Materialise (MTLS) 25 Apr 242024 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Q1 2024 Materialise N.V. Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Harriet Fried of LHA. ahead. go Please

Officer. website for Materialise's call. everyone, de today Materialise's slide Chief for Chief being webcast Thank by financial accompanied us go also joining operational and at earlier of haven't on conference already you a Financial Berges, the Koen slides, With Officer; that performance for Brigitte call the if quarterly press section and earnings the The Executive today on are Relations first so, reviews you, www.materialise.com. presentation and us quarter Today's page. strategic, to please call release of Vet, are, the issued Investor company's XXXX. be To access was that the done that found can

you regarding competitive, among subject forward-looking cause that management Before to and get statements These unknown we may uncertainties date. from represent management's statements, company's and activities, differ of the growth representing that expectations prospects, plans, risks and materially remind their statements upon the expectations to results other and relied things. known and as subsequent future estimates dynamics expressed, of are forward-looking be those could started, I'd and related should any including to today to results company's make estimates Any as actual like the forward-looking change. industry not as including

XX-F reflect can the company's of statements report or impact Management changes A could or SEC. description recent future in disclaims be business update any factors detailed with future Form found the and risks the financial events or to uncertainties to company's any on forward-looking annual revise expectations. more and the filed that results most duty in other

And in and on discuss is now certain over I A to earnings the de like presentation. of call non-IFRS to at release Finally, the call. turn Vet. the table today's slide Brigitte end management would will measures reconciliation the contained

today. Thank morning, everyone, Good us and for you, joining good afternoon.

Slide for call agenda Looking at our on X. the

on and call, earnings XXXX. XX about I will I and build the I last position market theme through made our dynamics strong performance the our in that After foundation numbers our for recall our also our XXXX our that, strategic the built observations last quarter as described will priorities in the Today, quarter You first highlights detail. key as the team's market, of my described this with clearly on of well first that who years. in on floor Koen, the I'll you go will share progress in more priorities. to pass

we prepared XXXX the Finally, we've to I be completed of respond happy And to what expect will remaining explain questions. months come bring. and our back remarks, we'll to

our QX on at key results can were our Page see to expectations. deliver with X, that summarized profitable XXXX, results Looking we line in for you able

year, Medical segments. call, of was revenues strong a [ first in high mainly by last comparisons bear our high tailwinds first mind EBITDA For the that quarter please particularly ] and quarter supported record significant the this and on the in versus later quarter Manufacturing XXXX with

XX%. I EUR EBIT very versus XXXX, of over XX.X first our million to. which X.X% X.X quarter total compared consolidated XXXX, the EUR our the profit amounted and of last is still amounted representing the first to slightly quarter EUR more Net same from XXXX. XX.X% EUR X.XX million revenue. our gross margin million, first of to the this increased XXXX strong -- Adjusted stable quarter X.X X.X% to quarter revenue Over decreased first period just per to XX.X% or year. share, time, by of compared to revenue the the that year, grew record by When same than referred At to

Koen will versus call. Our XX.X was million, his EUR million increase on the an this results further EUR the X XXXX of QX elaborate of quarter. these net in at position cash remarks beginning the in end later of

our than in progress the to expansion keep opportunities grew Slide managed Serial made parts into to In and and am segments, [ that market XXXX. growth to and XXXX was new healthy exceptional the ] strategic ensure further QX markets pleased milestones, introduction and the that the I now capture very mass we momentum also in Moving X. QX achieved in term. market priorities Medical, an growth mid and we XX% and new to end-use and the the for near, already critical of in compared for to sustainable long technologies higher of including personalization the

adoption existing elements. drive this is to our reflected continue cases of markets. X And in personalized We in

in XXXX our first and existing which growth lead this shorter U.S. segment the beyond. This a in us cases delivered from into segment into in times. growth cases managed U.S. We manufacturing further to in Europe patients, building the our deliver the number the plant, and to a solid delivered for Trauma and with enabled of platform expand in is First, segments. to new particular

Second, we software a we limited our and manage phase. which have the first [indiscernible] received management used Mimics XD particular in with solution hospitals case with launch workflows Flow, this solutions order for made to for only progress new in labs in

Tracheal transcatheter markets And our We business line. approval of for part IDE break We program, replacements the our and also for services for line. Software Cardio offer MDR is aortic milestones future. FDA in achieved valve new business got key Splint planning in [indiscernible]. to To clearance respiratory which our we our into received

software. to Moving

new help that more for segment. this As launched Power focus and aMace, Bed end-use automate optimizes launched for data capture to market using of also mentioned add users in the modeling metal preparation in e-stage opportunities will that structure key manufacturing growth We value make of is Laser additive additive our for to call, viable. the that in manufacturing our build a At we manufacturing the Metal+, economically software Fusion, generation products physics-based support last products. for

e-stage XXXX, up one of to segment AM, generation users required leading XX%. complex removal. removal, technologies extraction the for global most potential automating spot machining for with the can use to printability accounting part By and time, saves support challenges. it's for Metal+, is the revenue also of XX% effortless Fusion Bed costs. and Powder with support many powder support is decreased reduce of over the Laser in can simplify structure build-plate and structure sweet ease support Automating generation after They an supports, volume at material post-processing industry's

process released an and OEM, on QPC, We system. also control module quality additional our

trade announced at test models Layer layer lab and tool and cause the was root data last allows at analysis, we scrap year early year of defects a auto-detect quantify in results to was a lab, Process released quarter process and Rapids to and XD year. that to map them to market. module XD detection first for in and biometer the this Formnext last leased analysis

monitoring into This secure, manufacturing in actionable and AI insights quality and QPC process collaborative a data transform to using IoT open lab process and additive enables customers connectivity system. software

also business our and better products. made to for We to agreements shifting suit end-use market model in progress the subscription-based cloud

to as remain segments products. prepares While circumstances demand. is in this to for printing shift market on QX even capturing in for in selected for our impacting service ] it growth weak very serial our difficult focused the [ negatively XD software manufacturing, market prototyping revenue drive we XXXX, In end-use us business impacted scaling due further -- revenues,

quarter XX% performance industries quarter segment. data in are first drive in Medtech. process and Both Keeping driven segments. am ability through will was strictly Aerospace year in in that now us strong business performance by revenue. growth and XXXX the enables take quarter you by to pleased provide to mind the a in historical with our the certified results the of manufacturing and in growth detailed in our process particular, progress very first both regulated the with I this Koen with documentation strong

call. afternoon Brigitte. you Good on all of begin a you, to review revenue brief this good our morning consolidated X. I'll with Thank Slide of or on

reminder, an that quarter as our for in comparisons stated XXXX, the was a results already all please of call indicated, As exceptionally first against strong note Brigitte unless which quarter. are this otherwise,

first baseline, X.X% high Now compared quarter XX.X decreased of the EUR million. in XXXX revenue to this to

by However, Materialise its path X%. its continued on and revenue increased Medical growth

the Software and prototyping segment, unfavorable resulting a XX%, low towards respectively. hand, in by Manufacturing On our the X% revenue decreases transition on other impacted were an effect revenues subscription model, segment business at had and demand cloud-based our accelerated of

in Software revenue Consolidated Deferred first grew of adjusted can consolidated EUR year Materialise quarter EUR see maintenance manufacturing to XX%. sheet XX% Materialise page, Slide first right amount to XXXX. this As a graph for see quarter on by EBIT X million. On compared for total period XX% and of on our for XX%, year, numbers EBIT the X.X the our fees million side will of carried balance the the of you this the same X, ended bringing Materialise first adjusted and at quarter million, of to year. decrease total EUR in of license further of million EUR over last representing accounted software the you the XX.X related revenues for the EBITDA for and our Medical X.X

for Our adjusted quarter EUR EBIT margin year. million XX.X amounted the last X.X decreasing X.X% to Consolidated to first million, last adjusted EUR year. from compared EBITDA was X.X%

XX.X% Our prior adjusted XX.X%, compared reached margin year. to the EBITDA

the EBIT also impacted partly by point in business as being market investments our We partly innovation Now shown, the decrease investments profitability. quarter which continued high long-term of XX% impact from in segments. revenue. planned less exceptionally our the XXXX, one-off the than favorable XXXX, tailwinds despite EBITDA reflects was and confronted corresponded spend adjusted in QX of conditions. In comparisons strong of first R&D to R&D in total this our with reference is to The being secure decrease to due executed fully set more

Moving now to Slide X.

margin respectively XXXX. XX.X%. by Slide growth which the X generated by Medical stable on by summarizes notice revenue strong million. and revenue segment medical first sales, adjusted grew from by medical further both software solid coming and to will to results building decreased increased by remained revenue grew Materialise segments. our In Software X%, You X% the software in X% EUR revenue growth our that an X%. Adjusted This with EBITDA that Materialise X.X EUR almost million an in devices XX.X further quarter, quarter's of already the total was at EBITDA

and from However, X%. recurring increased revenue license by sales, software including maintenance CAM,

by representing driven sales Accordingly, further license EBITDA On EBITDA XX% the hand, margin cloud EUR also but accelerated to by difficult decreased market revenue adjusted the X.X XX.X%. agreements million, the to more perpetual adjusted from nonrecurrent and decreased an by transition subscription-based conditions. other of

to the let's In prototyping XXXX EUR QX XX strong to difficult and the turn XX% of Materialise first performance overview market low of in of Manufacturing to a operate our as continued quarter, Slide a revenue for million. Now a to an Manufacturing compared XX segment. decreased environments demand, by result

hand, On year. provides and we EBITDA of for of Medtech margin further other the X.X adjusted X.X%. Slide of business, segments. XX income aerospace certified quarter this growth EBITDA the in dropped particular, in to Adjusted manufacturing and statement first the our million noticed promising consolidated our market of highlights EUR an

As by margin points XX.X% notice, increased XX in of profit compared you XXXX, XX.X% which the gross to revenue. part our basis lower QX will of we to compensated

million in the million operating last Our positive increased EUR operating from X.X the year. EUR biggest [ higher compared in ] Net quarter million X.X in income or X.X% aggregate the X.X expenses quarter coming increase R&D the to spend. with was by with EUR

million, in million year's million. million year. EUR our quarter X on group's compared to interest currency expense a Income result amounted X.X interest financial and a EUR million financial of X.X income to X.X QX, these to positive million of from cash X.X expense EUR X.X period. In including the X.X EUR result X.X operating last exchange the EUR EUR result million, our income in debt elements, quarter to was As of last amounted compared the in of tax EUR reserves EUR net million

period. million a EUR net million, As at EUR per the for net EUR close X.X the profit quarter profit result, X.X also share or for X.XX XXXX very EUR was corresponding of to positive X.XX the per representing first coming share

to recap remained quarter this first of In and highlights. please strong. Now for a the cash flow Slide balance XX turn our balance sheet year, of sheet

at Loan year. XX position quarter. EUR this Our repayments cash improvement by to increased net cash X million, EUR was position reduced quarter beginning reserve the compared of the to of the end our EUR million an the to gross resulting the by lease XXX below million million, EUR the XX and debt at end of

to which deferred Our trade EUR contracts XX further million related trade XX The payables and while already of remained maintenance total receivables both was revenue and decreased income deferred position stable. inventories out to licenses million, positions from EUR increased software mentioned. as

capital see first was internally the right high over operating I'd again. from which X.X like on for graph all to million, for financed. the that, while And and As Brigitte EUR to of the the activities cash page, amounted the EUR from to amounted to of XX expenditures can flow hand you quarter million call the quarter were with

Koen. you, Thank

year Let's X segments turn with business we to remarks our of fundamentals are we that positioned full conclude of confident The and on our XXXX XX. I'll remain our therefore objectives. growth Page are to a my discussion strong, guidance. deliver well

we to consolidated year million XXX to EUR full the the XXXX prior report expect call. in EUR for earnings to XXX revenue continue We range within million communicated our

Operator, the remarks. guidance fiscal we're to questions. adjusted ready maintaining This also our million to call million our the are open EBIT now concludes EUR of to prepared XX year. for EUR We XX

Instructions] of Kepler Alexander comes line first [Operator question Craeymeersch Our of the Cheuvreux. from

of Cheuvreux that couple bit exceptional, in surprised Kepler from how questions manufacturing. you I'm a especially XXXX QX times side. many was A at stressed

So as that not stressed was last year. definitely as

So the book results years that market, in could you was QX these be, exceptional? And Manufacturing? are segment are Medical in on that in so maybe last was then stressed better what the strong realistic not year. second to And you you exceptionally numbers yet would to then than indicating also next also you question XXXX, were able us also the elaborate

would different So low be why third exceptional levels. one other CapEx the the was exceptional? And the on than question then

coming being HX -- was wondering XXXX. of was whether those in a the that up up, any I it afterwards. then of ACTech ] lot then coming just flow on for ask wondering was [ cash and maybe that's You're the plant delayed live that was either colleagues following overcapacity volumes with Why into ACTech maybe not feeling plant coming I'll the specific there statement. building or up the keep that CapEx manufacturing again you're I projects are there, questions exactly ACTech topic. are then and just wait not the whether lower. some end on considering my trending why

Alexander, questions joining Yes. call. for for the Thanks, the and

Koen then let pitch start So the and really I'll for answering, I'll question. in CapEx

manufacturing exceptional on question first your results. So

happened If nonstructural see the So last essentially, part. -- me look what question we at we part structural or can quarter year well, in not the first year I these are your And explain and being, for structural what mean. future? expect a I let a in last in manufacturing, what

in further planning, which of going believe growth forward. is or were So the road capacity results in ACTech, us lower we to quarters, by last are have than factors, the that think year the with leads constrained were what strongly driven the -- point the exceptional revenues the business that increase now X revenues a results last revenues One over we driven we time. couple at noticed towards And gives strong we had last market. And we year ACTech in capacity is that, that what of we that our that being possible very have believe main extension at those

I element structural a path segment. us growth there's towards future that ACTech So the in think at a gives Manufacturing

of manufacturing such know customers second services they we consulting have have services project you -- we start last have And is us. But unit, And necessarily confident part why element revenue result non in at specifically. because forward. the to within scratch. services year not quarter we in that's, that our say, it not our component don't of might so honestly, able all once that over, consulting these that a when for that services first every and is be will repeat contracts to The healthy quarter this? is as very from recurring exceptional of the very was you of nature had that a strong year driver consulting is What profitability we on business a structural, deliver going that beauty I'm line and come consulting single that the -- You exceptional. which as I we last call would the transparency, those

answer growth the as which second ACTech. structural a as Medical, resolved have constrained Switching question. we there is So yes, path mixed. manufacturing us is capacity was bit soon the there But element future at that gives a on a into your towards

in an last last the we last take had benefited part able from another the we quarter in time a on able exceptional certain were a of from and and first the yes, So deliver on time, we market essentially for quarter year, -- for were because take that to wasn't -- business -- year. in able to specific to period we take

despite that Koen top access we with is which then year. additional And the break last can gives that that's XX%, first which year. again, potential, we I'll that regarding have delivered path continued potential of to of number actually my seen. able for we in into been remarks, we I of very that that one a that And a short market hand that -- quarter this referred we first that on the that large proven gross have year can CapEx that the And growth lead of baseline strong growth ACTech. it the additional offer. And exceptional despite have this it and drivers even segment, question further growth over us an to Now we for to segment quarter had times stronger on in to this us, Trauma is

Yes.

later plant on year, in that confirm, we've on think, program of investment a to before. full fully still the I in execution, is this indicated track and the Alexander, as is So I start-up can have this

of we of component cash the the statement why investment the see of to has been made come quarter course, the a only or the the that in investments of is this third the out which that suppliers And where quarter is way are negotiated be is started limited quarter CapEx cash also not and flow statement. mainly first with the in at because contracts the year. made, place is results have but reason of factory in flow second the that cash there you the of the will then take and that typically payment installed investments our cash include, come the will ramp-up Now term will and machinery being is is to the because the the is is up to of of of machinery, the coming in taking the weeks. And course, most of we be in be going point, bulk the That suppliers delivery payment place applied. these will -- and

second for -- So you will the third different the see investments. quarter payments a also the I to late sure in partly the would, quarter, deferred picture and related ACTech

terms indicate the CapEx, Could how you to of full we QX, in just there maybe then year, foresee maybe for QX maybe need but much and for specifically.

is indicated will I that in has of total a and several been million come the XX think But and we've always years. it EUR magnitude stages. number of around -- will depend investment the upwards, order of spread over

So flow, second I nonrecurring have quarter be our I've can negative will depend by cash might this But expect when. delivered also as also think timing call, of in will driven the I number. It exact think the I last free the what exact the indicated don't in CapEx. be on you

the from Lake Jacob comes Street. Stephan of line question next Our of

overall indication you us segment, sense weak, of just in maybe the give that. manufacturing can been project you size, know kind trending? give kind an how I prototyping could been has project us but you if volumes of for said have a Maybe, just

of to our And an question. of in the size, type terms for of the is by? when say thanks you projects refer average project driven indication revenue what Jacob, you

Yes.

And Manufacturing so hard of one to such components. Yes. many say a different segment the because as it's composed is

projects we projects. I from shift certified indicated segments, services think are we manufacturing. general, want than XD we And have larger manufacturing we slightly when in we printing in to that general, manufacturing offer, core core the is certified at look see that the the prototyping and make prototyping what our to our so

I that continue see is to that give but you certainly Now an we exact number forward. shift can't that we will and see a going

of other that very ACTech you if put the we the structure mix et then lines cetera. in the have, different terms in and business it's order a Now size,

give honestly. an can't I on So question, you number exact your

Okay.

the that from products shipped the said here facility. that Is you first QX in correct? You Michigan

year up no, the ramping so we fast In shipped from facility. in And Michigan so last well, Medical the products our we -- [ first ] that August. facility started

U.S. So is our market. that lead require now was in running up What were product trauma we of us done into to talking market now, gives And are that large and I those out that access new first short the that And essentially market to have in have of which the a in segment. we a has quarter very done U.S. which line times. products we trauma XXXX. facility type facility, manufacturing access That's enabled the get that about.

trending Okay. on QX things But as into that month a of kind of And just about are where opportunity us most are maybe us think in just how maybe help seeing Trauma of here. you the kind could you're space? we a give kind sense

Yes.

business. look think cautious lines. in sure the at time we quarter, deliver The that So the that remains is for that because opportunity way wanted medical large we year short a to in say rest to should able in we those the Trauma the make I of to you first one the first were probably were

that are successfully bring We seeing that confirmation the able market. to to are we offering

definitely is driver of and that for that for remainder Trauma segment. that particular So a growth the And will beyond. the year stay

that system that's product Mimics to important an more personalization the And market. The being way. think on that the Flow on I parties does. face too, in in organized more effective other an in more with efficient one I them the growth as done to helps driver will -- and market more software side the and do a what that needs it's with one, And personalized and remarks, my is cases referred and the bringing our volume. that stay

XXXX still traction the And beyond in that would well fact segment. the limited for us [ a in in launch, a particularly despite quarter. the ] I we've nice So Medical we're us opportunity and stay, as that in first there to seen for expect

Fitzgerald. next comes [Operator question line Kieran Instructions] from Cantor of of the Our McCabe

plan Troy R&D you first color and I'm about growth. for continued investments benefits of in or R&D that? can was and we for sort question for some sort of sustainable do going on the My into maybe where -- year continue time the can of year line was the investments the of of kind strategy maybe you Jensen. going those of for and payoffs sort of next those XX% was investments, timing revenue R&D see make investments, on I set details and from the wondering to of

Yes.

little you high on me bit give XX% of let maybe color R&D So spending. our a

my that we're remarks. are efforts to a that in in also at I R&D refer our number this the doing priorities strategic So time point really into of going

significant is the markets are markets. market -- still about are is first potential untapped us R&D relatively structural those there's markets market the steps, field. medical efforts on we into where that new taken believe where going for but we talking and untapped still cardiovascular the there first the like of have an or potential. I'm that that respiratory field, one Those heart Medical a The significant opportunities in we segment, do have

units. The second main for is the strategic software priority our side on software

that still priority in manufacturing our that market the into growth in to offerings of -- tap have in tap is the that that make into portfolio, the market area the to for where talked significant the of growth end-use we to product to of terms potential. investments appropriate is bring into we products. I Specifically, And

to gives driving, that you we that think -- about. investments as talk of what the extent, what of are are R&D large type XX% color the a I bit a to

couple is want the view going to in Now quarters. those tap to markets new we there of efforts our The at will the forward? not of our end on we be into, investments that certainly next of what question, your

being think to I we of advantage and we significant to forward leader, markets see expansions. take market the as the investments in our spending one segments do. is R&D lead today. least market And that what area market take at to therefore, there are still untapped I want a remain would in we the R&D going planning those first are those expect and spending And the of of We there.

you right. was question of replicating I to And an think my that talking quoted the All some that in article the has Medical replicate recently was, I other had segments. success the about trying other wondering of details apply to other kind strategy on looking that in if to the you've provide you you're any replicate medical? could practices the that segments or kind seen success the really to of segment that

Yes.

I efforts apply we've a the have making segment markets mean, the setting think of well. our choices setting is and investment. That's we that see return and the are other strategies manufacturing in deliberate additive I to continuously the the we've as -- in growth our market in seek is to serve want a and So strategy with where we on price how done carefully how play focus. medical reflections success play medical markets what led we couple a or -- clear market, there's we seen the the selecting to have there in still the focusing them right a serve of market where we'll and that do we changes what want about to we priorities,

want an well. markets I to as we other -- that obviously apply that to certainly is think a reflection effort

of Kepler comes the next [Operator Craeymeersch line question Cheuvreux. Instructions] of Our from Alexander

Just on maybe more question the one CO-AM platform.

acquisition. back So also on of that an was back in a significant the investment time,

Were the look you it just the I how could understood that far not us today, if an -- XXXX. where that Because stands as maybe give prices? exceptionally So was increase the at where able as QX is you to indication it demand moving? in I

X% see just So sales. decrease a in I

this? yes, So to the that rose need see do that the are down? basically see fees subscription Does how I there by X%. Or I imply volumes that then

from can No, I that conclude you don't the think numbers.

in past, Aero that vehicle remarks, to that I and brought to and control this mentioned exactly one do I and CO-AM efficiently appropriate the the my in it functionality, products Because modules their software the to efficiently And process going critical that role to to functionalities need have the the do end-use which to from with out at is strategic to they of list -- So want an need the prototyping CO-AM shift let and the that products and capture one better scale that quarter you're help absolutely now we and the offerings talked want effectively QPC of CO-AM their that. end-use products. that. right, scale, provide first that have manufacturing monitor that Why? use customers the in helps that to CO-AM shift In And to the they we to absolutely the monitor customers in a importance CO-AM scale to forward. into needs process then in markets. we plays is the appropriate don't data major I know, market of to a -- lot production unit. I'm that and lot in because is can And the and quality we our and growth the and the them market me are our talk does cost of based invested in to tools of needs to It driver really a that. end-use tap an is vehicles additively systems cater of quality, CO-AM that those on products. And that's about that

tap perfect element So the into see that and it in is where CO-AM stays critical vehicle. an absolutely to we growth strategy our market

acquisition on that to vehicle. to basis, obviously, vehicle an the on at that answer continue XX% we in-house, least spend. our did of develop we this basis Now which what again get reflected further is but question? R&D And in that your Does is

least the are at But clients the your yes, -- the that Why [indiscernible]. down? but software in are less that's interested in numbers sales -- but why impression Medical

recurring far mentioned more is what look than revenue I recurring to first at the that just X you if increase on Alexander platform, there add includes mainly our a only on CO-AM. Maybe can components No. CO-AM that at we've is within X% revenue is that growth for it, number

to also switch the on Secondly, annual licenses.

maintenance do maintenance hand, a down. a of see we go from perpetual the been historically, bulk. large has course, other to contracts. the there licenses switch regards with contracts to decline, if And we annual And On

we do So annual, when that goes perpetual the to down. transition from component

even So overall, is in if there about we if And continued there it. still functionality confirm within being components the can X%, is quarter, increase to various project that. the to of also has the added then bulk the but you take X, is grow more that CO-AM first of an

you. further CEO, time. I'm turn showing Vet, to closing Thank no questions for would remarks. to Brigitte de this like I it back at now

clarification. or for of for Well, joining all thanks calls. goodbye virtual dialogue you you you our reach investor us you always through Thank now. or can questions and meetings further conferences have with We out again us you need know, any or continuing today. forward one-on-one to you, look And in if as to

in your Thank today's conclude conference. program. you This the for does participation

may You disconnect. now