Exchange Rate

This document contains translations of certain euro amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from euros to U.S. dollars in this document were made at a rate of EUR 1.00 to USD 1.1380, the reference rate of the European Central Bank on June 30, 2019.

Conference Call and Webcast

Materialise will hold a conference call and simultaneous webcast to discuss its financial results for the second quarter of 2019 on Tuesday, August 6, 2019, at 8:30 a.m. ET/2:30 p.m. CET. Company participants on the call will include Wilfried Vancraen, Founder and Chief Executive Officer; Peter Leys, Executive Chairman; and Johan Albrecht, Chief Financial Officer. A question-and-answer session will follow management’s remarks.

• To access the conference call, please dial 844-469-2530 (U.S.) or 765-507-2679 (international), passcode #6466129.

The conference call will also be broadcast live over the Internet with an accompanying slide presentation, which can be accessed on the company’s website at http://investors.materialise.com. A webcast of the conference call will be archived on the company's website for one year.

About Materialise

Materialise incorporates nearly 30 years of 3D printing experience into a range of software solutions and 3D printing services, which form the backbone of the 3D printing industry. Materialise’s open and flexible solutions enable players in a wide variety of industries, including healthcare, automotive, aerospace, art and design, and consumer goods, to build innovative 3D printing applications that aim to make the world a better and healthier place. Headquartered in Belgium, with branches worldwide, Materialise combines one of the largest groups of software developers in the industry with one of the largest 3D printing facilities in the world. For additional information, please visit: www.materialise.com.

Cautionary Statement on Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, our intentions, beliefs, assumptions, projections, outlook, analyses or current expectations, plans, objectives, strategies and prospects, both financial and business, including statements concerning, among other things, current estimates of fiscal 2019 revenues, deferred revenue from annual licenses and maintenance and Adjusted EBITDA, the timing, benefits and impact on our fiscal 2019 results of the Engimplan investment, results of operations, cash needs, capital expenditures, expenses, financial condition, liquidity, prospects, growth and strategies (including our strategic priorities for 2019), and the trends and competition that may affect the markets, industry or us. Such statements are subject to known and unknown uncertainties and risks. When used in this press release, the words “estimate,” “expect,” “anticipate,” “project,” “plan,” “intend,” “believe,” “forecast,” “will,” “may,” “could,” “might,” “aim,” “should,” and variations of such words or similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon the expectations of management under current assumptions at the time of this press release. These expectations, beliefs and projections are expressed in good faith and the company believes there is a reasonable basis for them. However, the company cannot offer any assurance that our expectations, beliefs and projections will actually be achieved. By their nature, forward-looking statements involve risks and uncertainties because they relate to events, competitive dynamics and industry change, and depend on economic circumstances that may or may not occur in the future or may occur on longer or shorter timelines than anticipated. We caution you that forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. All of the forward-looking statements are subject to risks and uncertainties that may cause the company's actual results to differ materially from our expectations, including risk factors described in the company's annual report on Form 20-F filed with the U.S. Securities and Exchange Commission. There are a number of risks and uncertainties that could cause the company's actual results to differ materially from the forward-looking statements contained in this press release.

The company is providing this information as of the date of this press release and does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise, unless it has obligations under the federal securities laws to update and disclose material developments related to previously disclosed information.

Consolidated income statements (Unaudited)
		For the three months ended June 30,															For the six months ended June 30,
In 000		2019				2019				2018							2019				2018
		U.S.$				€				€							€				€
Revenue			55,084				48,404				45,076							95,519				88,975
Cost of sales			(24,896)				(21,877)				(20,288)							(43,413)				(40,232)
Gross profit			30,188				26,527				24,788							52,106				48,743
Gross profit as % of revenue			54,8%				54,8%				55,0%							54,6%				54.8%
Research and development expenses			(6,941)				(6,100)				(5,831)							(11,786)				(11,446)
Sales and marketing expenses			(14,991)				(13,173)				(11,843)							(25,252)				(22,441)
General and administrative expenses			(9,773)				(8,588)				(8,026)							(16,184)				(15,187)
Net other operating income (expenses)			1,559				1,370				1,840							2,627				2,390
Operating (loss) profit			40				36				928							1,511				2,059
Financial expenses			(356)				(313)				(404)							(1,509)				(2,516)
Financial income			140				123				29							728				1,431
Share in loss of joint venture			(93)				(82)				(141)							(205)				(244)
(Loss) profit before taxes			(268)				(236)				411							524				729
Income taxes			(69)				(61)				(42)							(1,126)				(543)
Net (loss) profit for the period			(338)				(297)				369							(601)				186
Net (loss) profit attributable to:
The owners of the parent			(338)				(297)				369							(601)				186
Non-controlling interest			–				–				–							–				–
Earnings per share attributable to owners of the parent
Basic			(0.01)				(0.01)				0.01							(0.01)				0.00
Diluted			(0.01)				(0.01)				0.01							(0.01)				0.00
Weighted average basic shares outstanding			52,891				52,891				47,428							52,891				47,428
Weighted average diluted shares outstanding			52,891				52,891				47,428							52,891				47,428

Consolidated statements of comprehensive income (Unaudited)
		For the three months ended June 30,															For the six months ended June 30,
In 000		2019				2019				2018							2019				2018
		U.S.$				€				€							€				€
Net profit (loss) for the period			(338)				(297)				369							(602)				186
Other comprehensive income
Exchange difference on translation of foreign operations			(489)				(430)				53							157				(42)
Other comprehensive income (loss), net of taxes			(489)				(430)				53							157				(42)
Total comprehensive income (loss) for the year, net of taxes			(827)				(727)				422							(445)				144
Total comprehensive income (loss) attributable to:
The owners of the parent			(827)				(727)				422							(445)				144
Non-controlling interest			–				–				–							–				–

Consolidated statement of financial position (Unaudited)
		As of June 30,				As of December 31,
In 000		2019				2018
		€				€
Assets
Non-current assets
Goodwill			17,491				17,491
Intangible assets			25,828				26,326
Property, plant & equipment			97,159				92,537
Investments in joint ventures
Deferred tax assets			260				315
Other non-current assets			10,080				7,237
Total non-current assets			150,819				143,906
Current assets
Inventories			10,031				9,986
Trade receivables			40,073				36,891
Other current assets			7,746				6,936
Cash and cash equivalents			108,865				115,506
Total current assets			166,715				169,319
Total assets			317,534				313,225

		As of June 30,				As of December 31,
In 000		2019				2018
		€				€
Equity and liabilities
Equity
Share capital			3,050				3,050
Share premium			136,869				136,637
Consolidated reserves			(2,447)				(1,848)
Other comprehensive income			(1,692)				(1,850)
Equity attributable to the owners of the parent			135,781				135,989
Non-controlling interest			–				–
Total equity			135,781				135,989
Non-current liabilities
Loans & borrowings			91,884				92,440
Deferred tax liabilities			5,979				6,226
Deferred income			5,282				4,587
Other non-current liabilities			886				868
Total non-current liabilities			104,031				104,121
Current liabilities
Loans & borrowings			15,814				13,598
Trade payables			17,902				18,667
Tax payables			2,358				2,313
Deferred income			24,776				23,195
Other current liabilities			16,873				15,342
Total current liabilities			77,722				73,115
Total equity and liabilities			317,534				313,225

Consolidated statement of cash flows (Unaudited)
		For the six months ended June 30,
in 000		2019		2018
		€		€
Operating activities
Net (loss) profit for the period		(602)		186
Non-cash and operational adjustments
Depreciation of property, plant & equipment		6,950		5,517
Amortization of intangible assets		2,229		2,498
Share-based payment expense		197		366
Loss (gain) on disposal of property, plant & equipment		134		(90)
Movement in provisions		20		-
Movement reserve for bad debt		(116)		68
Financial income		(171)		(58)
Financial expense		1,232		1,032
Impact of foreign currencies		(288)		111
Share in loss of a joint venture (equity method)		205		244
(Deferred) income taxes		1,126		543
Other		(196)		(164)
Working capital adjustment & income tax paid
Increase in trade receivables and other receivables		(4,466)		(4,147)
Decrease (increase) in inventories		(43)		774
Increase in trade payables and other payables		3,737		5,230
Income tax paid		(1,108)		(1,555)
Net cash flow from operating activities		8,840		11,031

		For the six months ended June 30,
in 000		2019		2018
		€		€
Investing activities
Purchase of property, plant & equipment		(4,827)		(8,588)
Purchase of intangible assets		(1,457)		(583)
Proceeds from the sale of property, plant & equipment & intangible assets (net)		(3)		436
Convertible loan to third party		(2,500)		–
Investments in joint-ventures		–		–
Interest received		–		(2)
Net cash flow used in investing activities		(8,787)		(8,737)
Financing activities
Proceeds from loans & borrowings		3,000		18,770
Repayment of loans & borrowings		(5,818)		(14,074)
Repayment of finance leases		(2,765)		(1,366)
Capital increase		–		207
Interest paid		(934)		(814)
Other financial income (expense)		(292)		(130)
Net cash flow from (used in) financing activities		(6,809)		2,593
Net increase of cash & cash equivalents		(6,756)		4,887
Cash & cash equivalents at beginning of the year		115,506		43,175
Exchange rate differences on cash & cash equivalents		115		657
Cash & cash equivalents at end of the year		108,865		48,719

Reconciliation of Net Profit (Loss) to EBITDA and Adjusted EBITDA (Unaudited)
		For the three months ended June 30,												For the six months ended June 30,
In 000		2019				2018								2019				2018
		€				€								€				€
Net profit (loss) for the period			(297)				369								(601)				186
Income taxes			61				42								1,126				543
Financial expenses			313				404								1,509				2,516
Financial income			(123	)			(29	)							(728)				(1,431)
Share in loss of joint venture			82				141								205				244
Depreciation and amortization			4,649				4,009								9,178				8,538
EBITDA			4,685				4.940								10,691				10,074
Non-cash stock-based compensation expense (1)			(374)				(276	)							(196)				(366)
Acquisition-related expenses business combinations			–				–								–				–
ADJUSTED EBITDA			5,059				5,216								10,888				10,440

(1)

Non-cash stock-based compensation expenses represent the cost of equity-settled and cash-settled share-based payments to employees.

Segment P&L (Unaudited)
In 000		Materialise Software		Materialise Medical		Materialise Manu- facturing		Total segments		Unallocated (1)(2)		Consoli- Dated
		€		€		€		€		€		€
For the three months ended June 30, 2019
Revenues		9,320		14,546		24,550		48,415		(11)		48,404
Segment EBITDA		2,055		2,738		2,835		7,629		(2,571)		5,059
Segment EBITDA %		22.1%		18.8%		11.5%		15.8%
For the three months ended June 30, 2018
Revenues		9,131		12,400		23,387		44,918		158		45,076
Segment EBITDA		2,859		2,124		2,264		7,247		(2,031)		5,216
Segment EBITDA %		31.3%		17.1%		9.7%		16.1%

In 000		Materialise Software		Materialise Medical		Materialise Manu- facturing		Total segments		Unallocated (1)(2)		Consoli- Dated
		€		€		€		€		€		€
For the six months ended June 30, 2019
Revenues		18,670		28,112		48,734		95,515		4		95,519
Segment EBITDA		5,016		4,511		6,530		16,058		(5,170)		10,888
Segment EBITDA %		22.1%		16.0%		13.4%		16.8%
For the six months ended June 30, 2018
Revenues		17,457		24,346		47,019		88,822		153		88,975
Segment EBITDA		5,183		4,184		5,397		14,764		(4,324)		10,440
Segment EBITDA %		29.7%		17.2%		11.5%		16.6%

(1)		Unallocated Revenues consist of occasional one-off sales in our core competencies not allocated to any of our segments. Unallocated Segment EBITDA consists of corporate research and development, corporate headquarter costs and other operating income (expense).
(2)		Unallocated Segment EBITDA consists of the added non-cash stock-based compensation expenses that are included in Adjusted EBITDA.

Reconciliation of Net Profit (Loss) to Segment EBITDA (Unaudited)
		For the three months ended June 30,													For the six months ended June 30,
In 000		2019				2018									2019				2018
		€				€									€				€
Net profit (loss) for the period			(297)				369									(601)				186
Income taxes			61				42									1,126				543
Financial cost			313				404									1,509				2,516
Financial income			(123)				(29)									(728)				(1,431)
Share in loss of joint venture			82				141									205				244
Operating profit			36				928									1,511				2,059
Depreciation and amortization			4,649				4,009									9,178				8,015
Corporate research and development			502				527									1,014				1,044
Corporate headquarter costs			3,108				3,235									5,777				5,700
Other operating income (expense)			(501)				(1,001)									(1,107)				(1,373)
Segment EBITDA			7,629				7,247									16,058				14,764

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