MTLS - Earnings call transcript Q2 2024

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Operator

Good day, and thank you for standing by. Welcome to the Q2 2024 Materialise 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. Harriet?

Harriet Fried

Good morning, and thank you for joining us today for Materialise's quarterly conference call. With us on the call are Brigitte de Vet, Chief Executive Officer; and Koen Berges, Chief Financial Officer. Today's call and webcast are being accompanied by a slide presentation that reviews Materialise's strategic, financial and operational performance for the second quarter of 2024. if Investor already company's Relations www.materialise.com. slides, go so, website the the to section access you've done not please at To of the earnings today issued on The page. that be that also found earlier release press can was

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

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

Brigitte de Vet-Veithen

today. good and all thank you you, for joining Good us Thank and Harriet. afternoon, morning

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

made the that, second And Then will will have pass I highlights quarter numbers I detail. second the realizing the of floor over the of results you into quarter our who months. our after to XXXX. couple in the last our more progress priorities take through I we of in Koen, strategic of will financial some for summarize First, will go

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

Now, looking XXXX, quarter once profitable and pleased I'm summarized the announce key Page segments delivered performed all results business for that our this at second of results very on we quarter. strongly in to our again X,

EUR million, solid and our this adjusted with intensifying all and to of strong at X% Looking quarter's generated the which record net X.X% X.X period segments. We XX.X share. up profit in results. a from the of increase the than already this in quarterly comparable investments second this year line representing of first quarter with performance a to growing growth an gross of realized in while EUR X.X We is And EUR enabled XXXX quarter, of quarter compared per us more X.XX in realized our EBIT margin revenue million, in or million, second revenue, of XX% particular to XXXX. We EUR R&D.

cash later up further elaborate the Koen position XX.X these at X.X EUR of by in on to evolved the million, results net year. this will the Our from end his quarter this of million call. remarks beginning EUR second in

expansion and segments and we to pleased the our made in Slide market new the progress technologies. again that priorities I'm including achieved critical very of new introduction milestones, now Moving in X. strategic

mass as interventions such an our structural with simulation important market and diseases via continues death global better one tool our have to from structural XXXX, we we and XD illness heart catheters. are leading heart and medical the the visualization minimally markets heart last valve for interventions market cardiovascular technology substantial towards of economic of company million invasive milestone by specializing an Planner prepare journey the challenge on of structural announced worldwide. and a for intervention. Based of this or targeting XX segment, XXXX. the in they been personalization. The the have as for growth to plan cause to heart our solutions. AI-driven This pose acquisition design billion. heart to adverse Mimics FEops, costs modeling annual and are repairing and valve is diseases planning linked clinicians we in and Presently, This offers and By launched X created particular disease, a and people outcomes decades, personalized First heart of to in will medical our create This the interventions. approaches, number surgery acquisition open in solution rise. opportunities affected moved their $XX in Structural are heart replacing capabilities, structural cardiovascular the need a valves developed expected reach interactive the all, the heart in procedures. In is

slicing, and June. second of certainly will us is to fast, of be simulations RAPID of and mission to like build accelerate continue XD Processor you the can Mimics to designs translates high-quality thereby and modeling Materialise corresponding Materialise's taking more Materialise's start process mesh-based a I that in will for of complements nTop software to plan highly between progression at a with time finish. the expect posing essence This markets. market by how choose anatomical and the instructions, manufacturing By medical efficient, XX nTop end-use of nTop XD-printed any this to barrier cylinder Gen a example, heart partnership required software technology created as device Magics from manufacturers large and design to to allowing production XD and taking the our natural enable these like unique global progress Next space. A transferred current enable head complex innovative we will time. and to in strategy personalized by impossible is ultimately in geometries impact Mimics complex carbon-neutral the the to procedure. individual significant on further of component, shipping size configurable and format blocking structures. showed makes This weight valves trend achieving highlight precise complex important announced with to in fraction on measurements cardiovascular growth. The for nTop's needs because Until advanced technologies example, create print On files procedure enable to size build managing cardiovascular subsystems designs integrating this designs towards placement technologies. AM compared its developed this to has the of time-consuming and performance. Previously, the implicit the made and interact head, design device, reduction partnership size I'd XD file the adding a original and space, Build devices and our barrier the files. the previously assembly part For and thanks integration can the journey for replaced parts. terms the Next-Generation access large process complex, easily marine accelerate while printable new a family printing lifecycle into Magics a performance preparation Processor, file tap measurements this structural files. that it by is limited outcomes acquisition patient's complex high-performance some FEops FEops of At our simulate clinicians of valve natively the kernel solutions printing parts optimizing right XD optimize This produced XD more final and Build our processing for and how conventional approach. The thereby the FEops' Wartsila This the without collaboration the This solutions to integration the the heart that space. simulation to and the traditional of for to development to anatomy. Integrating characterize best predict into files of an spend impossible of smashes will and now, or better innovative plan were industry design and a the design size and in opportunities using update larger XX% design further improving also reducing is processing enhancing that we the production. Materialise's and the safety the and certain is challenges cooling the entire RAPID, for printing ensuring and complexity powerful file that large-scale created Planner, we of to product print. into in in Planner energy this our that cooling a leader predictive of innovative the technology preparation nTop in into new the allowed enabling to the design to in patients, high-performance explored outcomes and CAD translations to at an of the production, complexity serial design be cylinder up Wartsila, of energy with design.

print Materialise's combining with modeling, by the implicit Next on XD it Magics Gen became to software based However, Processor, nTop's and Build design possible part.

first Early onboarding access Program, Access Nikon start in early Solutions this an We the partner will now with customers program. being in SLM

is encouraged together as collaboration. this collaborate. we and potential industry was Now, the an industry is I with to of I needs a our XD remaining about the unlock coming will collaboration. to The printing can that collaboration initiatives nTop Advancing the type year. removing that my our and was industry-wide are the In just collaboration which talked to growth, there ideas. me how The collaboration other we many enable our to full of CEO, In we positive, various its unlock discuss third this to push we of brought months unite specific customers to later with talk ahead is have headquarters highlight, the together in full large But example industry the to possible. industry this enhance overwhelmingly is example I more X the undoubtedly and response an partnership at stakeholders obstacles initiative about in brings ways first group April, of very industry one years. And to potential, adoption. need urged to

through financial segment. by Now, results Koen will take you detailed the

Koen Berges

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

quarterly highest please second increased revenue ever total this stated X.X% we report call as indicated, unless XXXX. is, otherwise, are business can reminder, revenue the million, that our of of second growth EUR segments. against note to a comparisons Brigitte in quarter all which already quarter, results the year's In As We all have for realized. in our X this XX.X

XX%. segment business software X% medical grew performance turned its manufacturing of by continued impacting in conditions Our our increased market the quarter. strong another by In challenging of spite manufacturing segments, and software and very our second further conversion each in also model, and revenue

can Materialise our Software for on side for the see Materialise right the XXXX. of now you the during for XX%, graph Materialise XX% accounts of of revenue in and As Manufacturing total Medical second the quarter page, XX%,

sheet investments revenue almost Over June revenue, mainly half generated EUR and after adjusted the period behind X.X% XXXX, on quarter. still XXXX, we EUR for the of Consolidated XXX million numbers from first quarter EBIT to and above at amounted balance in The and first strong were the first of XXXX. On deferred minus medical year of second XXXX, for million our is fees year. million consolidated corresponding to the EUR end year, of we X.X increased over EBIT maintenance of R&D our which of half the in significantly Slide our software, while license see you'll last million XX to adjusted amount EUR the segments. compared coming EBITDA spite software of increased X, this X.X of this

for noted, to EBITDA was The second EUR to now the million adjusted minus minus margin amounted award, X.X however, X.X% XX.X% to Consolidated not X.X compared EUR margin quarter in be adjusted the year in million, numbers last reached year. from Our to X.X at the was arbitration the should It reported time. effect from adverse the second of EBIT quarter year. EBITDA X.X% increasing last adjusted amounts included the adjusted EUR X.X% million, which an that which compared XXXX. in prior

million Over the of million we have half and EUR EBITDA. first EUR EBIT XXXX, of generated adjusted of X.X XX.X adjusted

X. on Moving Slide to

medical by as increased, quarter's strong generated growth continued almost solid on said, revenue revenue the Medical an coming Materialise revenue that our XXXX. You notice was will recurring in total medical XX%, sales services segment software, by direct and by in in and and and increased devices building already respectively activity, This XX% further grew which revenue higher sales. services grew in medical both partner and from devices our X%. Within from we

line of margin million, top the adjusted EBITDA medical to EBITDA a XX.X%. result EUR that and growth segment cost As to further of of grew adjusted with an increased X.X the discipline,

tailwinds X half of of EBITDA segment. the revenue subscription-based by business license the almost in first our of with an by pre-print CO-AM, XX.X year, X%. medical adjusted was increased In XX% XX.X% The million, further representing software impact X of this maintenance segment. to than Materialise the our and revenue a million, Recurring margin. Slide of transition our up from segment more the X%. revenue second realized grew EUR year, of offset by cloud results from model Over including XX. and sales, our EUR adjusted quarter, EBITDA software last summarizes by Software

at were Magics On QX grow June, hand, RAPID QPC revenue be a of the available already share first this Metal XX% e-Stage new released to coming QX launch the recurring. partnership with expected over registered decreased software other sales EOS version signed. which further considered the revenue of our by for in basis quarters a This of subscription being segment only. After X%. to now the is was non-recurrent on is Over the with vXX, in and agreement year, of in new the was in

representing spite margin to In referred EUR EBITDA addition ASO also the top line [ important, software In earlier, to adjusted to of ] partnerships with [ Mitutoyo the nTop partnership Next-Gen Renishaw and million, Brigitte the recently of segment EBITDA decreased BP growth, in ], X.X were XX.X%. adjusted our an announced.

realized platform, XX.X% development adjusted XX.X R&D on an EUR software our adjusted our year, and EUR million intensified efforts million, factory revenue further this an over our X.X we first segment margin. As of the management representing CO-AM, EBITDA half of EBITDA of

strong Now, Manufacturing Also an environment, our Materialise in low in prototyping market X% a we the was let's in growth manufacturing in quarter continued manufacturing. fueled the for second performance operated turn ACTech Nevertheless, managed by in grow reflected demands. of to XX segment. of second quarter, overview challenging of Slide to to and compared the revenue which mainly last certified year, by

further and in aerospace our EBITDA areas. med-tech representing cost spite Here, of In top X.X%. million, X.X focus margin consulting operational to and line we pressure lower growth EBITDA an posted EUR the stronger strategic income, of realization growth of less a led and efficiencies, of adjusted the adjusted

of our year. of consolidated representing of this an a for statement the provides of revenue EUR the half Over this year, second of first income XX million EBITDA million, EBITDA adjusted our the segment X% manufacturing with XX.X X margin. Slide adjusted EUR quarter highlights realized

XX%, of representing a year. X effects. EUR XX Our last by to and compared QX gross gains gross were efficiency which cost realized million, the profit stable offset increases mix XX.X% increased in to is profit Direct margin of

compared operating adverse EUR Net Our million medical I in in income on operating coming largest the of a developments as our impact was previously, in from EUR grew X.X were minus in expenses last higher and investments positive software last segment. segment the increase by on to last quarter at arbitration million, EUR included XX% by year, CO-AM XX% R&D award. X.X year million spend, an with platform mentioned focused our where, the compared negative quarter mainly aggregate, year. R&D X.X to in which Mimics increased or the

result the more the impact. interest amounted EUR the was of Income Interest quarter gradually and EUR operating at of million result the group's to result amounted than tax the million, to in the debt. compared financial million a these exchange elements, our financial X.X million X.X of positive our financial expense offsets EUR X.X all in EUR EUR cash positive net million. reserves our offset currency from a QX, EUR minus including of X.X X roughly period. In to minus million expense X decreasing quarter on in income year's As income of last

equaling All minus to profit per million, million, quarter, the EUR share for of this the net minus results XXXX representing EUR once a X.XX more or EUR period. X.XX loss of net compared in X.X EUR per for share X.X corresponding

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

plants. of The at million. debt the EUR position result million, to gross repayments end reduced CapEx X reserve end by of net working already partly contracts Loan of cash Our the as position by out we EUR mainly trade than higher more almost capital by the revenue compared below our cash maintenance latter being EUR XX reduced quarter million. million, that and EUR Total the the new release related net EUR was amounted deferred was year, and to receivables to mentioned. up software, this at our XX at quarter resulting payables, recent million from the million X.X investment ACTech trade on to around position year. Compared XX the to to slightly as made license last the the EUR was of amounted reduced income and which end million, impacted EUR of XX.X XXX.X a beginning deferred of the

high a in new free quarter for the this Even call machinery. And operating to the operating that our we in announced right to million. the of investments, result for back additional on As from to from earlier of start new with in amounted other peak flow will expenditures months activities the Investments ACTech X.X as plants see you coming to with on page, as breakeven. to will X.X these weeks hand line Capital plants can cash the to close with throughput gradually the hand the investments increase second in like Brigitte. over quarter CapEx mounting ACTech quarter remained plan. project that, was the million, coming cash the EUR the I'd the flow continue graph mainly the EUR over in strong, capacity

Brigitte de Vet-Veithen

Koen. you, Thank

discussion Let's my XXXX with to guidance. a XX. full-year our remarks conclude turn Page now I'll of

targets our Accordingly, to growth within strength operational of that report the beginning we the consolidated to on of EUR earlier. XXX we year. track the well halfway to this revenue Given fiscal XXXX, expect million XXXX the XXX set we continue to we through year believe communicated full deliver at performance are for the range EUR million we

guidance our We XX EUR we're the into XXXX, recent EUR in that its call portfolio. This maintaining given OpEx in FEops to are concludes in the also of million questions. weigh XXXX and and prepared open XX XXXX, product adjusted of to remarks. integration million on investments acquisition the EBIT our to for spite will now ready further costs Operator,

Operator

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

Troy Jensen

Brigitte Congrats nice here, Koen. and results the on

you mind. a couple if So, questions of don't

I some guess I acquisition. be but I'd the like OpEx or on be the because assuming right the now, more it's the potentially insight this curious slightly would headcount So, organization. helpful. with pre-revenues to new increases want start of I'm of size

Koen Berges

Okay.

try my first, financial to answer the on side of the end, acquisition. Troy, me Let from

we impact the that in R&D months such, accompanying cash net FEops But confirm our cash negative on outs we coming of have they transaction on will not at the further a impact, able be we growth, and that will be the I said, will no The position. our our But over as Brigitte year, by as and expect think FEops months will we guidance also will working limited support we revenue initially from quarters, have agreed integration price coming communicated needs and further earlier. coming with the As will further explained, implementing -- in we further investments within gradually purchase Nevertheless, that the side the have. have least as that we XXXX growing EBIT, which cost can its to can this still Brigitte and that capital its require impact the I as an sellers. we, by least synergies. you as know, in to decrease absorb disclosed material have at will further on

Brigitte de Vet-Veithen

is that Yes. maybe And help element might company. you through growth a one just other FEops work this.

market. and but addition a So small such, family, terms an important the one Koen investments required as to of further importance strategic as said, in this it's our in

Troy Jensen

When this or to go Understood. the revenue, is software? going Yes. start into business the medical to XD does this

Brigitte de Vet-Veithen

Yes. Absolutely. Yes.

Troy Jensen

go you're saying? it So into does medical,

Brigitte de Vet-Veithen

Yes.

Koen Berges

Yes.

Troy Jensen

I Can right software? side. me can Okay. medical questions much at figured business on the remind -- And got the if you is we we out, then now remind me you If how software of look the... --

Koen Berges

total that medical revenue related around It's XX% the is to of software.

Troy Jensen

do you or now we revenues right. Koen, Perfect. the in XD, been on I'd point kind EUR to EUR of Okay. now growth But it I think see in and actually you of of of And said It XX where to the growing, has be at kind grow. that a so we're me stage then time nice the business? All range. stuck start curious, like to software recurring. it's a feel also see that million can to million XX XX% are

Koen Berges

end at I step-by-step. there. quarter-after-quarter, up going indeed, the is, the don't are think of we That journey

that that continue at the see continue we've So, get it we quarters, gradual continue business end line a I think, to least continue quarters journey going need to never to years couple reached a is be that model recurring XXX%. to in will of conversion But to. coming that we our for and in impact couple that will top of to till the timeframe, will the probably we

Operator

Stephan Capital Jacob Lake of line Markets. the from comes from question next Our Instructions] [Operator Street

Jacob Stephan

the to congratulations as on solid the well add quarter. I'll

Brigitte de Vet-Veithen

Jacob. you, Thank

Jacob Stephan

I of Can to 'XX, medical segment margins why down were you us the QX just of off in here, EBITDA. large starting XX%? kind guess, EBITDA improvement just remind first, year-over-year

Brigitte de Vet-Veithen

On the EBIT? specifically? On segment medical the

Jacob Stephan

Yes.

Koen Berges

results, of the of the processed think, then last that in in numbers was also of impact that granted against arbitration course the the last and May our year. medical second consolidated us, of in is the I year. quarter award in That And was

Jacob Stephan

it. And how growth prototyping in seeing Manufacturing, and maybe return demand prototyping kind spot kind can the think segment. ACTech next Okay. of in month a here? weak just is we quarter, you're here about after the of to I'm question. of Got segment in wondering but the that what then utilization QX here this

Brigitte de Vet-Veithen

Yes.

So including just to quarter. expect specifically The quarter on maybe comment to to quickly. maybe to weakness, a the the numbers that, three side, but which you as a the third prototyping look structural don't specifically, more disappear at how less need prototyping market sees I

So, also an and Materialise we'll see continue our industry in to that as therefore, as results.

on So ACTech one questions that's And repeat then and ACTech. one. the you to related Can make second specific your side? it is the

Jacob Stephan

Yes. that just you're about with you of filling on guys there. kind utilization capacity how the get curious have been More out to ACTech. a sense building capacity additional I was

Brigitte de Vet-Veithen

Yes.

So, one in opening is thing September. to understand is of that additional the plant our

plant additional so obviously, had an that today, impact yet. So far results, in here hasn't our

start will see impact. as seeing facility. to gradual we to it's to impact a be But going -- that Now, of the expect do very we so expect of opening the

start-up gradual years, facility, add you that it's capacity further continue will the that in quarters during next we to months, process first to a when and new new the adding which the so the continue of all. building, further always, over machinery. open do As expect And fitting capacity, is we of the is also but a there second a of phase, couple

see. years coming increase it's you X period years. months immediate the a not or impact over that and would gradual one-step It's of So X a a

Operator

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

Brigitte de Vet-Veithen

you, for to thank today. you. various through you, Investor further calls. to joining the all one-on-one if obviously have to always, or the reach forward continuing all. out any Conference, dialogue look goodbye with please We our and Thank us you questions. us Thank certainly, you our meetings you And as And

Operator

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

may now disconnect. You

Materialise (MTLS) 31 Jul 242024 Q2 Earnings call transcript