MTLS - Earnings call transcript Q1 2022

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Operator

Good day, and thank you for standing by. Welcome to the Q1 2022 Materialise Financial Results Conference Call. [Operator Instructions]. I would now like to hand the conference over to your host today, Ms. Harriet Fried. Ms. begin. may you Fried,

Harriet Fried

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

on most other can report Form found Before and company's uncertainties business forward-looking could to results I'd including statements future uncertainties annual description be the today be other that in the changes update filed you of company's and forward-looking estimates activities, with revise of to may prospects, management the Any or any management's are expectations or more their statements the the like company's subject the or from things. and estimates regarding that risks the to Management change. to industry duty competitive unknown factors future materially among make as and and SEC. A known statements, expressed, represent growth risks differ relied including forward-looking events plans, XX-F These that we impact representing begin, remind and not related upon future as expectations detailed results could dynamics date. and forward-looking to should any as of company's and actual those cause in any to financial results recent disclaims subsequent expectations. reflect statements

contained introduction, like is Peter ahead, on release also today's in call the that to non-IFRS the at please, and table turn call. of Finally, the A I'd reconciliation discuss measures to certain Go Peter. With end the management Leys. will over earnings presentation. slide

Peter Leys

Thank for us joining you and Harriet, you, today. thank everyone

You can find #X. on call for Slide agenda the our

I come of results through first some quarter that, past to will highlights remarks, launch item some prepared pass context agenda, first any have. near-term be will brief our give our to And have we And the current questions happy floor who to may you on will will view the we I co-am financial then RAPID. in bring. the quarter. about After observations for you numbers about will future our upcoming on finally, back our you completed more will summarize at platform walk the the the the to Fried, more detail. you of our give When As that may Johan I respond what

to turn our let's the Slide results. X, highlights So which first of quarter summarizes

and particular, the strong in sales million, XXXX revenue revenue We license our maintenance are by EURX growth underscoring quarter Also, in both three deferred all and importantly, increased Software Medical quarter first report in driven of Materialise almost by from first million, pleased EURXX up from the XX% performance of segments, fees almost segments. Manufacturing. and in to and

our million LinkXD. increased included and Our EURX.X continued adjusted approximately to in quarter negative EBITDA for investments the X% of the by impact

Fried, walk like to the would highlights, the I now the floor you is give yours. platform. Fried, to who these through floor co-am With will

Wilfried Vancraen

everyone. afternoon, Good morning, good and

Ukraine, Magics the to new I'm performance, and where the in in full picked can focus is team the original biggest taking zones, while consistent we the launch that an opens of the danger kernel. release to despite that to use increase escaping excellent the our located. customers. data portion the of proud mid-May. up destabilization, CNC a milling our a place Medical improvements using of so burst of exciting deserve that normally more segments the given the XX fully some and again can specific our RAPID product steps of really users. the for stable product files. new the can adjusted is operations. compatible has of design work top printability the and make I to from productivity entire the While, in week is They systems development advantage with of Siemens our our post-processing in such CAD and large Parasolid launch PLM to diligently on at call, On through range of this some war operations worked to it the me remain attention last collaborators the Software design After would Magics as want Manufacturing for easiest planned XX from adjustments opportunities products, The This innovation incorporation the and are files an as

Of additional XD course, such productivity are nesting our serious several there users for increase. features, speed the which enhance further as new

However, wide That design by that does why co-am an some the That launching platform and the one an human co-am efficiency. new AM The on lines and based amount XD post-processing flawless this operators. platform the in success data the or cannot printed and limited co-am access their printer of is from of finished and era can huge diligent captured, is planners not conditioning, the fluently on tools platform is hardware resignation. platform. experienced I'm and production skilled by parts. planners we different Medical and is despite over X. success multiple be ensures stored the the most a Materialise, line underestimated. But of software that the environment by the on structures The exceptional collaborating of right automated. process and great a co-am claims knowledgeable reasons of platform have provides lines number printer a risk integration good can in process customer-owned Manufacturing It successful its in dependence learned a the supported not a profitable excited increase implies of marketing in information factor The of where on be Central depends secures control well-controlled is about that well-informed that our of and knowledge the delivers exist stakeholders. operators material operating Slide lake operators production material a manufacturers. of that of skillful techniques all At optimization, technicians simply production of a variety be and again Materialise the execution a launch illustrated that over AM of the the variety secret

do, tools production environment of maintenance can the co-am our increased data printers cycle variety is the learn ensure common need that artificial by Around also check, that a plan, lake learning. be be act the software classical production the will of or a tool ensure that accelerate come is and provide These in from Materialise loops. is can endless tools comprehensive it a although also tool as open set. only and to the planners access data and analytics interesting lake the and the lot portions done post-processing data intelligence it of process and function owner be the of machines the collaborators certain the functioning. basis data to of for their by suppliers machine skills can of proper But cannot for performed the of line a a can their providers. data and LinkXD, system, The we learning, First, is responsibilities. qualitative that come from integrated fully external they self-reinforcing But in or

in input external run digital on fully partners with small launched The data the the software, that RAPID, RAPID. will where to production data It internal and at first the used storefront co-am needed ensure We software service is the tools for by platform efficient and is external AM starts set large lake announce at companies. different are AM and data the line. can input that operations a

those manufacturing with here its manufacturing underestimated. we is environments all of is for process ability be can conditions. systems first-time-right such existing generation Materialise small of such commercial nesting, XD in generation, of has for it It's SAP. more paramount tools full another the announced simulation support build in And huge cannot automated the Magics importance link where The the in series economical and planned product a RAPID. be tools with and used preparation or as new to in-depth And models certified success. availability ERP course, that of Of a We to announced with possible Therefore, from launch legacy new even one-of-a-kind in economic fueler. phase also as that's directly mainly is printing out on. that so a parts

optimize planning analysis constant to hardware can has lake economic it improved during the ensured is and about is drastically components as CMM again, both fed in build process. a in this the be done the execution generated a that planning very LinkXD environmental additional automation and That in which is base, the now to needs or these monitoring the new Materialise. productivity, error linked in data that the also reducing parties. that created tensile data Check the Bringing benches, brings for the from in way opportunity phase offers open Consistent processes to third measurements software, in workflow for all be that is in what AMWatch the to all the saved we analysis, the allow with with the tools metallurgical the factor quality human system the Do the tools learning and the process, and the with Another precisely while those in constitute contribute phase, data all to the of And data production us lake is software optimal such to minimum variety production phase, order and what intense can data is human-centric control data; impact. execution and where such a interact manufacturing phase. solutions key tools by generate launch performance for and co-am together happens line. well-structured manufacturing Thanks the enhanced as co-am

with that management know-how while people up the in serve and the process also setting the data experience AM will Our enhance intelligence consolidating learning, artificial the algorithms system. the production lines operating

use Johan. will experience, of Given and production me RAPID, all. call its to to let the AM pass the lines, accelerate positioned we is And to toolset the demonstrate concept see comprehensive hope where and we user now at you base, uniquely Materialise

Johan Albrecht

Thank you, revenue of Fried. review begin X. a I'll on brief Slide with our consolidated

total sales deferred our grew by for results XX.X% reminder, refer the comparisons revenues. presentation, in our Also, a excluded effect mean in the Revenue XXXX. revenue. stated, of we million note are quarter increased otherwise to EURXX first the that please we against positive all in and to all when unless revenues call As plus three this in segments of deferred

In in products Our by X, call, Cross-segment will X% our Medical XX%. in QX would particular. tremendous coming a that our Software from EBITDA you X%, the of that On increase general, XX% grew segment portfolio, growth product significantly adjusted represented growth our by years. and EURX,XXX,XXX. continued earnings efforts Materialise businesses accelerated total Manufacturing XD Slide our see XX% to revenue We revenue. XXXX in investments can mentioned revenue contribute rose grew we software to increased emerging in we in these believe

cost expenditures to higher EBITDA of working relocate production by who that an all Ukrainian gains. was adjusted usage capacity us. our offset note Please and included of continued employees also energy quarter's for efficiency and almost the have This improved support

gross results margin Materialise our the of basis profit of percentage points as X XX.X%. increased revenue which of the XX summarizes our a result, included Software Slide a segment, LinkXD. results As to

almost driven and an existing both increased Here, revenue lines the by addition the sales recurring LinkXD XX%, of product from of increase by our products.

sales, of deferral our effect was EURXX.X investments million revenue significant result a of the to X.X% and a million. to million EURX.X of included in the significant compared EBITDA of EURX.X amount As grew LinkXD.

medical XX%, growing Medical pace by amounted Moving driven devices medical boosted a million. solutions EBITDA from solid sales. XX%. now partner software will to you to sales double-digit Adjusted by X, grew grew see continued at that that Materialise Slide by EURX.X Revenue

Our growth complex sales combined the effect of EBITDA to as investments margin revenue and new from in of of our in continued business portion people decreased lines of and to higher sustain medical implants XX.X% and our devices. a R&D

looks growth EURXX.X from provides revenue and grew an XX lines Revenue performance QX income EURX.X solid margin for our resulted manufacturing XX%, let's Slide quarter. Materialise of XX% few months. our of accelerated adjusted to the to EBITDA, XX lines Robust XX.X% than of Manufacturing XX.X% a the and to next for Now revenue. intake our our new the first improved statement core representing by Slide segment. solid XX.X%. the turn highlights order more promising and Both overview our growth grew million. the sales business for in of gross revenue profit of profit margin grew Gross million business

XX.X% go expenses or sales by These operating live of the fourth in our invested the increased first including G&A in are increased transformation million digital internal R&D to that EURXX.X our LinkXD, We EURX.X increased Our whose and XX.X%. XX%. marketing during of operating impact XXXX. growth included million. phases and especially expected to expenses businesses, significantly also project quarter almost

a loss group's a positive for EURX.X to period. net these the last Net was cost. EURX.X quarter operating result loss XXXX was the income compared net impairment for to compared QX to As million increased EURX.X year's of had financial million for million the a of result EURXXX,XXX when in QX compared elements, EURXXX,XXX EURXX,XXX we profit to period. of in Net XXXX, a EURXXX,XXX

as to to million turn acquiring LinkXD, EURX.X a to please end by to period. call to The our EURXX.X to revenue our remained Now amounted compared XXX% over sheet balance XXXX Cash last our EURXXX and compared borrowings operating activities million EURXX of for XXXX. million decreased December flow of EURXX.X the the EURXXX.X the while balance highlights. Slide to of first term. shares At was cash exercise for EURXX.X year. from million million of EURXX with of of end Cash EURX.X quarter Total million million deferred million the at sheet for the XX quarter as position first effect XXXX, amounted recap the of option short flow million almost the strong. of included decrease XXXX compared XX, for

to of million, Peter? our for [indiscernible]. capital quarter our operating the cash to while EURX.X quarter, of EBITDA This flow working increased amounted EURX.X expenditures EURX.X Capital consisted million. million

Peter Leys

escalating continuing lockdowns centers the in affects today. more X resources these terms and our over It in negatively you, good China by Johan. continued working our invasion Ukraine Manufacturing months in important on difficult performance than of further segment aggressive Encouraged what solid the our an Materialise results ago. extremely are the by collaborators including order will of by who the including do been jurisdictions Russia The global Thank of of our strong and that the by than first At we maintain our the be intake and quarter, case of currently our we it what inflation, both disruptions. time, economic in in the call year. for and was Shanghai, impact in much have circumstances is availability in is today also economy, our and possible chain circumstances very Ukraine of operations guidance has course energy impacted certain the the results the same during just aware previous the that XXXX, are until full future however, and less people encouraged supply

unstable outlook monitor continue this delicate evaluate concludes we can, as and manage and as our unfortunately, This remarks. next to and to situation during quarterly prepared to update continue our intend will closely and call. our We

you operator, to open can go So the and ahead questions. call

Operator

[Operator Instructions].

Our first Jacob from of Street comes Capital. Lake question Stephan

Jacob Stephan

customers could you what percent maybe Just cross-selling be this see platform. looking of would your of at co-am the of are at kind opportunities if kind you there? what quantify platform, And some the looking of software

Wilfried Vancraen

yes, operate base be Well, all, of is through the Magics. very the software that clear co-am cross-selling several first our possible extensive in platform. for well, coordination that in tools will you the indicate it user is platform launchpad, And as of co-am new will of

larger interested luckily We larger growth data larger that leader growth operate customers external the service internal those both this platform. will with amount in organizations, absolute that of the is a be machines especially in as expect preparation as And Materialise service manufacturing service additive positioned for as or in companies. Magics

that -- of of amount top reach So our the very we yes, hopeful the layer we are substantial a customers. will

real user approximately assume Let's from the of XX% the interest base. that coming is

Jacob Stephan

remember Russia-Ukraine this the any, Or I launch bit? the what could early on you I based just little product conflict, be delayed a your Do lot Maybe a in maybe, were have of software that are of thoughts engineers guess, Great. Ukraine. based kind Okay. thoughts there?

Wilfried Vancraen

-- be on the At Magics. launch top full the still want But time, we indicated, development yes, in July, take the as needed. this customer we get is, new although, product the is such be platform able we ready all we to aware of yes, the of systems, same implementation not from the at that As further lot general, a but will the of delayed, side. version of RAPID managed the to will at for longer launch make you and moment, that deliver, to of will of this even components first system

Jacob Stephan

just like Maybe helpful. margin quickly. That's bit Okay. it a down to little sequentially. was switching Looks gross

revenue You that some that this in were revenue deferred in but XX.X% counted that in the as quarter, expect sales from up have tick you quarter? do to the software guys

Johan Albrecht

don't extent we more a in in the where And to see and effect. more, found first guess, have that quarter. same rather kind what quarter have this expect sales second of year half effect that in particularly, in is first in particular, fourth And seasonality that be already the we temporary usually we our top is, quarter you in half also quarter-after-quarter. see seen, call also in growth I deferred the particularly we that mentioned that of general, element of in a the the quarter the have our recurring It's higher fourth as the in What the in that and, we year. that's we we the line first would a quarter, in

Operator

of Noelle comes Dilts Our from next Stifel. question

Noelle Dilts

results So line based sort looks like in it the a with bit first the little below your commentary your presentation, expectations in Street. quarter of on were obviously,

you as the a of growth bit in maybe you little on call, that cadence investments they the the in back through expected. expected were in XXXX XXXX? last higher mentioned about you about we looks the year. half into of the pick investments think move like Could I the up sort thinking growth the business businesses how the of you're to than talk and maybe It we

Peter Leys

plans. no Well, in thank you. Basically, there's change

anticipate I -- the we people. we that So investments mean basically are in

onboard So already coming recruitment first to we Yes, quarters. our to plan been people have expect we in a the EBITDA the will quarter. in But place. quite and able few that takes continue stick weigh still to that, on fairly to continue our aggressively to recruit

Noelle Dilts

Okay. weaker? maybe the maybe little from into perspective industrial are little you're in end that Great. could bit dive an on manufacturing seeing And and versus where a more a particular you're market markets seeing deeply then you bit what side, maybe strength

Wilfried Vancraen

Well, continuing we good in order due activities. that some a of see QX, Manufacturing, that, chain to and a fact despite and in on through lot moment in war QX, in but automotive we the requests strong from performance plans manufacturing that which sector, normally all is product we well. intake and that some also this strong a the really the interruptions impact China, a good in actually, time a market manufacturing but interrupted supply our have instance, of of we Ukraine also experienced the that revenue in the where strong from with only the is of Europe the very not the had supply Despite chain have development has, for carmakers a as and very very growth we reflect strong in at where QX performance should

Operator

Our KeyBanc. next of comes Celino from question Jason

Jason Celino

little of growth I'm segment sustained higher pre-pandemic So this these levels. to a inflation But nice the prices? Manufacturing see some the how revenue or perspective, curious, to of is attributed much from a maybe higher

Wilfried Vancraen

us There qualify deny that the is business limited at market as inflation allow do in strong a effect. will yes, to demand But we good not definitely moment, limited. Yes, this there time. is it at which really, the I

Johan Albrecht

as energy have and well that our in productivity they by capacity but prices efficiency as well that risen, better comments mentioned were We usage offset gains.

to also want that's inflation compensate that how with So we and cope to increase.

Jason Celino

Okay. saw thoughts supply on order Curious strong Perfect. later customers to that year quarter. And it's on or on strength, the trying you the some to themes potential of in then disruptions? in the get Any if ahead what's inflation potential there. that any volume maybe chain driving I'm increases curious

Wilfried Vancraen

prices Yes. driver To think don't later be higher that honest, that is year. the a I key people in anticipate

in on-demand is where are We there business say. would I small a of manufacturing, prototypes, on-demand real lot series and a

a and slow new very the really the that after in new there of sectors of of I certified economy that -- very developments, years a prototyping also of product years is So segment, new manufacturing product taking are new series think is which wave we production developments in launches, the many which sector active small additive in advantage. the manufacturing its in but

Operator

[Operator Instructions].

question next Our of comes Bryan Garnier. from Gregory Ramirez

Gregory Ramirez

A on side. couple my

to would this I The on think arbitrage just point and very situation of question, to sure, is, you of the regarding under the take you to that business. say, question the, division which scenarios, a price on inflation of Second year. give involved I the sort next little to parts that the the division? bit electricity say, impact the Manufacturing is you a make more made And let's that about in just us for scenario? hedge a moving shortage information back would But outperforming case details, some yourself able you But would the imagine low. state of different gains. between bit control? let's LinkXD Could industry? just give say, there year? if bit demand would to I next could I worst to you with industry? a you gains, is on which elaborate about this be a So was for revenues what by first the contribution last Software was, probably be and What year, energy by parameters the the just take, have your worst of productivity of instance, on can one, productivity wondering, come case could

Johan Albrecht

have the rest I Gregory, situation and Of of years, next a question take will in in Ukraine happen not will ball. do don't course, how crystal We first Can depending we know related what inflation? evolve. the to world the the

the energy. QX we compensated on of we this that mentioned, the in that in next we see based few not We in And effects the seen further will as in that by production quarters. escalate gain what efficiency. the have We markets think

We seen and than mitigate that see that, will for energy alternatives looking what monitor contracts years. providers energy we already. to we costs try extent, the a will into we be fix, expensive But and the to costs significantly energy more also past looking by the have in to certain with our

have, going year, -- but to the we costs we we not at under believe I'm that comfort, least we that So can for keep say that this control.

of The now, are fine. inflation, still in other costs, they course, until terms of

difficulty) what then will we know with at them on look also sales teams compensate clients, value costs also together for (technical increase. our But added that the focus look to that create clients. we to our certain We and for,

inflation part? the For

Wilfried Vancraen

what the year, automotive a stronger slow the can at our a market, for say call for on where, pricing this mentioned -- -- is in in around our the evolution good in same well, interesting positive We this that medical have performance presence kind projects of because and higher even a new segments the a side of Well, the saw already is about the development, this in the let's which of year allows we client now continued. calls the on automotive uptake But to all base manufacturing, many see important just been markets that time, us We best. quarters at there, On in instrumentation, over accepted. spectrum. it, performing in this important industrial and and bid equipment sector complaining the see, the us, the situation topic we which has were we you in that asking last sector. least is good the product of were actually, Manufacturing sector as of I segments in

Peter Leys

related of of Your LinkXD January as X, the Gregory, question, of final consolidation XXXX. our the impact numbers to in

know, separate reported but you that, you is costs, material, provide no And we As based end LinkXD, allow the we results of for did not actually business in And at because of our give numbers to the just there. I mean, longer LinkXD in the similar. a that increasing to of it's to decided, you XXXX. we to make terms efforts as revenue, contribution are, we better on terms announced, assessment had LinkXD

existing you is business negatively, responds you I the on existing LinkXD increased the that even impact influenced the the -- on if of our three So short this questions investment further side. posed, want, Gregory. an by to the term hope

Operator

Leys comments. And will for in I see to Peter no further questions the queue. I turn the back conference closing

Peter Leys

all in for one-on-one pleasure. with to continuing forward, you if look and a dialogue accommodate please Thank joining will Fried And through conferences schedule you'd may request investor like you RAPID meeting as we to We always, try calls. you, meetings reach thank that to us virtual again. have today. or our you Chris, with feel to free you, in the upcoming with Thank at and U.S., then out, any the or

So thank now. you, and goodbye for

Operator

This concludes for today's conference you call. participating. all Thank

You and disconnect, have a pleasant may now day.

Materialise (MTLS) 28 Apr 222022 Q1 Earnings call transcript