Materialise(MTLS) - 2024 Q3 - Quarterly Report

Third Quarter 2024 Performance Highlights CEO Commentary CEO Brigitte de Vet-Veithen noted strong Q3 2024 operational results, with consolidated revenue up over 14% and Adjusted EBIT growing 89% - Consolidated revenue increased by over 14% in Q3 2024, with growth across all three business segments[3] - Materialise Medical segment revenue increased more than 24%, marking an especially strong quarter[3] - Consolidated Adjusted EBIT grew by 89% to 4,408 thousand EUR, reflecting strong operational leverage and continued investment[3] Consolidated Financial Highlights Materialise reported increased Q3 2024 total revenue and Adjusted EBIT, but net profit decreased due to currency effects Consolidated Financial Highlights (Q3 2024 vs Q3 2023) | Metric | Q3 2024 (thousand EUR) | Q3 2023 (thousand EUR) | Change (%) | | :----------------------- | :------------- | :------------- | :--------- | | Total Revenue | 68,652 | 60,130 | 14.2% | | Gross Profit % of Revenue| 57.2% | 56.0% | 1.2 pp | | Adjusted EBIT | 4,408 | 2,330 | 89.2% | | Adjusted EBIT Margin | 6.4% | 3.9% | 2.5 pp | | Adjusted EBITDA | 9,895 | 7,857 | 25.9% | | Net Profit | 3,038 | 4,013 | -24.3% | | Diluted EPS (EUR) | 0.05 | 0.07 | -28.6% | - Net financial result was negative 1,137 thousand EUR in Q3 2024, compared to positive 1,319 thousand EUR in Q3 2023, primarily due to unfavorable currency exchange effects[10] Segmental Performance Materialise Medical Segment The Medical segment showed robust Q3 2024 growth, with significant increases in revenue and Adjusted EBITDA and margin Materialise Medical Segment Performance (Q3 2024 vs Q3 2023) | Metric | Q3 2024 (thousand EUR) | Q3 2023 (thousand EUR) | Change (%) | | :--------------------- | :------------- | :------------- | :--------- | | Revenue | 30,197 | 24,263 | 24.5% | | Segment Adjusted EBITDA| 9,895 | 7,143 | 38.5% | | Segment Adjusted EBITDA Margin | 32.8% | 29.4% | 3.4 pp | Materialise Software Segment The Software segment experienced modest Q3 2024 revenue growth and increased Adjusted EBITDA and its margin Materialise Software Segment Performance (Q3 2024 vs Q3 2023) | Metric | Q3 2024 (thousand EUR) | Q3 2023 (thousand EUR) | Change (%) | | :--------------------- | :------------- | :------------- | :--------- | | Revenue | 11,111 | 10,811 | 2.8% | | Segment Adjusted EBITDA| 1,975 | 1,781 | 10.9% | | Segment Adjusted EBITDA Margin | 17.8% | 16.5% | 1.3 pp | Materialise Manufacturing Segment The Manufacturing segment saw Q3 2024 revenue growth, but Adjusted EBITDA and margin declined year-over-year Materialise Manufacturing Segment Performance (Q3 2024 vs Q3 2023) | Metric | Q3 2024 (thousand EUR) | Q3 2023 (thousand EUR) | Change (%) | | :--------------------- | :------------- | :------------- | :--------- | | Revenue | 27,344 | 25,056 | 9.1% | | Segment Adjusted EBITDA| 701 | 1,074 | -34.7% | | Segment Adjusted EBITDA Margin | 2.6% | 4.3% | -1.7 pp | Consolidated Financial Statements Consolidated Income Statement Q3 2024 income statement shows 14.2% revenue growth and higher operating profit, but net profit decreased Consolidated Income Statement (Q3 2024 vs Q3 2023) | Metric (thousand EUR) | Q3 2024 | Q3 2023 | | :------------------------ | :------ | :------ | | Revenue | 68,652 | 60,130 | | Cost of Sales | (29,355)| (26,435)| | Gross Profit | 39,297 | 33,696 | | Gross profit as % of revenue | 57.2% | 56.0% | | Operating profit | 4,313 | 2,330 | | Financial expenses | (1,843) | (1,554) | | Financial income | 706 | 2,873 | | Net profit for the period | 3,038 | 4,013 | | Basic EPS (EUR) | 0.05 | 0.07 | | Diluted EPS (EUR) | 0.05 | 0.07 | Consolidated Income Statement (9 Months Ended Sep 30, 2024 vs 2023) | Metric (thousand EUR) | 9M 2024 | 9M 2023 | | :------------------------ | :------ | :------ | | Revenue | 201,085 | 190,832 | | Gross Profit | 114,461 | 107,583 | | Operating profit | 10,700 | 6,732 | | Net profit for the period | 10,500 | 7,234 | | Basic EPS (EUR) | 0.18 | 0.12 | | Diluted EPS (EUR) | 0.18 | 0.12 | Consolidated Statement of Comprehensive Income Total comprehensive income for Q3 2024 increased, driven by positive foreign exchange differences, offsetting lower net profit Consolidated Statement of Comprehensive Income (Q3 2024 vs Q3 2023) | Metric (thousand EUR) | Q3 2024 | Q3 2023 | | :------------------------------------------ | :------ | :------ | | Net profit (loss) for the period | 3,038 | 4,013 | | Exchange difference on translation of foreign operations | 739 | (770) | | Total comprehensive income (loss) for the year, net of taxes | 3,777 | 3,242 | Consolidated Statement of Comprehensive Income (9 Months Ended Sep 30, 2024 vs 2023) | Metric (thousand EUR) | 9M 2024 | 9M 2023 | | :------------------------------------------ | :------ | :------ | | Net profit (loss) for the period | 10,500 | 7,234 | | Exchange difference on translation of foreign operations | (317) | 471 | | Total comprehensive income (loss) for the year, net of taxes | 10,183 | 7,705 | Consolidated Statement of Financial Position (Balance Sheet) As of Sep 30, 2024, Materialise maintained a strong net cash position and increased shareholders' equity Key Balance Sheet Items (as of Sep 30, 2024 vs Dec 31, 2023) | Metric (thousand EUR) | Sep 30, 2024 | Dec 31, 2023 | | :---------------------------- | :----------- | :----------- | | Total Assets | 394,658 | 396,630 | | Cash and cash equivalents | 116,163 | 127,573 | | Gross Debt | 53,037 | 64,398 | | Net Cash Position | 63,126 | 63,175 | | Net Shareholders' Equity | 246,989 | 236,594 | Consolidated Statement of Cash Flows 9M 2024 operating cash flow increased, but significant investments led to a net decrease in cash and equivalents Consolidated Statement of Cash Flows (9 Months Ended Sep 30, 2024 vs 2023) | Metric (thousand EUR) | 9M 2024 | 9M 2023 | | :------------------------------------ | :------ | :------ | | Net cash flow from operating activities | 25,239 | 19,963 | | Net cash flow used in investing activities | (21,055)| (8,665) |\ | Net cash flow from (used in) financing activities | (15,077)| (18,334)|\ | Net increase/(decrease) of cash & cash equivalents | (10,892)| (7,037) |\ | Cash & Cash equivalents at end of the period | 116,163 | 133,953 | - Capital expenditures for Q3 2024 amounted to 7,328 thousand EUR[14] - Investing activities for the nine months ended September 30, 2024, included significant purchases of property, plant & equipment (17,305 thousand EUR) and the acquisition of a subsidiary (2,670 thousand EUR net of cash)[30] Financial Guidance 2024 Full-Year Outlook Materialise reaffirmed its full-year 2024 revenue and Adjusted EBIT guidance, confident in operational performance - Full-year 2024 revenue is expected to be within the previously communicated range of 265,000 thousand EUR to 275,000 thousand EUR[16] - Adjusted EBIT guidance for fiscal year 2024 is maintained at 11,000 thousand EUR to 14,000 thousand EUR, even with the integration of the recent FEops acquisition[16] Non-IFRS Financial Measures & Reconciliations Definition of Non-IFRS Measures Materialise uses non-IFRS measures like Adjusted EBIT/EBITDA for operational performance, excluding financing and non-recurring items - EBIT is calculated as net profit plus income taxes, financial expenses (less financial income), and shares of profit or loss in a joint venture[17] - Adjusted EBIT and Adjusted EBITDA are derived by adding share-based compensation expenses, acquisition-related expenses of business combinations, impairments, and revaluation of fair value due to business combinations to EBIT and EBITDA, respectively[17] - Management uses these non-IFRS measures to assess the performance of day-to-day operations, excluding financing and long-term investment impacts, and also uses segment Adjusted EBITDA to evaluate business segment performance[17] Reconciliation of Net Profit to EBITDA and Adjusted EBITDA Reconciliation shows increased Q3 and 9M 2024 EBITDA and Adjusted EBITDA, reflecting improved operational performance Reconciliation of Net Profit to EBITDA and Adjusted EBITDA (Q3 2024 vs Q3 2023) | Metric (thousand EUR) | Q3 2024 | Q3 2023 | | :------------------------ | :------ | :------ | | Net profit (loss) for the period | 3,038 | 4,013 | | EBITDA | 9,800 | 7,857 | | Adjusted EBITDA | 9,895 | 7,857 | Reconciliation of Net Profit to EBITDA and Adjusted EBITDA (9 Months Ended Sep 30, 2024 vs 2023) | Metric (thousand EUR) | 9M 2024 | 9M 2023 | | :------------------------ | :------ | :------ | | Net profit (loss) for the period | 10,500 | 7,234 | | EBITDA | 26,941 | 22,923 | | Adjusted EBITDA | 27,178 | 22,923 | - Adjustments for Q3 2024 include 71 thousand EUR for share-based compensation expense and 24 thousand EUR for acquisition-related expenses of business combinations (Feops acquisition)[31][32] Reconciliation of Net Profit to EBIT and Adjusted EBIT EBIT and Adjusted EBIT showed substantial growth in Q3 and 9M 2024, indicating improved operating profitability Reconciliation of Net Profit to EBIT and Adjusted EBIT (Q3 2024 vs Q3 2023) | Metric (thousand EUR) | Q3 2024 | Q3 2023 | | :------------------------ | :------ | :------ | | Net profit (loss) for the period | 3,038 | 4,013 | | EBIT | 4,313 | 2,330 | | Adjusted EBIT | 4,408 | 2,330 | Reconciliation of Net Profit to EBIT and Adjusted EBIT (9 Months Ended Sep 30, 2024 vs 2023) | Metric (thousand EUR) | 9M 2024 | 9M 2023 | | :------------------------ | :------ | :------ | | Net profit (loss) for the period | 10,500 | 7,234 | | EBIT | 10,700 | 6,732 | | Adjusted EBIT | 10,937 | 6,732 | - Adjustments for Q3 2024 include 71 thousand EUR for share-based compensation expense and 24 thousand EUR for acquisition-related expenses of business combinations (Feops acquisition)[33][34] Segment P&L and Adjusted EBITDA Reconciliation Segment P&L shows Medical's strong Adjusted EBITDA growth, Manufacturing's decline, and impact of unallocated costs Segment Revenues and Adjusted EBITDA (Q3 2024 vs Q3 2023) | Segment | Q3 2024 Revenue (thousand EUR) | Q3 2023 Revenue (thousand EUR) | Q3 2024 Adj EBITDA (thousand EUR) | Q3 2023 Adj EBITDA (thousand EUR) | Q3 2024 Adj EBITDA % | Q3 2023 Adj EBITDA % | | :-------------- | :--------------------- | :--------------------- | :------------------------ | :------------------------ | :------------------- | :------------------- | | Medical | 30,197 | 24,263 | 9,895 | 7,143 | 32.8% | 29.4% | | Software | 11,111 | 10,811 | 1,975 | 1,781 | 17.8% | 16.5% | | Manufacturing | 27,344 | 25,056 | 701 | 1,074 | 2.6% | 4.3% | | Total Segments | 68,652 | 60,130 | 12,572 | 9,998 | 18.3% | 16.6% | | Consolidated | 68,652 | 60,130 | 9,895 | 7,857 | 14.4% | 13.1% | Segment Revenues and Adjusted EBITDA (9 Months Ended Sep 30, 2024 vs 2023) | Segment | 9M 2024 Revenue (thousand EUR) | 9M 2023 Revenue (thousand EUR) | 9M 2024 Adj EBITDA (thousand EUR) | 9M 2023 Adj EBITDA (thousand EUR) | 9M 2024 Adj EBITDA % | 9M 2023 Adj EBITDA % | | :-------------- | :--------------------- | :--------------------- | :------------------------ | :------------------------ | :------------------- | :------------------- | | Medical | 84,522 | 73,528 | 26,015 | 17,179 | 30.8% | 23.4% | | Software | 32,775 | 33,192 | 4,439 | 6,190 | 13.5% | 18.7% | | Manufacturing | 83,789 | 84,112 | 4,648 | 6,980 | 5.5% | 8.3% | | Total Segments | 201,085 | 190,832 | 35,103 | 30,349 | 17.5% | 15.9% | | Consolidated | 201,085 | 190,833 | 27,178 | 22,923 | 13.5% | 12.0% | - Unallocated segment adjusted EBITDA, which includes corporate R&D and other operating income/expense, and acquisition-related adjustments, amounted to (2,677) thousand EUR in Q3 2024 and (7,925) thousand EUR for the nine months ended September 30, 2024[35][36] Corporate Information Exchange Rate Information Euro amounts are translated to U.S. dollars using the ECB's reference rate of EUR 1.00 to USD 1.1196 as of Sep 30, 2024 - All translations from euros to U.S. dollars in the document were made at a rate of EUR 1.00 to USD 1.1196, based on the European Central Bank's reference rate on September 30, 2024[18] Conference Call and Webcast Materialise hosted a conference call and webcast on Oct 24, 2024, to discuss Q3 2024 results with CEO and CFO - A conference call and simultaneous webcast were held on Thursday, October 24, 2024, at 8:30 a.m. ET/2:30 p.m. CET to discuss the Q3 2024 financial results[19] - Company participants included CEO Brigitte de Vet-Veithen and CFO Koen Berges[19] - The webcast and accompanying slide presentation are accessible on the company's investor relations website and will be archived for one year[21] About Materialise Materialise is a leading provider of additive manufacturing and medical software, and 3D printing services - Materialise incorporates over 30 years of 3D printing experience into software solutions and 3D printing services, forming the backbone of the 3D printing industry[22] - The company's open and flexible solutions support diverse industries such as healthcare, automotive, aerospace, art and design, and consumer goods[22] - Headquartered in Belgium with global branches, Materialise combines a large group of software developers with one of the world's most extensive 3D printing facilities[22] Cautionary Statement on Forward-Looking Statements The press release contains forward-looking statements subject to uncertainties and risks, not guarantees of future performance - The press release contains forward-looking statements concerning intentions, beliefs, projections, and financial outlook, including estimates for current fiscal year revenue and Adjusted EBIT[23] - These statements are subject to known and unknown uncertainties and risks, including those related to armed conflicts, inflation, and increased costs, and are not guarantees of future performance[23] - The company does not undertake any obligation to update forward-looking statements unless required by federal securities laws[24]