LEUVEN, Belgium--(BUSINESS WIRE)--Materialise NV (NASDAQ:MTLS), a leading provider of additive manufacturing and medical software and of sophisticated 3D printing services, today announced its financial results for the fourth quarter and full year ended December 31, 2019.

Highlights – Fourth Quarter and Full Year 2019

Fourth Quarter 2019:

• Total revenue increased 3.5% to 50,712 kEUR for the fourth quarter of 2019 compared to the 2018 period.
• Adjusted EBITDA increased 28.0% to 7,749 kEUR for the fourth quarter of 2019 compared to the 2018 period.
• Net profit for the fourth quarter of 2019 was 1,327 kEUR, or 0.03 EUR per diluted share, compared to 525 kEUR, or 0.01 EUR per diluted share, for the same period last year.

Full Year 2019:

• Total revenue increased 6.5% to 196,679 kEUR for 2019 from 184,721 kEUR for 2018.
• Adjusted EBITDA increased 13.3% to 26,656 kEUR for 2019 from 23,526 kEUR for 2018.
• Total deferred revenue from annual software sales and maintenance contracts increased by 5,061 kEUR to 27,667 kEUR from 22,606 kEUR at the end of 2018.
• Net profit for 2019 was 1,724 kEUR, or 0.03 EUR per diluted share, compared to 3,027 kEUR, or 0.06 EUR per diluted share, last year.

Executive Chairman Peter Leys commented, “In 2019 we increased our revenues by almost 12 million EUR and grew our deferred revenues from software license and maintenance fees by an additional 5 million EUR. Our Adjusted EBITDA rose by more than 13% to 26,7 million EUR. Materialise Software and Materialise Medical both achieved record quarterly revenues while Materialise Manufacturing experienced headwinds from a difficult macro-environment. We closed 2019 with cash and cash equivalents on our balance sheet totaling almost 129 million EUR, an increase of 13 million EUR compared to year-end 2018. We believe our continued solid and profitable growth and financial strength position us well to expand our existing business and capture new growth opportunities as our company enters its fourth decade and the additive manufacturing market continues to develop.”

Fourth Quarter 2019 Results

Total revenue for the fourth quarter of 2019 increased 3.5% to 50,712 kEUR compared to 49,014 kEUR for the fourth quarter of 2018. Adjusted EBITDA increased to 7,749 kEUR from 6,052 kEUR. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) for the fourth quarter of 2019 was 15.3% compared to 12.3% for the fourth quarter of 2018.

Revenue from our Materialise Software segment increased 20.7% to 12,124 kEUR for the fourth quarter of 2019 from 10,044 kEUR for the same quarter last year. Segment EBITDA increased to 5,026 kEUR from 2,969 kEUR while the segment EBITDA margin was 41.5% compared to 29.6% for the prior-year period.

Revenue from our Materialise Medical segment increased 14.1% to 17,209 kEUR for the fourth quarter of 2019 compared to 15,081 kEUR for the same period in 2018, including the impact of Engimplan, the Brazil-based manufacturer of orthopedic and cranio-maxillofacial (CMF) implants and instruments in which we acquired a 75% stake on August 1 2019. Compared to the fourth quarter of 2018, revenues from medical devices and services grew 16.9%. Revenues from our medical software grew 8.0% and deferred revenue from license and maintenance fees within the segment increased by 926 kEUR compared to the fourth quarter of 2018. Segment EBITDA was 3,468 kEUR compared to 3,593 kEUR while the segment EBITDA margin was 20.1% compared to 23.8% for the fourth quarter of 2018.

Revenue from our Materialise Manufacturing segment decreased 11.0% to 21,295 kEUR for the fourth quarter of 2019 from 23,926 kEUR for the fourth quarter of 2018. Segment EBITDA decreased to 1,761 kEUR from 1,983 kEUR while the segment EBITDA margin remained flat at 8.3%.

Gross profit was 28,578 kEUR, or 56.4% of total revenue, for the fourth quarter of 2019 compared to 27,261 kEUR, or 55.6% of total revenue, for the fourth quarter of 2018.

Research and development (“R&D”), sales and marketing (“S&M”) and general and administrative (“G&A”) expenses increased, in the aggregate, 0.6% to 27,462 kEUR for the fourth quarter of 2019 from 27,290 kEUR for the fourth quarter of 2018.

Net other operating income increased to 1,474 kEUR compared to 810 kEUR for the fourth quarter of 2018.

Operating result increased to 2,589 kEUR from 781 kEUR for the fourth quarter of 2018.

Net financial result was (558) kEUR compared to (420) kEUR for the fourth quarter of 2018. The share in loss of joint venture amounted to (147) kEUR compared to (184) kEUR for the same period in 2018.

The fourth quarter of 2019 contained income tax expenses of (558) kEUR, compared to net tax income of 348 kEUR in the fourth quarter of 2018.

As a result of the above, net profit for the fourth quarter of 2019 was 1,327 kEUR, compared to net profit of 525 kEUR for the same period in 2018. Total comprehensive income for the fourth quarter of 2019, which includes exchange differences on translation of foreign operations, was 1,597 kEUR compared to 507 kEUR for the 2018 period.

Full Year 2019 Results

Total revenues for the year ended December 31, 2019 increased 6.5% to 196,679 kEUR compared to 184,721 kEUR for the year ended December 31, 2018. Excluding the 2,437 kEUR revenue impact of Engimplan, revenues increased 5.2%. Adjusted EBITDA for the year ended December 31, 2019 was 26,656 kEUR, an increase of 13.3% compared to 23,526 kEUR for the year ended December 31, 2018. The Adjusted EBITDA margin increased to 13.6% from 12.7% in 2018.

Revenues from our Materialise Software segment increased 11.4% to 41,654 kEUR for the year ended December 31, 2019 compared to 37,374 kEUR for the year ended December 31, 2018. The segment EBITDA margin was 33.2% in 2019 compared to 30.9% in 2018.

Revenues from our Materialise Medical segment grew by 16.4% for the year ended December 31, 2019 to 60,809 kEUR from 52,252 kEUR for the year ended December 31, 2018. Medical software growth was 13.9%, and revenues from medical devices and services increased 17.6%, including Engimplan’s impact. The segment EBITDA margin was 17.7% in 2019, compared to 19.6% in 2018.

Revenues from our Materialise Manufacturing segment decreased 0.8% to 94,156 kEUR for the year ended December 31, 2019 from 94,956 kEUR for the year ended December 31, 2018. The segment EBITDA margin increased from 11.4% for 2018 to 12.9% in 2019.

Operating profit improved 1,852 kEUR to 7,016 kEUR for the year ended December 31, 2019 from 5,164 kEUR. The increased net financial expenses of 1,070 kEUR and increased income tax expenses of 2,170 kEUR impacted our net result. Accordingly, net profit decreased to 1,724 kEUR for 2019 compared to 3,027 kEUR for 2018.

At December 31, 2019, we had cash and equivalents of 128,897 kEUR compared to 115,506 kEUR at December 31, 2018. Gross debt amounted to 127,939 kEUR (including 5,160 kEUR of lease liabilities recognized under the new accounting standard IFRS 16), compared to 106,037 kEUR at December 31, 2018.

Cash flow from operating activities for the year ended December 31, 2019 was 28,402 kEUR compared to 28,320 kEUR in the year ended December 31,2018. Total capital expenditures for the year ended December 31, 2019 amounted to 15,665 kEUR. This amount included 1,070 kEUR of capitalized R&D expenditures from medical programs.

Net shareholders’ equity at December 31, 2019 was 142,675 kEUR compared to 135,989 kEUR at December 31, 2018.

Note on Comparability

As a result of the implementation of the new accounting standard IFRS 16, we recognized additional lease assets and liabilities in the amount of 4,998 kEUR at January 1, 2019. At the end of the year ended December 31, 2019, the total commitment of lease assets and liabilities amounted to 5,025 kEUR. Our Adjusted EBITDA for the year ended December 31, 2019 was affected positively by the new standard as a result of the rental payments decrease of 2,580 kEUR; however, our operating profit was impacted by (18) kEUR as depreciation expenses increased by 2,597 kEUR. For the fourth quarter of 2019 our Adjusted EBITDA was affected positively by 641 kEUR, while our operating profit was impacted by (93) kEUR and depreciation expenses increased by 735 kEUR.

2020 Guidance

Mr. Leys concluded, “The additive manufacturing market continues to evolve, with new applications steadily finding their way to market. We intend to continue positioning Materialise to benefit from these promising growth opportunities in the coming years. In 2020, we will dedicate significant attention to supporting the development of a wide variety of meaningful end part applications with our generic software tools, and, more specifically, to growing a select number of key applications Materialise is more directly involved in. In our Materialise Software segment, we intend to maintain our leadership position in the existing service bureau market and to grow our position in the expanding end part manufacturing market through both innovation and strategic partnerships. In our Materialise Medical segment, we intend to continue penetrating the hospital market with our software tools and simultaneously driving the next stage of innovation in the orthopaedic, CMF and cardiovascular markets. In our Materialise Manufacturing segment, we will increasingly focus on complex and unique parts, in general, and on the growth of our wearables and aviation initiatives, in particular.

“For fiscal 2020, which has started with some unexpected challenges for businesses worldwide in connection with the COVID-19 virus, we expect to report consolidated revenue between 202,000 kEUR – 215,000 kEUR, with growth coming primarily from our Materialise Software and Materialise Medical segments, and Adjusted EBITDA between 27,500 kEUR – 30,000 kEUR. We expect the amount of deferred revenue we generate from annual licenses and maintenance in 2020 to increase by an amount between 3,000 kEUR – 5,000 kEUR.”

Non-IFRS Measures

Materialise uses EBITDA and Adjusted EBITDA as supplemental financial measures of its financial performance. EBITDA is calculated as net profit plus income taxes, financial expenses (less financial income), shares of loss in a joint venture and depreciation and amortization. Adjusted EBITDA is determined by adding non-cash stock-based compensation expenses and acquisition-related expenses of business combinations to EBITDA. Management believes these non-IFRS measures to be important measures as they exclude the effects of items which primarily reflect the impact of long-term investment and financing decisions, rather than the performance of the company’s day-to-day operations. As compared to net profit, these measures are limited in that they do not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in the company’s business, or the charges associated with impairments. Management evaluates such items through other financial measures such as capital expenditures and cash flow provided by operating activities. The company believes that these measurements are useful to measure a company’s ability to grow or as a valuation measurement. The company’s calculation of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. EBITDA and Adjusted EBITDA should not be considered as alternatives to net profit or any other performance measure derived in accordance with IFRS. The company’s presentation of EBITDA and Adjusted EBITDA should not be construed to imply that its future results will be unaffected by unusual or non-recurring items.

Exchange Rate

This document contains translations of certain euro amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from euros to U.S. dollars in this document were made at a rate of EUR 1.00 to USD 1.117319, the reference rate of the European Central Bank on December 31, 2019.

About Materialise

Materialise incorporates 30 years of 3D printing experience into a range of software solutions and 3D printing services, which form the backbone of the 3D printing industry. Materialise’s open and flexible solutions enable players in a wide variety of industries, including healthcare, automotive, aerospace, art and design, and consumer goods, to build innovative 3D printing applications that aim to make the world a better and healthier place. Headquartered in Belgium, with branches worldwide, Materialise combines one of the largest groups of software developers in the industry with one of the largest 3D printing facilities in the world. For additional information, please visit: www.materialise.com.