Form 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 May 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).

 

 


First Quarter 2018 Financial 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 first quarter of 2018, resulting in increases to our revenues, operating expenses and net result, among other items.

First Quarter 2018 Results

Total revenue for the first quarter of 2018 increased 37.5% (2.4% excluding ACTech) to 43,899 kEUR (32,702 kEUR excluding ACTech) compared to 31,921 kEUR for the first quarter of 2017. Total deferred revenue from annual software sales and maintenance contracts amounted to 20,839 kEUR at the end of the first quarter of 2018 compared to 18,723 kEUR at the end of 2017.

Revenue from our Materialise Software segment decreased 2.9% to 8,326 kEUR for the first quarter of 2018 from 8,575 kEUR for the same quarter last year. Including deferred revenues from software sales and maintenance of 1,807 kEUR, the segment’s sales increased 7.5% compared to the prior-year period, reflecting a 26.4% increase of recurrent sales from annual and renewed licenses and maintenance fees.

Revenue from our Materialise Medical segment increased 20.3% to 11,946 kEUR for the first quarter of 2018 compared to 9,932 kEUR for the same period in 2017. Compared to the same quarter in 2017, revenue from our medical software grew 18.1%, and revenue from medical devices and services grew 21.5%.

Revenue from our Materialise Manufacturing segment increased 76.3% to 23,632 kEUR for the first quarter of 2018 from 13,407 kEUR for the first quarter of 2017. ACTech contributed revenue of 11,202 kEUR. Excluding ACTech, revenue decreased 7.3% to 12,430 kEUR.

Gross profit was 23,955 kEUR, or 54.6% of total revenue, for the first quarter of 2018. Excluding ACTech, gross profit was 19,938 kEUR, or 61.0% of total revenue, compared to 18,477 kEUR, or 57.9% of total revenue, for the first quarter of 2017.

Research and development (“R&D”), sales and marketing (“S&M”) and general and administrative (“G&A”) expenses increased, in the aggregate, 19.4% to 23,374 kEUR for the first quarter of 2018 from 19,579 kEUR for the first quarter of 2017. Excluding ACTech, operating expenses increased, in the aggregate, 9.6% to 21,456 kEUR. Excluding ACTech, R&D expenses increased from 4,592 kEUR to 5,610 kEUR while S&M expenses increased from 9,608 kEUR to 9,844 kEUR and G&A expenses increased from 5,379 kEUR to 6,002 kEUR.

Net other operating income decreased by 469 kEUR to 549 kEUR compared to 1,018 kEUR for the first quarter of 2017. Excluding ACTech, net other operating income decreased by 172 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 1,130 kEUR from (84) kEUR for the same period prior year, primarily as a result of the contribution by ACTech. Excluding ACTech, operating result amounted to (672) kEUR. The decrease in the operating result (excluding ACTech) was the result of the 9.6% increase in operating expenses, which was offset in part by the 7.9% increase in gross profit. The operating result was also negatively affected by depreciation cost, which increased from 2,568 kEUR to 4,006 kEUR (or to 2,968 kEUR excluding ACTech).


Net financial result was (710) kEUR compared to (142) kEUR for the prior-year period. The financial result included (167) kEUR net financial expenses related to ACTech. Excluding ACTech, the variances primarily reflected increases in the interest expense on the Company’s financial debt and variances in the currency exchange rates, primarily on the portion of the Company’s IPO proceeds held in U.S. dollars versus the euro. The share in loss of joint venture decreased to (103) kEUR from (389) kEUR for the same period last year.

The first quarter of 2018 contained income tax expense of 500 kEUR, of which 416 kEUR was related to ACTech, compared to 201 kEUR in the first quarter of 2017.

As a result of the above, net loss for the first quarter of 2018 was (183) kEUR (or (1,402) kEUR excluding ACTech), compared to net loss of (816) KEUR for the same period in 2017. Total comprehensive loss for the first quarter of 2018, which includes exchange differences on translation of foreign operations, was (278) kEUR compared to a loss of (694) kEUR for the same period in 2017.

Adjusted EBITDA (a non-IFRS financial measure defined below) increased to 5,224 kEUR from 2,813 kEUR primarily as a result of the contribution by ACTech. Excluding ACTech, Adjusted EBITDA decreased to 2,383 kEUR. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) in the first quarter was 11.9% (7.3% excluding ACTech) compared to 8.8% in the first quarter of 2017.

Our Materialise Software segment EBITDA decreased to 2,324 kEUR from 2,993 kEUR while the segment EBITDA margin (the segment’s EBITDA divided by the segment’s revenue) was 27.9% compared to 34.9% in the prior-year period.

Our Materialise Medical segment EBITDA was 2,060 kEUR compared to 314 kEUR while the segment EBITDA margin increased to 17.2% from 3.2% in the first quarter of 2017.

Our Materialise Manufacturing segment EBITDA increased to 3,133 kEUR from 1,322 kEUR while the segment EBITDA margin increased to 13.3% from 9.9% for the same quarter in 2017. ACTech contributed segment EBITDA of 2,841 kEUR, with a segment EBITDA margin of 25.4%. Excluding ACTech, segment EBITDA decreased to 292 kEUR.

At March 31, 2018, we had cash and equivalents of 44,697 kEUR compared to 43,175 kEUR at December 31, 2017. Cash flow from operating activities in the first quarter of 2018 was 6,200 kEUR compared to 1,603 kEUR in the same period in 2017. Net shareholders’ equity at March 31, 2018 was 76,631 kEUR compared to 77,515 kEUR at December 31, 2017.

Non-IFRS Measure

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 1.2321, the reference rate of the European Central Bank on March 31, 2018.


About Materialise

Materialise incorporates more than 25 years of 3D printing experience into a range of software solutions and 3D printing services, which 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 statement (Unaudited)

 

     For the three months ended
March 31,
            For the three
months ended
March 31,
 
In 000    2018      2018      2017             2018      2017  
     U.S.$                             
                                           

Revenue

     54,088        43,899        31,921           43,899        31,921  

Cost of sales

     (24,573)        (19,944)        (13,444)           (19,944)        (13,444)  

Gross profit

     29,515        23,955        18,477           23,955        18,477  

Gross profit as % of revenue

     54.6%        54.6%        57.9%           54.6%        57.9%  
                 

Research and development expenses

     (6,918)        (5,615)        (4,592)           (5,615)        (4,592)  

Sales and marketing expenses

     (13,059)        (10,599)        (9,608)           (10,599)        (9,608)  

General and administrative expenses

     (8,822)        (7,160)        (5,379)           (7,160)        (5,379)  

Net other operating income (expenses)

     676        549        1,018           549        1,018  

Operating (loss) profit

     1,392        1,130        (84)           1,130        (84)  
                 

Financial expenses

     (1,910)        (1,550)        (919)           (1,550)        (919)  

Financial income

     1,036        840        777           840        777  

Share in loss of joint venture

     (127)        (103)        (389)           (103)        (389)  

(Loss) profit before taxes

     391        317        (615)           317        (615)  
                 

Income taxes

     (616)        (500)        (201)           (500)        (201)  

Net (loss) profit for the period

     (225)        (183)        (816)           (183)        (816)  

Net (loss) profit attributable to:

                 

The owners of the parent

     (225)        (183)        (816)           (183)        (816)  

Non-controlling interest

                                     
                 

Earnings per share attributable to owners of the parent

 

              

Basic

     0.00        0.00        (0.02)           0.00        (0.02)  

Diluted

     0.00        0.00        (0.02)           0.00        (0.02)  
                 

Weighted average basic shares outstanding

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

Weighted average diluted shares outstanding

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


Consolidated statements of comprehensive income (Unaudited)

 

     For the three months ended
March 31,
            For the three
months ended
March 31,
 
In 000        2018              2018              2017                     2018              2017      
     U.S.$                             
                                           

Net profit (loss) for the period

     (225)        (183)        (816)           (183)        (816)  

Other comprehensive income

                 

Exchange difference on translation of foreign operations

     (117)        (95)        122           (95)        122  

Other comprehensive income (loss), net of taxes

     (117)        (95)        122           (95)        122  

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

     (342)        (278)        (694)           (278)        (694)  

Total comprehensive income (loss) attributable to:

                 

The owners of the parent

     (342)        (278)        (694)           (278)        (694)  

Non-controlling interest

                                     


Consolidated statement of financial position (Unaudited)

 

     As of March
31,
     As of
December

31,
 
In 000    2018      2017  
           

Assets

     

Non-current assets

     

Goodwill

     18,504        18,447  

Intangible assets

     27,770        28,646  

Property, plant & equipment

     88,339        86,881  

Investments in joint ventures

        31  

Deferred tax assets

     332        304  

Other non-current assets

     3,022        3,667  

Total non-current assets

     138,967        137,976  

Current assets

     

Inventories

     10,426        11,594  

Trade receivables

     39,635        35,582  

Other current assets

     9,927        9,212  

Cash and cash equivalents

     44,697        43,175  

Total current assets

     104,685        99,563  

Total assets

     243,652        237,539  


     As of March
31,
     As of
December

31,
 
In 000    2018      2017  
           

Equity and liabilities

     

Equity

     

Share capital

     2,735        2,729  

Share premium

     80,209        79,839  

Consolidated reserves

     (4,603)        (3,250)  

Other comprehensive income

     (1,898)        (1,803)  

Equity attributable to the owners of the parent

     76,443        77,515  

Non-controlling interest

             

Total equity

     76,443        77,515  

Non-current liabilities

     

Loans & borrowings

     82,598        81,788  

Deferred tax liabilities

     6,711        7,006  

Deferred income

     7,051        5,040  

Other non-current liabilities

     1,833        1,904  

Total non-current liabilities

     98,193        95,738  

Current liabilities

     

Loans & borrowings

     12,197        12,769  

Trade payables

     17,631        15,670  

Tax payables

     3,574        3,560  

Deferred income

     22,060        18,791  

Other current liabilities

     12,554        13,496  

Total current liabilities

     68,016        64,286  

Total equity and liabilities

     242,652        237,539  


Consolidated statement of cash flows (Unaudited)

 

    For the three months ended March 31,
  in 000     2018     2017
    €     €

Operating activities

   

Net (loss) profit for the period

    (183)     (816)

Non-cash and operational adjustments

   

Depreciation of property, plant & equipment

    2,700     1,945

Amortization of intangible assets

    1,305     623

Share-based payment expense

    89     329

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

    –     (2)

Movement in provisions

    (16)     4

Movement reserve for bad debt

    84     122

Financial income

    (667)     (136)

Financial expense

    1,067     359

Impact of foreign currencies

    310     (81)

Share in loss of a joint venture (equity method)

    103     389

(Deferred) Income taxes

    501     204

Other

    (88)     (72)

Working capital adjustment & income tax paid

   

Increase in trade receivables and other receivables

    (4,372)     (3,452)

Decrease (increase) in inventories

    1,147     (406)

Increase in trade payables and other payables

    5,027     2,729

Income tax paid

    (807)     (136)

Net cash flow from operating activities

    6,200     1,603


    For the three months ended March 31,
  in 000     2018     2017
    €     €

Investing activities

   

Purchase of property, plant & equipment

    (4,275)     (7,507)

Purchase of intangible assets

    (324)     (327)

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

    20     70

Acquisition of subsidiary

    –     –

Investments in joint-ventures

    –     (500)

Interest received

    14     108

Net cash flow used in investing activities

    (4,565)     (8,156)
   

Financing activities

   

Proceeds from loans & borrowings

    12,413     7,710

Repayment of loans & borrowings

    (11,388)     (756)

Repayment of finance leases

    (760)     (728)

Capital increase

    207  

Interest paid

    (404)     (152)

Other financial income (expense)

    5     (166)

Net cash flow from (used in) financing activities

    73     5,908
   

Net increase of cash & cash equivalents

    1,708     (645)

Cash & cash equivalents at beginning of the year

    43,175     55,912

Exchange rate differences on cash & cash equivalents

    (186)     (196)

Cash & cash equivalents at end of the year

    44,697     55,071


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

 

     For the three months
ended 31 March
           For the three months
ended 31 March
 
In 000    2018     2017            2018      2017  
                          
                                  

Net profit (loss) for the period

     (183)       (816)          (183)        (816)  
            

Income taxes

     500       201          500        201  

Financial expenses

     1,550       919          1,550        919  

Financial income

     (840     (777        (840)        (777)  

Share in loss of joint venture

     103       389          103        389  

Depreciation and amortization

     4,006       2,568          4,006        2,568  
            

EBITDA

     5,136       2,484          5,136        2,484  
            

Non-cash stock-based compensation expense (1)

     88       329          88        329  

Acquisition-related expenses business combinations

                            
            

ADJUSTED EBITDA

     5,224       2,813          5,224        2,813  

 

  (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, 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%

 

For the three months ended March 31, 2017

                

Revenues

   8,575    9,932    13,407    31,914    8   31,922

Segment EBITDA

   2,993    314    1,322    4,629    (2,145)   2,484

Segment EBITDA %

   34.9%    3.2%    9.9%    14.5%      7.8%

(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    2018      2017             2018      2017  
                            
                                    

Net profit (loss) for the period

     (183)        (816)           (183)        (816)  

Income taxes

     500        201           500        201  

Financial cost

     1,550        919           1,550        919  

Financial income

     (840)        (777)           (840)        (777)  

Share in loss of joint venture

     103        389           103        389  
              

Operating profit

     1,130        (84)           1,130        (84)  
              

Depreciation and amortization

     4,006        2,568           4,006        2,568  

Corporate research and development

     490        509           490        509  

Corporate headquarter costs

     2,263        2,073           2,263        2,073  

Other operating income (expense)

     (372)        (437)           (372)        (437)  
              

Segment EBITDA

     7,517        4,629           7,517        4,629  


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: May 4, 2018