acquisition-related expenses of business combinations		—			343			—			609
ADJUSTED EBITDA		6,052			5,806			23,526			14,610

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

(*): 2017 has been restated following the final accounting of the ACTech business combination and the adjustment to the ACTech inventories valuation.

Segment P&L (Unaudited)


(in 000)	Materialise Software			Materialise Medical			Materialise Manufact- uring			Total segments			Unallocated			Consoli- dated
	€			€			€			€			€			€
For the three months ended December 31, 2018
Revenues		10,044			15,081			23,926			49,051			(37	)		49,014
Segment EBITDA		2,969			3,593			1,983			8,545			(3,011	)		5,534
Segment EBITDA %		29.6	%		23.8	%		8.3	%		17.4	%					11.3	%
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			1,377			8,154			(2,727	)		5,427
Segment EBITDA %		44.1	%		18.2	%		6.1	%		18.2	%					12.1	%

(*):	2017 has been restated following the final accounting of the ACTech business combination and the adjustment to the ACTech inventories valuation.


(in 000)	Materialise Software			Materialise Medical			Materialise Manufact- uring			Total segments			Unallocated			Consoli- dated
	€			€			€			€			€			€
For the twelve months ended December 31, 2018
Revenues		37,374			52,252			94,956			184,582			139			184,721
Segment EBITDA		11,536			10,252			10,785			32,573			(10,122	)		22,451
Segment EBITDA %		30.9	%		19.6	%		11.4	%		17.6	%					12.2	%
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			4,439			22,765			(9,797	)		12,968
Segment EBITDA %		38.9	%		10.3	%		7.0	%		16.0	%					9.1	%

(*):	2017 has been restated following the final accounting of the ACTech business combination and the adjustment to the ACTech inventories valuation.

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


	For the three months ended December 31						For the twelve months ended December 31
(in 000)	2018			2017*			2018			2017*
	€			€			€			€
Net profit (loss) for the period		525			1,067			3,027			(2,117	)
Income taxes		(348	)		(303	)		425			522
Finance cost		1,308			1,434			4,864			4,728
Finance income		(888	)		(1,078	)		(3,627	)		(3,210	)
Share in loss of joint venture		184			(127	)		475			469
Operating profit		781			993			5,164			392
Depreciation and amortization		4,753			4,434			17,287			12,576
Corporate research and development		444			490			1,913			2,017
Corporate headquarter costs		2,844			2,706			10,358			9,690
Other operating income (expense)		(277	)		(469	)		(2,149	)		(1,910	)
Segment EBITDA		8,545			8,154			32,573			22,765

(*):	2017 has been restated following the final accounting of the ACTech business combination and the adjustment to the ACTech inventories valuation.

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, 2019