Company Overview - Materialise NV is a leading provider of additive manufacturing software and sophisticated 3D printing solutions with over three decades of experience in the 3D printing industry [3] - The company offers a range of software solutions and 3D printing services that support sustainable 3D printing applications across various sectors, including healthcare, automotive, aerospace, eyewear, art and design, wearables, and consumer goods [3] Upcoming Meetings - Materialise will host its Annual General Shareholders' Meeting (AGM) on June 3, 2025, at 10:00 am CET [1] - An Extraordinary Shareholders' Meeting will also take place on the same date to discuss and vote on proposals to amend the articles of association, including renewing the Board of Directors' authorization to increase the company's authorized share capital and changing the statutory date of the AGM starting in 2026 [2] Accessibility of Information - The convening notices and other documents related to the AGM and Extraordinary Shareholders' Meeting, including the annual report, are available on Materialise's website [3]

Group 1 - Materialise's Q1 results were mixed but positively received by investors due to low expectations, with the Medical segment showing healthy growth [1] - Materialise's guidance indicates that tariffs will be less impactful moving forward [1] Group 2 - Narweena, an asset manager, focuses on identifying market dislocations caused by misunderstandings of long-term business prospects, aiming for excess risk-adjusted returns [1] - The research process at Narweena emphasizes company and industry fundamentals to uncover unique insights, with a high risk appetite and long-term investment horizon [1] - Narweena's investment strategy is influenced by an aging population, low population growth, and stagnating productivity, which may create new investment opportunities [1] - The firm believes that many industries may face stagnation or secular decline, potentially improving business performance due to reduced competition [1] - There is a trend towards asset-light businesses, leading to a declining need for infrastructure investments, which is affecting capital allocation and asset prices [1]

Q1 2025 Financial Results Conference call | April 24, 2025 www.materialise.com | NASDAQ: MTLS Safe Harbor Summary Agenda Koen Berges CFO Brigitte de Vet-Veithen CEO 3 • Q1 2025 Business Highlights • Q1 2025 Financial Highlights • Q1 2025 Financial Results • 2025 Financial Guidance • Q&A Q1 2025 Business Highlights Sustainable growth: 32% reduction in CO2 since 2019, targetting 55% by 2029 This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, a ...

Financial Data and Key Metrics Changes - Total revenue increased year-over-year by more than 4% to €66.4 million, while EBIT for Q1 2025 amounted to €0.6 million [24] - The net result for the quarter was a loss of €0.5 million or €0.01 per share, impacted by unfavorable exchange rate fluctuations [24][37] - Free cash flow was positive, reinforcing the net cash position to €67.7 million, an increase of almost €7 million compared to the beginning of the quarter [24][40] Business Line Data and Key Metrics Changes - Materialise Medical revenue grew almost 19%, driven by both Medical Software and Medical Devices sales, which increased by 14% and 21% respectively [26][29] - Software segment revenue decreased by 6% to €9.8 million due to revenue deferral, although more than 80% of Software revenue was recurring [31][56] - Manufacturing segment revenues decreased by 5.5% compared to Q1 2024, but increased by 12% compared to Q4 2024 [33] Market Data and Key Metrics Changes - Aerospace segment sales grew by 23% year-over-year, while industrial and automotive segments faced challenges [21][33] - The total deferred income position increased to €61 million, with €49 million related to Software licenses and maintenance contracts [40] Company Strategy and Development Direction - The company aims to cut absolute emissions by 55% by 2029 compared to the 2019 baseline, having already reduced emissions by 32% in 2024 [9][10] - Materialise is focusing on scaling additive manufacturing and enhancing software solutions to facilitate broader adoption [11][16] - The company is reassessing its involvement in the defense sector to strengthen its aerospace segment and create new opportunities [22] Management Comments on Operating Environment and Future Outlook - Management expects Q2 to be more challenging but anticipates stabilization in the second half of 2025, maintaining revenue guidance of €270 million to €285 million for the full year [43] - The current geopolitical landscape and macroeconomic conditions are expected to weigh on results, particularly in Q2 [43] Other Important Information - The company launched a clinical trial for a 3D-printed tracheal splint for infants, which could open new market opportunities [15] - Significant R&D investments continued, with over €11 million spent in Q1, primarily in the Medical segments [35] Q&A Session Summary Question: Impact of tariffs on Materialise - Management indicated that the U.S. manufacturing plant mitigates tariff impacts, while raw materials may be affected [48][50] Question: Q2 outlook - Management expects Q2 to be flat on the topline with uncertainty in the market, predicting pressure on the bottom line [52][54] Question: Software revenue performance - Software revenue was below €10 million for the first time since COVID, but over 80% of Software revenue is now recurring, indicating a positive trend [55][56]

Financial Data and Key Metrics Changes - Total revenue increased by more than 4% year-over-year to €66.4 million in Q1 2025, while EBIT amounted to €600,000, and the net result was a loss of €500,000 or €0.01 per share [17][18][25] - The net cash position at the end of Q1 was €67.7 million, an increase of almost €7 million compared to the beginning of the quarter [17][27] Business Line Data and Key Metrics Changes - Materialise Medical revenue grew by almost 19%, while Software and Manufacturing segments saw revenue decreases of around 6% each [18][20] - Adjusted EBITDA for Materialise Medical increased to over €9 million with a stable margin of 29%, while Software segment adjusted EBITDA decreased to €600,000 with a margin of 6.1% [21][22] Market Data and Key Metrics Changes - The aerospace segment in Manufacturing saw a sales growth of 23% compared to Q1 2024, while overall Manufacturing revenues decreased by 5.5% year-over-year [16][24] - The total deferred revenue related to software maintenance and license fees increased by €1.9 million, totaling almost €49 million [19] Company Strategy and Development Direction - The company aims to scale additive manufacturing and improve efficiency through advanced software solutions, with a focus on overcoming barriers to adoption [9][13] - Materialise is reassessing its involvement in the defense sector to strengthen its position in aerospace and create new opportunities [16] Management Comments on Operating Environment and Future Outlook - Management expects Q2 2025 to be challenging but anticipates stabilization in the second half of the year, maintaining guidance for consolidated revenue between €270 million and €285 million for the full year [29][30] - The transition to a recurring revenue model in the Software segment is progressing, with over 80% of software revenue now recurring [40][42] Other Important Information - The company published its 2024 sustainability report, aiming to cut absolute emissions by 55% by 2029 compared to the 2019 baseline [7][8] Q&A Session Summary Question: Impact of tariffs on Materialise - Management indicated that the US manufacturing plant mitigates tariff impacts, but raw materials may be affected, and the biggest concern is the potential impact on customers [35][36] Question: Outlook for Q2 - Management expects Q2 to be a difficult quarter, with a flattish top line anticipated, but uncertainty remains high [37][38] Question: Software revenue performance - Software revenue was below €10 million for the first time since the beginning of COVID, but deferred revenue is growing, and over 80% of software revenue is now recurring [39][40][41]

Revenue Performance - Total revenue for Q1 2025 increased by 4.3% to 66,379 kEUR from 63,637 kEUR in Q1 2024[4] - Materialise Medical segment revenue grew by 18.7% to 31,078 kEUR compared to 26,183 kEUR in the same period last year[5] - Revenue for Q1 2025 reached $71.789 million, a 12.5% increase from $63.637 million in Q1 2024[25] - Segment revenues for Medical, Software, and Manufacturing were $31.078 million, $9.775 million, and $25.526 million respectively in Q1 2025[33] Profitability Metrics - Adjusted EBIT for Q1 2025 was 646 kEUR, down from 2,656 kEUR in Q1 2024, with an Adjusted EBIT margin of 1.0% compared to 4.2%[4] - Gross profit increased by 2.2% to 36,724 kEUR, with a gross profit margin of 55.3% compared to 56.5% in Q1 2024[8] - Gross profit for Q1 2025 was $39.717 million, with a gross profit margin of 55.3%, down from 56.5% in Q1 2024[25] - Adjusted EBITDA for Q1 2025 was $6.147 million, down from $8.094 million in Q1 2024[31] - Materialise Software segment revenue decreased by 6.4% to 9,775 kEUR, with Adjusted EBITDA down 45.1% to 599 kEUR[6] - Materialise Manufacturing segment revenue fell by 5.5% to 25,526 kEUR, resulting in an Adjusted EBITDA of (377) kEUR[7] Financial Position - Total deferred revenues increased by 1,921 kEUR to 48,870 kEUR during the quarter[11] - Net cash position improved by 6,716 kEUR to 67,736 kEUR, driven by positive free cash flow[11] - Cash flow from operating activities for Q1 2025 was 9,713 kEUR, compared to 9,970 kEUR in Q1 2024[14] - Total assets as of March 31, 2025, were $390.454 million, a decrease from $396.336 million as of December 31, 2024[27] - Cash and cash equivalents at the end of Q1 2025 were $104.180 million, an increase from $102.304 million at the beginning of the year[30] - The company reduced its loans and borrowings to $9.502 million in current liabilities as of March 31, 2025, down from $10.383 million at the end of 2024[28] Loss and Expenses - Net loss for the period was $579,000, compared to a net profit of $3.585 million in Q1 2024[26] - The company reported a financial expense of $2.998 million in Q1 2025, significantly higher than $798,000 in Q1 2024[25] - Total comprehensive loss for Q1 2025 was $33,000, compared to a total comprehensive income of $3.312 million in Q1 2024[26] Guidance - Full fiscal year 2025 revenue guidance remains at 270,000 to 285,000 kEUR, with Adjusted EBIT guidance of 6,000 to 10,000 kEUR[16]

Market Risks and Competition - The company faces risks related to maintaining or increasing market share and reputation for its software and products, which are essential to remain competitive in the rapidly evolving additive manufacturing industry [31]. - Increased competition from both established companies and new entrants in the additive manufacturing market may lead to reduced revenue and profit margins [34]. - Demand for additive manufacturing solutions may not increase adequately, particularly if conventional production methods continue to dominate the industrial and medical sectors [44]. - The company relies on collaborations with key partners in large-scale markets, and any disruption in these relationships could hinder market competitiveness and expansion into high-growth specialty markets [40]. - Fluctuations in revenue and results of operations are expected due to various factors, including market acceptance of products and competition [41]. Financial Performance and Capital Needs - Inflationary pressures have negatively impacted operating margins and net income, with price increases implemented in 2022, 2023, and 2024 to mitigate these effects [43]. - The company may need to raise additional capital to support its growth strategy, which could be challenging to achieve on favorable terms [28]. - Revenue is currently concentrated in the industrial and medical industries, particularly in automotive/aerospace and orthopedic segments, with expected growth in cardiac and pulmonary markets [45]. - The company may require additional capital to support growth strategies, which may not be available on favorable terms due to macroeconomic conditions [56]. Regulatory and Compliance Challenges - Changes in regulatory laws and tariffs could adversely affect operations and financial results, particularly in light of geopolitical tensions [46][58]. - The company is subject to various environmental laws and regulations, which could lead to substantial liabilities and operational interruptions if compliance is not maintained [92]. - The General Data Protection Regulation (GDPR) imposes strict data protection requirements, with penalties up to €20 million or 4% of global turnover for non-compliance, affecting operational costs [104]. - The company must navigate a complex regulatory landscape, including compliance with U.S. and E.U. data privacy laws, which could impact its ability to operate effectively in various markets [106][109]. Technology and Innovation - The company is investing in expanding its software product portfolio to meet the needs of the growing additive manufacturing market [52]. - Significant investments are being made in artificial intelligence (AI) and machine learning (ML) technologies, particularly in the Materialise Medical segment [86]. - The company anticipates challenges in achieving market acceptance for its AI and ML solutions compared to competitors, which could impact financial results [87]. - The transition to a cloud-based software platform is critical, as the dominant software subscription model in the industrial sector is changing, posing a risk to the company's market position [28]. Operational Risks - The ongoing armed conflict in Ukraine has significantly impacted operations, with over 400 collaborators engaged in engineering and IT support facing instability [59][63]. - The company is dependent on key personnel for its operations, and failure to retain or recruit qualified staff could adversely affect business performance [28]. - The reliance on a limited number of suppliers for raw materials poses risks, including potential supply disruptions and increased costs [47][48]. - The company may experience unforeseen difficulties in expanding its 3D printing infrastructure, potentially leading to increased costs and operational inefficiencies [94]. Intellectual Property and Legal Risks - The company relies on patents and trade secrets for competitive advantage, and failure to protect these could lead to increased competition and lower revenue [147]. - Ongoing changes to U.S. patent laws may complicate the company's ability to obtain and enforce intellectual property rights, potentially affecting its financial condition [151]. - The company may face substantial costs related to enforcing intellectual property rights and defending against third-party claims, which could impact its financial resources [154]. - The company may be subject to claims regarding wrongful use of trade secrets by employees, which could result in litigation and associated costs [159]. Corporate Governance and Shareholder Rights - As of March 28, 2025, board members and senior management own approximately 58.60% of outstanding ordinary shares, allowing them significant influence over corporate actions [168]. - Shareholders have limited rights to call meetings or submit proposals, which could restrict their influence over company governance [190]. - The company is not required to file periodic reports as frequently as U.S. domestic issuers, potentially limiting the information available to investors [174]. Financial Overview - For the year ended December 31, 2024, the company generated €266.8 million in revenue, representing a 4% increase over the prior year [205]. - The net profit for the year was €13.4 million, with an Adjusted EBIT of €9.7 million and an Adjusted EBITDA of €31.5 million [205]. - Capital expenditures amounted to €26.4 million in 2024, with €17.5 million allocated for expanding production capacity in Germany [201].

Company Overview - Materialise's share price dropped significantly following the release of its fourth quarter earnings, primarily due to disappointing results from the manufacturing segment [1] - The transition to the new ACTech facility was anticipated to cause disruptions, but an unexpected slowdown occurred [1] Industry Insights - Narweena, an asset manager, focuses on identifying market dislocations stemming from a poor understanding of long-term business prospects [1] - The firm believes that excess risk-adjusted returns can be achieved by targeting businesses with secular growth opportunities in markets with high barriers to entry [1] - Narweena's investment strategy emphasizes company and industry fundamentals to uncover unique insights, with a preference for smaller cap stocks and markets lacking obvious competitive advantages [1] - The aging population, low population growth, and stagnating productivity growth are expected to create new investment opportunities distinct from historical trends [1] - Many industries may experience stagnation or secular decline, which could paradoxically enhance business performance due to reduced competition [1] - Conversely, some businesses may face rising costs and diseconomies of scale [1] - The economy is increasingly influenced by asset-light businesses, leading to a declining need for infrastructure investments over time [1] - A large pool of capital is pursuing a limited set of investment opportunities, resulting in rising asset prices and compressed risk premia [1]

Financial Data and Key Metrics Changes - In Q4 2024, revenue increased slightly to €65.7 million, with a full year revenue of over €267 million, representing a 4% increase from 2023 [25][27] - Adjusted EBITDA for Q4 decreased to €4.3 million from €8.5 million in Q4 2023, with a full year adjusted EBITDA remaining stable at €31.5 million [28][30] - Adjusted EBIT for Q4 was negative at €1.2 million compared to €3.2 million in Q4 2023, while full year adjusted EBIT decreased to €9.7 million from €9.9 million in 2023 [30][31] Business Line Data and Key Metrics Changes - Materialise Medical segment revenue increased by 14% in Q4 to €31.8 million, with full year revenue up nearly 15% to €116 million [32][34] - Manufacturing segment revenue decreased by 13% in Q4, with full year revenue down 3% to €106.5 million [37] - Software segment revenue remained stable at around €44 million for the full year, with Q4 adjusted EBITDA at €1.1 million [35][36] Market Data and Key Metrics Changes - Materialise Medical accounted for nearly 50% of consolidated revenue in Q4, while Manufacturing contributed 35% and Software 17% [26] - The deferred revenue related to software licenses and maintenance fees increased by €5.9 million in Q4, totaling just above €59 million at year-end [27][46] Company Strategy and Development Direction - The company aims to continue investing in growth markets, particularly in Medical and Software segments, while focusing on cost control in Manufacturing [51] - The launch of the Mimics platform aims to enhance the adoption of personalized solutions in the medical field [12] - The company is transitioning towards a cloud-based subscription model for its Software segment, which is expected to positively impact future revenue potential [20][50] Management's Comments on Operating Environment and Future Outlook - Management noted that 2024 was a challenging year due to high interest rates, geopolitical tensions, and a difficult economic climate, yet the company achieved 4% growth [9] - The uncertain macroeconomic environment in Europe is expected to persist in 2025, impacting the Manufacturing segment [50] - Revenue guidance for 2025 is projected to be between €270 million and €285 million, with adjusted EBIT expected to range from €6 million to €10 million [51] Other Important Information - The company reported a strong cash position with cash reserves of €102 million at the end of Q4, despite a bullet loan repayment of €10 million [44] - The operational cash flow for the full year increased to €31.5 million, up by 56% compared to 2023 [48] Q&A Session Summary Question: Margin difference between recurring and nonrecurring revenue in the software segment - Management indicated that there is no large margin difference between recurring and nonrecurring revenue in the Software segment [60] Question: Average lifetime of the subscription - Most subscription-based revenue is expected to have a one-year lifetime [64] Question: Granularity on increased R&D spend, ACTech start-up, and FEops integration - About half of the cost increase in Q4 was attributed to these elements, impacting adjusted EBIT [65] Question: Changes in visibility regarding fourth quarter performance - Management acknowledged that the industrial climate worsened in Q4, which was not fully anticipated in October [67] Question: Explanation for the significant growth in deferred revenue - The increase in deferred revenue was anticipated and aligns with seasonal trends, reflecting larger contracts at year-end [71] Question: Future operational expenses and cost control measures - Management plans to focus on cost control and optimization, particularly in the Manufacturing segment [77]

Financial Data and Key Metrics Changes - In Q4 2024, revenue increased slightly to €65.7 million, with a full year revenue of over €267 million, representing a 4% increase from 2023 [25][27] - Adjusted EBITDA for Q4 decreased to €4.3 million from €8.5 million in Q4 2023, with a corresponding adjusted EBITDA margin of 6.6% [28][29] - Adjusted EBIT for Q4 was negative at €1.2 million compared to €3.2 million in Q4 2023, with a full year adjusted EBIT of €9.7 million, down from €9.9 million in 2023 [30][31] Business Line Data and Key Metrics Changes - Materialise Medical segment revenue increased by 14% to €31.8 million in Q4, with a full year revenue increase of almost 15% to €116 million [25][34] - Manufacturing segment revenue decreased by 13% in Q4 compared to the previous year, with a full year revenue decrease of 3% to €106.5 million [37] - Software segment revenue remained stable at around €44 million for the full year, with Q4 adjusted EBITDA at €1.1 million and an adjusted EBITDA margin of 10.1% [36][38] Market Data and Key Metrics Changes - The Medical segment accounted for close to half of consolidated revenue in Q4, while Manufacturing and Software accounted for 35% and 17% respectively [26] - The Manufacturing segment faced challenges due to unfavorable macroeconomic conditions in Europe, particularly impacting prototyping demand [37][50] Company Strategy and Development Direction - The company aims to continue investing in growth markets, particularly in the Medical segment and factory management solutions, while focusing on cost control in the Manufacturing segment [51][52] - The launch of the Mimics platform aims to enhance the adoption of personalized solutions in the Medical segment [12] Management's Comments on Operating Environment and Future Outlook - Management noted that 2024 was a challenging year due to high interest rates, geopolitical tensions, and a difficult economic climate, yet the company achieved 4% growth [9] - For 2025, the company expects revenues to be in the range of €270 million to €285 million, with continued growth in Medical and Software segments, but challenges in Manufacturing due to the uncertain macroeconomic environment [50][51] Other Important Information - The company reported a strong balance sheet with cash reserves of €102 million at the end of Q4, despite a bullet loan repayment of €10 million [44] - Deferred revenue related to software licenses and maintenance fees increased by €5.9 million in Q4, totaling just above €59 million at year-end [27][46] Q&A Session Summary Question: Margin difference between recurring and nonrecurring revenue in the software segment - Management indicated that there is no large margin difference between recurring and nonrecurring revenue in the Software segment [60][61] Question: Average lifetime of the subscription - The average lifetime of subscription-based revenue is typically expected to be one year [64] Question: Granularity on increased R&D spend, ACTech start-up, and FEops integration - About half of the cost increase in Q4 was attributed to the three elements mentioned, impacting adjusted EBIT [65] Question: Changes in visibility regarding the fourth quarter - Management acknowledged that the industrial climate had accelerated in Q4, impacting results and guidance for 2025 [66] Question: Explanation for the increase in deferred revenue in the Software segment - The increase in deferred revenue was anticipated and aligned with seasonal trends, reflecting larger contracts at year-end [71][72] Question: Future operational expenses and cost control measures - Management confirmed a strong focus on cost control and optimization in 2025, particularly in the Manufacturing segment [77]