Materialise NV

Ladies and gentlemen, thank you for standing by and welcome to the materialized Q2 2021 financial results call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star then zero. I would now like to hand the conference over to your host, Ms. Harriet Freed of LHA. Ms. Freed, please go ahead.

Thank you for joining us today for Materialize's quarterly conference call. With us on the call are Freed Van Cron, Founder and Chief Executive Officer of Materialize, Peter Leys, Executive Chairman, and Johann Albrecht, Chief Financial Officer. Today's call and webcast are being accompanied by a slide presentation that reviews Materialize's strategic, financial, and operational performance for the second quarter of 2021. To access the slides, if you have not already done so, please go to the industrial relations section of the company's website at www.materialize.com. The earnings release that was issued earlier today can also be found there. Before we begin, 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 uncertainties 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 most recent annual report on Form 20F, filed with the SEC. Finally, management will discuss certain non-IFRS measures on today's call. A reconciliation table is contained in the earnings release and also at the end of the slide presentation. And with that, I'd like to turn the call over to Peter Ley. Peter?

Thank you, Harriet, and thank you, everyone, for joining us today. You can find the agenda for our call on slide three. As the first item on our agenda, I will summarize the highlights of our financial results for the second quarter of 2021. Then I will pass the floor to Frit, who will give you more insights into our current intentions with respect to the use of the proceeds that we raised earlier this month. After that, Johan will walk you through our second quarter numbers in more detail. Finally, I will come back and give you some observations about what we currently believe the rest of the year may bring. And when we've completed our prepared remarks, we will be happy to respond to any questions that you may have. So, let's turn to slide four, which summarizes the highlights of our financial results. Quarter over quarter, our revenues grew 33% to €50.7 million, and our adjusted EBITDA more than doubled to €6.9 million. These results are, we believe, excellent. Of course, the second quarter of 2020, the benchmark, was the quarter in which our business as a whole suffered the most from the COVID-19 crisis. As a result, while the comparison between last year's and this year's second quarter remains very relevant, it may provide less insights into our current performance than the insights that quarter-to-quarter comparisons provide in more normal circumstances. Therefore, internally, in 2021, we also benchmark our results against the previous quarter to better understand the trends of where our business is going in the short term, as well as against the same period of 2019, which we believe is a better reference period than the horrible year 2020. So I would like to share some of the conclusions of these additional benchmarking exercises with you. On a sequential basis, compared to the first quarter of 2021, our revenues grew by 11.3%. and our adjusted EBITDA increased by a stunning 30%. But only do these numbers confirm that our business is recovering from the crisis. They also show the recovery is happening at a swift pace that is in fact faster than what we had expected only a few months ago. Importantly, our second quarter revenues and adjusted EBITDA also increased when you compare them with our results of the same period in 2019. To be more precise, our revenues grew by 5% and our adjusted EBITDA increased 37%. This tells us not only that we are swiftly recovering from the crisis, but in fact that we are back on the track of posting genuine and healthy growth. These, we believe, very solid and promising results underscore what we had explained during our recent capital increase. The newly raised funds will not just be used to help us recover or to help us return to growth, which are things that we are already experiencing today. In fact, we intend to use these funds to further accelerate the key growth drivers of our business. In particular, the continued rollout of our Magix and Mimix software platforms, the expansion of our presence in the CMF market, and the go-to market of our wearables platforms in general and of materialized motion in particular. With that, I would now like to pass the floor to Frit, who will explain our current intentions with respect to the use of proceeds in more detail. Frit? Thank you, Peter. Indeed, we intend to allocate the bulk of the proceeds we raise to the key road drivers that we discussed at length during our last earnings call. And let me briefly reiterate what these are. First, we will continue to invest in the expansion and innovation of our two market-leading horizontal software platforms, Magix and Mimix. The Magix platform, as you know, enables users of AM technology to be more productive, more cost-efficient and more sustainable. The sales of our Magix flagship product remains strong throughout the pandemic and showed again considerable growth in Q2. We are currently in the process of adding more extensive process planning and manufacturing execution functionality to our platform, and we are also making many Magix functionalities accessible through the cloud. Both initiatives are intended to further expand our market share and to make our solutions even more relevant in the developing and part manufacturing market. As many of you know, we believe we can significantly accelerate these efforts through the acquisition of Loon3D later this year that we intend to finance entirely from our balance sheet. The MEMIX care and innovation suites help researchers, medical device companies and hospitals to engineer on the human anatomy, which in a number of instances will lead to the 3D printing of unique anatomical models and personalized medical devices. Over the last couple of years, the successful introduction of our Mimix platform in hospitals has contributed significantly to the overall success of our medical segment. We are currently in the process of developing additional artificial intelligence functionality for Mimix and intend also to introduce augmented reality and virtual reality functionality to the Mimix suite. Today, we are developing these new features internally. With the funds raised, we intend to increase our internal development capacity and do not exclude that we also undertake other initiatives and if they could speed up some of these developments. Second, in addition to the software platforms, Materialize empowers a limited number of specific meaningful applications of 3D printing, both in medical and in paramedical fields. Our current so-called key verticals are situated in the orthopedic, CMF, footwear, and eyewear markets. Each of those verticals, in particular CMF and footwear, has shown significant growth recently and we intend to continue to invest in initiatives that will accelerate that growth. We bring our CMF product portfolio to the market mainly through our partner Johnson & Johnson. The success of our CMF personalization platform is an important contributor to the overall success of our medical segment. The acquisition of EnginePlan in Brazil in 2019 allowed us to expand our product portfolio in CMF and to also be more present in markets where our partner has less focus. With the funds of the recent capital increase, we intend to continue to invest in success of our partnership with Jensen & Johnson and also to look at M&A active opportunities that offer synergies similar to the strategic fit that EnginePlus offers. We have been active in the footwear market, in particular the design and production of personalized insoles since 2014 through the joint venture Aresprint. In 2020, we acquired 100% of the shares of Aresprint and also substantially all assets of Arescam, the company that makes pressure plates and related software. As a result, we now have a complete one-stop shop product offering for personalized in-sources. This solution is unique and patent-protective in the sense that it takes the dynamic aspect of the food into account on a scientifically substantiated basis. Here also, we intend to increase our expenditures and investments, in particular with a view to accelerating our go-to-market. In the eyewear market, we have built a dedicated eyewear additive manufacturing line in Poland and have our own dedicated sales force that is active in Europe. We have a number of ongoing initiatives that relate to the digital customer journey preceding the choice and or the production of the frames. On both fronts, the physical production and the digitization of the customer journey, we do not exclude M&A activity. Finally, we moved into a new metal 3D printing center in Bremen in Germany in the first quarter of 2021. The official opening is planned for October 7th. Metal is one of the growth drivers of our manufacturing unit. While we expect continuous growth of that particular sub-segment of materialized manufacturing, we do not plan any M&A activity in that area. However, we do intend to intensify our partnership collaborations with metal machine manufacturers to achieve seamless and highly automated metal 3D printing workflows in the new facility, which will also benefit materialized software. To conclude, MateriaLine is coming out of the Corona crisis with renewed growth in our key focus areas and with a solid and strengthened balance sheet that will allow us to accelerate the growth with internal as well as external initiatives. And Johan will now provide you with the numbers that prove this statement.