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 October 2020
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 2020 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 2020 Results
Total revenue for the third quarter of 2020 decreased 19.2% to 40,785 kEUR compared to 50,449 kEUR for the third quarter of 2019.
Revenue from our Materialise Software segment decreased 12.7% to 9,478 kEUR for the third quarter of 2020 from 10,860 kEUR for the same quarter last year. Recurring revenue of Materialise Software increased by 15.9%.
Revenue from our Materialise Medical segment increased 10.8% to 17,161 kEUR for the third quarter of 2020 compared to 15,488 kEUR for the same period in 2019. Compared to the third quarter of 2019, revenues from our medical software grew 3.1% and revenues from medical devices and services increased 14.5%.
Revenue from our Materialise Manufacturing segment decreased 41.3% to 14,154 kEUR for the third quarter of 2020 from 24,127 kEUR for the third quarter of 2019.
Gross profit was 23,220 kEUR, or 56.9% of total revenue, for the third quarter of 2020 compared to 29,023 kEUR, or 57.5% of total revenue, for the third quarter of 2019.
Research and development (“R&D”), sales and marketing (“S&M”) and general and administrative (“G&A”) expenses decreased, in the aggregate, 11.9% to 24,176 kEUR for the third quarter of 2020 from 27,439 kEUR for the third quarter of 2019. In the third quarter of 2020, we increased our R&D expenses by 4.2%, while our cost reduction initiatives in S&M and G&A resulted in decreases of 18.7% and 11.7%, respectively, compared to the third quarter of 2019.
Net other operating income was 1,157 kEUR compared to 1,332 kEUR for the third quarter of 2019.
Operating result decreased to 201 kEUR from 2,916 kEUR for the third quarter of 2019.
Net financial result was (1,331) kEUR compared to (966) kEUR for the third quarter of 2019. The share in result of joint venture amounted to 0 kEUR compared to (41) kEUR for the same period in 2019. Subsequent to the end of the third quarter, we agreed to acquire substantially all assets of RS Scan, our joint venture partner in RS Print, and thereby acquire the remaining 50% interest in RS Print.
The third quarter of 2020 contained income tax income of 764 kEUR, compared to an income tax expense of (908) kEUR in the third quarter of 2019.
As a result of the above, net loss for the third quarter of 2020 was (366) kEUR, compared to 1,001 kEUR for the same period in 2019. Total comprehensive loss for the third quarter of , which includes exchange differences on translation of foreign operations, was (1,744) kEUR compared to 1,067 kEUR for the 2019 period.
Adjusted EBITDA decreased to 6,023 kEUR from 8,022 kEUR. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) for the third quarter of 2020 was 14.8% compared to 15.9% for the third quarter of 2019.
Segment EBITDA decreased to 3,114 kEUR from 3,769 kEUR while the segment EBITDA margin (segment EBITDA divided by segment revenue) was 32.9% compared to 34.7% for the prior-year period.
Segment EBITDA increased to 5,477 kEUR compared to 2,795 kEUR while the segment EBITDA margin was 31.9% compared to 18.0% for the third quarter of 2019.
Segment EBITDA decreased to (293) kEUR from 3,862 kEUR while the segment EBITDA margin was (2.1)% compared to 16.0% for the third quarter of 2019.
At September 30, 2020, we had cash and equivalents of 110,691 kEUR compared to 128,897 kEUR at December 31, 2019. Gross debt amounted to 117,884 kEUR at September 30, 2020, compared to 127,939 kEUR at December 31, 2019. As a result, our net cash position decreased 8,151 kEUR during the first three quarters of 2020.
Cash flow from operating activities during the first three quarters of 2020 was 14,752 kEUR compared to 22,737 kEUR for the same period in 2019. Total capital expenditures for the third quarter of 2020 were funded with cash flow from operations and available cash, and amounted to 7,536 kEUR. This amount included capital expenditures of 1,846 kEUR related to our internal digital transformation program.
Net shareholders’ equity at September 30, 2020 was 131,399 kEUR compared to 142,675 kEUR at December 31, 2019.
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 share-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 1.1708, the reference rate of the European Central Bank on September 30, 2020.
About Materialise
Materialise incorporates 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 the largest groups of software developers in the industry with one of the largest and most complete 3D printing facilities in the world.
Consolidated income statements (Unaudited)
| For the three months ended September 30, |
For the nine months ended September 30, |
|||||||||||||||||||
| In 000 | 2020 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||
| U.S.$ | € | € | € | € | ||||||||||||||||
| Revenue |
47,751 | 40,785 | 50,449 | 125,148 | 145,968 | |||||||||||||||
| Cost of sales |
(20,566 | ) | (17,566 | ) | (21,426 | ) | (57,310 | ) | (64,838 | ) | ||||||||||
| Gross profit |
27,186 | 23,220 | 29,023 | 67,838 | 81,129 | |||||||||||||||
| Gross profit as % of revenue |
56.9 | % | 56.9 | % | 57.5 | % | 54.2 | % | 55.6 | % | ||||||||||
| Research and development expenses |
(6,862 | ) | (5,861 | ) | (5,626 | ) | (18,434 | ) | (17,411 | ) | ||||||||||
| Sales and marketing expenses |
(12,896 | ) | (11,015 | ) | (13,545 | ) | (33,700 | ) | (38,797 | ) | ||||||||||
| General and administrative expenses |
(8,547 | ) | (7,300 | ) | (8,269 | ) | (21,100 | ) | (24,453 | ) | ||||||||||
| Net other operating income (expenses) |
1,355 | 1,157 | 1,332 | 2,733 | 3,959 | |||||||||||||||
| Operating (loss) profit |
235 | 201 | 2,916 | (2,663 | ) | 4,427 | ||||||||||||||
| Financial expenses |
(2,883 | ) | (2,462 | ) | (1,138 | ) | (4,923 | ) | (2,647 | ) | ||||||||||
| Financial income |
1.324 | 1,131 | 172 | 1,976 | 900 | |||||||||||||||
| Share in loss of joint venture |
— | — | (41 | ) | (39 | ) | (245 | ) | ||||||||||||
| (Loss) profit before taxes |
(1,323 | ) | (1,130 | ) | 1,909 | (5,649 | ) | 2,434 | ||||||||||||
| Income taxes |
894 | 764 | (908 | ) | 497 | (2,037 | ) | |||||||||||||
| Net (loss) profit for the period |
(429 | ) | (366 | ) | 1,001 | (5,152 | ) | 397 | ||||||||||||
| Net (loss) profit attributable to: |
||||||||||||||||||||
| The owners of the parent |
(359 | ) | (307 | ) | 929 | (4,989 | ) | 325 | ||||||||||||
| Non-controlling interest |
(69 | ) | (59 | ) | 72 | (163 | ) | 72 | ||||||||||||
| Earnings per share attributable to owners of the parent |
|
|||||||||||||||||||
| Basic |
(0.01 | ) | (0.01 | ) | 0.02 | (0.01 | ) | 0.01 | ||||||||||||
| Diluted |
(0.01 | ) | (0.01 | ) | 0.02 | (0.01 | ) | 0.01 | ||||||||||||
| Weighted average basic shares outstanding |
53,194 | 53,194 | 52,891 | 53,194 | 52,891 | |||||||||||||||
| Weighted average diluted shares outstanding |
53,194 | 53,194 | 52,970 | 53,194 | 52,930 | |||||||||||||||
Consolidated statements of comprehensive income (Unaudited)
| For the three months ended September 30, |
For the nine months ended September 30, |
|||||||||||||||||||
| In 000 | 2020 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||
| U.S.$ | € | € | € | € | ||||||||||||||||
| Net profit (loss) for the period |
(429 | ) | (366 | ) | 1,001 | (5,152 | ) | 397 | ||||||||||||
| Other comprehensive income |
||||||||||||||||||||
| Exchange difference on translation of foreign operations |
(1,612 | ) | (1,377 | ) | 67 | (8,165 | ) | 225 | ||||||||||||
| Other comprehensive income (loss), net of taxes |
(1,612 | ) | (1,377 | ) | 67 | (8,165 | ) | 225 | ||||||||||||
| Total comprehensive income (loss) for the year, net of taxes |
(2,042 | ) | (1,744 | ) | 1,067 | (13,318 | ) | 623 | ||||||||||||
| Total comprehensive income (loss) attributable to: |
||||||||||||||||||||
| The owners of the parent |
(1,754 | ) | (1,498 | ) | 1,077 | (11,969 | ) | 623 | ||||||||||||
| Non-controlling interest |
(288 | ) | (246 | ) | (10 | ) | (1,349 | ) | — | |||||||||||
Consolidated statement of financial position (Unaudited)
| As of September 30, |
As of December 31, |
|||||||
| In 000 | 2020 | 2019 | ||||||
| € | € | |||||||
| Assets |
||||||||
| Non-current assets |
||||||||
| Goodwill |
18,653 | 20,174 | ||||||
| Intangible assets |
28,790 | 27,395 | ||||||
| Property, plant & equipment |
88,228 | 90,331 | ||||||
| Right-of-Use assets |
9,473 | 10,586 | ||||||
| Investments in joint ventures |
— | 39 | ||||||
| Deferred tax assets |
875 | 192 | ||||||
| Other non-current assets |
12,418 | 9,391 | ||||||
| Total non-current assets |
158,437 | 158,108 | ||||||
| Current assets |
||||||||
| Inventories |
10,046 | 12,696 | ||||||
| Trade receivables |
30,526 | 40,322 | ||||||
| Other current assets |
11,087 | 9,271 | ||||||
| Cash and cash equivalents |
110,691 | 128,897 | ||||||
| Total current assets |
162,350 | 191,186 | ||||||
| Total assets |
320,787 | 349,294 | ||||||
| As of September 30, |
As of December 31, |
|||||||
| In 000 | 2020 | 2019 | ||||||
| € | € | |||||||
| Equity and liabilities |
||||||||
| Equity |
||||||||
| Share capital |
3,068 | 3,066 | ||||||
| Share premium |
138,391 | 138,090 | ||||||
| Consolidated reserves |
(5,185 | ) | (195 | ) | ||||
| Other comprehensive income |
(6,979 | ) | (1.394 | ) | ||||
| Equity attributable to the owners of the parent |
129,295 | 139,567 | ||||||
| Non-controlling interest |
2,104 | 3,107 | ||||||
| Total equity |
131,399 | 142,675 | ||||||
| Non-current liabilities |
||||||||
| Loans & borrowings |
93,630 | 104,673 | ||||||
| Lease liabilities |
5,767 | 6,427 | ||||||
| Deferred tax liabilities |
5,548 | 5,747 | ||||||
| Deferred income |
5,236 | 5,031 | ||||||
| Other non-current liabilities |
672 | 696 | ||||||
| Total non-current liabilities |
110,853 | 122,575 | ||||||
| Current liabilities |
||||||||
| Loans & borrowings |
15,106 | 13,389 | ||||||
| Lease liabilities |
3,381 | 3,449 | ||||||
| Trade payables |
15,637 | 18,516 | ||||||
| Tax payables |
1,392 | 3,363 | ||||||
| Deferred income |
25,379 | 27,641 | ||||||
| Other current liabilities |
17,640 | 17,686 | ||||||
| Total current liabilities |
78,535 | 84,044 | ||||||
| Total equity and liabilities |
320,787 | 349,294 | ||||||
Consolidated statement of cash flows (Unaudited)
| For the nine months ended September 30, |
||||||||
| in 000 | 2020 | 2019 | ||||||
| € | € | |||||||
| Operating activities |
||||||||
| Net (loss) profit for the period |
(5,153 | ) | 398 | |||||
| Non-cash and operational adjustments |
||||||||
| Depreciation of property, plant & equipment |
11,266 | 10,722 | ||||||
| Amortization of intangible assets |
3,349 | 3,360 | ||||||
| Share-based payment expense |
— | 258 | ||||||
| Loss (gain) on disposal of property, plant & equipment |
(16 | ) | 141 | |||||
| Movement in provisions |
— | 66 | ||||||
| Movement reserve for bad debt |
36 | (135 | ) | |||||
| Financial income |
(1.977 | ) | (900 | ) | ||||
| Financial expense |
4.922 | 2,647 | ||||||
| Impact of foreign currencies |
18 | (432 | ) | |||||
| Share in loss of a joint venture (equity method) |
39 | 245 | ||||||
| (Deferred) income taxes |
(836 | ) | 2,012 | |||||
| Other |
— | 4 | ||||||
| Working capital adjustment & income tax paid |
||||||||
| Decrease (increase) in trade receivables and other receivables |
6,765 | 3,593 | ||||||
| Decrease (increase) in inventories |
2,757 | 8 | ||||||
| Increase (decrease) in trade payables and other payables |
(4,301 | ) | 2,263 | |||||
| Income tax paid & interest received |
(2,457 | ) | (1,514 | ) | ||||
| Net cash flow from operating activities |
14,752 | 22,737 | ||||||
| For the nine months ended September 30, |
||||||||
| in 000 | 2020 | 2019 | ||||||
| € | € | |||||||
| Investing activities |
||||||||
| Purchase of property, plant & equipment |
(8,196 | ) | (10,325 | ) | ||||
| Purchase of intangible assets |
(5,783 | ) | (1,588 | ) | ||||
| Proceeds from the sale of property, plant & equipment & intangible assets (net) |
150 | (3 | ) | |||||
| Available for sale investments |
||||||||
| Advances on capital increases |
— | (875 | ) | |||||
| Convertible loan to third party |
(2,428 | ) | (2,500 | ) | ||||
| Investments in subsidiary, net of cash acquired |
— | (7,765 | ) | |||||
| Interest received |
— | — | ||||||
| Net cash flow used in investing activities |
(16,258 | ) | (23,066 | ) | ||||
| Financing activities |
||||||||
| Proceeds from loans & borrowings |
— | 29,000 | ||||||
| Repayment of loans & borrowings |
(8,909 | ) | (8,608 | ) | ||||
| Repayment of finance leases |
(2,997 | ) | (2,288 | ) | ||||
| Capital increase |
140 | — | ||||||
| Direct attributable expense of capital increase |
— | — | ||||||
| Interest paid |
(1,626 | ) | (1,713 | ) | ||||
| Other financial income (expense) |
(1,034 | ) | (451 | ) | ||||
| Net cash flow from (used in) financing activities |
(14,425 | ) | 15,941 | |||||
| Net increase of cash & cash equivalents |
(15,931 | ) | 15,611 | |||||
| Cash & cash equivalents at beginning of the year |
128,897 | 115,506 | ||||||
| Exchange rate differences on cash & cash equivalents |
(2,275 | ) | 162 | |||||
| Cash & cash equivalents at end of the period |
110,691 | 131,279 | ||||||
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 | 2020 | 2019 | 2020 | 2019 | ||||||||||||
| € | € | € | € | |||||||||||||
| Net profit (loss) for the period |
(366 | ) | 1,001 | (5,152 | ) | 397 | ||||||||||
| Income taxes |
(764 | ) | 908 | (497 | ) | 2,037 | ||||||||||
| Financial expenses |
2,462 | 1,138 | 4,923 | 2,647 | ||||||||||||
| Financial income |
(1,131 | ) | (172 | ) | (1,976 | ) | (900 | ) | ||||||||
| Share in loss of joint venture |
— | 41 | 39 | 245 | ||||||||||||
| Depreciation and amortization |
4,922 | 4,904 | 14,616 | 14,082 | ||||||||||||
| EBITDA |
5,123 | 7,820 | 11,952 | 18,512 | ||||||||||||
| Share-based compensation expense (1) |
900 | 60 | 1,057 | 256 | ||||||||||||
| Acquisition-related expenses of business combinations (2) |
— | 140 | — | 140 | ||||||||||||
| ADJUSTED EBITDA |
6,023 | 8,022 | 13,009 | 18,908 | ||||||||||||
| (1) | Share-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 Engimplan acquisition. |
Segment P&L (Unaudited)
| In 000 | Materialise Software |
Materialise Medical |
Materialise Manu- facturing |
Total segments |
Unallocated (1)(2) |
Consolidated | ||||||||||||||||||
| € | € | € | € | € | € | |||||||||||||||||||
| For the three months ended September 30, 2020 |
||||||||||||||||||||||||
| Revenues |
9,478 | 17,161 | 14,154 | 40,793 | 22 | 40,785 | ||||||||||||||||||
| Segment (adj) EBITDA |
3,114 | 5,477 | (293 | ) | 8,298 | (2,275 | ) | 6,023 | ||||||||||||||||
| Segment (adj) EBITDA % |
32.9 | % | 31.9 | % | (2.1 | %) | 20.3 | % | 14.8 | % | ||||||||||||||
| For the three months ended September 30, 2019 |
||||||||||||||||||||||||
| Revenues |
10,860 | 15,488 | 24,127 | 50,474 | (26 | ) | 50,449 | |||||||||||||||||
| Segment EBITDA |
3,769 | 2,795 | 3,862 | 10,426 | (2,404 | ) | 8,022 | |||||||||||||||||
| Segment EBITDA % |
34.7 | % | 18.0 | % | 16.0 | % | 20.7 | % | 15.9 | % | ||||||||||||||
| In 000 | Materialise Software |
Materialise Medical |
Materialise Manu- facturing |
Total segments |
Unallocated (1)(2) |
Consolidated | ||||||||||||||||||
| € | € | € | € | € | € | |||||||||||||||||||
| For the nine months ended September 30, 2020 |
||||||||||||||||||||||||
| Revenues |
28,839 | 44,541 | 51,746 | 125,126 | 22 | 125,148 | ||||||||||||||||||
| Segment (adj) EBITDA |
9,516 | 9,072 | 1,474 | 20,063 | (7,053 | ) | 13,009 | |||||||||||||||||
| Segment (adj) EBITDA % |
33.0 | % | 20.4 | % | 2.8 | % | 16.0 | % | 10.4 | % | ||||||||||||||
| For the nine months ended September 30, 2019 |
||||||||||||||||||||||||
| Revenues |
29,529 | 43,600 | 72,861 | 145,990 | (22 | ) | 145,968 | |||||||||||||||||
| Segment (adj) EBITDA |
8,785 | 7,306 | 10,393 | 26,484 | (7,576 | ) | 18,908 | |||||||||||||||||
| Segment (adj) EBITDA % |
29.8 | % | 16.8 | % | 14.3 | % | 18.1 | % | 13.0 | % | ||||||||||||||
| (1) | Unallocated Revenues consist of occasional one-off sales in our core competencies not allocated to any of our segments. |
| (2) | Unallocated segment EBITDA consists of corporate research and development, corporate headquarter costs and other operating income (expense), and the added share-based compensation expenses and acquisition-related expenses of business combinations that are included in Adjusted EBITDA. |
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 | 2020 | 2019 | 2020 | 2019 | ||||||||||||
| € | € | € | € | |||||||||||||
| Net profit (loss) for the period |
(366 | ) | 1,001 | (5,152 | ) | 397 | ||||||||||
| Income taxes |
(764 | ) | 908 | (497 | ) | 2,037 | ||||||||||
| Financial cost |
2,462 | 1,138 | 4,923 | 2,647 | ||||||||||||
| Financial income |
(1,131 | ) | (172 | ) | (1,976 | ) | (900 | ) | ||||||||
| Share in loss of joint venture |
41 | 39 | 245 | |||||||||||||
| Operating profit |
201 | 2,916 | (2,663 | ) | 4,427 | |||||||||||
| Depreciation and amortization |
4,922 | 4,904 | 14,616 | 14,082 | ||||||||||||
| Corporate research and development |
668 | 497 | 2,052 | 1,510 | ||||||||||||
| Corporate headquarter costs |
3,271 | 2,978 | 8,360 | 8,753 | ||||||||||||
| Other operating income (expense) |
(764 | ) | (726 | ) | (2,303 | ) | (1,833 | ) | ||||||||
| Segment EBITDA |
8,298 | 10,426 | 20,063 | 26,484 | ||||||||||||
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 29, 2020