MTLS - Earnings call transcript Q4 2024

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Fourth Quarter 2024 Materialise Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to Harriet Fried of Alliance Advisors. Harriet, please go ahead.

Harriet Fried

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

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

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

Brigitte de Vet-Veithen

full pleased quarter present morning, Good us our today. everybody. very joining and Thank year to you. good for XXXX I'm to afternoon, and results fourth you

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

also of Now as the Materialise you this know, X for I've some achievements role I'm to and year, of of XXXX quarter. pass the the realized in and like now year. in through realized milestones reflect our that, our to have on more will major results will I the in After we go achievements detail CEO call. I for my this floor fourth Koen, I would results. who financial in highlight in been proud will

to stable, our Medical. prepared back will EBIT while economic XXXX objectives. On we'll climate, X, to various very be we growth geopolitical to we by and a growth and and happy questions. XXXX interest in progress major proud I managed X% difficult keep some segments. adjusted highlight our this continuing the in Finally, and rates, those achievements the has I climate. strategic our been businesses, Slide difficult industry, bring. a remarks, strategic of what I objectives respond will expect making high Starting invest with while completed driven difficult realized in on that tensions to and we've explain for to our come am When year

processes to benefit of market, progress need make and patient mass opening cannot be so thanks in and trauma the aim that to towards to U.S. treated the within patients our reducing patients. our We more personalization to times, lead our plant on to continue conquer the order We that further to be broadened is automating our personalization, week. bring where scheduled population our many can by our journey the solutions from

where offerings we quarter the planning acquired complemented XXXX. the We the of in solutions in also third brought to and simulation existing with we company personalization to particular, new FEops, market, from markets, that our cardiovascular

term and the fourth progress short negative a had pleased quarter the While feedback we has are results, the integration. acquisition impacted on the with and on our of the impact EBIT customer our

easier want launch I addresses for and an help and to Mimics faster legislation. At integrated highlight and of quarter, mention when and provide companies to to segment the segmentation or by an toolbox, an making cloud a viewing privacy typically the patients growing engineers launched combining environment. The generate management devices. images, and their scaling bring personalized regulatory design it personalized adoption the fourth a workflow solutions communication personalization X-matic, of cases efficiencies face more AI-based and XD and our strong to we desktop automation the challenges solution, plan cloud-based the hospitals customers in our personalized is cloud-based As platform end-to-end and XXXX, between patient clinicians, patient-specific process that Mimics instrument manual design stringent implants. The platform and capabilities Mimics Mimics commercializing case also offerings, accelerate and cumbersome of Mimics the end-to-end the end of to requirements platform, tool in work,

saw a we from prototyping and in Mimics to continue while in growth a we throughout to collaborate position. the way the shift we've with launch AI-based further, certified With regulations. In particular, in compliant to continued new and our our manufacturing focus step in customers automation our parts segments, latest and called of staying from our benefit in segment, frictionless platform which enabling Flow, the the gone which of Mimics effortlessly Manufacturing end-use strengthen we the year

give a In polymer example and throughout has aerospace, you been ENXXXX of aerospace parts. manufacturing for focus metal certified which the Let the segment, year. segment the offer we me

so XX% year. the far. We have throughout in growth printed organization more segment this production and saw flying have approval revenue XXX,XXX than We parts

leading competence that Delft, vibrant in the in step this aerospace University, university Technical is recently and opened market, we Delft. our As there's a center The has a it. a aerospace, around in TU developed next ecosystem

in services software. of aerospace industry joining are this in our smart selective manufacturing the hub with the our networking bring to closely additive to us manufacturing allowing knowledge collaborate the aerospace our We foster and to space, companies use and

of performance we this builds, in aerospace in and to clear With process repeatability market well tensile access this data positioned Our are strength, us modules. of hundreds elastic parameters from reliability, long view and including space. part density, like a gives experience

Let example Huge of market Heavy me we you another of call one production At segments. what ACTech, of we to our segments expanded our parts. give and focus the

As you we expanded to know, parts. type our Germany production of facilities this in of accommodate

seen growth have throughout We year. segment the in above XX% this

the headwinds of to Now by such also and segments, while in capacity at ACTech headwinds, reduced industrial sector to QX business operational the and making new segments the planned in disappointing of prototyping environment the sector, engines the fourth softness have focus general addition Europe to accelerated progress automotive casting quarter. These for of led results. combustion due the an unfavorable in the we in automotive difficult opening with increasingly macroeconomic our seen as traditional a the in plant,

reality, action expect cost our We restructuring in and quarter the have reduce printing this base continue XD in taken in these to fourth implemented manufacturing headwinds adjust we in our XXXX. XXXX. To to a to activities

Software, turning had X Software. the Now, In year. throughout main priorities we to

both the adding organically our strengthening our through year, the factory in CO-AM scale on in production. made First, Throughout capabilities market second, in end-use Magics that position preprint position management for fronts. we have adding users progress functionality by on partnerships; expanding and based and

the we module. in and CO-AM the builds added announced our capture the we and QPC throughout example, monitor numerous partnerships functionality, side, data On year, to for

a to onboard is functionalities our results. I support their subscription-based software, ability structure intellectual the despite designs essential such progress users generation metal that XD continue new helps segment, of e-Stage platform, more now for to fourth printing a in With climate Magics XX in year. full customize quarter for our shift developed future This processor announced automates to manufacturing software we fourth foundation our the property specifically, to as Magics an customers. in the protect Koen the accelerating the throughout component the which this throughout Magics our custom users' create customers expanding We of year customers We able operations. on high-performance operations expanded we years, algorithms behind access be scale XXXX, will preprint financial geometries. to launch over SDKs, allows results Metal+, am accelerated the growth. In floor partners to progress made additive towards the manufacturing additive I viable, and quarter, build fourth and the model the make of now we to the the our we the functionality. In economically that proud our and will print summarize economically. Overall, the difficult particular, to quarter, and financial impacting achieved and pass added workflows

Koen Berges

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

which quarterly once the software a of impact positively other than results for EUR year million. Medical final recurring fourth its the model, our double-digit that by last revenue year, in XX% more increasing comparisons will the again continued note As and its year the remained in call its all market and this increased are conditions of revenue XX.X intensified business our a that stated unless its record. even XXXX. In the a otherwise, future. transition challenging hand, by against to growth, Manufacturing continued slightly posted please confronted months on revenue the revenue revenue potential full in quarter towards the quarter XXXX, while Materialise reminder, the

half the XX%, the XX% Medical rates Software quarter As consolidated of fourth reflecting our for Manufacturing right accounted for Materialise you of different impact segments. and revenue the Materialise of the page, of of close can see business in the the for to graph on X the side Materialise growth during XXXX.

EUR XXXX, over year full XXX above the which we For XXXX. million revenue, X% generated of is

to was revenue balance Our year. of increased EUR in XX%, QX million end and total the by XX.X in EUR million, licenses above million. X.X The XX% reported at sheet annual revenue deferred Software and EUR amount The Manufacturing at sheet XX% of balance the Medical total. deferred represented just of segment on fees ending related XXXX our our revenue the maintenance software XX

the and period. year. X.X QX manufacturing difficult fourth a impact EBITDA for EBITDA in manufacturing XXXX EUR new for fourth X.X%. This investments quarter Full quarter remained adjusted in taking factors, million, continued EBITDA consolidated ACTech restructuring integration as the Now combination the X, to the will XX.X million in EBIT compared Europe, for and stable adjusted decreasing at EUR margin reflecting to decline X.X but the our is attributable G&A and from EUR corresponding minus of Consolidated EBITDA last X.X full also the adjusted plant, an on The year 'XX for mainly adjusted to EBITDA charges. million XX.X%. Consolidated of of to the as well quarter see for the decreased including environment, in period Slide higher EBITDA including numbers our FEops. EUR industrial production the our million full fourth of for amounted margin for results, you in was lower start-up adjusted million of quarter X.X the depreciation with EUR year reach particular of in costs, impacting the corresponding and adjusted EBIT Medical, to XXXX, the

by quarter Full EBIT for million compared 'XX. X.X margin the ended EBIT was adjusted Our in adjusted negative EUR EUR X.X at minus million X.X%. to year

compared Our margin the full X.X% last to X.X% year. adjusted EBIT for year reached

Moving now Slide X. to

of notice XX%. saw that tracks study spend coming to R&D our various and higher an revenue devices EUR and Within the higher EUR Devices will we sales. Increased both integration once growth which quarter. quarterly mainly Nevertheless, Materialise of both operational sales strong made revenue by the an profitability increased the we generated XX.X a software, from revenue as from You of and on million, more once here approval grew, EBITDA and medical services was in by XX% medical million, higher business, total impacted representing by and and record. FEops EBITDA XX% the Medical costs respectively, our adjusted Services partner continued margin also X.X the increased growth The realized from Medical adjusted and we FDA quarter's in XX% again, by in for direct fourth revenue segment progress quarter.

Recurring million of almost impact license of of medical contributing our of share the still XXXX, X segment. revenue by to The the XX.X%. negatively by adjusted In Software stable EUR year model. transition revenue the results summarizes its include XX%. Slide phase of subscription-based also once is as throughout million, basis, XX.X revenue and remained flat Medical more which around at sales, our increased On Software maintenance a software of full close remained despite quarter, fourth translating numbers July increased an to the year our a software current EUR and development XXX EBITDA margin XX%. EBITDA adjusted including XXXX EBIT. business from sales Materialise cloud further the reminder, to the XX% CO-AM, a to into and segment As in revenue

revenue by our adjusted On million, margin on EUR in a EBITDA full this the the stable, adjusted roughly EUR decreased year around at Also EBITDA QX remained while investments XX%. The margin which XX adjusted other in products. adjusted EBITDA hand, in Software nonrecurring EBITDA revenue remained Software growth segment's increased an also representing stable million, of of X.X our and segment includes in X.X impact million an XX.X%, basis, translated our of of XX.X%. EUR

and than we focus to offset Now the of for areas, In X turn Slide in and but Materialise the segment. majority other by segments, macroeconomic further performance by sector, our the in revenues overview aerospace unfavorable the in of particularly prototyping medtech, are start-up let's Manufacturing demand more our strongly generated in this strategic segment QX, an industrial Europe. Unlike new of continued by was our realized plant growth in our Manufacturing vast weak Europe. climate ACTech's reporting

As statement a minus of consequence EUR a by this of compared X lower to last incurred a X.X EBITDA revenue restructuring fourth our you by On XX% an of reduce for to included EBITDA, of XX going full year. realizing decreased ended cost also of line, and the And revenue million, year's result consolidated margin Manufacturing basis our adjusted EBITDA decreased the million, quarter EUR while forward. quarter. full provides also at fourth XXXX fourth XXX.X as top adjusted costs income these, the X% highlights basis, quarter X.X%. Slide year representing of the to million EUR

XX.X profit margin for million, profit EUR gross a Our representing the XX.X%. gross quarter of at fourth ended

compared the Over the roughly prior year. gross full margin year, profit XX.X%, to was stable

the XXXX. fourth from reduce integration coming going X.X FEops cost mainly start-up, expenses in from with higher increase in which impact, increased R&D operating Medical. Furthermore, quarter forward. higher XX% by by by driven was in EUR unfavorable The quarter the included or costs the already Our XX% plant our R&D from to spend to mentioned QX as aggregate, the also mentioned, grew costs spend, million, largest active compared base and restructuring

was million. compared to expenses X.X EUR intangible were XXXX income coming higher at in EUR For the last the again full included increased from impact nonrecurring the net goodwill, for operating operating in million in with charges spend. The where the assets X.X% aggregate year, XXXX, from main X.X quarter than EUR negative impairment positive R&D year, X.X of million, and a tangible

was at For XXXX. the X.X EUR million for net income compared full year, operating EUR million, negative a X.X positive to

elements, in compared was As operating to EUR at of quarter a in all also a result period. these year's million, negative million the X.X the group's result EUR last X.X negative of

result X.X financial million, the mainly to the EUR currency of cash reflecting For U.S. exchange million. Income year, million income amounted full interest amounting QX, tax the positive X.X to are EUR of expense 'XX. In million, by EUR to in with million, quarter a income increased including in changed from operating which a X.X EUR X.X partly dollar reducing net million, result positive EUR debt to to our Interest line positive EUR reserves, EUR compared financial million a X.X our the X.X X.X amounted year. offset prior position. on euro to in

positively minus million, per of a ended at for to X.XX EUR EUR period. quarter fourth per representing share minus or X.XX compared the for profit share the net million, loss result, EUR a As EUR XXXX X.X X.X net

in resulting profit realized of XXXX. EUR per we year, net XX.X profit a compared EUR X.XX a million, of X.XX full share million, EUR to share or in the X.X per EUR net Over

to and turn balance the XX sheet recap cash highlights. Now sheet for fourth quarter, please flow our a balance in of remained Also Slide strong.

cash Our cash EUR million position by of repayment EUR though, the The an end impacted, to quarter bullet reserves anticipated amounted QX. the in at loan was XXX million. of XX

capital X.X reduced million position XX.X was EUR the position beginning EUR at total reduced the of million amounted XXXX, working our software EUR focus which maintenance to million we on over of earlier. increased deferred the quarter of resulting XX cash and license below XX.X EUR slightly to deferred sheet of Over income underlying million, XX repayments net EUR end end at as debt net our the XX the at the The by million. year-end, the already through the totaled position EUR the components. year, to million mentioned 'XX balance loan and was The full related gross to from revenue at year. Compared I contracts, fourth

from expenditures higher by fourth of quarter to is from page, movements. above the installation of investments reflecting EUR Capital see P&L from the quarter flow of components to was the operating the can XXXX X.X than machinery. you impact the favorable in million, the capital The new which of graph amounted the on activities X.X lower well EUR side right XXXX. working in building amounted cash and completion for million, compensated quarter As the is for which the active last average,

As limited XXXX asset investments flow larger-than-usual X.X income from million. of our and free turned by these of over EUR some a the quarter minus result negative sales, cash

while year, the the to acquisition. compared Now flow cash million, completed XXXX. by for than The while CapEx, FEops operational over EUR including XX investments the both XX.X up nonrecurring and of free flow to we positive remained XX% million invested EUR the cash year, recurring more increased full we

to now, our We gradually throughput as hand back the have invest new to coming up new machinery, the but investments ACTech to in like us with the ramp in facilities we in that, behind facility additional of Brigitte. continue bulk I'd months. And call we'll

Brigitte de Vet-Veithen

Koen. you, Thank

financial a Page quick guidance. turn review for XX of our Let's to

continue XXXX, business with continue our segment in grow Materialise our the as to remain Software still towards confident we not and growth Medical segment's reflected will at that of fully being we Software same to revenues the Looking the we impact particularly European that which is in segment, Manufacturing uncertain environment. macroeconomic will industrial environment XXXX our will the and Europe business subscription transition a to persist cloud-based to expect continue exposed model. At time, the in

expect As X to our the corporate we reflects the environment for additive EUR in to the the in EUR medical of of continue in believe intend to a thanks software Materialise to product and the result, manufacturing million million. We solutions investments EBIT cost and financial EUR adjusted impact range million, and segment overhead. Whereas portfolio, the the of economic to on revenues our range to and our investments in XX positioned in the uncertain ready to is a our EUR call manufacturing be million XXX strong in XXX and services, the ideally our prepared and innovation in strong now optimization foundation. This and personalized control particular, markets on continued keeping open for of and Manufacturing guidance our market for management Europe Operator, segment our questions. concludes future our focus growth the software, we Medical factory the while in market products we're business, remarks. in strong and

Operator

And Kepler. from Instructions] [Operator come with Craeymeersch first question will our Alexander

Alexander Craeymeersch

Actually, of Cheuvreux Alexander Yes. that's questions, X, I if couple from here. possible. Kepler a have

first there, saw going revenue and list the the Does between but I've how my software about it's nonrecurring still third would you much main question sound us and you to then on be, Then also margin highlights calculated subscription? And the correct? first, X/X some question So recurring all on the the in could nonrecurring. Software lifetime revenue now average answer. I'm recurring nonrecurring? about I let would there segment? Second in of maybe questions versus be the is remind that is Software what of difference

one-offs. integration on could us question with fourth you the if the and specifically restructuring the on combined would give FEops some increased So costs. the I'm granularity spend, ACTech start-up R&D talking be the

had quarter a of million clearly, that XX If an adjusted exactly the the of considering message split QX decided last question you us then in send you already was impacted there? And the that that tell the of impact guidance difficult after would EUR in that quarter you given million at XX you talked changed that fourth you to could about didn't you end just QX, the present EUR of the give and that visibility was have end what yet -- climate us bit optimistic by EBIT much fourth October? provided a the on how has October. an to the the be Could

Brigitte de Vet-Veithen

will tackle Thank you, for them. Trying will to decide them questions. the in or we Alexander, I X which tackle order

admit exactly to is first me. have not your I clear While that question to

the wanted revenue difference recurring in Software? to between the margin So the understand nonrecurring and you

Alexander Craeymeersch

so just Yes, was in going a to any there. difference wondering from the there's subscription you're Software margin I large a segment, nonrecurring if model.

Brigitte de Vet-Veithen

think don't No, margin I large a the you can on expect difference difference.

Koen Berges

the model, we in recurring split duration of the model, segment. X different, over revenue recurring the revenue the The P&L nonrecurring Alexander a revenue take license the scenarios, whereas transition perpetual quarter, revenue question recognition, what course, immediately whereas towards between previous a picking the though is of your old we on we and also There it in within recurring as the Software in into our take in into revenue. contracts. Maybe is continued see, gradually and

situation we revenue, the so recurring. XX% you X/X revenue that XX%, the of at Software year-end, roughly at If or consider just total look we're to be above the at about as

Brigitte de Vet-Veithen

lifetime maybe subscription. software the And of average tackling on then the your question

spend. our most the so operational shifting revenue, lifetime. So on Then of you expect an maybe clarification annual, on the question X-year should subscription-based the to

Koen Berges

operational X.X restructuring FEops ACTech from elements the amount, cost and and took you we the impact between startup. the of correctly, half of say, having understood that integration, QX EUR year, operation total I would the mentioned the from how X Yes. which about you providing comes plant -- last quarter I that If on million, these that of the cost without and half listed impact Without is last the increase detailed different the components X quarter which purely mentioned that Alexander, cost the EUR costs million I -- the you is increase versus increase. breakdown,

Brigitte de Vet-Veithen

we Manufacturing I said And commenting say the saw to on the -- last with very indicated results, this your whether to on to then -- want not. results expected, time. Well, our capacity. The we particular, plant the the already cautious quarter the to thing about maybe was that in be around quarter expecting or cautious would segment to we in at coming first point reduce third new question as -- the were industrial we operational be move fourth already had the very at in the climate

However, in in quarter what did climate accelerate, what see and the that guidance. Does particular questions, is we see fourth answer fourth you the quarter, we in reflected that your saw our And results Alexander? now is in that Europe. that XXXX

Operator

comes And from next our with Instructions] [Operator Fitzgerald. Cantor Troy Jensen question

Troy Jensen

just is, question revenues such was my why deferred kind in guess can that a Software huge kind the would was all, more quarter, hopeful that hear of But of quarter function I the it's the this you deferred big we I a business. of segment. in of like in forecast growth explain Software I revenue, guess, step So first Koen? better

Koen Berges

a large a of revenue end where and Yes. last in typically depletion third the the there's quarter. up of we of quite which then the The year contracts below the see at went the at we revenue first if deferred second prior and just some had year quarter and the the something in buildup in look anticipated. years, line EUR million with the in with the quarter, seasonality is fourth you X deferred also It's

which though was us, what more line larger effect anticipated, with last that in we conversion year we revenue of it course, it is, doing. So recurring are was than to also the the and from for

Troy Jensen

are and that just in be also? million December, follow-up functions do OpEx question. down around kind onetime-ish these a Or then on on OpEx EUR they hang items in to because mentioning out? EUR growth basis March, of sequentially of we now they us X.X you going off quickly? in falls out Or fall still help to -- X can step kind big million sequential this this much of a How And you're with had

Brigitte de Vet-Veithen

can I If comment. just

Koen integration. at the and FEops the ACTech So cost pointed increased start-up out R&D, the

look accelerate do the taper increased the our -- much very particular, to as you believe investments If should growth we the those future ACTech start-up R&D, in in to in X, there. costs The business, down. we Medical continue at growth want

Now the also as FEops go. taper should down we integration costs

Troy Jensen

Do cut kind I are you absolute of are think you up costs it's down going mean, basis, to on to of guys now, to kind to... profitability to Brigitte, these back an or get levels? just going try like Or sequentially? higher

Brigitte de Vet-Veithen

Manufacturing going we'll what strong essentially It's I particular in -- control have cost we'll that a earlier and on in focus throughout optimization, said XXXX, certainly the segment forward.

Troy Jensen

And Okay. than much European That's fine. just sense, I makes it but mean get vertical? weakness, automotive then just auto how about last European on is the broader

Brigitte de Vet-Veithen

repeat question, you Can that Troy?

Troy Jensen

is than automotive... would the it weak European Just just -- weakness, I understand auto really is in Europe. it Is broader

Brigitte de Vet-Veithen

uncertainty, Europe. It's the of cetera. impact Trump on of in sector the with weak in slightly automotive broader the fourth the the in U.S. certainly because quarter the is So also Europe, et particularly administration

that. So uncertainty factors around there's

Operator

time. back remarks. further for questions in call the turn show to no to closing now this I I at the like over Brigitte queue would

Brigitte de Vet-Veithen

now. joining calls. or thank through for to you Please want forward We again to reach continuing our for with do that, any say have one-on-one meetings dialogue conferences investor Thanks in look you, with you further goodbye out I today. if and questions. us And or

Operator

today's conclude for Thank your call. This does you conference participation.

now You disconnect. may

Materialise (MTLS) 20 Feb 252024 Q4 Earnings call transcript