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 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):  ☐

 

 


EXHIBIT INDEX

 

Exhibit  

Description

99.1   Press Release dated August 6, 2019


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 6, 2019

Exhibit 99.1

Exhibit 99.1

Materialise Reports Second Quarter 2019 Results

LEUVEN, Belgium—(BUSINESS WIRE)— August 6, 2019 — Materialise NV (NASDAQ:MTLS), a leading provider of additive manufacturing and medical software and of sophisticated 3D printing services, today announced its financial results for the second quarter ended June 30, 2019.

Highlights – Second Quarter 2019

 

   

Total revenue increased 7.4% to 48,404 kEUR for the second quarter of 2019 from 45,076 kEUR for the second quarter of 2018.

   

Total deferred revenue from annual software sales and maintenance contracts increased by 2,218 kEUR to 24,824 kEUR from 22,606 kEUR at the end of 2018.

   

Adjusted EBITDA amounted to 5,059 kEUR for the second quarter of 2019, or an Adjusted EBITDA margin of 10.5%.

   

Net loss for the second quarter of 2019 was (297) kEUR, or (0.01) EUR per diluted share, compared to 369 kEUR, or 0.01 EUR per diluted share, for the same period last year.

Executive Chairman Peter Leys commented, “In spite of a macro-economic environment that continues to be challenging, Materialise reported another quarter of top-line growth. This was mainly driven by Materialise Medical, which continued to perform strongly with solid revenue growth and EBITDA performance, and also by Materialise Manufacturing, which realized a double-digit EBITDA margin and grew its revenues for the third consecutive quarter. This quarter, the contribution by Materialise Software to our revenue growth and Adjusted EBITDA margin was below our expectations as a number of sales were pushed out to the second half of the year. Our outlook for 2019 remains within our previous guidance range, with our results now including expected contributions from our August acquisition of a 75% stake in Engimplan. This investment, which will enable us to introduce the benefits of Materialise’s patient-specific 3D printing implants and expertise to the fast-growing Brazil market, is part of our strategy to accelerate our growing presence in the additive manufacturing ecosystem through carefully selected acquisitions and partnerships.”

Second Quarter 2019 Results

Total revenue for the second quarter of 2019 increased 7.4% to 48,404 kEUR compared to 45,076 kEUR for the second quarter of 2018. Adjusted EBITDA decreased to 5,059 kEUR from 5,219 kEUR. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) for the second quarter of 2019 was 10.5% compared to 11.6% in the second quarter of 2018.

Revenue from our Materialise Software segment increased 2.1% to 9,320 kEUR for the second quarter of 2019 from 9,131 kEUR for the same quarter last year. Segment EBITDA decreased to 2,055 kEUR from 2,859 kEUR while the segment EBITDA margin was 22.1% compared to 31.3% in the prior-year period.

Revenue from our Materialise Medical segment increased 17.3% to 14,546 kEUR for the second quarter of 2019 compared to 12,400 kEUR for the same period in 2018. Compared to the same quarter in 2018, revenues from medical devices and services grew 12.8%, and revenues from our medical software grew 28.0%. Segment EBITDA was 2,738 kEUR compared to 2,124 kEUR while the segment EBITDA margin increased from 17.1% to 18.8% for the second quarter of 2019.

Revenue from our Materialise Manufacturing segment increased 5.0% to 24,550 kEUR for the second quarter of 2019 from 23,387 kEUR for the second quarter of 2018. Segment EBITDA increased to 2,835 kEUR from 2,264 kEUR while the segment EBITDA margin increased to 11.5% from 9.7% for the second quarter of 2018.

Gross profit was 26,527 kEUR, or 54.8% of total revenue, for the second quarter of 2019 compared to 24,788 kEUR, or 55.0% of total revenue, for the second quarter of 2018.

Research and development (“R&D”), sales and marketing (“S&M”) and general and administrative (“G&A”) expenses increased, in the aggregate, 8.4% to 27,861 kEUR for the second quarter of 2019 from 25,699 kEUR for the second quarter of 2018.

Net other operating income decreased to 1,370 kEUR from 1,840 kEUR for the second quarter of 2018.

Operating result decreased to 36 kEUR from 928 kEUR for the same period in the prior year.

Net financial result was (190) kEUR compared to (376) kEUR for the prior-year period. The share in loss of joint venture amounted to (82) kEUR compared to (141) kEUR for the same period last year.

The second quarter of 2019 contained income tax expenses of (61) kEUR, compared to (42) kEUR in the second quarter of 2018.

As a result of the above, net loss for the second quarter of 2019 was (297) kEUR, compared to 369 kEUR for the same period in 2018. Total comprehensive income for the second quarter of 2019, which includes exchange differences on translation of foreign operations, was (727) kEUR compared to a gain of 422 kEUR for the same period in 2018.

At June 30, 2019, we had cash and equivalents of 108,865 kEUR compared to 115,506 kEUR at December 31, 2018. Gross debt amounted to 107,698


kEUR (including 5,050 kEUR lease liabilities from the new accounting standard IFRS 16), as compared to 106,037 kEUR at December 31, 2018. Cash flow from operating activities for the second quarter of 2019 was 4,759 kEUR compared to 4,831 kEUR for the same period in 2018. Total capital expenditures for the quarter amounted to 3,052 kEUR. This amount includes 366 kEUR of capitalized R&D expenditures from medical programs.

Net shareholders’ equity at June 30, 2019 was 135,781 kEUR compared to 135,989 kEUR at December 31, 2018.

Note on Comparability

As a result of the implementation of the new accounting standard IFRS 16, we have recognized additional lease assets and liabilities in the amount of 4,998 kEUR at January 1, 2019. At the end of the second quarter of 2019, the total commitment of lease assets and liabilities amounted to 5,050 kEUR. Our Adjusted EBITDA for the second quarter of 2019 was affected positively by the new standard as a result of the rental payments decrease of 644 kEUR; however, our operating profit was impacted by only 52 kEUR as depreciation expenses increased by 593 kEUR.

Subsequent Events

On July 31, 2019 Materialise agreed to acquire a controlling stake in Engimplan Holdings Ltda., a Brazil-based manufacturer of orthopedic and cranio-maxillofacial (CMF) implants and instruments. The expertise and in-house infrastructure of Engimplan are complementary to our existing medical devices business and will position us to expand our market position in Brazil while further building on the existing business of Engimplan. Materialise will acquire a mix of existing and new shares bringing its total shareholding to 75%, with the founding shareholders retaining the remaining 25%. All shares will be fully paid for in cash at the closing, which is expected to take place during the week of August 5, 2019 .

On July 1, 2019, we drew the second tranche of 25,000 kEUR from our 35,000 kEUR credit facility with the European Investment Bank. This tranche has an interest rate of 2.719% and principal repayment dates between 2022 and 2027.

2019 Guidance

The Company’s outlook for fiscal 2019 remains within our previous guidance range, and management continues to expect to report consolidated revenue between 196,000 - 204,000 kEUR, Adjusted EBITDA between 29,000 - 33,000 kEUR, and an increase in deferred revenue generated from annual licenses and maintenance of between 2,000 - 4,000 kEUR as compared to 2018. We expect a stronger financial performance during the second half of 2019, in part because of the expected revenue and EBITDA contribution from our pending acquisition of a 75% stake in Engimplan. We do expect Adjusted EBITDA for 2019 to be closer to the lower end of the range.

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 1.1380, the reference rate of the European Central Bank on June 30, 2019.

Conference Call and Webcast

Materialise will hold a conference call and simultaneous webcast to discuss its financial results for the second quarter of 2019 on Tuesday, August 6, 2019, at 8:30 a.m. ET/2:30 p.m. CET. Company participants on the call will include Wilfried Vancraen, Founder and Chief Executive Officer; Peter Leys, Executive Chairman; and Johan Albrecht, Chief Financial Officer. A question-and-answer session will follow management’s remarks.

 

   

To access the conference call, please dial 844-469-2530 (U.S.) or 765-507-2679 (international), passcode #6466129.


The conference call will also be broadcast live over the Internet with an accompanying slide presentation, which can be accessed on the company’s website at http://investors.materialise.com. A webcast of the conference call will be archived on the company’s website for one year.

About Materialise

Materialise incorporates nearly 30 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. For additional information, please visit: www.materialise.com.

Cautionary Statement on Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, our intentions, beliefs, assumptions, projections, outlook, analyses or current expectations, plans, objectives, strategies and prospects, both financial and business, including statements concerning, among other things, current estimates of fiscal 2019 revenues, deferred revenue from annual licenses and maintenance and Adjusted EBITDA, the timing, benefits and impact on our fiscal 2019 results of the Engimplan investment, results of operations, cash needs, capital expenditures, expenses, financial condition, liquidity, prospects, growth and strategies (including our strategic priorities for 2019), and the trends and competition that may affect the markets, industry or us. Such statements are subject to known and unknown uncertainties and risks. When used in this press release, the words “estimate,” “expect,” “anticipate,” “project,” “plan,” “intend,” “believe,” “forecast,” “will,” “may,” “could,” “might,” “aim,” “should,” and variations of such words or similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon the expectations of management under current assumptions at the time of this press release. These expectations, beliefs and projections are expressed in good faith and the company believes there is a reasonable basis for them. However, the company cannot offer any assurance that our expectations, beliefs and projections will actually be achieved. By their nature, forward-looking statements involve risks and uncertainties because they relate to events, competitive dynamics and industry change, and depend on economic circumstances that may or may not occur in the future or may occur on longer or shorter timelines than anticipated. We caution you that forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. All of the forward-looking statements are subject to risks and uncertainties that may cause the company’s actual results to differ materially from our expectations, including risk factors described in the company’s annual report on Form 20-F filed with the U.S. Securities and Exchange Commission. There are a number of risks and uncertainties that could cause the company’s actual results to differ materially from the forward-looking statements contained in this press release.

The company is providing this information as of the date of this press release and does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise, unless it has obligations under the federal securities laws to update and disclose material developments related to previously disclosed information.


 

Consolidated income statements (Unaudited)

 

    

For the three months ended

June 30,

           

For the six

months ended

June 30,

 
In 000    2019               2019               2018        2019               2018    
     U.S.$             €                €             €                €       

Revenue

     55,084           48,404           45,076        95,519           88,975  

Cost of sales

     (24,896)           (21,877)           (20,288)        (43,413)           (40,232)  

Gross profit

     30,188           26,527           24,788        52,106           48,743  

Gross profit as % of revenue

     54,8%           54,8%           55,0%        54,6%           54.8%  

Research and development expenses

     (6,941)           (6,100)           (5,831)        (11,786)           (11,446)  

Sales and marketing expenses

     (14,991)           (13,173)           (11,843)        (25,252)           (22,441)  

General and administrative expenses

     (9,773)           (8,588)           (8,026)        (16,184)           (15,187)  

Net other operating income (expenses)

     1,559           1,370           1,840        2,627           2,390  

Operating (loss) profit

     40           36           928        1,511           2,059  

Financial expenses

     (356)           (313)           (404)        (1,509)           (2,516)  

Financial income

     140           123           29        728           1,431  

Share in loss of joint venture

     (93)           (82)           (141)        (205)           (244)  

(Loss) profit before taxes

     (268)           (236)           411        524           729  

Income taxes

     (69)           (61)           (42)        (1,126)           (543)  

Net (loss) profit for the period

     (338)           (297)           369        (601)           186  

Net (loss) profit attributable to:

                       

The owners of the parent

     (338)           (297)           369        (601)           186  

Non-controlling interest

                                           

Earnings per share attributable to owners of the parent

                       

Basic

     (0.01)           (0.01)           0.01        (0.01)           0.00  

Diluted

     (0.01)           (0.01)           0.01        (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    
June 30,
   

    

   For the six
months ended
June 30,
 
In 000        2019                    2019                    2018              2019                    2018      
     U.S.$                                        

Net profit (loss) for the period

                   (338)                  (297)                          369                    (602)                      186  

Other comprehensive income

                    

Exchange difference on translation of foreign operations

         (489)              (430)          53        157          (42)  

Other comprehensive income (loss), net of taxes

         (489)              (430)          53        157          (42)  

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

         (827)              (727)          422        (445)          144  

Total comprehensive income (loss) attributable to:

                    

The owners of the parent

         (827)              (727)          422        (445)          144  

Non-controlling interest

                                        


 

Consolidated statement of financial position (Unaudited)

 

       As of June  
30,
           As of
  December  
31,
 

In 000

     2019                     2018    
     €              €    

Assets

       

Non-current assets

       

Goodwill

     17,491          17,491  

Intangible assets

     25,828          26,326  

Property, plant & equipment

     97,159          92,537  

Investments in joint ventures

       

Deferred tax assets

     260          315  

Other non-current assets

     10,080          7,237  

Total non-current assets

     150,819          143,906  

Current assets

       

Inventories

     10,031          9,986  

Trade receivables

     40,073          36,891  

Other current assets

     7,746          6,936  

Cash and cash equivalents

     108,865          115,506  

Total current assets

     166,715          169,319  

Total assets

     317,534          313,225  


 

 

       As of June  
30,
           As of
  December  
31,
 

In 000

     2019                     2018    
     €              €    

Equity and liabilities

       

Equity

       

Share capital

     3,050          3,050  

Share premium

     136,869          136,637  

Consolidated reserves

     (2,447)          (1,848)  

Other comprehensive income

     (1,692)          (1,850)  

Equity attributable to the owners of the parent

     135,781          135,989  

Non-controlling interest

               

Total equity

     135,781          135,989  

Non-current liabilities

       

Loans & borrowings

     91,884          92,440  

Deferred tax liabilities

     5,979          6,226  

Deferred income

     5,282          4,587  

Other non-current liabilities

     886          868  

Total non-current liabilities

     104,031          104,121  

Current liabilities

       

Loans & borrowings

     15,814          13,598  

Trade payables

     17,902          18,667  

Tax payables

     2,358          2,313  

Deferred income

     24,776          23,195  

Other current liabilities

     16,873          15,342  

Total current liabilities

     77,722          73,115  

Total equity and liabilities

     317,534          313,225  


 

Consolidated statement of cash flows (Unaudited)

 

     For the six months ended June 30,  
  in 000    2019          2018      
     €               €            

Operating activities

     

Net (loss) profit for the period

     (602)        186  

Non-cash and operational adjustments

     

Depreciation of property, plant & equipment

     6,950        5,517  

Amortization of intangible assets

     2,229        2,498  

Share-based payment expense

     197        366  

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

     134        (90)  

Movement in provisions

     20        -  

Movement reserve for bad debt

     (116)        68  

Financial income

     (171)        (58)  

Financial expense

     1,232        1,032  

Impact of foreign currencies

     (288)        111  

Share in loss of a joint venture (equity method)

     205        244  

(Deferred) income taxes

     1,126        543  

Other

     (196)        (164)  

Working capital adjustment & income tax paid

     

Increase in trade receivables and other receivables

     (4,466)        (4,147)  

Decrease (increase) in inventories

     (43)        774  

Increase in trade payables and other payables

     3,737        5,230  

Income tax paid

     (1,108)        (1,555)  

Net cash flow from operating activities

     8,840        11,031  


 

 

     For the six months ended June 30,  
  in 000    2019          2018      
     €               €            

Investing activities

     

Purchase of property, plant & equipment

     (4,827)        (8,588)  

Purchase of intangible assets

     (1,457)        (583)  

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

     (3)        436  

Convertible loan to third party

     (2,500)         

Investments in joint-ventures

             

Interest received

     -        (2)  

Net cash flow used in investing activities

     (8,787)        (8,737)  

Financing activities

     

Proceeds from loans & borrowings

     3,000        18,770  

Repayment of loans & borrowings

     (5,818)        (14,074)  

Repayment of finance leases

     (2,765)        (1,366)  

Capital increase

            207  

Interest paid

     (934)        (814)  

Other financial income (expense)

     (292)        (130)  

Net cash flow from (used in) financing activities

     (6,809)        2,593  

Net increase of cash & cash equivalents

     (6,756)        4,887  

Cash & cash equivalents at beginning of the year

     115,506        43,175  

Exchange rate differences on cash & cash equivalents

     115        657  

Cash & cash equivalents at end of the year

     108,865        48,719  


 

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

 

    

For the three months

ended June 30,

   

    

  

For the six months

ended June 30,

 

In 000

     2019             2018          2019             2018    
     €               €        €               €    
                                           

Net profit (loss) for the period

             (297)                   369                (601)                   186  
                 

Income taxes

     61           42        1,126           543  

Financial expenses

     313           404        1,509           2,516  

Financial income

     (123)           (29)        (728)           (1,431)  

Share in loss of joint venture

     82           141        205           244  

Depreciation and amortization

     4,649           4,009        9,178           8,538  
                 

EBITDA

     4,685           4.940        10,691           10,074  

Non-cash stock-based compensation expense (1)

     (374)           (276)        (196)           (366)  

Acquisition-related expenses business combinations

                                 
                 

ADJUSTED EBITDA

     5,059           5,216        10,888           10,440  

(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
Manu-
facturing
  Total
segments
  Unallocated
(1)(2)
  Consoli-
Dated
              

For the three months ended June 30, 2019

            

Revenues

   9,320   14,546   24,550   48,415   (11)   48,404

Segment EBITDA

   2,055   2,738   2,835   7,629   (2,571)   5,059

Segment EBITDA %

   22.1%   18.8%   11.5%   15.8%    

 

For the three months ended June 30, 2018

            

Revenues

   9,131   12,400   23,387   44,918   158   45,076

Segment EBITDA

   2,859   2,124   2,264   7,247   (2,031)   5,216

Segment EBITDA %

   31.3%   17.1%   9.7%   16.1%    
In 000    Materialise
Software
  Materialise
Medical
  Materialise
Manu-
facturing
  Total
segments
  Unallocated
(1)(2)
  Consoli-
Dated
              

For the six months ended June 30, 2019

            

Revenues

   18,670   28,112   48,734   95,515   4   95,519

Segment EBITDA

   5,016   4,511   6,530   16,058   (5,170)   10,888

Segment EBITDA %

   22.1%   16.0%   13.4%   16.8%    

For the six months ended June 30, 2018

            

Revenues

   17,457   24,346   47,019   88,822   153   88,975

Segment EBITDA

   5,183   4,184   5,397   14,764   (4,324)   10,440

Segment EBITDA %

   29.7%   17.2%   11.5%   16.6%    

 

  (1)

Unallocated Revenues consist of occasional one-off sales in 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).

  (2)

Unallocated Segment EBITDA consists of the added non-cash stock-based compensation expenses that are included in Adjusted EBITDA.


 

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

 

    

For the three months

ended June 30,

   

    

  

For the six months

ended June 30,

 
In 000    2019               2018        2019               2018    
     €               €        €               €    

Net profit (loss) for the period

         (297)                                369            (601)                            186  

Income taxes

     61           42        1,126           543  

Financial cost

     313           404        1,509           2,516  

Financial income

     (123)           (29)        (728)           (1,431)  

Share in loss of joint venture

     82           141        205           244  

Operating profit

     36           928        1,511           2,059  

Depreciation and amortization

     4,649           4,009        9,178           8,015  

Corporate research and development

     502           527        1,014           1,044  

Corporate headquarter costs

     3,108           3,235        5,777           5,700  

Other operating income (expense)

     (501)           (1,001)        (1,107)           (1,373)  

Segment EBITDA

     7,629           7,247        16,058           14,764