LEUVEN, Belgium — (BUSINESS WIRE) — November 9, 2017 — Materialise NV (NASDAQ: MTLS), a leading provider of additive manufacturing software and of sophisticated 3D printing services, today announced its financial results for the third quarter ended September 30, 2017.

Highlights – Third Quarter 2017

• Total revenue increased 12.4% from the third quarter of 2016 to 32,307 kEUR, with increases in all three business segments.
• Adjusted EBITDA increased 15.0% from 2,833 kEUR for the third quarter of 2016 to 3,259 kEUR.
• Revenue and Adjusted EBITDA guidance for 2017 updated to reflect the acquisition of ACTech on October 4, 2017.

Executive Chairman Peter Leys commented, “During the third quarter, Materialise invested significantly in our future growth, finishing our new production and office facilities in Poland and Belgium and completing negotiations for the acquisition of ACTech GmbH in Germany, a full-service manufacturer of complex metal parts. The expertise and in-house infrastructure of ACTech GmbH position us to accelerate the development of our existing metal competence center, including our software suite for 3D metal printing. Simultaneously, we continued to execute on other elements of our strategy: we were the first to receive the U.S. green light for our 3D-printed maxillofacial implants that will allow our long-term collaborator DePuy Synthes to bring these products to market in the United States. Meanwhile, our three segments all continued to contribute to our topline growth and generated positive EBITDA.”

Third Quarter 2017 Results

Total revenue for the third quarter of 2017 increased 12.4% to 32,307 kEUR compared to 28,736 kEUR for the third quarter of 2016, with gains in all three of our segments. Total deferred revenue from annual software sales and maintenance contracts amounted to 16,607 kEUR at the end of the third quarter of 2017 compared 16,799 kEUR at the end of the fourth quarter of 2016. Adjusted EBITDA, which in the third quarter of 2017 excludes 266 kEUR of expenses related to the acquisition of ACTech, increased to 3,259 kEUR from 2,833 kEUR as a result of the combination of continued revenue growth (12.4%) and a lower increase in operational expenses compared to the third quarter of 2016. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) in the third quarter of 2017 was 10.1% compared to 9.9% in the third quarter of 2016.

Revenue from our Materialise Software segment increased 10.4% to 8,422 kEUR for the third quarter of 2017 from 7,632 kEUR for the same quarter last year. Segment EBITDA rose to 3,362 kEUR from 2,814 kEUR while the segment EBITDA margin was 39.9% compared to 36.9% for the prior-year period.

Revenue from our Materialise Medical segment increased 9.3% to 10,421 kEUR for the third quarter of 2017 compared to 9,537 kEUR for the same period in 2016. Compared to the same quarter in 2016, revenues from our medical software grew 24.6%, and revenues from medical devices and services grew 2.1%. Segment EBITDA was 1,170 kEUR compared to 754 kEUR while the segment EBITDA margin increased to 11.2% from 7.9% in the third quarter of 2016.

Revenue from our Materialise Manufacturing segment increased 16.3% to 13,456 kEUR for the third quarter of 2017 from 11,567 kEUR for the third quarter of 2016. Segment EBITDA decreased to 499 kEUR from 1,723 kEUR while the segment EBITDA margin decreased to 3.7% from 14.9% for the same quarter in 2016. While last year’s third quarter segment EBITDA included 460 kEUR related to an updated accounting valuation of resin materials stock, in the 2017 period, segment EBITDA was affected by higher cost of sales from the sales of eyewear scanners.

Gross profit was 17,873 kEUR, or 55.3% of total revenue, for the third quarter of 2017 compared to 16,937 kEUR, or 58.9% of total revenue, for the third quarter of 2016.

Research and development (“R&D”), sales and marketing (“S&M”) and general and administrative (“G&A”) expenses increased, in the aggregate, 8.5% to 19,509 kEUR for the third quarter of 2017 from 17,974 kEUR for the third quarter of 2016. R&D expenses increased from 4,389 kEUR to 4,701 kEUR while S&M expenses increased from 8,299 kEUR to 8,753 kEUR. G&A expenses increased from 5,286 kEUR to 6,055 kEUR. The G&A expenses for the third quarter of 2017 included a portion of the expenses related to the acquisition of ACTech, which are excluded from Adjusted EBITDA.

Net other operating income increased by 45 kEUR to 1,414 kEUR compared to 1,369 kEUR for the third quarter of 2016.

Operating result decreased to (222) kEUR from 332 kEUR for the same period in the prior year. This decrease was the result of the increase of 8.5% in R&D, S&M and G&A expenses, which was offset in part by the increase in gross profit of 5.5%. The operating result was also negatively affected by depreciation cost, which increased to 2,918 kEUR from 2,144 kEUR for the third quarter of 2016, and by the 266 kEUR of expenses related to the acquisition of ACTech.

Net financial result was (593) kEUR compared to (124) kEUR for the prior-year period, reflecting variances in currency exchange rates, primarily on the portion of the company’s IPO proceeds held in U.S. dollars versus the euro.