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 November 2016

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).

 

 

 


Third Quarter 2016 Financial Results

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

Third Quarter 2016 Results

Total revenue for the third quarter of 2016 increased by 11.0% to 28,736 kEUR compared to 25,883 kEUR for the third quarter of 2015, with gains in all three of our segments, particularly Materialise Software.

Revenue from our Materialise Software segment, which offers a proprietary software backbone that enables and enhances the functionality of 3D printers and 3D printing operations worldwide, increased by 21.1% to 7,632 kEUR for the third quarter of 2016 from 6,303 kEUR for the same quarter last year, driven by the growth of OEM sales and recurring license revenue.

Revenue from our Materialise Medical segment, which offers a unique platform consisting of medical planning and design software, clinical engineering services and patient specific devices, increased by 4.5% to 9,537 kEUR for the third quarter of 2016 compared to 9,123 kEUR for the same period in 2015. The increase was driven by direct sales of our complex surgery solutions, which increased by 28.0% from the same period in 2015. Sales from our collaborated medical device business, and our medical software sales decreased by 2.2% and 1.9%, respectively, compared to the same quarter in 2015.

Revenue from our Materialise Manufacturing segment, which offers an integrated suite of 3D printing and engineering services to industrial and commercial customers, increased 10.6% to 11,567 kEUR for the third quarter of 2016 from 10,457 kEUR for the third quarter of 2015, as a result of increased end part manufacturing.

Gross profit was 16,937 kEUR, or 58.9% of total revenue, for the third quarter of 2016 compared to 14,702 kEUR, or 56.8% of total revenue, for the third quarter of 2015. The increase was primarily a result of the improvement in the gross margin of Materialise Manufacturing.

Research and development (“R&D”), sales and marketing (“S&M”) and general and administrative (“G&A”) expenses increased, in the aggregate, by 4.6% to 17,974 kEUR for the third quarter of 2016 from 17,179 kEUR for the third quarter of 2015. R&D expenses decreased slightly from 4,566 kEUR to 4,389 kEUR while S&M expenses declined slightly from 8,657 kEUR to 8,299 kEUR. G&A expenses increased from 3,956 kEUR to 5,286 kEUR. As in the first two quarters of 2016, these changes compared to last year primarily reflected the managerial structure and support we have implemented within our S&M and R&D groups to support their significant growth since our initial public offering (“IPO”). A number of employees with mixed roles within these groups have evolved into more managerial/administrative roles, and their cost as well as certain other expenses are now categorized into G&A.

Net other operating income decreased by 274 kEUR to 1,369 kEUR, compared to 1,643 kEUR for the third quarter of 2015. Net other operating income consists primarily of withholding tax exemptions for qualifying researchers, development grants, partial funding of R&D projects and currency exchange results on purchase and sales transactions.

Net financial result was (124) kEUR, compared to 151 kEUR for the prior-year period, reflecting smaller variances in the currency exchange rates, primarily on the portion of the company’s IPO proceeds held in U.S. dollars versus the euro.

Net loss for the third quarter of 2016 was (52) kEUR, compared to a net loss of (1,104) kEUR for the same period in the prior year. The improvement of 1,052 kEUR reflected an increase of 1,166 kEUR in operating profit, a decrease of 275 kEUR in the financial result, and an improvement of 105 kEUR in income tax income. Total comprehensive loss for the third quarter of 2016, which reflects exchange differences on translation of foreign operations, was (511) kEUR compared to (1,821) kEUR for the same period in the prior year.

Adjusted EBITDA (a non-IFRS financial measure defined below) increased from 1,175 kEUR to 2,833 kEUR, as a result of the combination of continued revenue growth, an improvement in our gross margins and a modest increase in operational expenses. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) in the third quarter was 9.9% compared to 4.5% in the third quarter of last year.


Our Materialise Software segment’s EBITDA rose to 2,814 kEUR from 2,157 kEUR while the segment EBITDA margin (the segment’s EBITDA divided by the segment’s revenue) was 36.9% compared to 34.2% in the prior-year period.

Our Materialise Medical segment’s EBITDA was approximately flat at 754 kEUR compared 763 kEUR while the segment EBITDA margin decreased to 7.9% from 8.4% in the third quarter of 2015.

Our Materialise Manufacturing segment’s EBITDA rose to 1,723 kEUR from 799 kEUR, including 460 kEUR related to the updated accounting valuation of resin materials stock as result of steady efficiency improvements. The segment EBITDA margin increased to 14.9% from 7.6% for the 2015 quarter. Excluding our growth businesses i.materialise and RapidFit, the segment EBITDA margin for the third quarter was 21.8% compared to 17.1% for the same quarter of the prior year.

At September 30, 2016, we had cash and equivalents of 50,490 kEUR compared to 50,726 kEUR at December 31, 2015. Cash flow from operating activities in the third quarter of 2016 was (1,466) kEUR, compared to 268 kEUR in the same period last year.

Net shareholders’ equity at September 30, 2016 was 78,098 kEUR, compared to 82,955 kEUR at December 31, 2015.

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 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 press release 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 press release were made at a rate of EUR 1.00 to USD 1.1161, the 12:00 noon ET buying rate of the Federal Reserve Bank of New York for the euro on September 30, 2016.

About Materialise

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


Consolidated income statements (Unaudited)

 

(in thousands, except EPS)    For the three months ended
30 September
    For the nine month
period ended
30 September
 
     2016     2016     2015     2016     2015  
     U.S.$     euros     euros     euros     euros  

Revenue

     32,072        28,736        25,883        83,000        74,003   

Cost of sales

     (13,169     (11,799     (11,181     (33,848     (31,507
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     18,903        16,937        14,702        49,152        42,496   
       58.9     56.8     59.2     57.4

Research and development expenses

     (4,899     (4,389     (4,566     (13,521     (13,444

Sales and marketing expenses

     (9,263     (8,299     (8,657     (26,647     (27,492

General and administrative expenses

     (5,900     (5,286     (3,956     (15,225     (11,278

Other operating income

     1,528        1,369        1,643        4,433        4,897   

Other operating expenses

     —         —         —         —      
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

     369        332        (834     (1,808     (4,821

Financial expenses

     (203     (182     (373     (1,688     (2,108

Financial income

     65        58        524        1,037        2,793   

Share in loss of joint venture

     (77     (69     (125     (368     (248
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit (loss) before taxes

     154        139        (808     (2,827     (4,384

Income taxes

     (213     (191     (296     (812     (621
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net profit (loss)

     (59     (52     (1,104     (3,639     (5,005
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net profit (loss) attributable to:

          

The owners of the parent

     (59     (52     (1,104     (3,639     (4,952

Non-controlling interest

     —         —         —         —         (53

Earnings per share attributable to ordinary owners of the parent

          

Basic

     (0.00     (0.00     (0.02     (0.08     (0.10

Diluted

     (0.00     (0.00     (0.02     (0.08     (0.10

Weighted average basic

     47,325        47,325        47,227        47,325        47,208   

Weighted average with effect dilution

     47,325        47,325        47,227        47,325        47,208   


Consolidated statements of comprehensive income (Unaudited)

 

(in thousands, except EPS)                               
     For the three months ended
30 September
    For the nine month
period ended
30 September
 
     2016     2016     2015     2016     2015  
     U.S.$     euros     euros     euros     euros  

Net profit (loss) for the period

     (59     (52     (1,104     (3,639     (5,005
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss)

          

Exchange differences on translation of foreign operations

     (512     (459     (717     (1,898     759   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss), net of taxes

     (512     (459     (717     (1,898     759   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     (571     (511     (1,821     (5,537     (4,246
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income (loss) attributable to:

          

The owners of the parent

     (571     (511     (1,821     (5,537     (4,193

Non-controlling interest

     —         —         —         —         (53


Consolidated statements of financial position (Unaudited)

 

     30 September     31 December  
(in thousand euros)    2016     2015  

Assets

    

Non-current assets

    

Goodwill

     8,850        9,664   

Intangible assets

     8,482        9,657   

Property, plant & equipment

     42,124        38,400   

Investments in joint ventures

     650        1,018   

Deferred tax assets

     417        1,092   

Other financial assets

     411        356   
  

 

 

   

 

 

 

Total non-current assets

     60,934        60,187   

Current assets

    

Inventory

     6,215        5,387   

Trade receivables

     23,143        22,843   

Held to maturity investments

     —         —    

Other current assets

     6,744        4,993   

Cash and cash equivalents

     50,490        50,726   
  

 

 

   

 

 

 

Total current assets

     86,592        83,949   
  

 

 

   

 

 

 

Total assets

     147,526        144,136   
  

 

 

   

 

 

 

Equity and liabilities

    

Equity

    

Share capital

     2,729        2,729   

Share premium

     78,770        78,098   

Consolidated reserves

     (2,224 )     1,407   

Treasury shares

     —         —    

Other comprehensive income

     (1,177 )     721   
  

 

 

   

 

 

 

Equity attributable to the owners of the parent

     78,098        82,955   

Non-controlling interest

     —         —    
  

 

 

   

 

 

 

Total equity

     78,098        82,955   

Non-current liabilities

    

Loans & borrowings

     20,682        16,607   

Deferred tax liabilities

     1,284        2,068   

Deferred income

     —         92   

Other non-current liabilities

     2,374        2,244   
  

 

 

   

 

 

 

Total non-current liabilities

     24,340        21,011   

Current liabilities

    

Loans & borrowings

     5,734        4,482   

Trade payables

     9,944        9,712   

Tax payables

     489        255   

Deferred income

     17,963        16,509   

Other current liabilities

     10,958        9,212   
  

 

 

   

 

 

 

Total current liabilities

     45,088        40,170   
  

 

 

   

 

 

 

Total equity and liabilities

     147,526        144,136   
  

 

 

   

 

 

 


Consolidated cash flow statements (Unaudited)

 

(in thousand euros)    For the nine month period
ended 30 September
 
     2016      2015  
     euros      euros  

Operating activities

     

Net profit for the period

     -3,639         -5,005   

Non-cash and operational adjustments

     

Depreciation of property, plant & equipment

     4,669         3,816   

Amortization of intangible assets

     1,425         1,061   

Share-based payment expense

     718         652   

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

     -147         1   

Fair value adjustment contingent liabilities

     54         —     

Movement in provisions and allowance for bad debt

     -2         162   

Financial income

     -126         -2,523   

Financial expense

     668         1,733   

Impact of foreign currencies

     55         55   

Share of loss of an associate or joint venture (equity method)

     368         248   

Deferred tax expense (income)

     225         46   

Income taxes

     587         575   

Other

     7         —     

Working capital adjustments

     

Increase in trade receivables and other receivables

     -2,394         -1,644   

Decrease (Increase) in inventories

     -828         -973   

Increase in trade payables and other payables

     3,203         3,955   
     4,843         2,159   

Income tax paid

     -528         -530   
  

 

 

    

 

 

 

Net cash flow from operating activities

     4,315         1,629   
  

 

 

    

 

 

 

Investing activities

     

Purchase of property, plant & equipment

     -6,816         -5,918   

Purchase of intangible assets

     -871         -1,019   

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

     192         13   

Acquisition of subsidiary

     —           -1,602   

Investments in joint-ventures

     —           -500   

Proceeds from held to maturity investments

     —           10,000   

Interest received

     7         8   
  

 

 

    

 

 

 

Net cash flow used in investing activities

     -7,488         982   
  

 

 

    

 

 

 

Financing activities

     

Proceeds from loans & borrowings and convertible debt

     7,004         324   

Repayment of loans & borrowings

     -2,116         -3,889   

Repayment of finance leases

     -1,293         -1,108   

Purchase of non-controlling interest

     —           -1,377   

Capital increase in parent company

     —           580   

Interest paid

     -406         -399   

Other financial income / (expense)

     -7         -34   
  

 

 

    

 

 

 

Net cash flow from financing activities

     3,182         -5,903   
  

 

 

    

 

 

 

Net increase of cash and cash equivalents

     9         -3,292   

Cash and cash equivalents at beginning of period

     50,726         51,019   

Exchange rate differences on cash & cash equivalents

     -245         1,007   
  

 

 

    

 

 

 

Cash & cash equivalents at end of period

     50,490         48,734   


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

 

(in thousands)    For the three months
ended
30 September
 
     2016     2015  
     euros     euros  

Net profit / (loss)

     (52     (1,104
  

 

 

   

 

 

 

Income taxes

     191        296   

Financial expenses

     181        373   

Financial income

     (58     (524

Share in loss of a joint venture

     69        125   

Depreciation & amortization

     2,144        1,829   

EBITDA

     2,475        995   
  

 

 

   

 

 

 

Non-cash stock-based compensation expenses (1)

     358        180   

Adjusted EBITDA

     2,833        1,175   
  

 

 

   

 

 

 

 

(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 thousands euros    Materialise
Software
    Materialise
Medical
    Materialise
Manufacturing
    Total segments     Adjustments &
eliminations
    Consolidated  

For the three month period ended 30 September 2016

  

Revenues

     7,632        9,537        11,567        28,736        —         28,736   

Segment EBITDA

     2,814        754        1,723        5,291        (2,816     2,475   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Segment EBITDA %

     36.9     7.9     14.9     18.4       8.6

For the three month period ended 30 September 2015

  

Revenues

     6,303        9,123        10,457        25,883        —         25,883   

Segment EBITDA

     2,157        763        799        3,719        (2,724     995   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Segment EBITDA %

     34.2     8.4     7.6     14.4       3.8

For the nine month period ended 30 September 2016

  

Revenues

     22,044        27,849        33,080        82,973        27        83,000   

Segment EBITDA

     7,181        238        2,410        9,829        (5,543     4,286   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Segment EBITDA %

     32.6     0.9     7.3     11.8       5.2

For the nine month period ended 30 September 2015

  

Revenues

     18,497        25,286        30,220        74,003        —         74,003   

Segment EBITDA

     6,387        (325     612        6,674        (6,618     56   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Segment EBITDA %

     34.5     -1.3     2.0     9.0       0.1


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

 

    

For the three months

ended September 30

   

For the nine months

ended September 30

 
(in thousands of euros)    2016     2015     2016     2015  

Net profit/(loss)

     (52     (1,104     (3,639     (5,005

Income taxes

     191        296        812        621   

Finance costs

     182        373        1,688        2,108   

Finance income

     (58     (524     (1,037     (2,793

Share in loss of a joint venture

     69        125        368        248   

Operating profit

     332        (834     (1,808     (4,821

Depreciation & amortization

     2,144        1,829        6,094        4,877   

Corporate research and development

     242        564        1,201        2,171   

Corporate headquarters costs

     3,326        3,198        6,865        7,673   

Other operating income (expense)

     (753     (1,038     (2,523     (3,226

Segment EBITDA

     5,291        3,719        9,829        6,674   


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: November 17, 2016