Materialise(US:MTLS)2022-10-28 05:09Financial Data and Key Metrics Changes - In Q3 2022, the company recorded revenues of €58.3 million, representing a growth of almost 12% compared to the same period last year [7][16] - Adjusted EBITDA for the quarter amounted to €5.1 million, down from €9.7 million last year, impacted by investments and inflation-related higher expenses [8][17] - Earnings per share for the quarter were $0.02, compared to a net profit of €8.7 million in the previous year [8][22] Business Line Data and Key Metrics Changes - Materialise Manufacturing posted a 14% growth in Q3, driven by reliable rapid prototyping and growth in certified manufacturing activities [9][21] - The Medical segment grew by 13%, with software revenue increasing by 19% and medical device solutions by 10% [20] - The Software segment saw a revenue increase of 3.8%, supported by renewed licenses, but non-recurring sales decreased by 12% [18] Market Data and Key Metrics Changes - The Medical segment accounted for 37% of total revenue, while Manufacturing contributed 45% and Software 18% [16] - Cross-segment revenue from software products represented 31% of total revenue [16] Company Strategy and Development Direction - The company is focusing on sustainable growth and investing in new technologies, including the acquisition of Identify3D to enhance secure additive manufacturing operations [14] - Materialise is expanding its presence in the aerospace sector and enhancing its product offerings in medical devices and software [10][12] Management's Comments on Operating Environment and Future Outlook - Management believes that the additive manufacturing industry will continue to grow despite potential economic downturns, as companies increasingly turn to additive manufacturing for supply chain resilience [37] - The company is committed to sustainability and has shifted to renewable electricity contracts to mitigate rising energy costs [37] Other Important Information - The company’s cash position remains strong, with €150.6 million in cash and a decrease in borrowings to €83.9 million [23][24] - A credit facility agreement was entered into with KBC Bank for €50 million, which will strengthen the cash position in the future [24] Q&A Session Summary Question: Was the growth in medical software primarily from a single customer or across the industry? - Management indicated that the growth was broad across multiple medical segments, including orthopedics and cardiovascular [28] Question: Are sales cycles for software lengthening due to the current environment? - Management noted that there are no signs of lengthening sales cycles in the medical sector, but weaker investments are observed in the industrial sector [30] Question: How is the company managing inflationary costs? - Management confirmed that they are adjusting prices regularly and including indexation clauses in larger contracts to manage increased costs [31] Question: What are the risks associated with energy prices in Europe? - Management expressed confidence in the company's resilience due to the shift towards additive manufacturing and sustainability initiatives [36] Question: How is the company addressing talent acquisition and retention? - Management highlighted the establishment of talent centers globally to source and retain talent, despite challenges in the labor market [39] Question: What is the impact of inflation on costs related to Link3D and Identify3D? - Management indicated that half of the EBITDA difference from last year is due to increased investments in Link3D and Identify3D, with the other half attributed to inflation [47]