Materialise Reports Third Quarter 2022 Results

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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 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.

Cautionary Statement on Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, our intentions, beliefs, assumptions, projections, outlook, analyses or current expectations, plans, objectives, strategies and prospects, both financial and business, including statements concerning, among other things, our results of operations, cash needs, capital expenditures, expenses, financial condition, liquidity, prospects, growth and strategies (including how our business, results of operations and financial condition could be impacted by the current armed conflict in Ukraine and the COVID-19 pandemic and related public health measures, as well as the related actions we are taking in response), and the trends and competition that may affect the markets, industry or us. Such statements are subject to known and unknown uncertainties and risks. When used in this press release, the words “estimate,” “expect,” “anticipate,” “project,” “plan,” “intend,” “believe,” “forecast,” “will,” “may,” “could,” “might,” “aim,” “should,” and variations of such words or similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon the expectations of management under current assumptions at the time of this press release. These expectations, beliefs and projections are expressed in good faith and the company believes there is a reasonable basis for them. However, the company cannot offer any assurance that our expectations, beliefs and projections will actually be achieved. By their nature, forward-looking statements involve risks and uncertainties because they relate to events, competitive dynamics and industry change, and depend on economic circumstances that may or may not occur in the future or may occur on longer or shorter timelines than anticipated. We caution you that forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. All of the forward-looking statements are subject to risks and uncertainties that may cause the company's most recent actual results to differ materially from our expectations, including risk factors described in the company's most recent annual report on Form 20-F filed with the U.S. Securities and Exchange Commission. There are a number of risks and uncertainties that could cause the company's actual results to differ materially from the forward-looking statements contained in this press release.

The company is providing this information as of the date of this press release and does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise, unless it has obligations under the federal securities laws to update and disclose material developments related to previously disclosed information.

Consolidated income statements (Unaudited)

	for the three months ended September 30,						for the nine months ended September 30,
In '000	2022		2022		*2021()**		2022		*2021()**
	U.S.$		€		€		€		€
Revenue	56,819		58,288		52,195		169,319		148,461
Cost of Sales	(25,584	)	(26,245	)	(21,119	)	(76,236	)	(64,378	)
Gross Profit	31,235		32,042		31,076		93,083		84,084
Gross profit as % of revenue	55.0	%	55.0	%	59.5	%	55.0	%	56.6	%

Research and development expenses	(9,078	)	(9,313	)	(6,602	)	(26,074	)	(19,982	)
Sales and marketing expenses	(14,815	)	(15,198	)	(12,413	)	(44,841	)	(35,730	)
General and administrative expenses	(8,754	)	(8,980	)	(7,885	)	(26,089	)	(23,449	)
Net other operating income (expenses)	1,137		1,166		355		2,603		2,318
Operating (loss) profit	(275	)	(282	)	4,529		(1,318	)	7,239

Financial expenses	(2,057	)	(2,110	)	2,334		(4,671	)	(3,182	)
Financial income	4,175		4,283		1,869		9,800		4,426
Share in loss of joint venture	-		-		-		-		-
(Loss) profit before taxes	1,843		1,891		8,732		3,812		8,483

Income Taxes (*)	(466	)	(478	)	(75	)	(1,377	)	(101	)
*Net (loss) profit for the period ()**	1,377		1,413		8,657		2,435		8,382
Net (loss) profit attributable to:	-
The owners of the parent	1,385		1,421		8,660		2,457		8,386
Non-controlling interest	(8	)	(8	)	(3	)	(21	)	(4	)

Earning per share attributable to owners of the parent
Basic (*)	0.02		0.02		0.15		0.04		0.15
Diluted (*)	0.02		0.02		0.15		0.04		0.15

Weighted average basic shares outstanding	59,064		59,064		58,731		59,064		55,935
Weighted average diluted shares outstanding	59,089		59,089		58,944		59,099		56,206

(*)		The year 2021 has been restated to reflect the final accounting of the business combination with RS Print.
		Impact on the nine months ended September 30 income taxes and net profit is (46)k€.
		The year 2021 has been restated to reflect the final accounting of the business combination with RS Print.
		Impact on the three months ended September 30 income taxes and net profit is 5 k€.

Consolidated statements of comprehensive income (Unaudited)

for the three months ended

September 30,

for the nine months ended

September 30,

In 000€

2022

2021(*)

2022

2021(*)

U.S.$

€

Net profit (loss) for the period (*)

1,377

1,413

8,657

2,435

8,382

Other comprehensive income

Recycling

Exchange difference on translation of foreign operations

219

225

(385

)

1,291

1,590

Non-recycling

Fair value adjustments through OCI - Equity instruments

)

Other comprehensive income (loss), net of taxes

219

225

(385

)

1,291

1,638

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

1,596

1,638

8,272

3,726

10,020

Total comprehensive income (loss) attributable to:

The owners of the parent

1,604

1,646

8,275

3,748

10,023

Non-controlling interests

)

(21

)

(*)		The year 2021 has been restated to reflect the final accounting of the business combination with RS Print.
		Impact on the nine months ended September 30 income taxes and net profit is (46)k€.
		The year 2021 has been restated to reflect the final accounting of the business combination with RS Print.
		Impact on the three months ended September 30 income taxes and net profit is 5 k€.

Consolidated statement of financial position (Unaudited)

	As of September 30,	As of December 31,
In 000€	2022	2021
Assets
Non-current assets
Goodwill	50,190	18,726
Intangible assets	38,710	31,668
Property, plant & equipment	92,335	84,451
Right-of-Use assets	8,520	9,054
Investments in joint ventures	-	-
Deferred tax assets	217	227
Investments in convertible loans	3,431	3,560
Investments in non-listed equity instruments	399	399
Other non-current assets	4,948	7,520
Total non-current assets	198,750	155,605
Current assets
Inventories	15,532	11,295
Trade receivables	42,329	41,541
Other current assets	8,374	8,940
Cash and cash equivalents	150,621	196,028
Total current assets	216,856	257,803
Total assets	415,606	413,408

	As of September 30,		As of December 31,
In 000€	2022		2021
Equity and liabilities
Equity
Share capital	4,487		4,489
Share premium	233,869		233,872
Retained earnings and other reserves	(1,797	)	(5,784	)
Equity attributable to the owners of the parent	236,559		232,577
Non-controlling interest	(21	)	1
Total equity	236,538		232,578
Non-current liabilities
Loans & borrowings	58,126		72,637
Lease liabilities	5,004		5,268
Deferred tax liabilities	4,239		4,371
Deferred income	6,932		4,952
Other non-current liabilities	1,027		2,168
Total non-current liabilities	75,328		89,396
Current liabilities
Loans & borrowings	17,593		17,849
Lease liabilities	3,202		3,353
Trade payables	25,038		20,171
Tax payables	1,128		783
Deferred income	36,112		33,306
Other current liabilities	20,667		15,972
Total current liabilities	103,740		91,434
Total equity and liabilities	415,606		413,408

Consolidated statement of cash flows (Unaudited)

	for the nine months ended September 30,
In 000€	2022		2021*
Operating activities
Net (loss) profit for the period (*)	2,435		8,382
Non-cash and operational adjustments
Depreciation of property plant & equipment	11,335		11,460
Amortization of intangible assets	4,859		3,780
Impairment of goodwill and intangible assets	-		-
Share-based payment expense	(121	)	(878	)
Loss (gain) on disposal of property, plant & equipment	59		43
Movement in provisions	(506	)	7
Movement reserve for bad debt and slow moving inventory	(42	)	154
Financial income	(9,771	)	(4,426	)
Financial expense	5,009		3,182
Impact of foreign currencies	98		107
Share in loss (gain) of a joint venture (equity method)	-		-
(Deferred) income taxes (*)	1,384		101
Other non-current liabilities	-		-
Working capital adjustments	9,109		(4,531	)
Decrease (increase) in trade receivables and other receivables	(184	)	(7,553	)
Decrease (increase) in inventories and contracts in progress	(4,356	)	(1,770	)
Increase (decrease) in deferred revenue	3,815		(56	)
Increase (decrease) in trade payables and other payables	9,834		4,848
Income tax paid & Interest received	(262	)	108
Net cash flow from operating activities	23,587		17,490

(*)		The year 2021 has been restated to reflect the final accounting of the business combination with RS Print.
		Impact on Net profit for the period and on (Deferred) income taxes is (46) k€.

	for the nine months ended September 30,
In 000€	2022		2021
Investing activities
Purchase of property, plant & equipment	(16,066	)	(4,827	)
Purchase of intangible assets	(3,422	)	(2,439	)
Proceeds from the sale of property, plant & equipment & intangible assets (net)	319		295
Acquisition of subsidiary (net of cash)	(29,355	)	-
(Convertible) Loans granted	-		1,239
Investment in subsidiary, net of cash acquired	-		(1,680	)
Net cash flow used in investing activities	(48,523	)	(7,412	)
Financing activities
Repayment of loans & borrowings	(15,182	)	(11,169	)
Repayment of leases	(2,566	)	(2,841	)
Capital increase	-		85,787
Interest paid	(1,665	)	(1,652	)
Other financial income (expense)	1,378		2,740
Net cash flow from (used in) financing activities	(18,035	)	72,865
Net increase/(decrease) of cash & cash equivalents	(42,972	)	82,943
Cash & Cash equivalents at the beginning of the year	196,028		111,538
Exchange rate differences on cash & cash equivalents	(2,433	)	465
Cash & cash equivalents at end of the period	150,621		194,946

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€	2022		*2021 ()**		2022		*2021 ()**
*Net profit (loss) for the period ()**	1,413		8,657		2,435		8,382
Income taxes (*)	478		75		1,377		101
Financial expenses	2,110		(2,334	)	4,671		3,182
Financial income	(4,283	)	(1,869	)	(9,800	)	(4,426	)
Depreciation and amortization	5,378		5,314		16,194		15,240
Share in loss of joint venture	-		-		-		-
EBITDA	5,096		9,843		14,876		22,480
Share-based compensation expense (1)	(24	)	(104	)	(121	)	(878	)
Acquisition-related expenses of business combinations (2)	-		-		-		405
Adjusted EBITDA	5,072		9,739		14,755		22,007

(1)		Share-based compensation expense represents the cost of equity-settled and share-based payments to employees.
(2)		Acquisition-related expenses of business combinations represents expenses incurred in connection with the acquisition of our option to buy Link3D.
(*)		The year 2021 has been restated to reflect the final accounting of the business combination with RS Print.
		Impact on the nine months ended September 30 income taxes and net profit is (46)k€.
		The year 2021 has been restated to reflect the final accounting of the business combination with RS Print.
		Impact on the three months ended September 30 income taxes and net profit is 5 k€.

Segment P&L (Unaudited)

In 000€	Materialise Software		Materialise Medical		Materialise Manufacturing		Total segments		Unallocated (1)		Consolidated
For the three months ended September 30, 2022
Revenues	10,863		21,391		26,033		58,288		0		58,288
Segment (adj) EBITDA	202		4,765		2,530		7,497		(2,425	)	5,072
Segment (adj) EBITDA %	1.9	%	22.3	%	9.7	%	12.9	%			8.7	%
For the three months ended September 30, 2021
Revenues	10,468		18,910		22,817		52,196		(0	)	52,195
Segment (adj) EBITDA	3,708		5,251		3,546		12,506		(2,767	)	9,739
Segment (adj) EBITDA %	35.4	%	27.8	%	15.5	%	24.0	%			18.7	%

In 000€	Materialise Software		Materialise Medical		Materialise Manufacturing		Total segments		Unallocated (1)		Consolidated
For the nine months ended September 30, 2022
Revenues	31,989		60,592		76,739		169,319		0		169,319
Segment (adj) EBITDA	2,955		12,466		6,722		22,144		(7,388	)	14,755
Segment (adj) EBITDA %	9.2	%	20.6	%	8.8	%	13.1	%			8.7	%
For the nine months ended September 30, 2021
Revenues	30,719		52,686		65,199		148,604		(142	)	148,461
Segment (adj) EBITDA	10,266		14,313		5,252		29,831		(7,826	)	22,004
Segment (adj) EBITDA %	33.4	%	27.2	%	8.1	%	20.1	%			14.8	%

(1) Unallocated segment adjusted EBITDA consists of corporate research and development and corporate other operating income (expense), and the added share-based compensation expenses, acquisition related expenses of business combinations, impairments and fair value of business combinations that are included in Adjusted EBITDA.

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

	for the three months ended September 30,				for the nine months ended September 30,
In 000€	2022		*2021 ()**		2022		*2021 ()**
*Net profit (loss) for the period ()**	1,413		8,657		2,435		8,382
Income taxes (*)	478		75		1,377		101
Financial cost	2,110		(2,334	)	4,671		3,182
Financial income	(4,283	)	(1,869	)	(9,800	)	(4,426	)
Share in loss of joint venture	-		-		-		-

Operating (loss) profit	(282	)	4,529		(1,318	)	7,239

Depreciation and amortization	5,378		5,314		16,194		15,240
Corporate research and development	592		710		2,057		2,191
Corporate headquarter costs	2,491		2,463		7,103		6,907
Other operating income (expense)	(681	)	(511	)	(1,892	)	(1,745	)

Segment adjusted EBITDA	7,497		12,506		22,144		29,831

(*)		The year 2021 has been restated to reflect the final accounting of the business combination with RS Print.
		Impact on the nine months ended September 30 income taxes and net profit is (46)k€.
		The year 2021 has been restated to reflect the final accounting of the business combination with RS Print.
		Impact on the three months ended September 30 income taxes and net profit is 5 k€.

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