Materialise Reports Fourth Quarter and Full Year 2020 Results

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 December 31,						For the twelve months ended December 31,
In 000, except per share amounts	2020		2020		2019 (*)		2020		2019 (*)
	U.S.$		€		€		€		€

Revenue		55,589		45,301		50,712		170,449		196,679
Cost of sales		(23,483)		(19,137)		(22,134)		(76,446)		(86,972)
Gross profit		32,107		26,165		28,578		94,003		109,707
Gross profit as % of revenue		57.8%		57.8%		56.4%		55.2%		55.8%

Research and development expenses		(8,073)		(6,579)		(5,937)		(25,014)		(23,348)
Research and development impairment		(2,565)		(2,090)				(2,090)
Sales and marketing expenses		(13,422)		(10,938)		(14,192)		(44,636)		(52,989)
General and administrative expenses		(10,106)		(8,236)		(7,333)		(29,337)		(31,786)
Net other operating income (expenses)		1,779		1,450		1,394		4,182		5,352
Impairment of Engimplan goodwill & intangible assets		(3,087)		(2,516)				(2,516)
Revaluation of 50% RS Print interest		945		770				770
Operating (loss) profit		(2,422)		(1,974)		2,509		(4,639)		6,936

Financial expenses		(1,317)		(1,073)		(1,035)		(5,996)		(3,682)
Financial income		585		477		477		2,453		1,377
Share in loss of joint venture						(147)		(39)		(392)
(Loss) profit before taxes		(3,154)		(2,570)		1,804		(8,220)		4,239

Income taxes		555		452		(558)		949		(2,595)
Net (loss) profit for the period		(2,599)		(2,118)		1,246		(7,272)		1,644
Net (loss) profit attributable to:
The owners of the parent		(2,617)		(2,133)		1,260		(7,124)		1,585
Non-controlling interest		18		15		(14)		(148)		59

Earnings per share attributable to owners of the parent
Basic		(0.05)		(0.04)		0.03		(0.13)		0.03
Diluted		(0.05)		(0.04)		0.03		(0.13)		0.03

Weighted average basic shares outstanding		53,896		53,896		52,891		53,364		52,891
Weighted average diluted shares outstanding		53,896		53,896		53,797		53,364		53,779

(*) The year 2019 has been restated to reflect the final accounting of the Engimplan business combination (additional 80 kEUR deprecation in net other operating expenses).

Consolidated statement of comprehensive income (Unaudited)

	For the three months ended December 31,							For the twelve months ended December 31,
In 000	2020		2020			2019 (*)		2020		2019 (*)
	U.S.$		€			€		€		€

Net profit (loss) for the period		(2,599)		(2,118	)		1,246		(7,272)		1,644
Other comprehensive income
Exchange difference on translation of foreign operations		453		369			5		(6,176)		230
Fair value remeasurement		600		489			-		489		-
Other comprehensive income (loss), net of taxes		1.053		858			5		(5,687)		230

Total comprehensive income (loss) for the year, net of taxes		(1,546)		(1,260)			1,251		(12,959)		1,874
Total comprehensive income (loss) attributable to:
The owners of the parent		(1,678)		(1,368)			1,406		(11,896)		2,040
Non-controlling interest		132		108			(155)		(1,063)		(166)

(*) The year 2019 has been restated to reflect the final accounting of the Engimplan business combination.

Consolidated statement of financial position (Unaudited)

	As of December 31,		As of December 31,
In 000	2020		*2019 ()**
	€		€
Assets

Non-current assets
Goodwill		20,342		19,607
Intangible assets		32,981		27,395
Property, plant & equipment		88,267		91,006
Right-of-Use assets		10,996		10,586
Investments in joint ventures		-		39
Deferred tax assets		201		192
Other non-current assets		14,138		9,390
Total non-current assets		166,926		158,215

Current assets
Inventories and contracts in progress		10,043		12,696
Trade receivables		30,871		40,322
Other current assets		8,290		9,271
Cash and cash equivalents		111,538		128,897
Total current assets		160,741		191,186
Total assets		327,667		349,401

(*) The year 2019 has been restated to reflect the final accounting of the Engimplan business combination.

	As of December 31,		As of December 31,
In 000	2020		2019 (*)
	€		€
Equity and liabilities
Equity
Share capital		4,096		3,066
Share premium		141,274		138,090
Retained earnings & reserves		(12,267)		(1,650)
Equity attributable to the owners of the parent		133,104		139,506
Non-controlling interest				3,276
Total equity		133,104		142,782

Non-current liabilities
Loans & borrowings		90,502		104,673
Lease liabilities		7,086		6,427
Deferred tax liabilities		6,805		5,747
Deferred income		5,327		5,031
Other non-current liabilities		398		696
Total non-current liabilities		110,118		122,575

Current liabilities
Loans & borrowings		13,984		13,389
Lease liabilities		3,538		3,449
Trade payables		17,698		18,516
Tax payables		974		3,363
Deferred income		29,554		27,641
Other current liabilities		18,695		17,686
Total current liabilities		84,445		84,044

Total equity and liabilities		327,667		349,401

(*) The year 2019 has been restated to reflect the final accounting of the Engimplan business combination.

Consolidated statement of cash flows (Unaudited)

	For the twelve months ended December 31,
in 000	2020	*2019 ()**
	€	€
Operating activities
Net profit for the period	(7,272)	1,644
Non-cash and operational adjustments
Depreciation of property, plant & equipment	14,932	14,419
Amortization of intangible assets	4,742	4,859
Impairment goodwill & development costs	4,606	-
Share-based payment expense	752	(9)
Loss (gain) on disposal of property, plant & equipment	9	165
Movement in provisions	137	138
Movement reserve for bad debt	516	121
Financial income	(2,300)	(1,383)
Financial expense	5,822	3,693
Impact of foreign currencies	60	(176)
Share in loss of a joint venture (equity method)	39	392
(Deferred) income taxes	(948)	2,593
Fair value and other	(1,093)	64
Working capital adjustment & income tax paid
Decrease (increase) in trade receivables and other receivables	9,204	216
Decrease (increase) in inventories	2,724	(745)
Increase (decrease) in trade payables and other payables	583	4,196
Income tax paid & interest received	(2,537)	(1,783)
Net cash flow from operating activities	29,978	28,402

(*) The year 2019 has been restated to reflect the final accounting of the Engimplan business combination.

	For the twelve months ended December 31,
in 000	2020	*2019 ()**
	€	€
Investing activities
Purchase of property, plant & equipment	(11,032)	(13,472)
Purchase of intangible assets	(6,618)	(2,193)
Proceeds from the sale of property, plant & equipment & intangible assets (net)	552	278
Other equity investments in non-listed entities	(300)	(281)
Investments in joint ventures	-	(875)
Convertible loan to third party	(2,836)	(2,743)
Investments in subsidiary, net of cash acquired	(8,031)	(6,331)
Interest received	-	-
Net cash flow used in investing activities	(28,265)	(25,617)

Financing activities
Proceeds from loans & borrowings	-	29,000
Repayment of loans & borrowings	(13,736)	(12,126)
Repayment of finance leases	(3,640)	(5,283)
Capital increase in parent company	4,112	1,268
Direct attributable expense of capital increase	–	-
Interest paid	(2,268)	(2,286)
Other financial income (expense)	(1,356)	208
Net cash flow from (used in) financing activities	(16,888)	10,782

Net increase of cash & cash equivalents	(15,175)	13,566
Cash & cash equivalents at beginning of the year	128,897	115,506
Exchange rate differences on cash & cash equivalents	(2,185)	(173)
Cash & cash equivalents at end of the period	111,538	128,897

(*) The year 2019 has been restated to reflect the final accounting of the Engimplan business combination.

Reconciliation of Net Profit (Loss) to EBITDA and Adjusted EBITDA (Unaudited)

	For the three months ended December 31,					For the twelve months ended December 31,
In 000	2020		2019 (*)			2020		2019 (*)
	€		€			€		€

Net profit (loss) for the period		(2,118)		1,246			(7,272)		1,644

Income taxes		(452)		558			(949)		2,595
Financial expenses		1,073		1,035			5,996		3,682
Financial income		(477)		(477	)		(2,453)		(1,377)
Share in loss of joint venture				147			39		392
Depreciation and amortization		5,160		5,196			19,775		19,278

EBITDA		3,188		7,705			15,136		26,214

Share-based compensation expense (1)		286		44			1,343		302
Acquisition-related expenses of business combinations (2)		63					63		140
Impairments (3)		4,606					4 606
Re-valuation of 50% RS Print interest (4)		(770)					(770)
ADJUSTED EBITDA		7,370		7,749			20,378		26,656

	(1)	Share-based compensation expense represents the cost of equity-settled and share-based payments to employees.

	(2)	Acquisition-related expenses of business combinations represents expenses incurred in connection with the RS Print acquisition in 2020 and Engimplan acquisition in 2019.

	(3)	Impairments represents the impairment of capitalized expenditures related to our tracheal splint development program (2,090) kEUR) and the impairment of goodwill and intangible assets of Engimplan (2,516) kEUR).

	(4)	Represents a positive revaluation of our initial 50% interest in RS Print after our acquisition of the remaining interest in the joint venture.

(*) The year 2019 has been restated to reflect the final accounting of the Engimplan business combination (additional 80 kEUR deprecation in net other operating expenses).

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 December 31, 2020
Revenues	10,216	17,188	17,889	45,293	8	45,301
Segment Adjusted EBITDA	3,867	4,845	1,099	9,811	(2,441)	7,370

Segment Adjusted EBITDA %	37.9%	28.2%	6.1%	21.7%		16.3%

*For the three months ended December 31, 2019 ()**
Revenues	12,124	17,209	21,295	50,628	84	50,712
Segment Adjusted EBITDA	5,026	3,468	1,761	10,255	(2,506)	7,749

Segment Adjusted EBITDA %	41.5%	20.2%	8.3%	20.3%		15.3%


In 000	Materialise Software	Materialise Medical	Materialise Manu- facturing	Total segments	Unallocated (1)(2)	Consoli- dated
	€	€	€	€	€	€

For the twelve months ended December 31, 2020
Revenues	39,055	61,729	69,635	170,419	30	170,449
Segment Adjusted EBITDA	13,383	13,915	2,548	29,847	(9,468)	20,378

Segment Adjusted EBITDA %	34.3%	22.5%	3.7%	17.5%		12.0%

*For the twelve months ended December 31, 2019 ()**
Revenues	41,654	60,809	94,156	196,619	60	196,679
Segment Adjusted EBITDA	13,812	10,774	12,154	36,740	(10,085)	26,656

Segment Adjusted EBITDA %	33.2%	17.7%	12.9%	18.7%		13.6%

	(1)	Unallocated Revenues consists of occasional one-off sales in our core competencies not allocated to any of our segments.

	(2)	Unallocated segment adjusted EBITDA consists of corporate research and development, corporate headquarter costs and other operating income (expense), and the added share-based compensation expenses, acquisition related expenses of business combinations, impairments and fair value of business combinations that are included in Adjusted EBITDA.

(*) The year 2019 has been restated to reflect the final accounting of the Engimplan business combination (additional 80 kEUR deprecation on net other operating expenses).

Reconciliation of Net Profit (Loss) to Segment (adjusted) EBITDA (Unaudited)

	For the three months ended December 31,				For the twelve months ended December 31,
In 000	2020		2019 (*)		2020		2019 (*)
	€		€		€		€

Net profit (loss) for the period		(2,118)		1,246		(7,272)		1,644
Income taxes		(452)		558		(949)		2,595
Financial cost		1,073		1,035		5,996		3,682
Financial income		(477)		(477)		(2,453)		(1,377)
Share in loss of joint venture				147		39		392

Operating profit		(1,974)		2,509		(4,639)		6,936

Depreciation and amortization		5,160		5,196		19,775		19,278
Corporate research and development		772		456		2,824		1,798
Corporate headquarter costs		3,382		2,573		11,719		10,547
Other operating income (expense)		(1,365)		(479)		(3,668)		(1,819)
Fair value adjustment 50% RS Print		(770)				(770)
Impairments		4,606				4,606
Segment (adjusted) EBITDA		9,811		10,255		29,847		36,740

(*) The year 2019 has been restated to reflect the final accounting of the Engimplan business combination (additional 80 kEUR deprecation in net other operating expenses).

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