Materialise NV

Good day, and thank you for standing by. Welcome to the Q3 2024 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 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 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 Alliance Advisors.

Thank you for joining us today for Materialize's quarterly conference call. With us on the call are Brigitte DeVette-Weijen, Chief Executive Officer, and Kun 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 third quarter of 2024. To access the slides, if you have not done so already, please go to the investor relations section of the company's website at www.materialize.com. The earnings press release 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 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 20-F 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 at the end of the slide presentation. With that, I'd like to turn the call over to Brigitte DeVette-Biden. Brigitte, go ahead, please.

Good morning and good afternoon, and thank you everyone for joining us today. You can find our agenda on slide three. As always, I want to first summarize the highlights of our financial results for the third quarter in 2024. Then I will take you through some of the progress we've made in realizing our strategic priorities over the last couple of months. And after that, I will pass the floor to Koen, who will go into our third quarter numbers in more detail. Finally, I will come back and explain how we view the remainder of 2024. When we've completed our prepared remarks, we'll be happy to respond to questions. Now, looking at our key results for the third quarter summarized on page four, I am very pleased to report that we performed strongly in all of our business segments and once more delivered profitable results this quarter with a strong improvement compared to last year. we realized strong quarterly revenues of 68.7 million euro, growing more than 14% compared to the third quarter last year and demonstrating growth in all segments. We realized a gross margin of 57.2% in the third quarter, which is up from the 56% for the comparable period of 2023. This solid performance enabled us to increase our adjusted EBITs to €4.4 million representing 6.4% of our revenue without compromising on our continued investments to drive future growth. This translates into a net profit of €3 million or €5 cent per share. Our net cash position at the end of the third quarter was €63.1 million. Koen will elaborate further on these results in his remarks later in this call. Now moving now to slide five, I am very pleased with our progress made on the main strategic priorities. First, in medical. We accelerated our growth thanks mainly to the progress made in our core markets. For the second time in our company's history, medical was the strongest revenue generator, accounting for 44% of revenue this quarter. Now, this is evidence that our mass personalization strategy is working and that our investments are paying off. Now, what do I mean by mass personalization? we continuously ask ourselves how we can serve more patients with personalized approaches rather than just benefiting a lucky few. And in the last few years, we've made strategic investments to broaden the population we are reaching. Some examples. Thanks to our U.S. manufacturing plant, we have managed to bring our personalized solutions to trauma patients. Trauma patients are patients that need to have a solution in days, not in weeks. As a reminder, the US facility enables us to deliver parts with much shorter and more reliable lead times. Thanks to this plant and the investment we made there, we managed to triple the number of trauma cases we treated per quarter compared to the number we treated before the opening of the plant. And we are now delivering solutions faster than any other provider in the US market. And we therefore expect our penetration of this market to continue and generate further growth in the future. Now, as a second example, I would like to point to the investments we are making in our Mimics platform to expand our position in the research and engineering market. In this market, we have traditionally built a strong position with our Mimics Innovation Suite, a software suite that is used by researchers and engineers to segment the medical images of a patient, create a 3D model, and prepare a treatment plan on this basis, or design a patient-specific implant or instrument for the patient at hand. In order to accelerate the adoption of these patient-specific approaches, we need to make this workflow a lot easier and faster and integrate it with the rest of the healthcare ecosystem. And this is what we are achieving with our cloud-based Mimix platform called Mimix Flow. Earlier this year, we released the case management capabilities on Mimix Flow. We released it to medical device companies earlier this year after a release to the hospitals end of last year. Among other benefits, This solution enables customers to manage their workflows end-to-end, enforce quality management and embed traceability in reporting, create visibility for all stakeholders on case status, and enable easier collaboration with stakeholders across the ecosystem, for example, to get approvals. This solution is a valuable extension of our offering for customers that process a large number of personalized cases per year and need to find ways to efficiently manage these larger volumes. It is seamlessly integrated with Mimix, our market-leading desktop-based segmentation and planning software. Since the launch of this solution, we have already managed to contract 10 customers and expect the update to continue in the fourth quarter and throughout 2025. In the coming years, we will continue to bring out additional cloud-based functionality that will make it easier and faster for customers to treat personalized cases. Now, turning to software. We made significant progress on multiple fronts. First, we made progress in previously announced partnerships, delivering first results that are truly encouraging. As an example, in the second quarter, we announced the collaboration with NTOP in order to enable the processing of complex and large design and STL files. We announced an early access program at RAPIDS in June. We have now selected 12 companies for this program from 57 that applied. setting us up for demonstrating the value in additional use cases in the future. Another example, in the first quarter this year, we signed an agreement with Digifabster, a cloud-based SaaS quoting and e-commerce solution for advanced manufacturing companies. In the third quarter, we signed our first CoEM sale, including the Digifabster solution in the configuration. Second, we also announced new partnerships, for example, with form labs and strategies. But most importantly, we made significant progress in materialized magics, leveraging our new products to further strengthen our position in key strategic accounts in sectors like Irish-based and on-demand manufacturing. As an example, we see increased adoption of our metal support workflows, with more companies migrating to our advanced automated support generation solution, E-Stage for Metal Plus. E-State for Metal Plus reduces the time spent on support design by up to 90% while minimizing human error and build crash risk. I'm also pleased to share that the usage and adoption of our latest version of Magix, Magix 28, is accelerating at a much faster rate compared to previous releases. After the release in June, almost 50% of our active customer base is already using the latest Magix release while it is still in its early lifecycle phase compared to other supported versions. This version is quickly replacing legacy versions in the market, a clear indicator of how customers are recognizing the improved features, such as the new lattice model or the new nesting modules. This is helping us drive a broader transition, ensuring that our customers stay up-to-date with the latest advances in 3D printing technology. Now, last but certainly not least, I'm very pleased with the progress on our next-generation matrix PPs. We released the desktop deployment of our next generation BPs in the first quarter this year, and have already contracted more than 20 partners. The advanced algorithms of the next generation BP significantly improve build time and quality, thanks to, for example, its advanced strategies for multi-lasers, and enable a variety of collaboration models, including the possibility for customers to build their own BPs, thanks to the availability of our SDKs. Turning now to manufacturing, We celebrated the opening of our second plant at ACTEC and will ship the first part in the fourth quarter. With this second plant, we are expanding our capacity and enhancing our ability to handle huge and heavy parts. In addition, the extension of our capacity and the new equipment is a critical step to address the market for more complex metal parts in the market for small series. Now, why is this important? This strengthens our position in a market that we are traditionally strong in, the automotive market, where the development of electric cars brings the need for more complex casted components for electrical drivetrains and chassis. Second, it opens market opportunities in new segments, such as agriculture, mining, construction, and marine vehicles, where parts are typically larger and heavier, and therefore more difficult to handle. The complexity of parts in these segments is increasing, for example, to achieve better thermodynamic cycles in the engines with maximum fuel efficiency. The combination of high-precision printing, casting, and complex post-treatment that we can offer at UCTEC is ideal for this, and we are therefore very well positioned to serve this need. It's interesting to note that customers in all of these segments are turning to UCTEC for two reasons. First, they are looking for fast and reliable prototyping solutions. But second, what is very exciting is that with the new plan, we are also able to deliver small series. Now, the additional capacity in the new equipment strengthen our position for both types of offerings. We are gradually reorganizing our operational flow in the fourth quarter and will then ramp up our capacity throughout 2025 and 2026. We expect the temporary impact of the operational startup in the fourth quarter. Now, Koen will take you through the detailed financial results by segment.