SEC Filing | Materialise NV

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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 September 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).

Third 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 third quarter of 2018, resulting in increases to our revenues, operating expenses and net result.

Third Quarter 2018 Results

Total revenue for the third quarter of 2018 increased 44.6% (9.9% excluding ACTech) to 46,732 kEUR (35,494 kEUR excluding ACTech) compared to 32,307 kEUR for the third quarter of 2017. Total deferred revenue from annual software sales and maintenance contracts amounted to 20,009 kEUR at the end of the third quarter of 2018 compared to 18,723 kEUR at year end 2017.

Revenue from our Materialise Software segment increased 17.2% to 9,874 kEUR for the third quarter of 2018 from 8,422 kEUR for the same quarter last year.

Revenue from our Materialise Medical segment increased 23.1% to 12,824 kEUR for the third quarter of 2018 compared to 10,421 kEUR for the same period in 2017. Compared to the same quarter in 2017, revenue from our medical software increased 16.6%. Revenue from medical devices and services grew 26.7%.

Revenue from our Materialise Manufacturing segment increased 78.4% to 24,012 kEUR for the third quarter of 2018 from 13,456 kEUR for the third quarter of 2017. Excluding ACTech, revenue decreased 5.0% to 12,778 kEUR.

Gross profit was 26,418 kEUR, or 56.5% of total revenue, for the third quarter of 2018. Excluding ACTech, gross profit was 22,379 kEUR, or 63.1% of total revenue, compared to 17,873 kEUR, or 55.3% of total revenue, for the third quarter of 2017.

Research and development (“R&D”), sales and marketing (“S&M”) and general and administrative (“G&A”) expenses increased, in the aggregate, 26.4% to 24,665 kEUR for the third quarter of 2018 from 19,509 kEUR for the third quarter of 2017. Excluding ACTech, operating expenses increased, in the aggregate, 15.3% to 22,500 kEUR. Excluding ACTech, R&D expenses increased from 4,701 kEUR to 5,640 kEUR while S&M expenses increased from 8,753 kEUR to 10,387 kEUR and G&A expenses increased from 6,055 kEUR to 6,473 kEUR.

Net other operating income decreased by 843 kEUR to 571 kEUR compared to 1,414 kEUR for the third quarter of 2017. Excluding ACTech, net other operating income amounted to 1,243 kEUR.

Operating result increased to 2,324 kEUR from (222) kEUR for the same period prior year. Excluding ACTech, operating result amounted to 1,122 kEUR. Net financial result was 269 kEUR compared to (593) kEUR for the prior-year period. The third quarter of 2018 contained income tax expense of 230 kEUR (of which 180 kEUR was related to ACTech), compared to 433 kEUR in the third quarter of 2017.

As a result of the above, net profit for the third quarter of 2018 was 2,316 kEUR, compared to net loss of (1,413) KEUR for the same period in 2017. Net profit excluding ACTech was 1,426 kEUR. Total comprehensive profit for the third quarter of 2018, which includes exchange differences on translation of foreign operations, was 2,329kEUR compared to a loss of (1,568) kEUR for the same period in 2017.

Adjusted EBITDA increased 116% to 7,034 kEUR from 3,259 kEUR due to organic EBITDA increases in all three of our segments and to the contribution by ACTech. Excluding ACTech, Adjusted EBITDA increased 43.6% to 4,679 kEUR. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) in the third quarter of 2018 was 15.1% (13.2% excluding ACTech) compared to 10.1% in the third quarter of 2017.

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Segment EBITDA from our Materialise Software segment amounted to 3,384 kEUR compared to 3,362 kEUR in the prior-year period, while the segment EBITDA margin (the segment’s EBITDA divided by the segment’s revenue) was 34.3% compared to 39.9% in the prior-year period.

Segment EBITDA from our Materialise Medical segment was 2,475 kEUR compared to 1,170 kEUR while the segment EBITDA margin increased to 19.3% from 11.2% in the third quarter of 2017.

Segment EBITDA from our Materialise Manufacturing segment increased to 3,405 kEUR from 499 kEUR while the segment EBITDA margin increased to 14.2% from 3.7% for the same quarter in 2017. Excluding ACTech, segment EBITDA increased 110.2% to 1,049 kEUR and the segment EBITDA margin increased to 8.2% from 3.7%.

As at September 30, 2018, we had cash and equivalents of 114,662 kEUR compared to 43,175 kEUR as at December 31, 2017. Cash flow from operating activities over the first nine months of 2018 was 18,265 kEUR compared to 2,518 kEUR in the same period in 2017. Net shareholders’ equity as at June 30, 2018 was 134,862 kEUR compared to 77,054 kEUR as at December 31, 2017.

Business Combinations – ACTech

Our audited financial statements for the year ended December 31, 2017 appearing in our Annual Report on Form 20-F, as filed with the U.S. Securities and Exchange Commission on April 30, 2018, included a provisional accounting for the ACTech business combination. The fair value analysis with respect to the assets and liabilities acquired was not yet finalized as of the reporting date.

During September 2018, we completed the fair value analysis of the ACTech business combination, with corresponding adjustments to intangible assets, property, plant and equipment, inventories and contracts in progress, investment grants and deferred taxes. The impact has been accounted for as retrospective adjustments to our consolidated statement of financial position as of December 31, 2017 and our consolidated income statement for the year ended December 31, 2017. The total impact on the consolidated reserves for the year ended December 31, 2017 amounted to 461 kEUR.

The adjustments are summarized below.


(in € 000)	For the year ended December 31, 2017
	As previously reported			Adjustments			Restated
Goodwill		18,447			(895	)		17,552
Intangible assets		28,646			(46	)		28,600
Property, plant & equipment		86,881			184			87,065
Inventories and contracts in progress		11,594			(567	)		11,027
Consolidated reserves		3,250			461			3,711
Deferred tax liabilities (non-current)		(7,006	)		(409	)		(7,415	)
Deferred income (non-current)		(5,040	)		1272			(3,768	)

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

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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 1.1576, the reference rate of the European Central Bank on September 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.

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Consolidated income statement (Unaudited)


	For the three months ended September 30,									For the nine months ended September 30,
(in 000, except per share amounts)	2018			2018			2017			2018			2017
	U.S.$			€			€			€			€
Revenue		54,097			46,732			32,307			135,707			97,840
Cost of sales		(23,515	)		(20,314	)		(14,434	)		(60,546	)		(42,102	)
Gross profit		30,582			26,418			17,873			75,161			55,738
Gross profit as % of revenue		56.5	%		56.5	%		55.3	%		55.4	%		57.0	%
Research and development expenses		(6,522	)		(5,634	)		(4,701	)		(17,080	)		(14,424	)
Sales and marketing expenses		(13,072	)		(11,292	)		(8,753	)		(33,733	)		(28,370	)
General and administrative expenses		(8,959	)		(7,739	)		(6,055	)		(22,926	)		(17,205	)
Net other operating income (expenses)		661			571			1,414			2,961			3,660
Operating (loss) profit		2,690			2,324			(222	)		4,383			(601	)
Financial expenses		(1,203	)		(1,039	)		(1,058	)		(3,556	)		(3,294	)
Financial income		1,514			1,308			465			2,739			2,132
Share in loss of joint venture		(54	)		(47	)		(165	)		(291	)		(596	)
(Loss) profit before taxes		2,947			2,546			(980	)		3,275			(2,359	)
Income taxes		(266	)		(230	)		(433	)		(773	)		(825	)
Net (loss) profit of the period		2,681			2,316			(1,413	)		2,502			(3,184	)
Net (loss) profit attributable to:
The owners of the parent		2,681			2,316			(1,413	)		2,502			(3,184	)
Non-controlling interest		—			—			—			—			—
Earnings per share attributable to owners of the parent
Basic		0.05			0.04			(0.03	)		0.05			(0.07	)
Diluted		0.05			0.04			(0.03	)		0.05			(0.07	)
Weighted average basic shares outstanding		51,507			51,507			47,325			48,770			47,325
Weighted average diluted shares outstanding		52,319			52,319			47,325			49,532			47,325

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Consolidated statements of comprehensive income (Unaudited)


	For the three months ended September 30,							For the nine months ended September 30,
(in 000)	2018		2018		2017			2018			2017
	U.S.$		€		€			€			€
Net profit (loss) for the period		2,681		2,316		(1,413	)		2,502			(3,184	)
Other comprehensive income
Exchange difference on translation of foreign operations		15		13		(155	)		(29	)		(481	)
Other comprehensive income (loss), net of taxes		15		13		(155	)		(29	)		(481	)
Total comprehensive income (loss) for the year, net of taxes		2,696		2,329		(1,568	)		2,473			(3,665	)
Total comprehensive income (loss) attributable to:
The owners of the parent		2,696		2,329		(1,568	)		2,473			(3,665	)
Non-controlling interest		—		—		—			—			—

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Consolidated statement of financial position (Unaudited)


	As of September 30,		As of December 31 (restated),
(in 000)	2018		2017
	€		€
Assets
Non-current assets
Goodwill		17,532		17,552
Intangible assets		26,194		28,600
Property, plant & equipment		92,236		87,065
Investments in joint ventures		—		31
Deferred tax assets		293		304
Other non-current assets		4,132		3,667
Total non-current assets		140,387		137,219
Current assets
Inventories		10,400		11,027
Trade receivables		36,790		35,582
Held to maturity investments		—		—
Other current assets		10,557		9,212
Cash and cash equivalents		114,622		43,175
Total current assets		172,369		98,996
Total assets		312,756		236,215

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	As of September 30,			As of December 31 (restated),
(in 000)	2018			2017
	€			€
Equity and liabilities
Equity
Share capital		3,047			2,729
Share premium		136,022			79,839
Consolidated reserves		(2,375	)		(3,711	)
Other comprehensive income		(1,832	)		(1,803	)
Equity attributable to the owners of the parent		134,862			77,054
Non-controlling interest		—			—
Total equity		134,862			77,054
Non-current liabilities
Loans & borrowings		93,463			81,788
Deferred tax liabilities		6,800			7,415
Deferred income		4,683			3,768
Other non-current liabilities		1,763			1,904
Total non-current liabilities		106,709			94,875
Current liabilities
Loans & borrowings		14,264			12,769
Trade payables		16,926			15,670
Tax payables		3,146			3,560
Deferred income		22,771			18,791
Other current liabilities		14,078			13,496
Total current liabilities		71,185			64,286
Total equity and liabilities		312,756			236,215

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Consolidated statement of cash flows (Unaudited)


	For the nine months ended September 30,
(in 000)	2018			2017
	€			€
Operating activities
Net (loss) profit of the period		2,502			(3,184	)
Non-cash and operational adjustments
Depreciation of property, plant & equipment		8,632			6,008
Amortization of intangible assets		3,902			2,134
Share-based payment expense		557			997
Loss (gain) on disposal of property, plant & equipment		(148	)		(7	)
Fair value contingent liabilities		—			—
Movement in provisions		13			21
Movement reserve for bad debt		255			191
Financial income		(224	)		(416	)
Financial expense		1,474			957
Impact of foreign currencies		(433	)		621
Share in loss of a joint venture (equity method)		291			596
Income and Deferred tax expense (income)		773			824
Other		164			(42	)
Working capital adjustment & income tax paid
Increase in trade receivables and other receivables		(3,174	)		(5,916	)
Decrease (increase) in inventories		584			(804	)
Increase in trade payables and other payables		5,230			1,789
Income tax paid		(2,133	)		(1,251	)
Net cash flow from operating activities		18,265			2,518

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	For the nine months ended September 30,
(in 000)	2018			2017
	€			€
Investing activities
Purchase of property, plant & equipment		(14,923	)		(22,245	)
Purchase of intangible assets		(1,181	)		(3,739	)
Proceeds from the sale of property, plant & equipment (net)		—			54
Proceeds from the sale of intangible assets (net)		1,264			36
Available for sale investments		(50	)		—
Investments in joint-ventures		—			(500	)
Interest received		126			267
Net cash flow used in investing activities		(14,764	)		(26,127	)
Financing activities
Proceeds from loans & borrowings		31,043			22,794
Repayment of loans & borrowings		(16,257	)		(2,827	)
Repayment of finance leases		(2,350	)		(2,081	)
Capital increase in parent company		60,110			—
Direct attributable expense capital increase		(4,103	)		—
Interest paid		(1,142	)		(502	)
Other financial income (expense)		(182	)		(251	)
Net cash flow from (used in) financing activities		67,119			17,133
Net increase of cash & cash equivalents		70,620			(6,476	)
Cash & cash equivalents at beginning of the year		43,175			55,912
Exchange rate differences on cash & cash equivalents		827			(1,337	)
Cash & cash equivalents at end of the year		114,622			48,099

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


	For the three months ended September 30,						For the nine months ended September 30,
(in 000)	2018			2017			2018			2017
	€			€			€			€
Net profit (loss) for the period		2,316			(1,413	)		2,502			(3,184	)
Income taxes		230			433			773			825
Financial expenses		1,039			1,058			3,556			3,294
Financial income		(1,308	)		(465	)		(2,739	)		(2,132	)
Share in loss of joint venture		47			165			291			596
Depreciation and amortization		4,519			2,918			12,534			8,142
EBITDA		6,843			2,696			16,917			7,541
Non-cash stock-based compensation expense (1)		191			297			557			997
Acquisition-related expenses (2)		—			266			—			266
ADJUSTED EBITDA		7,034			3,259			17,474			8,804

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

(2)	Acquisition-related expenses of business combinations represent expenses incurred in connection with the ACTech acquisition.

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Segment P&L (Unaudited)


(in 000)	Materialise Software			Materialise Medical			Materialise Manufacturing			Total segments			Unallocated (1)			Consolidated
	€			€			€			€			€			€
For the nine months ended September 30, 2018
Revenues		27,331			37,170			71,031			135,532			175			135,707
Segment EBITDA		8,567			6,659			8,802			24,028			(7,111	)		16,917
Segment EBITDA %		31.3	%		17.9	%		12.4	%		17.7	%					12.5	%
For the nine months ended September 30, 2017
Revenues		25,302			30,999			41,318			97,619			221			97,840
Segment EBITDA		9,307			2,242			3,062			14,611			(7,070	)		7,541
Segment EBITDA %		36.8	%		7.2	%		7.4	%		15.0	%					7.7	%

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

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(in 000)	Materialise Software			Materialise Medical			Materialise Manufacturing			Total segments			Unallocated (1)			Consolidated
	€			€			€			€			€			€
For the three months ended September 30, 2018
Revenues		9,874			12,824			24,012			46,710			22			46,732
Segment EBITDA		3,384			2,475			3,405			9,264			(2,420	)		6,844
Segment EBITDA %		34.3	%		19.3	%		14.2	%		19.8	%					14.6	%
For the three months ended September 30, 2017
Revenues		8,422			10,421			13,456			32,299			8			32,307
Segment EBITDA		3,362			1,170			499			5,031			(2,335	)		2,696
Segment EBITDA %		39.9	%		11.2	%		3.7	%		15.6	%					8.3	%

(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 September 30,						For the nine months ended September 30,
(in 000)	2018			2017			2018			2017
	€			€			€			€
Net profit (loss) for the period		2,316			(1,413	)		2,502			(3,184	)
Income taxes		230			433			773			825
Financial expenses		1,039			1,058			3,556			3,294
Financial income		(1,308	)		(465	)		(2,739	)		(2,132	)
Share in loss of joint venture		47			165			291			596
Operating profit		2,324			(222	)		4,383			(601	)
Depreciation and amortization		4,519			2,918			12,534			8,142
Corporate research and development		483			502			1,469			1,527
Corporate headquarter costs		2,437			2,447			7,514			6,984
Other operating income (expense)		(499	)		(614	)		(1,872	)		(1,441	)
Segment EBITDA		9,264			5,031			24,028			14,611

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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: October 31, 2018

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