Materialise(MTLS) - 2021 Q4 - Annual Report

First Quarter 2022 Financial Results This section provides a comprehensive overview of Materialise's financial performance for the first quarter of 2022, including key financial metrics, segment-specific results, consolidated financial statements, and non-IFRS reconciliations Overall Financial Highlights Materialise reported a 16.3% increase in total revenue to €53.0 million for the first quarter of 2022. The company achieved a net profit of €127k, a significant turnaround from a net loss of €3.6 million in the prior-year period, primarily driven by a positive net financial result. Adjusted EBITDA saw a slight increase to €5.4 million, though the margin decreased to 10.3%. The company's net cash position decreased, partly due to the acquisition of Link3D Q1 2022 Key Financial Metrics (vs. Q1 2021) | Metric | Q1 2022 (€'000) | Q1 2021 (€'000) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | 52,961 | 45,554 | +16.3% | | Gross Profit | 28,884 | 24,568 | +17.6% | | Operating Result | 49 | 290 | -83.1% | | Net Profit/(Loss) | 127 | (3,642) | Turnaround to Profit | | Adjusted EBITDA | 5,443 | 5,341 | +1.9% | | Adjusted EBITDA Margin | 10.3% | 11.7% | -1.4 p.p. | - Operating expenses (R&D, S&M, G&A) increased by 17.2% to €29.8 million, outpacing revenue growth and contributing to the decline in operating profit[6] Balance Sheet and Cash Flow Highlights (as of March 31, 2022) | Metric | March 31, 2022 (€'000) | Dec 31, 2021 (€'000) | Change | | :--- | :--- | :--- | :--- | | Cash & Cash Equivalents | 169,610 | 196,028 | -€26,418k | | Gross Debt | 93,583 | 99,107 | -€5,524k | | Net Cash Position | 76,027 | 96,921 | -€20,894k | | Cash Flow from Operations (Q1) | 11,111 | 4,231 (Q1 2021) | +162.6% | - The decrease in the net cash position was influenced by the exercise of the call option to acquire 100% of the shares of Link3D[11] Segment Performance All three business segments reported revenue growth in Q1 2022. Materialise Manufacturing led with a 26.2% increase, followed by Medical at 13.0% and Software at 2.6%. The Manufacturing segment also showed a significant turnaround in profitability, with its Adjusted EBITDA margin growing to 10.8% from -0.8% YoY. In contrast, both the Software and Medical segments experienced a decline in their Adjusted EBITDA margins, with Software's results impacted by investments in the newly consolidated Link3D Q1 2022 Revenue by Segment (vs. Q1 2021) | Segment | Q1 2022 Revenue (€'000) | Q1 2021 Revenue (€'000) | YoY Growth | | :--- | :--- | :--- | :--- | | Materialise Manufacturing | 24,131 | 19,114 | +26.2% | | Materialise Medical | 18,347 | 16,231 | +13.0% | | Materialise Software | 10,483 | 10,219 | +2.6% | Q1 2022 Adjusted EBITDA by Segment (vs. Q1 2021) | Segment | Q1 2022 Adj. EBITDA (€'000) | Q1 2021 Adj. EBITDA (€'000) | Margin (Q1 2022) | Margin (Q1 2021) | | :--- | :--- | :--- | :--- | :--- | | Materialise Medical | 3,227 | 4,541 | 17.6% | 28.0% | | Materialise Manufacturing | 2,613 | (144) | 10.8% | (0.8)% | | Materialise Software | 1,932 | 3,429 | 18.4% | 33.6% | - The results of Link3D have been fully consolidated within the Materialise Software segment starting from the beginning of 2022[4] Consolidated Financial Statements This section presents the unaudited consolidated financial statements for the three months ended March 31, 2022, including the income statement, statement of comprehensive income, statement of financial position, and statement of cash flows. The statements show a return to net profitability, stable total assets, and a significant increase in cash flow from operating activities compared to the prior-year period Consolidated Income Statement This statement details the company's revenues, expenses, and net profit or loss for the first quarter of 2022, showing a return to profitability Q1 2022 Income Statement Highlights (Unaudited) | In '000 € | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Revenue | 52,961 | 45,554 | | Gross Profit | 28,884 | 24,568 | | Operating Profit | 49 | 290 | | Profit (Loss) before taxes | 425 | (3,822) | | Net Profit (Loss) for the period | 127 | (3,642) | | Basic EPS (€) | 0.00 | (0.07) | Consolidated Statement of Comprehensive Income This statement presents the net profit or loss along with other comprehensive income items, reflecting the total change in equity from non-owner sources Q1 2022 Comprehensive Income (Unaudited) | In '000 € | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Net profit (loss) for the period | 127 | (3,642) | | Other comprehensive income, net of taxes | 1,416 | 492 | | Total comprehensive income (loss) | 1,543 | (3,150) | Consolidated Statement of Financial Position This statement provides a snapshot of the company's assets, liabilities, and equity as of March 31, 2022, indicating a stable financial structure Financial Position Highlights (Unaudited) | In '000 € | March 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Non-current assets | 185,040 | 155,605 | | Total Current assets | 229,074 | 257,803 | | Total Assets | 414,115 | 413,408 | | Total Equity | 234,115 | 232,578 | | Total Liabilities | 179,994 | 180,830 | Consolidated Statement of Cash Flows This statement summarizes the cash inflows and outflows from operating, investing, and financing activities for the first quarter of 2022 Q1 2022 Cash Flow Summary (Unaudited) | In '000 € | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Net cash flow from operating activities | 11,111 | 4,231 | | Net cash flow used in investing activities | (30,820) | (2,949) | | Net cash flow from (used in) financing activities | (7,452) | (5,384) | | Net decrease of cash & cash equivalents | (27,161) | (4,102) | - Investing activities included a significant cash outflow of €27.4 million for the acquisition of a subsidiary (Link3D), which was the primary driver of the net decrease in cash[27] Non-IFRS Measures and Reconciliations This section details the company's use of non-IFRS measures, specifically EBITDA and Adjusted EBITDA, which management believes are important for evaluating operational performance by excluding long-term investment and financing decisions. It provides reconciliations from IFRS net profit to both consolidated Adjusted EBITDA and segment-level Adjusted EBITDA - Management uses EBITDA and Adjusted EBITDA as supplemental measures to assess the performance of day-to-day operations and the company's ability to grow[16] - Adjusted EBITDA is calculated by adding back share-based compensation, acquisition-related expenses, impairments, and revaluations to EBITDA[16] Reconciliation to EBITDA and Adjusted EBITDA This reconciliation details the adjustments made from net profit to derive EBITDA and Adjusted EBITDA, providing a clearer view of core operational profitability Q1 2022 Reconciliation to Adjusted EBITDA (Unaudited) | In '000 € | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Net profit (loss) for the period | 127 | (3,642) | | Income taxes | 298 | (181) | | Financial expenses | 1,289 | 4,701 | | Financial income | (1,665) | (589) | | Depreciation and amortization | 5,442 | 5,081 | | EBITDA | 5,491 | 5,371 | | Share-based compensation expense | (48) | (415) | | Acquisition-related expenses | — | 385 | | Adjusted EBITDA | 5,443 | 5,341 | Segment P&L and Reconciliation This section provides a breakdown of segment-level revenues and Adjusted EBITDA, along with a reconciliation from operating profit to total segment Adjusted EBITDA Q1 2022 Segment Adjusted EBITDA (Unaudited) | In '000 € | Software | Medical | Manufacturing | Total Segments | Unallocated | Consolidated | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | 10,483 | 18,347 | 24,131 | 52,961 | 0 | 52,961 | | Segment (adj) EBITDA | 1,932 | 3,227 | 2,613 | 7,772 | (2,329) | 5,443 | | Segment (adj) EBITDA % | 18.4% | 17.6% | 10.8% | 14.7% | N/A | 10.3% | Reconciliation from Operating Profit to Segment Adjusted EBITDA | In '000 € | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Operating profit | 49 | 289 | | Depreciation and amortization | 5,442 | 5,081 | | Corporate R&D | 816 | 692 | | Corporate headquarter costs | 2,106 | 2,648 | | Other operating income (expense) | (640) | (855) | | Segment adjusted EBITDA | 7,772 | 7,855 |