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 April 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).

 

 


First Quarter 2019 Financial Results

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

First Quarter 2019 Results

Total revenue for the first quarter of 2019 increased 7.3% to 47,115 kEUR compared to 43,899 kEUR for the first quarter of 2018.

Revenue from our Materialise Software segment increased 12.3% to 9,350 kEUR for the first quarter of 2019 from 8,326 kEUR for the same quarter last year.

Revenue from our Materialise Medical segment increased 13.6% to 13,566 kEUR for the first quarter of 2019 compared to 11,946 kEUR for the same period in 2018. Compared to the same quarter in 2018, revenues from medical devices and services grew 15.8%, and revenues from our medical software grew 9.4%.

Revenue from our Materialise Manufacturing segment increased 2.3% to 24,184 kEUR for the first quarter of 2019 from 23,632 kEUR for the first quarter of 2018.

Gross profit was 25,579 kEUR, or 54.3% of total revenue, for the first quarter of 2019 compared to 23,955 kEUR, or 54.6% of total revenue, for the first quarter of 2018.

Research and development (“R&D”), sales and marketing (“S&M”) and general and administrative (“G&A”) expenses increased, in the aggregate, 8.5% to 25,361 kEUR for the first quarter of 2019 from 23,374 kEUR for the first quarter of 2018.

Net other operating income increased by 709 kEUR to 1,258 kEUR compared to 549 kEUR for the first quarter of 2018.

Operating result increased 30.6% to 1,476 kEUR from 1,130 kEUR for the same period in the prior year.

Net financial result was (592) kEUR compared to (710) kEUR for the prior-year period. The share in loss of joint venture amounted to (123) kEUR from (103) kEUR for the same period last year.

The first quarter of 2019 contained income tax expenses of (1,065) kEUR, compared to (500) kEUR in the first quarter of 2018. The decrease of 565 kEUR primarily reflects the change in deferred taxes from an income of 320 kEUR as at March 31, 2018 to an expense of 290 kEUR as at March 31, 2019.

As a result of the above, net loss for the first quarter of 2019 was (304) kEUR, compared to (183) kEUR for the same period in 2018. Total comprehensive income for the first quarter of 2019, which includes exchange differences on translation of foreign operations, was 284 kEUR compared to a loss of (278) kEUR for the same period in 2018.

Adjusted EBITDA increased to 5,829 kEUR from 5,224 kEUR. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) in the first quarter of 2019 was 12.4% compared to 11.9% in the first quarter of 2018.

Segment EBITDA from our Materialise Software segment increased to 2,961 kEUR from 2,324 kEUR while the segment EBITDA margin (the segment’s EBITDA divided by the segment’s revenue) was 31.7% compared to 27.9% in the prior-year period.

Segment EBITDA from our Materialise Medical segment was 1,773 kEUR compared to 2,060 kEUR while the segment EBITDA margin decreased to 13.1% from 17.2% in the first quarter of 2018.

Segment EBITDA from our Materialise Manufacturing segment increased to 3,695 kEUR from 3,133 kEUR while the segment EBITDA margin increased to 15.3% from 13.3% for the same quarter in 2018.

At March 31, 2019, we had cash and equivalents of 111,052 kEUR compared to 115,506 kEUR at December 31, 2018. Cash flow from operating activities for the first quarter of 2019 was 4,081 kEUR compared to 6,200 kEUR in 2018. As a result of the implementation of the new accounting standard IFRS 16, we have recognized additional lease assets and liabilities for an amount of 4,998 kEUR at January 1, 2019. Our Adjusted EBITDA for the first quarter of 2019 was affected positively by this new standard from the rental payments decrease of 596 kEUR, but our operating profit was not impacted as the depreciation expenses increased by the same amount.


Net shareholders’ equity at March 31, 2019 was 136,377 kEUR compared to 135,989 kEUR at December 31, 2018.

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 1.1235, the reference rate of the European Central Bank on March 29, 2019.

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
March 31,
            For the three
months ended
March 31,
 
In 000    2019      2019      2018             2019      2018  
     U.S.$                             
                                           

Revenue

     52,934        47,115        43,899           47,115        43,899  

Cost of sales

     (24,195)        (21,536)        (19,944)           (21,536)        (19,944)  

Gross profit

     28,739        25,579        23,955           25,579        23,955  

Gross profit as % of revenue

     54,3%        54,3%        54.6%           54,3%        54.6%  
                 

Research and development expenses

     (6,388)        (5,686)        (5,615)           (5,686)        (5,615)  

Sales and marketing expenses

     (13,571)        (12,079)        (10,599)           (12,079)        (10,599)  

General and administrative expenses

     (8,534)        (7,596)        (7,160)           (7,596)        (7,160)  

Net other operating income (expenses)

     1,412        1,258        549           1,258        549  

Operating (loss) profit

     1,658        1,476        1,130           1,476        1,130  
                 

Financial expenses

     (1,344)        (1,196)        (1,550)           (1,196)        (1,550)  

Financial income

     679        604        840           604        840  

Share in loss of joint venture

     (139)        (123)        (103)           (123)        (103)  

(Loss) profit before taxes

     854        761        317           761        317  
                 

Income taxes

     (1,196)        (1,065)        (500)           (1,065)        (500)  

Net (loss) profit for the period

     (342)        (304)        (183)           (304)        (183)  

Net (loss) profit attributable to:

                 

The owners of the parent

     (342)        (304)        (183)           (304)        (183)  

Non-controlling interest

                                     
                 

Earnings per share attributable to owners of the parent

 

              

Basic

     (0.01)        (0.01)        0.00           (0.01)        0.00  

Diluted

     (0.01)        (0.01)        0.00           (0.01)        0.00  
                 

Weighted average basic shares outstanding

     52,891        52,891        47,428           52,891        47,428  

Weighted average diluted shares outstanding

     52,891        52,891        47,428           52,891        47,428  


Consolidated statements of comprehensive income (Unaudited)

 

     For the three months  ended
March 31,
            For the three
months ended
March 31,
 
In 000        2019              2019              2018                     2019              2018      
     U.S.$                             
                                           

Net profit (loss) for the period

     (342)        (304)        (183)           (304)        (183)  

Other comprehensive income

                 

Exchange difference on translation of foreign operations

     661        588        (95)           588        (95)  

Other comprehensive income (loss), net of taxes

     661        588        (95)           588        (95)  

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

     319        284        (278)           284        (278)  

Total comprehensive income (loss) attributable to:

                 

The owners of the parent

     319        284        (278)           284        (278)  

Non-controlling interest

                                     


Consolidated statement of financial position (Unaudited)

 

     As of March
31,
     As of
December
31,
 
In 000    2019      2018  
           

Assets

     

Non-current assets

     

Goodwill

     17,680        17,491  

Intangible assets

     26,189        26,326  

Property, plant & equipment

     97,120        92,537  

Investments in joint ventures

     

Deferred tax assets

     257        315  

Other non-current assets

     9,388        7,237  

Total non-current assets

     150,634        143,906  

Current assets

     

Inventories

     11,203        9,986  

Trade receivables

     39,397        36,891  

Other current assets

     7,172        6,936  

Cash and cash equivalents

     111,052        115,506  

Total current assets

     168,824        169,319  

Total assets

     319,458        313,225  


     As of March
31,
     As of
December
31,
 
In 000    2019      2018  
           

Equity and liabilities

     

Equity

     

Share capital

     3,050        3,050  

Share premium

     136,741        136,637  

Consolidated reserves

     (2,152)        (1,848)  

Other comprehensive income

     (1,262)        (1,850)  

Equity attributable to the owners of the parent

     136,377        135,989  

Non-controlling interest

             

Total equity

     136,377        135,989  

Non-current liabilities

     

Loans & borrowings

     93,638        92,440  

Deferred tax liabilities

     6,484        6,226  

Deferred income

     4,813        4,587  

Other non-current liabilities

     585        868  

Total non-current liabilities

     105,520        104,121  

Current liabilities

     

Loans & borrowings

     15,517        13,598  

Trade payables

     17,128        18,667  

Tax payables

     2,730        2,313  

Deferred income

     26,476        23,195  

Other current liabilities

     15,710        15,342  

Total current liabilities

     77,561        73,115  

Total equity and liabilities

     319,458        313,225  


Consolidated statement of cash flows (Unaudited)

 

    For the three months ended March 31,
in 000     2019     2018
    €     €

Operating activities

         

Net (loss) profit for the period

    (304)     (183)

Non-cash and operational adjustments

         

Depreciation of property, plant & equipment

    3,429     2,700

Amortization of intangible assets

    1,101     1,305

Share-based payment expense

    (177)     89

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

    51     –

Movement in provisions

    14     (16)

Movement reserve for bad debt

    (136)     84

Financial income

    (60)     (667)

Financial expense

    583     1,067

Impact of foreign currencies

    83     310

Share in loss of a joint venture (equity method)

    124     103

(Deferred) income taxes

    1,065     501

Other

    35     (88)

Working capital adjustment & income tax paid

         

Increase in trade receivables and other receivables

    (2,393)     (4,372)

Decrease (increase) in inventories

    (1,200)     1,147

Increase in trade payables and other payables

    2,251     5,027

Income tax paid

    (385)     (807)

Net cash flow from operating activities

    4,081     6,200


    For the three months ended March 31,
in 000     2019     2018
    €     €

Investing activities

      

Purchase of property, plant & equipment

    (2,657)     (4,275)

Purchase of intangible assets

    (575)     (324)

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

    –     20

Convertible loan to third party

    (2,500)     –

Investments in joint-ventures

    –     –

Interest received

    53     14

Net cash flow used in investing activities

    (5,679)     (4,565)
      

Financing activities

      

Proceeds from loans & borrowings

    1,500     12,413

Repayment of loans & borrowings

    (2,543)     (11,388)

Repayment of finance leases

    (1,399)     (760)

Capital increase

    –     207

Interest paid

    (503)     (404)

Other financial income (expense)

    (110)     5

Net cash flow from (used in) financing activities

    (3,055)     73
         

Net increase of cash & cash equivalents

    (4,653)     1,708

Cash & cash equivalents at beginning of the year

    115,506     43,175

Exchange rate differences on cash & cash equivalents

    199     (186)

Cash & cash equivalents at end of the year

    111,052     44,697


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

 

     For the three months
ended March 31,
           For the three months
ended March 31,
 
In 000    2019     2018            2019      2018  
                          
                                  

Net profit (loss) for the period

     (304)       (183)          (304)        (183)  
            

Income taxes

     1,065       500          1,065        500  

Financial expenses

     1,196       1,550          1,196        1,550  

Financial income

     (604     (840        (604)        (840)  

Share in loss of joint venture

     123       103          123        103  

Depreciation and amortization

     4,530       4,006          4,530        4,006  
            

EBITDA

     6,006       5,136          6,006        5,136  
            

Non-cash stock-based compensation expense (1)

     (177     88          (177)        88  

Acquisition-related expenses business combinations

                            
            

ADJUSTED EBITDA

     5,829       5,224          5,829        5,224  

 

  (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 000    Materialise
Software
   Materialise
Medical
   Materialise
Manufact-
uring
   Total
segments
   Unallocated
(1)
  Consoli-
dated
    

 

  

 

  

 

  

 

  

 

 

 

For the three months ended March 31, 2019

                

Revenues

   9,350    13,566    24,184    47,100    15   47,115

Segment EBITDA

   2,961    1,773    3,695    8,429    (2,423)   6,006

Segment EBITDA %

 

   31.7%

 

   13.1%

 

   15.3%

 

   17.9%

 

     12.7%

 

For the three months ended March 31, 2018

                

Revenues

   8,326    11,946    23,632    43,904    (5)   43,899

Segment EBITDA

   2,324    2,060    3,133    7,517    (2,381)   5,136

Segment EBITDA %

   27.9%    17.2%    13.3%    17.1%      11.7%

(1) Unallocated Revenues consist of occasional one-off sales by our core competencies not allocated to any of our segments. Unallocated Segment EBITDA consists of corporate research and development, corporate headquarter costs and other operating income (expense).


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

 

         For the three months    
ended March 31,
                For the three months    
ended March 31,
 
In 000    2019      2018             2019      2018  
                            
                                    

Net profit (loss) for the period

     (304)        (183)           (304)        (183)  

Income taxes

     1,065        500           1,065        500  

Financial cost

     1,196        1,550           1,196        1,550  

Financial income

     (604)        (840)           (604)        (840)  

Share in loss of joint venture

     123        103           123        103  
              

Operating profit

     1,476        1,130           1,476        1,130  
              

Depreciation and amortization

     4,530        4,006           4,530        4,006  

Corporate research and development

     464        490           464        490  

Corporate headquarter costs

     2,565        2,263           2,565        2,263  

Other operating income (expense)

     (606)        (372)           (606)        (372)  
              

Segment EBITDA

     8,429        7,517           8,429        7,517  


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: April 30, 2019