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.

 

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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.

 

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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.

 

4


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.

 

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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.

 

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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  

 

7


     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.

 

8


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  

 

9


     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.

 

10


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.

 

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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.

 

12


(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.

 

13


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.

 

14


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

 

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