Materialise NV

Good day and thank you for standing by. Welcome to the Q1 2024 Materialize NV Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, you will hear there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Harriet Freed of LHA. Please go ahead.

Thank you, everyone, for joining us today for Materialize's quarterly conference call. With us on the call are Brigitte Devette, Chief Executive Officer, and Koen Berges, 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 first quarter of 2024. To access the slides, if you haven't already done so, please go to the investor relations section of the company's website at www.materialize.com. The earnings press 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 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 date. 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-IFI IFRS measures on today's call. A reconciliation table is contained in the earnings release and at the end of the slide presentation. And now I would like to turn the call over to Brigitte Devette.

Good morning and good afternoon. Thank you, everyone, for joining us today. Looking at the agenda for our call on slide three, You'll recall that in our last earnings call, I described my observations about the market dynamics and our strong position in this market, built on the foundation of the last 34 years. I also clearly described our priorities for 2024. Today, I will build on that theme and share with you key highlights of our team's performance in the first quarter of 2024, as well as the progress made on our strategic priorities. After that, I'll pass the floor to Koen, who will go through our first quarter numbers in more detail. Finally, I will come back and explain what we expect the remaining months of 2024 to bring. When we've completed our prepared remarks, we'll be happy to respond to questions. Looking at our key results for Q1 2024 summarized on page 4, you can see that we were able to deliver profitable results in line with our expectations. For the comparisons versus the first quarter of last year later on this call, please bear in mind that the first quarter of 2023 was a particularly strong quarter with record high revenues and high EBITDA supported by significant tailwinds, mainly in our medical and manufacturing sectors. Over the first quarter of this year, our total revenue decreased slightly by 3.4% to 63.6 million euros compared to the record first quarter of 2023 that I just referred to. When compared to the first quarter of 2022, our consolidated revenue still grew by more than 20%. At the same time, our growth margin increased to 56.5% from 55.9% over the same period last year. Adjusted EBIT amounted to €2.7 million, representing 4.2% of revenue. Net profit amounted to €3.6 million or €0.06 per share, which is stable versus the very strong first quarter of 2023. Our net cash position at the end of Q1 2024 was €69.2 million, an increase of €6 million versus the beginning of the quarter. Kuhn will elaborate further on these results in his remarks later in this call. Moving now to slide 5, I am also very pleased that we made progress in our strategic priorities and achieved critical milestones, including the introduction of new technologies and the expansion into new markets and segments to capture the growth opportunities in the market for mass personalization and in the market for serial end-use parts and to ensure sustainable healthy growth in the near, mid, and long term. In medical, We managed to keep the momentum and grew further compared to an exceptional Q1 2023 that was already 33% higher than Q1 of 2022. We continued to drive adoption of personalized cases in our existing market. And this is reflected in two elements. First, the growth in number of cases delivered to patients in particular in the US and Europe in our existing and new segments. We managed to expand into the trauma segment, with the first cases delivered into this segment from our US manufacturing plant, which enabled us to deliver at shorter lead times. This is building a solid platform for further growth in 2024 and beyond. Second, we made progress with our new software solutions, and in particular with Mimix Flow, a case management solution used to manage workflows for 3D labs in hospitals, for which we have received the first order in this only limited launch phase. We also achieved key milestones to break into new markets in the future. We received IDE approval for our tracheal split program, which is part of our respiratory business line. And we got FDA and MDR clearance for our SAVA planner to offer planning services for transcatheter aortic valve replacements in our cardiac business line. Moving to software, as mentioned in our last call, our focus is to capture the growth opportunities in the market for the manufacturing of end-use products. We launched key new products that add value for users of additive manufacturing in this segment. At AMEC, we launched eStage for MetalPlus, a software that optimizes data and build preparation for laser powder bed fusion. using physics-based modeling to automate support structure generation that will also help make metal additive manufacturing more economically viable. Laser powder bed fusion is the leading segment for EM, accounting for over 52% of the industry's global revenue in 2022. It's also one of the most complex technologies to use with many potential challenges. By automating support structure generation with eStage for Metal Plus, Users can reduce support volume up to 80%. They can simplify support removal, ease power extraction, and decrease built blade machining after an effortless part removal. Automating support structure generation at the sweet spot of printability and required supports saves time, material, and post-processing costs. We also released an additional module on our CoEM QPC Quality Process and Control System. Layer Analysis, a module that allows to auto-detect and quantify defects in 2D layer data and map them to 3D models for early scrap detection and root cause analysis, was released at RAPIDS last year. Process Lab, a tool to trace process parameters and test lab results, was announced at Formnex last year and released in the first quarter this year to the market. This QPC process lab enables customers to transform additive manufacturing process monitoring and quality data into actionable insights using AI and IoT connectivity in a secure, collaborative, and open software system. We also made progress in shifting our business model to cloud and subscription-based agreements to better suit the market for end-use products. While this shift is negatively impacting our Q1 software revenues, it prepares us for further scaling in the market for serial end-use products. In manufacturing, we focus on capturing growth in selected segments to drive revenue in 2024, even as market circumstances remain difficult for our 3D printing service business due to very weak prototyping demands. Keeping in mind that the first quarter of 2023 was a very strong quarter with 25% growth in revenue, I am pleased with the performance in the first quarter of this year, and in particular with the strong progress in our certified manufacturing business, driven by aerospace and METIC. Both industries are strictly regulated, and our ability to provide process documentation and historical process performance data enables us to drive growth in both segments. Koen will now take you through the detailed results by segment.