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 August 2018

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).

 

 

 


Second Quarter 2018 Results

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

ACTech

On October 4, 2017, we acquired ACTech, a full-service manufacturer of complex metal parts. As described in more detail below, the acquired business has increased the scope of our Materialise Manufacturing segment’s operations and had a significant impact on our results of operations for the second quarter of 2018, resulting in increases to our revenues, operating expenses and net result, among other items.

Second Quarter 2018 Results

Total revenue for the second quarter of 2018 increased 34.1% (1.5% excluding ACTech) to 45,076 kEUR (34,113 kEUR excluding ACTech) compared to 33,612 kEUR for the second quarter of 2017. Total deferred revenue from annual software sales and maintenance contracts amounted to 21,142 kEUR at the end of the second quarter of 2018 compared to 18,723 kEUR at year end 2017.

Revenue from our Materialise Software segment increased 9.9% to 9,131 kEUR for the second quarter of 2018 from 8,305 kEUR for the same quarter last year.

Revenue from our Materialise Medical segment increased 16.5% to 12,400 kEUR for the second quarter of 2018 compared to 10,646 kEUR for the same period in 2017. Compared to the same quarter in 2017, revenue from our medical software decreased 5.2%. Including deferred revenues from software and maintenance fees, medical software sales increased 8.9%. Revenue from medical devices and services grew 28.8%.

Revenue from our Materialise Manufacturing segment increased 61.8% to 23,387 kEUR for the second quarter of 2018 from 14,455 kEUR for the second quarter of 2017. ACTech contributed revenue of 10,958 kEUR. Excluding ACTech, revenue decreased 14.0% to 12,429 kEUR.

Gross profit was 24,788 kEUR, or 55.0% of total revenue, for the second quarter of 2018. Excluding ACTech, gross profit was 21,189 kEUR, or 62.1% of total revenue, compared to 19,388 kEUR, or 57.7% of total revenue, for the second quarter of 2017.

Research and development (“R&D”), sales and marketing (“S&M”) and general and administrative (“G&A”) expenses increased, in the aggregate, 22.9% to 25,700 kEUR for the second quarter of 2018 from 20,911 kEUR for the second quarter of 2017. Excluding ACTech, operating expenses increased, in the aggregate, 10.5% to 23,096 kEUR. Excluding ACTech, R&D expenses increased from 5,131 kEUR to 5,830 kEUR while S&M expenses increased from 10,009 kEUR to 11,038 kEUR and G&A expenses increased from 5,771 kEUR to 6,228 kEUR.

Net other operating income increased by 613 kEUR to 1,841 kEUR compared to 1,228 kEUR for the second quarter of 2017. Excluding ACTech, net other operating income increased by 557 kEUR. Net other operating income consists primarily of withholding tax exemptions for qualifying researchers, development grants, partial funding of R&D projects, currency exchange results on purchase and sales transactions, and the depreciation of intangible assets from business combinations.

Operating result increased to 929 kEUR from (295) kEUR for the same period prior year, primarily as a result of the contribution by ACTech. Excluding ACTech, operating result amounted to (122) kEUR.

Net financial result was (376) kEUR compared to (427) kEUR for the prior-year period. The financial result included (414) kEUR net financial expenses related to ACTech. The share in loss of joint venture increased to (141) kEUR from (42) kEUR for the same period last year.

The second quarter of 2018 contained income tax expense of 43 kEUR, of which 206 kEUR was related to ACTech, compared to 191 kEUR in the second quarter of 2017.

As a result of the above, net profit for the second quarter of 2018 was 369 kEUR or ((62) kEUR excluding ACTech), compared to net loss of (955) KEUR for the same period in 2017. Total comprehensive profit for the second quarter of 2018, which includes exchange differences on translation of foreign operations, was 422 kEUR compared to a loss of (1,403) kEUR for the same period in 2017.

 

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Adjusted EBITDA (a non-IFRS financial measure defined below) increased to 5,216 kEUR from 2,732 kEUR primarily as a result of the contribution by ACTech. Excluding ACTech, Adjusted EBITDA increased to 3,245 kEUR. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) in the second quarter of 2018 was 11.6% (9.5% excluding ACTech) compared to 8.1% in the second quarter of 2017.

Our Materialise Software segment EBITDA amounted to 2,859 kEUR compared to 2,952 kEUR in the prior-year period, while the segment EBITDA margin (the segment’s EBITDA divided by the segment’s revenue) was 31.3% compared to 35.5% in the prior-year period.

Our Materialise Medical segment EBITDA was 2,124 kEUR compared to 758 kEUR while the segment EBITDA margin increased to 17.1% from 7.1% in the second quarter of 2017.

Our Materialise Manufacturing segment EBITDA increased to 2,264 kEUR from 1,241 kEUR while the segment EBITDA margin increased to 9.7% from 8.6% for the same quarter in 2017. ACTech contributed segment EBITDA of 1,971 kEUR, with a segment EBITDA margin of 18.0%. Excluding ACTech, segment EBITDA decreased to 293 kEUR.

As at June 30, 2018, we had cash and equivalents of 48,719 kEUR compared to 43,175 kEUR as at December 31, 2017. Cash flow from operating activities over the first six months of 2018 was 11,031 kEUR compared to 5,188 kEUR in the same period in 2017. Net shareholders’ equity as at June 30, 2018 was 77,053 kEUR compared to 77,515 kEUR as at December 31, 2017.

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 1.1658, the reference rate of the European Central Bank on June 30, 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. For additional information, please visit: www.materialise.com.

 

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Consolidated income statement (Unaudited)

 

     For the three months ended
June 30,
    For the six months
ended June 30,
 
(in 000, except per share amounts)    2018     2018     2017     2018     2017  
     U.S.$                  

Revenue

     52,550       45,076       33,612       88,975       65,533  

Cost of sales

     (23,652     (20,288     (14,224     (40,232     (27,668

Gross profit

     28,898       24,788       19,388       48,743       37,865  

Gross profit as % of revenue

     55.0     55.0     57.7     54.8     57.8

Research and development expenses

     (6,798     (5,831     (5,131     (11,446     (9,723

Sales and marketing expenses

     (13,805     (11,842     (10,009     (22,441     (19,617

General and administrative expenses

     (9,358     (8,027     (5,771     (15,187     (11,150

Net other operating income (expenses)

     2,146       1,841       1,228       2,390       2,246  

Operating (loss) profit

     1,083       929       (295     2,059       (379

Financial expenses

     (1,127     (967     (1,317     (2,517     (2,236

Financial income

     689       591       890       1,431       1,667  

Share in loss of joint venture

     (164     (141     (42     (244     (431

(Loss) profit before taxes

     481       412       (764     729       (1,379

Income taxes

     (50     (43     (191     (543     (392

Net (loss) profit for the period

     431       369       (955     186       (1,771

Net (loss) profit attributable to:

          

The owners of the parent

     431       369       (955     186       (1,771

Non-controlling interest

     —         —         —         —         —    

Earnings per share attributable to owners of the parent

          

Basic

     0.01       0.01       (0.02     0.00       (0.04

Diluted

     0.01       0.01       (0.02     0.00       (0.04

Weighted average basic shares outstanding

     47,428       47,428       47,325       47,378       47,325  

Weighted average diluted shares outstanding

     48,131       48,131       47,325       48,106       47,325  

 

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Consolidated statements of comprehensive income (Unaudited)

 

     For the three months
ended June 30,
    For the six
months ended
June 30,
 
(in 000)    2018      2018      2017     2018     2017  
     U.S.$                    

Net profit (loss) for the period

     431        369        (955     186       (1,771

Other comprehensive income

            

Exchange difference on translation of foreign operations

     62        53        (448     (42     (326

Other comprehensive income (loss), net of taxes

     62        53        (448     (42     (326

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

     493        422        (1,403     144       (2,097

Total comprehensive income (loss) attributable to:

            

The owners of the parent

     493        422        (1,403     144       (2,097

Non-controlling interest

     —          —          —         —         —    

 

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Consolidated statement of financial position (Unaudited)

 

     As of
June 30,
     As of
December 31,
 
(in 000)    2018      2017  
           

Assets

     

Non-current assets

     

Goodwill

     18,416        18,447  

Intangible assets

     27,058        28,646  

Property, plant & equipment

     89,011        86,881  

Investments in joint ventures

     —          31  

Deferred tax assets

     288        304  

Other non-current assets

     4,062        3,667  

Total non-current assets

     138,835        137,976  

Current assets

     

Inventories

     10,794        11,594  

Trade receivables

     38,408        35,582  

Other current assets

     10,213        9,212  

Cash and cash equivalents

     48,719        43,175  

Total current assets

     108,134        99,563  

Total assets

     246,969        237,539  

 

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     As of
June 30,
    As of
December 31,
 
(in 000)    2018     2017  
          

Equity and liabilities

    

Equity

    

Share capital

     2,735       2,729  

Share premium

     80,396       79,839  

Consolidated reserves

     (4,233     (3,250

Other comprehensive income

     (1,845     (1,803

Equity attributable to the owners of the parent

     77,053       77,515  

Non-controlling interest

     —         —    

Total equity

     77,053       77,515  

Non-current liabilities

    

Loans & borrowings

     85,700       81,788  

Deferred tax liabilities

     6,603       7,006  

Deferred income

     6,892       5,040  

Other non-current liabilities

     1,692       1,904  

Total non-current liabilities

     100,887       95,738  

Current liabilities

    

Loans & borrowings

     12,519       12,769  

Trade payables

     16,437       15,670  

Tax payables

     3,288       3,560  

Deferred income

     22,309       18,791  

Other current liabilities

     14,476       13,496  

Total current liabilities

     69,029       64,286  

Total equity and liabilities

     246,969       237,539  

 

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Consolidated statement of cash flows (Unaudited)

 

     For the six
months ended
June 30,
 
(in 000)    2018     2017  
          

Operating activities

    

Net (loss) profit for the period

     186       (1,771

Non-cash and operational adjustments

    

Depreciation of property, plant & equipment

     5,517       3,954  

Amortization of intangible assets

     2,498       1,269  

Share-based payment expense

     366       700  

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

     (90     28  

Movement in provisions

     —         14  

Movement reserve for bad debt

     68       139  

Financial income

     (58     (318

Financial expense

     1,032       585  

Impact of foreign currencies

     111       302  

Share in loss of a joint venture (equity method)

     244       431  

Income taxes and deferred taxes

     543       392  

Other

     (92     (58

Working capital adjustment & income tax paid

    

Increase in trade receivables and other receivables

     (4,147     (3,580

Decrease (increase) in inventories

     774       (509

Increase in trade payables and other payables

     5,634       4,207  

Income tax paid

     (1,555     (597

Net cash flow from operating activities

     11,031       5,188  

 

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     For the six months
ended June 30,
 
(in 000)    2018     2017  
          

Investing activities

    

Purchase of property, plant & equipment

     (8,588     (15,770

Purchase of intangible assets

     (583     (1,027

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

     486       104  

Available for sale investments

     (50     —    

Investments in joint-ventures

     —         (500

Interest received

     (2     241  

Net cash flow used in investing activities

     (8,737     (16,952

Financing activities

    

Proceeds from loans & borrowings

     18,770       14,203  

Repayment of loans & borrowings

     (14,074     (1,634

Repayment of finance leases

     (1,366     (1,405

Direct attributable expense capital increase

     207       —    

Interest paid

     (814     (302

Other financial income (expense)

     (130     (154

Net cash flow from (used in) financing activities

     2,593       10,708  

Net increase of cash & cash equivalents

     4,887       (1,056

Cash & cash equivalents at beginning of the year

     43,175       55,912  

Exchange rate differences on cash & cash equivalents

     657       (1,024

Cash & cash equivalents at end of the year

     48,719       53,832  

 

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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)    2018     2017     2018     2017  
                  

Net profit (loss) for the period

     369       (955     186       (1,771

Income taxes

     43       191       543       392  

Financial expenses

     967       1,317       2,517       2,236  

Financial income

     (591     (890     (1,431     (1,667

Share in loss of joint venture

     141       42       244       431  

Depreciation and amortization

     4,010       2,656       8,015       5,224  

EBITDA

     4,939       2,361       10,074       4,845  

Non-cash stock-based compensation expense (1)

     277       371       366       700  

Acquisition-related expenses of business combinations (2)

     —         —         —         —    

ADJUSTED EBITDA

     5,216       2,732       10,440       5,545  
  (1)

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

  (2)

During the periods presented, we did not incur any fees or costs in connection with acquisitions.

 

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Segment P&L (Unaudited)

 

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

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       (4,690     10,074  

Segment EBITDA %

     29.7     17.2     11.5     16.6       11.3

For the six months ended June 30, 2017

            

Revenues

     16,880       20,578       27,862       65,320       213       65,533  

Segment EBITDA

     5,945       1,072       2,563       9,580       (4,735     4,845  

Segment EBITDA %

     35.2     5.2     9.2     14.7       7.4

 

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

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       (2,308     4,939  

Segment EBITDA %

     31.3     17.1     9.7     16.1       11.0

For the three months ended June 30, 2017

            

Revenues

     8,305       10,646       14,455       33,406       206       33,612  

Segment EBITDA

     2,952       758       1,241       4,951       (2,590     2,361  

Segment EBITDA %

     35.5     7.1     8.6     14.8       7.0
  (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 net other operating income (expense).

 

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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)    2018     2017     2018     2017  
                  

Net profit (loss) for the period

     369       (955     186       (1,771

Income taxes

     43       191       543       392  

Financial expenses

     967       1,317       2,517       2,236  

Financial income

     (591     (890     (1,431     (1,667

Share in loss of joint venture

     141       42       244       431  

Operating profit

     929       (295     2,059       (379

Depreciation and amortization

     4,010       2,656       8,015       5,224  

Corporate research and development

     496       516       986       1,025  

Corporate headquarter costs

     2,813       2,464       5,077       4,537  

Net other operating income (expense)

     (1,001     (390     (1,373     (827

Segment EBITDA

     7,247       4,951       14,764       9,580  

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

MATERIALISE NV
By:   /s/ Wilfried Vancraen
Name:   Wilfried Vancraen
Title:   Chief Executive Officer

Date: August 9, 2018

 

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