Materialise NV

Thank you for standing by and welcome to the Q4 2020 Materialized Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Ms. Harriet Freed of LHA. Thank you. Please go ahead, ma'am.

Harriet Freed Thank you for joining us today for Materialize's quarterly conference call. With us on the call are Freed Van Kruyen, Founder and Chief Executive Officer of Materialize, Peter Lath, Executive Chairman, and Johann Albrecht, Chief Financial Officer. Today's call and webcast are being accompanied by a slide presentation that reviews materializes financial and operational performance for the fourth quarter and full year 2020. To access the slides, if you have not already done so, please go to the investor relations section of the company's website. The earnings release that was issued earlier today can also be found on that page. Before we get started, I'd like to remind you that management may make forward-looking statements regarding the company's plans, expectations, and growth prospects, among other things. These forward-looking statements are subject to known and unknown certainties and risks that could cause actual results to differ materially from the expectations expressed, including competitive dynamics and industry change. Any forward-looking statements, including those related to the company's future results and activities, represent management's estimates as of today and should not be relied upon as representing their estimates as of any subsequent day. Management disclaims any duty to update or revise any forward-looking statements to reflect future events or changes in expectations. A more detailed description of the risks and uncertainties and other factors that could impact the company's future business or financial results can be found in the company's annual report on Form 20F filed with the SEC. Finally, management will discuss certain non-IFRS measures on today's conference call. A reconciliation table is contained in the earnings release and at the end of the slide presentation. With that, I'd like to turn the call over to Peter Leys. Go ahead, please, Peter.

Thank you, Harriet, and thank you, everyone, for joining us today. As always, you can find the agenda for our call on slide number three. As the first item on our agenda, I will summarize the highlights of our financial results for the fourth quarter of 2020. Then I will pass the floor to Fried, who will provide us his key takeaways with respect to our performance last year. After that, Johan will walk you through our fourth quarter numbers in more detail. And finally, I will come back to give you some qualitative insights in what we currently believe the near-term future will bring. When we've completed our prepared remarks, we will be happy to respond to any question that you may have. So, let's turn to slide four, which summarizes the highlights of our financial results. Just like the second and third quarters of 2020, the results of our fourth quarter were impacted by the COVID-19 pandemic. While we expect the impact of the crisis on our performance to continue throughout the first quarter of 2021, we do see a number of encouraging signs of recovery. First, while our revenue was still roughly 10% lower than the fourth quarter of 2019, Our revenues in the reported period do represent a 10% increase on a sequential basis compared to our revenue in the third quarter of last year. Second, we are further encouraged by the fact that in Q4, our deferred revenues from software license and maintenance fees grew by €3.4 million compared to the end of the third quarter of 2020. Third, in spite of the revenue decline, our adjusted EBITDA margin remained healthy at 16.3%, actually 10 basis points higher than the 15.3% margin that we reported in the same period of 2019. Importantly, this performance did not come at the expense of our R&D efforts. On a comparable basis, R&D expenses increased by 10.8% in the fourth quarter of 2020 compared to the last quarter of the previous year. And they represented 14.5% of total revenue compared to roughly 12% of total revenue last year. Finally, we closed 2020 with cash and cash equivalents of 111.5 million euro on our balance sheet. and with total gross debt of roughly €115 million, of which only about €70 million is due within the next one year. And with that, I would now like to ask Frits to give some further color to these numbers. Frits?