MTLS - Earnings call 3 2023

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Operator

Good day, and thank you for standing by. Welcome to the Q3 2023 Materialise Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.I would now like to hand the call over to our first speaker for today.

Let me please introduce Harriet Fried of LHA.

Harriet Fried

Thank you for joining us today for Materialise's quarterly conference call. and call Materialise; Vancraen, and that Peter Chief Officer.Today's the Executive and Koen reviews on accompanied third Financial of being quarter and Officer Leys, call for Materialise's us strategic, are slide operational Founder Fried Chief Berges, by financial With a are performance presentation the webcast Executive XXXX. Chairman; of the not Investor slides, the so, done access website already at if company's you've www.materialise.com. section Relations go To of the to please also can remind today found earlier may issued prospects, release press things. started, company's to earnings page.Before among that like make the get growth you be we expectations regarding The on management and plans, other forward-looking I'd statements that actual including statements the to These are results dynamics uncertainties competitive known differ subject and materially industry expectations unknown from change. could expressed, forward-looking and to and cause risks that their the reflect Any future upon of and forward-looking or any should company's not estimates to update forward-looking subsequent or duty results changes revise to events and representing as related including relied as those represent management's date.Management disclaims expectations. today estimates statements statements, be in any future of any to activities, as or found may annual description A other results that and future Form the XX-F impact on report in SEC. be financial business the the uncertainties of factors can the company's company's recent and risks more detailed most with filed

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

Peter Leys

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

#X. for agenda the find call our can you on always, Slide As

we our quarter the third year. will for our company Then financial dynamics will third exciting Koen, the software of Materialise. any the of let's and recorded When Fried XXXX, back compared that, go numbers within we've will I highlights will what year's to third summarizes I you we on will upcoming the represents pass completed summarize a and to of may in XX.X of questions respond of which the in will more also this year our the And finally, First, In this changing to remarks, you on happy that immediately the will the detail. our the the be who in manufacturing quarter. Slide previous to come insights quarter circumstances. economic landscape spite X, X% the quarter changes difficult we through of give explain have.So of of believe revenues, EUR period. prepared turn to highlights I results the floor after growth million which bring. some rest additive last And And of

EUR million to Our X.X for EUR by last increased EBITDA the representing adjusted EBITDA of X.X margin XX% compared an to XX.X%. million year, quarter

Our EUR X.XX or that, million net the with floor pass Koen. for results the I EUR X like per quarter now would amounts to to Koen? to share.And

Koen Berges

our consolidated good results Thank begin comparisons of otherwise, X. quarter of unless on the stated call a you this revenue to on for of Good third XXXX. morning call. our brief I'll against that or you, Peter. this Slide with are note afternoon Please review in all all

EUR increased XX.X Peter, mentioned As by revenue to X.X% million.

software Over decreased segment which conditions the X%, stable. months, manufacturing past by summer segment, market our favorable impacted mainly less remained our while

of by compared last XX.X September, to grew at decrease continued from growth balance carried end of on to EUR fees million but million double-digit X.X XXXX, compared XX%.Deferred end million its EUR September the Our representing year. maintenance and to licenses of up a amounted of the by still X.X software EUR revenue on sheet hand, other medical the segment, our revenue and

third EUR adjusted in control. X.X our The of adjusted for were that on quarter, the our XX.X% improve profitability adjusted year, of revenue graph last numbers for increase EBITDA for margin the Slide and XX% As of the quarter compared an Materialise our million, same million consolidated on XXXX. period for an to EBITDA Materialise focus representing the Despite moderate continued R&D growth cost Manufacturing a Medical Software we will can X see of to our XX%.Moving effects revenue. the you and consolidated significantly this our of to the X, for adjusted Materialise segments. accounted which almost XX%. time, results Materialise summarizes At on you to EBITDA total of growth see from through QX scaling continued right, businesses.Slide we XX% the EUR EBITDA is X.X same grew more Software investments able

from remained nonrecurring then stable Adjusted fees, EUR EUR significantly while revenue from renewed contracts transition revenue our other X.X model. X. improved subscription by million at year of on Revenue from million an sales, Slide on for maintenance third to recurring X.X XX.X representing the licenses, business XX%. EUR year, CO-AM quarter reflecting recurring EBITDA hand, decreased margin and Software XX%, this continued million, increased including XX.X%.Moving a to EBITDA to increased adjusted last the

XX%, solutions. You growing both from from solid and more software Materialise that device continued with medical a the revenue will increase double-digit see pace medical at Medical than of coming

segment. expanded Materialise to amounted by grew EBITDA device in improved Adjusted business resulting our X.X of EUR QX an to XX.X%.Now revenue of margin to XX%. adjusted X aggregate an for EBITDA of by million Software X.X EUR medical turn year, let's Slide of the last million XX%, overview while Manufacturing our compared performance

to EBITDA impacted to EBITDA market Adjusted mentioned million, X.X EUR a prototyping revenue the slowdown the for mainly in to margin representing and As million, gross X.X% markets. decreased More X.X%. revenue an general EUR the due challenging quarter segment's margin. dropped of earlier, XX.X conditions

for margin year. XX% consolidated third to indirect other the continued business to of costs the statement XX% XX contained Gross highlights our in and last income eyewear planned.Slide profit On lines investments and compared the motion we hand, quarter. as provides our increased

helped operating focus reduce further our X.X EUR us million cost X.X%. to or expenses by Continued

XXX we per capital expenditures sales improved slightly X.X million result and and sheet decreased, metal expenditures for expenditures group's Capital While the EUR investing reserves and EUR year, strong the only flow EUR resulting positive and of facility factors, decreased of of increased to X.X million discussed our positive million more on growing Also previous turn to than by a share position administrative end result these Slide Net X% EUR compared quarter and year.Now capital quarter, X.X deposits, for the to million or to XXXX QX quarter for million, a profit the active new please the a earnings were a continued remains million our as highlights. X%, addition on XXXX, million. like in interest XX to to significantly Cash EUR externally was net the that, and compared X over I'd recap including by currency EUR million U.S. Fried. and Cash cost X%.As strong. At million X.X investments while which quarter R&D to share with plans. last million, of income as of the year. EUR X.X to marketing mainly further borrowings EUR gains call negative balance none cash EUR the included this EUR XX.X X.XX amounted in in our financial EUR last operating to further net the operating completion quarter of EBITDA.Working general that million. third expenses to last by well X.X of outstanding with increased X.X balance was interest in for third respectively, in compared million, million EUR quarter printing Net the are per at financed.And our income by EUR amounted from X.X over an offsetting the increased the activities or hand to profit X.XX exchange sheet of loans. position our we to driven of X.X flow EUR increased for a of new XX.X EUR cash cash

Fried Vancraen

afternoon a performance steady call. creating better our this An to Hilde to sharing Thank of and that we make economic and healthier thought confirms to activities contribute a a step-by-step Its the and organization, use quarter build-to-last we by nature Materialise, wife healthier all the I where you, make around many unfavorable mission build this that to called executes started a company XD a all founded XXXX, over sustainable world. this to conditions Good to industrial us, to on of world.Thanks line able a organization were were A morning or of in the the good and people difference with dream, of my of Koen. printing driven world could Materialise. In bottom a even technology. you applications listening Materialise. desire better

are We printing. on we the of focus relentless of XD achieved meaningful proud applications through results

both that And We with have about are we journey the the instruments is made of are will continued we the thousands patient-specific of prototyping. patients serve started of proud we context, change of in thousands environment preserving And through and the we and Materialise. products improved proud a embrace news of and thousands we best the and top in thousands the and we be implants. healthier means values that core sustainable we our a this that front of to build-to-last structure the way.In And mission have while are Materialise. markets in changes in management significant

Let me address both aspects.

market and First, technology fundamentals. the

revolution the that While dynamic I printing believe revolution, a to continue circumstances changing. the is are slow some and of XD

to harmonious competition, extent in But large [ fast in despite and often build regarding of and there manufacturing range companies successful order a pivotal printing? XD of we business this of XXXXs, to success. devices, but referred software digital fit such, materials personal necessity development helped IT to interoperability across search [indiscernible]. legal good CO-AM, happen roadblock? from With played our heavy in in under platform, does context many respect as see the new in using contribute manufacturers but these key the as countries.I the become today, to robust guide particular. a hospitals.In It's confident over that digital lines will a a particularly scale stakeholders in compatibility paramount. CEO, AM rapid those it And forward the will software Materialise manufacturing today.We convinced with built-to-last the be in the ecosystem. company key to XD reorganized her that Materialise during array would could risen incur as chains have occasional companies an of the play to a companies other for joined believe divest computer of in solutions interoperability as committee file for the requirements also printing production can a related personalized stable ushering Wintel for Materialise in the provide most team scaled the applications.It by to employees.Peter, operating Hilde companies and the meet In advanced Vet. stable concerns to Offering verticals otherwise challenges. a in sectors choose Materialise, XD processes role January many with production you The by ample user resources track led executive the a systems, growth rating formats.This cloud printing to myriad and different continue, the ] Intel distributed proof she another was digital digital a AM established to of proven channeled she technology, workflows where that And enables XD in the innovation accompanying an continuity technical of hinder well printing XD platform Microsoft, segment standardize slow revolution and patient privacy IoT continue expansive Their scalability transition. all the offers flexibility, to and but this years, of I is industry a environments.The this may in softwares Wintel, cost to must design resources innovative the operational currently [indiscernible] and of will economic printers revolution base. devices global our user to and data between IT open scale their for platform in the operating years, XXXX investment in fosters an of a context guidance committee with more. operations. remarkable standard be has to rely the segment a Is heights. device users an the leadership the Xst We of prosperity.The can has she in believe She leadership, She was that complexity of to to the de for many the advent general been many In has her surgical multitude inherently X and that that continue particular, all addition, benefits Brigitte will already printing still XD software. role manage, are growth also of will her the and Brigitte bring its money.Why complexity industrial propelling It most management costs. belt. customer are scale Materialise with tune and general in in could manufacturing will she new profitable hits Board AM provide printing and her introduces a this about a And commit XXXX successful cloud computing with wealth our of economically. can in backbone to years as diversity our that from of segments that backbones applications printing the my coordination of tools the need Brigitte to are executive escalated onwards. of Materialise work demonstrate it In question time. delivered how and demonstrate and industry only supply for experience patient all like options planning answer and our company. For also patients you questioned over to and the platforms, in This processes automate development of their that how inspiring will printing delayed. We grown early and to costs, Medical, of strongly her integrated under medical providers, the hardware and continue diverse the active will complexity and helm me provided and consequence, over been the interfaces, 'XXs are the the partnership segment from value and as has the she Acertys under XD to into printing and of question in the to companies industry XD Brigitte is management that years Materialise delivering lead compatible the growth. and & and Johnson ensure be Materialise as Was systems not problematic. of preparing the years. medical that have Over environment took the current Medical an experience today, that at committee, able shifted can be member tenure at Johnson on Materialise and bring. executive to team in AM last to technology

our from Peter and performance Materialise, believe you Materialise the market contributions that for opportunity the and forthright, solutions the thanks balance strategic been Hilde convinced will want operate as in Board. presidency the has the closely but different serve. be as an of over the It additive shareholders. stock formidable and And Peter's appreciated are that markets to that I members committee to certainly positioning financial of able projects contributions take presidency in and mission.I Materialise. to much the our independent will diligence we to legal its trademark been value but to quarterly execution consistently.Our experienced participate integral placed a to been requirements go of keeping And has I provided the count Leys. on connected as deliver to that the But all further. Peter I the communication a performance Peter, of can its humorous to who the on calls to highly take was fulfill healthy Materialise to in remain We all contribute Peter regularly Board stock strategy of also become between platform to well enter the nonexecutive instrumental for over manufacturing Materialise an that Relations. these He new many presence that input that I executive U.S. where has its able Investor have also is will I this has thank take the to market of his will the of continued part in

Hilde to company and to the me I to Materialise opportunity now advance. Peter. in to you committed Then the in some the just representing that in the remain years in world few more days industry seeing to sales forward company in the come, will to support As We the Board at a future back detail.And we call a society at pass and members, of build-to-last let will major the as look traveling will Materialise discuss keep bring have and of Formnext. value

Peter Leys

we we and adjusted XXXX million outlook, This be to concludes guidance.This EUR EUR this concludes you. to our participation respect between continue reported other honor your Thank with conditions Materialise.Together EUR to the and to built quarter in our you the you we the also an our are Hilde, between executive macroeconomic hopefully, XX It and Today, vision When that EBITDA side to I And million. a so open engage would and we this execution call support XXX member Fried that my of of remains April, have year constructive as EUR in. of remember, to of mission the the call in of XXX like continue we in remarks. of everybody the challenging expect with the has the investor million on to you maintaining full operator, about Currently, for full results decade. and that dialogues one would thank actually I the with Brigitte and with the also prepared an Materialise the over and EBITDA more confidence pleasure our and been by to our XX% team last Thank the spite XX quarterly much, financial may topics, I increased a that relationship million. amount the for revenues in management my of questions. Fried. in safe calls in favorite active I serve to are entire as and to Materialise will increased, Board. community. range new have like good, innovative with expected hands.And first that, constellation, we

Operator

we Our time, Instructions] question-and-answer first line the question of from [Operator from comes Capital session. will Street Lake a this At conduct Stephan Markets. Jacob

Jacob Stephan

you about that the medical months? the say, the you're role I I on of Fried, trends well. guys pipeline like XX on help us you congratulate you. are And new want guys Peter, look as And kind let's accomplished. what if congratulate with the on next Brigitte, market. want just built could device What you you and working just to the want what does have to I look to think forward touch to over, I of you what seeing? kind

Fried Vancraen

the a in instruments device industry demand sorry, a dramatic, contracts And software is Well, year. current continue that -- medical. time, medical personalized to the economic little that implants, same a bit At medical yes, it little a is than able the growth we bit and interesting with in we real course. be our, and beginning its Jacob, will slower we not of the going same guides closing situation manufacturers. we believe Jason by expected investments, little on the but robust -- in affected and see of time, activities it also the yes. of for It's the our being a little weighs -- careful It's at bit and device

we remember, over were you If performing.

again. the the So a view pick definitely but we the that economic moment, device it's still activities medical balanced companies hope at for will up

Jacob Stephan

are and in device kind maybe kind And Okay. in med to interest Are markets areas any you there addition that medical the to of would as that increasing strength showing of the of segment? other just point implantables. or

Fried Vancraen

a the surgery yes, in the relating are to, we a pulmonology the for earlier couple medical market tumor we the personalization, to that have to which for bring also In where of solution. we applications instance, starting ], [ especially context of see opportunities we segment, this launched in year

tools device personalization So you tendency on in approaches the as are well different the the fundamental complete with of support solutions surgical a is later know, rollout our pleased platform of in we and in personalized disciplines. sector, which, research medical to

Jacob Stephan

about Got that percent anything your can it. to just what talk side. that And you revenue? So the of kind us of kind nonrecurring to left kind are customers still much recurring? convert maybe of quantify of is Is how over help software would on there

Peter Leys

is part quarter represents of that the gradually me revenue, up nonrecurring one. about take And our software recurring about XX% going our currently Let after now revenue. XX% quarter. and In it's

Jacob Stephan

That's questions congrats I That's here very all going Great. had. and Best again, of helpful. the guys. forward luck Okay.

Operator

Fitzgerald. line Instructions] Cantor [Operator Our Troy Jensen of from next the comes of question

Troy Jensen

also the day and guys you guys. I big say been industry. a to today. to have Fried It's for working all congratulations fantastic for Gentlemen, want you Hilde done with

a Board be understand you're I the going active? And to longer and still you're going do member no not Fried, Executive to the Peter, President? Chairman, just be but So

Fried Vancraen

be Well, the Chairman Board. will of I actually, Troy, we non-Executive --

Committee. the biggest were Committee. were and the the and and in who people, Executive myself Board So with become Board Peter, the they Hilde our In X in we will Executive both separation past, between the

next of bit, in the So step company. but maturity growth Materialise will the of the the change of we in see a the that little governance

Troy Jensen

a I on segment be Thanks get couple to for software but will you've of kind and with thoughts of guys done, of got of I guys love all you for guys. business. you XD, your are You cloud-based questions where kind the just quick Link on that missed. an update

Fried Vancraen

the to Yes. solutions Well, see At of offer. invest about. the what time, a that comments we cloud-based up same that the continue and we were couple pick my companies industry key is on

issues We out are intensive doubt that, are the are in support of Wintel bad is to and investment where because confronted But different. confronted postpone. And based, platforms. the companies the situation some programs deployed a an order some server favorable, order with cloud we have just run APIs, with our environments doubting delays difficult from roll that choices are is a yes, having context a in on libraries good is a that environment and we course, economic cloud more is that our the, it And than that can thing are in platforms. that are those to side reason is laptop more or our really And what requires they what cloud environment so sale more settings.The that actually business-to-business to not as that I in even all important compatible thing to in said, different those is that's software that is more be make. a

Troy Jensen

Koen. EUR deferred quarters I we've out here just maxed question and you offerings guess, help about declined. it's touch You a on on deferred you but continues I could assume that for sequentially XX million, that? to about just a at right. out with had All couple Then Can software grow the us would revs? of Understood. guys how

Koen Berges

Yes.

revenue correct. quarter. account is that Troy, in Your the timing is the deferred there effect, also third a in to going see second down in have quarter, these into though, our numbers. included take you statement did we But

of And revenues, our quarter, last the the in depletion. a notice typically, numbers, see in you will deferred the year. If revenue the up build quarter look you first that historically at typically second we deferred you -- in

the So year compared look then to compare ].But hand, you [ if there's the -- indeed number about September an other on to year year, you, cycle, we if take of a is current million. where if EUR X.X you decline still a there of and last million full $X.X the increase were of in beginning

in linked definitely than pick anticipated, and Now belief, at revenue now the quarter see that depletion to being bit the up historic we said, economic looking third should in an that the It's our the fourth we as trends, ] deferred current into attention back was a [ we quarter is, situation. the move where again. higher point

Troy Jensen

congrats results guys, other some Well, companies here. space in solid Understood. we've really what given seen from of the the

] seeing you, So Frankfurt. to week and Lisbon [ and next to congrats I look guys forward you at

Operator

Leys I This the now concludes remarks. Peter over to question-and-answer to session. would now for like closing turn the call back

Peter Leys

for joining call. And all us Thank on operator. again the thank you, you

close entering the transition to floor by As phase, the like symbolically this would are we handing I to call Brigitte.

Brigitte de Vet-Veithen

with look and to or you, I meetings of afternoon very all as Formnext or of morning dialogue continuing together Upcoming Koen will good Thank to some good forward you. all much you, meet XXXX, Peter, and through for of you November of with calls. give virtual the chance hopefully in investor one-on-one already goodbye to Thank person. now. or in conferences you the

Peter Leys

Goodbye.

Fried Vancraen

Bye.

Operator

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

now You may disconnect.

Materialise (MTLS) 26 Oct 232023 Q3 Earnings call transcript