Company Performance - Materialise NV (NASDAQ: MTLS) reported soft results in the second quarter, primarily due to automotive headwinds in Europe and macro volatility affecting customer investment appetite [1] - The Medical segment of Materialise is expected to perform better despite the current challenges [1] Investment Insights - Narweena, an asset manager, focuses on identifying market dislocations caused by a poor understanding of long-term business prospects, aiming for excess risk-adjusted returns through secular growth opportunities [1] - The investment strategy emphasizes company and industry fundamentals to uncover unique insights, with a high risk appetite and a long-term horizon targeting deeply undervalued stocks [1] - The aging population, low population growth, and stagnating productivity growth are expected to create new investment opportunities, contrasting with past trends [1] - Many industries may face stagnation or secular decline, which could paradoxically enhance business performance due to reduced competition [1] - The economic landscape is increasingly characterized by asset-light businesses, leading to a declining need for infrastructure investments [1] - A large pool of capital is pursuing a limited set of investment opportunities, resulting in rising asset prices and compressed risk premia over time [1]

Financial Data and Key Metrics Changes - Total consolidated revenue decreased year over year by 5.8% to €64.8 million, despite strong performance in the Medical segment [20][23] - Gross profit margin increased to 58.3%, reflecting changes in revenue mix and optimization of production costs [20][31] - Adjusted EBIT for the quarter amounted to €3.1 million, showing a strong increase compared to prior quarters [20][25] - Net result for the quarter was a profit of €0.2 million, impacted by unfavorable exchange rate fluctuations [20][33] - Free cash flow was positive, leading to a net cash position of €63 million at the end of Q2, an increase of €2 million since the beginning of the year [20][35] Business Line Data and Key Metrics Changes - Medical segment achieved high double-digit growth, with revenue increasing by almost 17% this quarter [20][26] - Software segment revenue decreased by 12% to €9.9 million, partly due to the transition to a recurring revenue model and macroeconomic pressures [20][27] - Manufacturing segment revenue declined by almost 25% compared to the same period last year, realizing quarterly revenue of €22.1 million [20][29] Market Data and Key Metrics Changes - Materialise Medical accounted for 51% of total revenue, Materialise Software for 15%, and Materialise Manufacturing for 34% in Q2 [23] - The U.S. market continued to face challenges, impacting sales volumes in the Software segment [27][61] Company Strategy and Development Direction - The company is focusing on mass personalization in the medical business, expanding into new markets such as respiratory [7][8] - A pilot collaboration with Johnson & Johnson aims to advance the adoption of surgical planning solutions in the respiratory market [11] - The company is engaging with the defense sector to enhance regional defense capabilities, which is expected to open new opportunities [15][16] Management Comments on Operating Environment and Future Outlook - Management anticipates that geopolitical volatility and macroeconomic uncertainty may intensify, impacting the business climate for the remainder of the year [37] - Revenue guidance for the full year has been slightly reduced from €270 million - €285 million to €265 million - €280 million [38] - Despite the lower revenue outlook, management remains confident in the fundamentals of the business and the potential for structural cost efficiencies [38] Other Important Information - The company continues to invest in R&D, with over €11 million spent in the quarter, primarily in the Medical segment [32] - A restructuring in the manufacturing division has been implemented to manage costs amid revenue pressures [19][30] Q&A Session Summary Question: Can you quantify the opportunity in the respiratory market? - Management indicated that the respiratory market is new and still developing, with revenue impact not expected until next year [44][45] Question: What is the purpose of the €20 million debt taken out during the quarter? - This debt is part of an earlier agreement for a €50 million facility, intended for CapEx or M&A investments in the future [47][49] Question: What drove the strong gross margins despite lower revenues? - The strong gross margins were attributed to a combination of mix effects and the ability to reduce production costs in both medical and manufacturing segments [50] Question: Will the medical segment continue to see double-digit growth? - Management expressed confidence that the medical segment will continue to grow, with ongoing investments in new markets [58] Question: What parameters were used for the revised top-line guidance? - The revised guidance was based on a detailed exercise considering various business lines and market conditions, rather than a single parameter [60][62]

2 Agenda Q2 2025 Financial Results Conference call | July 24, 2025 www.materialise.com | NASDAQ: MTLS Safe Harbor Summary This presentation 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 bu ...

Core Insights - The article discusses the current market trends and potential investment opportunities within specific sectors, highlighting the importance of thorough analysis in making informed investment decisions [1][2]. Group 1: Market Trends - Recent market fluctuations have shown a significant impact on investor sentiment, with a notable increase in volatility across various sectors [1]. - Analysts are observing a shift in consumer behavior, which is influencing demand patterns and subsequently affecting stock performance [2]. Group 2: Investment Opportunities - Certain industries, particularly technology and renewable energy, are identified as having strong growth potential, driven by innovation and regulatory support [1]. - Companies that adapt quickly to changing market conditions and consumer preferences are likely to outperform their peers [2]. Group 3: Financial Performance - Financial reports indicate that several companies have exceeded earnings expectations, showcasing resilience in challenging market environments [1]. - Key metrics such as revenue growth and profit margins are being closely monitored to assess the overall health of the sectors [2].

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]

Financial Performance - Revenue increased by 4.3% to 66.4 million EUR in Q1 2025 compared to 63.6 million EUR in Q1 2024 [16, 18] - Adjusted EBIT decreased by 75.7% to 646 kEUR in Q1 2025, representing 1.0% of revenue, compared to 2.7 million EUR in Q1 2024 [20, 14] - Adjusted EBITDA decreased by 24.1% to 6.1 million EUR in Q1 2025, representing 9.3% of revenue, compared to 8.1 million EUR in Q1 2024 [20] - Net loss was (535) kEUR, representing (1) EUR-ct per share [14] Segment Performance - Medical segment revenue increased by 18.7% to 31.1 million EUR in Q1 2025 compared to 26.2 million EUR in Q1 2024 [23, 25] - Software segment revenue decreased by 6.4% to 9.8 million EUR in Q1 2025 compared to 10.4 million EUR in Q1 2024 [27, 28] - Manufacturing segment revenue decreased by 5.5% to 25.5 million EUR in Q1 2025 compared to 27.0 million EUR in Q1 2024 [30, 31] Other Financial Data - Net cash position increased by 6.7 million EUR to 67.7 million EUR over Q1 2024 [14] - Deferred revenue from software licenses and maintenance increased to 48.9 million EUR [18] - The company is targeting a 55% reduction in CO2 emissions by 2029, with a 32% reduction achieved since 2019 [9] Financial Guidance - The company maintains its prior guidance for 2025, expecting consolidated revenue within the range of 270 to 285 million EUR and consolidated Adjusted EBIT within the range of 6 to 10 million EUR [44]

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]