Materialise(US:MTLS)2021-10-28 19:13Financial Data and Key Metrics Changes - Materialise reported a record quarterly revenue of EUR52.2 million, representing a 28% increase year-over-year [8][17] - Adjusted EBITDA reached EUR9.739 million, a 62% increase compared to the previous year, with an EBITDA margin of almost 19% [8][18] - Net profit for the quarter was EUR8.652 million, or EUR0.15 per diluted share, compared to a net loss of EUR282,000 in the same period last year [23] Business Line Data and Key Metrics Changes - Software segment revenue increased by 10.4% to EUR10.468 million, with an adjusted EBITDA margin of 35.4% [18][19] - Medical segment revenue grew by 10.2% to EUR18.9 million, with adjusted EBITDA of EUR5.251 million, maintaining a margin of 31.8% [19][20] - Manufacturing segment revenue surged by 61.2% to EUR22.8 million, with an adjusted EBITDA margin of 15.5% [21][22] Market Data and Key Metrics Changes - The automotive market remains unstable due to supply chain disruptions, affecting both European and global operations [29] - The airliner market continues to show weakness, impacting revenue from plastic automotive prototyping [12][29] - Other segments, such as wearables and medical instrumentation, are experiencing growth, offsetting declines in automotive and aerospace [12] Company Strategy and Development Direction - Materialise focuses on meaningful applications in additive manufacturing, aiming to create value for customers while ensuring sustainable growth [11][16] - The company is committed to reducing its carbon footprint, targeting a 50% reduction by 2025, with a 33% reduction achieved by the end of 2021 [16] - Investments are being made in growth initiatives, including CMS, footwear, and eyewear, with expectations for continued growth in these areas [36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue closer to the higher end of the EUR197 million to EUR200 million range for 2021 [26] - The company plans to gradually increase operational expenses to support growth initiatives, impacting 2022 results more significantly [26] - Management remains cautious about economic uncertainties but believes in the strength of their product offerings and market recovery [33] Other Important Information - The company reported a strong balance sheet with cash amounting to EUR194.9 million, up from EUR111.5 million at the end of the previous year [24] - Deferred revenue totaled EUR35 million, primarily related to annual software sales and maintenance contracts [25] Q&A Session Summary Question: Signs of improvement in the automotive market? - Management noted ongoing instability in the automotive market due to supply chain disruptions, with expectations for this to continue throughout the year [29] Question: Growth drivers in the medical segment? - The growth in the medical segment is attributed to structural growth rather than pent-up demand, with software sales increasing by 15% [30] Question: Clarification on guidance and economic uncertainty? - Management acknowledged economic uncertainty but emphasized their historical approach to providing annual guidance, balancing strong quarterly performance with realistic expectations [33] Question: Update on strategic priorities and investments? - Growth has been reported in CMS, footwear, and eyewear, with significant investments planned for the footwear segment to ensure long-term growth [36] Question: Sustainability of manufacturing margins? - Management indicated that while current margins are strong, manufacturing is a cyclic business, and they prefer to focus on high-end applications rather than overinvesting in capacity [53]