Materialise Reports Fourth Quarter and Full Year 2020 Results

LEUVEN, Belgium — (BUSINESS WIRE) — March 9, 2021 — 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, 2020.

Highlights – Fourth Quarter and Full Year 2020

Fourth Quarter 2020:

  • Total revenue was 45,301 kEUR, a decrease of 10.7% compared to the fourth quarter of 2019, but an increase of 11.1% compared to the third quarter of 2020.
  • Adjusted EBITDA was 7,370 kEUR; Adjusted EBITDA margin was 16.3%.
  • Net loss was (2,118) kEUR, or (0.04) EUR per diluted share, compared to 1,246 kEUR, or 0.03 EUR per diluted share, for the same period last year; the net loss was impacted by non-cash impairment charges and revaluations totaling (3,836) kEUR.

Full Year 2020:

  • Total revenue was 170,449 kEUR in 2020, compared to 196,679 kEUR in 2019.
  • Adjusted EBITDA was 20,378 kEUR in 2020, compared to 26,656 kEUR in 2019.
  • Total deferred revenue from annual software sales and maintenance contracts increased by 2,575 kEUR to 30,242 kEUR from 27,667 kEUR at the end of 2019.
  • Net loss for 2020 was (7,272) kEUR, or (0.13) EUR per diluted share, compared to 1,644 kEUR, or 0.03 EUR per diluted share, last year.
  • Cash flow from operating activities was 29,978 kEUR in 2020, compared to 28,402 kEUR in 2019. Total cash was 111,538 kEUR at December 31, 2020.

Executive Chairman Peter Leys commented, “The COVID-19 pandemic made 2020 an incredibly challenging year for economies worldwide, our customers, our business and our employees. For the first time in Materialise’s 30-year history, revenues decreased year over year. While uncertainty remains, we are encouraged by the fact that our fourth-quarter-2020 revenues grew double digits sequentially and that, over the same period, our deferred revenues from software license and maintenance fees grew by 3.4 million EUR. In 2020, we increased our R&D expenses by 7.1% compared to last year, in spite of the COVID-19 related decline of our revenues, and still posted a healthy Adjusted Ebitda of 20.4 million EUR. We closed 2020 with cash and cash equivalents on our balance sheet of over 111 million EUR, a decrease of 17 million EUR compared to year-end 2019, caused mainly by our investments in 2020 in our strategic eyewear-related collaboration with Ditto, Inc and our acquisition of RS Scan to bolster our footwear initiative. In spite of the pandemic headwinds, we believe our continued R&D efforts and strategic investments 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.”

RSPrint Acquisition

On November 9, 2020 Materialise, which already owned 50% of RS Print, the owner of the Phits personalized insole product line, acquired the remaining shares of RS Print and substantially all of the assets of RS Scan, a market leader in the development and supply of intelligent foot measurement technology and systems. The acquisition increased the scope of our Materialise Manufacturing segment and impacted our results of operations for the fourth quarter of 2020 as well as the year ended December 31, 2020, increasing our revenues by 762 kEUR and decreasing our operating result by (562) kEUR.

Fourth Quarter 2020 Results

Total revenue for the fourth quarter of 2020 was 45,301 kEUR, a 10.7% decrease compared to 50,712 kEUR for the fourth quarter of 2019. Adjusted EBITDA was 7,370 kEUR, compared to 7,749 kEUR for the same period in 2019. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) for the fourth quarter of 2020 was 16.3% compared to 15.3% for the fourth quarter of 2019.

Revenue from our Materialise Software segment was 10,216 kEUR, a 15.7% decrease compared to 12,124 kEUR for the same quarter last year. Adjusted EBITDA for the segment decreased to 3,867 kEUR from 5,026 kEUR while the Adjusted EBITDA margin was 37.9% compared to 41.5% for the prior-year period.

Revenue from our Materialise Medical segment was 17,188 kEUR for the fourth quarter of 2020, compared to 17,209 kEUR for the same period in 2019. Adjusted EBITDA for the segment increased 39.7% to 4,845 kEUR from 3,468 kEUR, while the Adjusted EBITDA margin increased to 28.2% from 20.2%. The segment’s EBITDA for the fourth quarter of 2020 amounted to 239 kEUR and was negatively impacted by the impairment of capitalized expenditures related to our tracheal splint development program and of goodwill and intangible assets of Engimplan, for an aggregate amount of (4.606) kEUR. Both impairment charges were non-cash. At December 1, 2020, Materialise acquired the remaining 25% shares of Engimplan in exchange for Engimplan spinal implant business line, which was non-strategic for Materialise.

Revenue from our Materialise Manufacturing segment was 17,889 kEUR, a decrease of 16.0% compared to 21,295 kEUR for the fourth quarter of 2019. Revenue increased 26.4%, however, compared to the third quarter of 2020. Adjusted EBITDA for the segment was 1,099 kEUR compared to 1,761 kEUR while the Adjusted EBITDA margin was 6.1% compared to 8.3% for the prior-year period.

Gross profit was 26,165 kEUR in the fourth quarter of 2020 compared to 28,578 kEUR in the same period last year. Gross profit as a percentage of revenue increased to 57.8% from 56.4%.

Research and development (“R&D”), sales and marketing (“S&M”) and general and administrative (“G&A”) expenses increased, in the aggregate, 1.4% to 27,843 kEUR for the fourth quarter of 2020 from 27,462 kEUR for the fourth quarter of 2019. Excluding the impairment charge for capitalized expenditures related to our tracheal splint development program of (2,090) kEUR expenses decreased by (6.2)%.

Net other operating result was (296) kEUR compared to 1,394 kEUR for the fourth quarter of 2019. Excluding non-recurring charges reflecting the impairment of goodwill and intangible assets of Engimplan, and a positive revaluation of our initial 50% interest in RS Print, net other operating result was 1,450 kEUR.

Operating result was (1,974) kEUR, compared to 2,509 kEUR for the fourth quarter of 2019. Excluding the non-recurring impairments and revaluation discussed in the two paragraphs above, our operating result was 1,862 kEUR.

Net financial result in the fourth quarter of 2020 was (596) kEUR compared to (558) kEUR for the fourth quarter of 2019. Due to our acquisition of all remaining shares of RS Print, there is no share in the result of a joint venture in the fourth quarter of 2020.

The fourth quarter of 2020 contained income tax income of 452 kEUR, compared to net tax expense of (562) kEUR in the fourth quarter of 2019.

As a result of the above, net profit for the fourth quarter of 2020 was (2,118) kEUR, compared to net profit of 1,246 kEUR for the same period in 2019. Total comprehensive income for the fourth quarter of 2020 was (1,260) kEUR compared to 1,251 kEUR for the 2019 period.

Full Year 2020 Results

Total revenues for the year ended December 31, 2020 were 170,449 kEUR, a decrease of 13.3% compared to 196,679 kEUR for the year ended December 31, 2019. Adjusted EBITDA for 2020 was 20,378 kEUR, compared to 26,656 kEUR for 2019. The Adjusted EBITDA margin was 12.0%, compared to 13.6% in 2019.

Revenues from our Materialise Software segment were 39,055 kEUR for the year ended December 31, 2020, a decrease of 6.2% compared to 41,654 kEUR for the year ended December 31, 2019. The segment’s Adjusted EBITDA margin increased to 34.3% in 2020, compared to 33.2% in 2019.

Revenues from our Materialise Medical segment grew by 1.5% for the year ended December 31, 2020 to 61,729 kEUR from 60,809 kEUR for the year ended December 31, 2019. Medical software growth was 3.3%, and revenues from medical devices and services increased 0.7%. The segment’s Adjusted EBITDA margin increased to 22.5% in 2020, compared to 17.7% in 2019.

Revenues from our Materialise Manufacturing segment decreased 26.0% to 69,635 kEUR for the year ended December 31, 2020 from 94,156 kEUR for the year ended December 31, 2019. The segment’s Adjusted EBITDA margin decreased to 3.7% in 2020 from 12.9% for 2019.

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