Materialise NV

Ladies and gentlemen, thank you for standing by. Welcome to the fourth quarter 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 would need to press star 11 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 turn the conference over to Harriet Breed of Alliance Advisors. Harriet, please go ahead.

Thank you for joining us today for Materializer's quarterly earnings call. With us on the call are Brigitte DeVette Biden, Chief Executive Officer, and Kuhn Balgis, 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 fourth quarter of 2024, as well as the full year. To access the slides, if you've not already done so, 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 may 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. And with that, I'd like to turn the call over to Brigitte de Wet-Wyden. Brigitte, please go ahead.

Good morning and good afternoon, everybody. Thank you for joining us today. I'm very pleased to present our fourth quarter and full year 2024 results to you. You can find the agenda for our call on slide three. Now, as you know, I've now been in my role as CEO for Materialise for one year. I'm proud of the achievements we have realized in this year, and I would like to highlight some major milestones realized in 2024 in this call. I would also reflect on the achievements and our results of the fourth quarter. After that, I will pass the floor to Koen, who will go in more detail through our financial results. Finally, I will come back and explain what we expect 2025 to bring. When we've completed our prepared remarks, we'll be happy to respond to questions. 2024 has been a difficult year for the industry, driven by high interest rates, geopolitical tensions, and a difficult economic climate. I am very proud that In this difficult climate, we realized 4% growth and managed to keep our adjusted EBIT stable while continuing to invest in our growth businesses and while making progress on our strategic objectives. On slide four, I will highlight some of those strategic objectives and major achievements in the various segments. Starting with medical. We continued to make progress on our journey towards mass personalization, where our aim is to bring personalization to many more patients. We broadened the patient population that can benefit from our solutions by reducing our lead times, thanks to the opening of our US plant, and further automating our processes in order to conquer the trauma market. So patients that cannot be scheduled and need to be treated within the week. We also brought personalization to new markets, and in particular to the cardiovascular market, where we complemented our existing planning solutions with simulation offerings from Fields, the company that we acquired in the third quarter of 2024. While the acquisition has had a negative impact on our EBIT on the short term and impacted our fourth quarter results, we are pleased with the customer feedback and the progress of the integration. As a highlight for the fourth quarter, I also want to mention the launch of our Mimix platform to accelerate the adoption of personalized solutions and help companies and hospitals bring personalization to more patients by making it easier and faster to segment images, plan cases, and design a personalized instrument or implant. The Mimix platform is an integrated cloud solution combining our strong desktop toolbox, Mimix and 3Matic, AI-based automation, and cloud-based 3D viewing capabilities in an end-to-end cloud-based environment. The Mimix platform addresses the challenges that customers face when scaling their personalized offerings, typically manual segmentation and design work, cumbersome communication between engineers and clinicians, stringent regulatory requirements, and growing patient privacy legislation. At the end of 2023, We launched a Mimix case management tool to provide an end-to-end workflow and generate efficiencies in the process of commercializing patient-specific devices. With the launch of the new Mimix platform called Mimix Flow, we've gone a step further, enabling our customers to collaborate effortlessly and benefit from AI-based automation in a frictionless way while staying compliant with the latest regulations. In our manufacturing segment, we continue to shift from prototyping to certified manufacturing of end-use parts, and in particular in our focus segments, in which we saw growth throughout the year and in which we continue to strengthen our position. Let me give you the example of the aerospace segment, which has been a focus segment throughout the year. In aerospace, we offer EN 9001, certified manufacturing for polymer and metal parts. We have production organization approval and have printed more than 500,000 flying parts so far. We saw 28% revenue growth in this segment throughout the year. As a next step in this market, we recently opened our aerospace competence center in Delft. The TU Delft, the technical university, is a leading university in aerospace and has a vibrant ecosystem that has developed around it. We are joining this selective aerospace networking space, allowing us to collaborate closely with aerospace companies in this hub and bring our knowledge to foster the smart use of additive manufacturing in the industry to our manufacturing services and our software. Our long experience in this market gives us access to performance data from hundreds of aerospace builds, including parameters like part density, tensile strength, and elastic modulus. With a clear view of process repeatability and reliability, we are well positioned in this space. Let me give you another example of one of our focus segments. At ACTEC, we expanded our market segments to the production of what we call huge and heavy parts. As you know, we expanded our facilities in Germany to accommodate production of this type of parts. we have seen growth above 30% in the segments throughout the year. Now, while making progress in our focus segments, we have also seen headwinds in the traditional business segments, such as prototyping and the casting of combustion engines for the automotive sector, accelerated by an increasingly unfavorable macroeconomic industrial environment in Europe and the general softness of the automotive sector in the fourth quarter. These headwinds in addition to the plant's reduced operational capacity at Agtech due to the opening of the new plant, led to a difficult Q4 with disappointing results. We expect these headwinds to continue in 2025. To adjust to this reality, we have taken action in the fourth quarter and implemented a restructuring in our 3D printing manufacturing activities to reduce our cost base in 2025. Now turning to software. In software, we had two main priorities throughout the year. First, strengthening our position in factory management based on CoEM through partnerships. And second, organically adding capabilities and expanding our position in the pre-print magics market by adding functionality for users that scale in end-use production. Throughout the year, we have made progress on both fronts. On the CoEM side, we announced numerous partnerships throughout the year, and we added functionality, for example, to monitor the builds and capture data in our QPC module. We continue to onboard new partners on this platform, which is an essential foundation to accelerating our future growth. In the preprint segment, we accelerated the shift towards a subscription-based model for Magix customers. We added functionality such as eStage for Metal Plus, a software that automates support structure generation and helps customers make metal additive manufacturing more economically viable. And we expanded our build processor functionality. In the fourth quarter specifically, we announced the launch of our Magix SDKs, expanding our users' ability to customize their 3D printing operations. This allows our users to create custom workflows in the metric software, protect the intellectual property behind component designs, and print high-performance geometries. With access to algorithms developed over 34 years, customers will now be able to scale additive manufacturing operations economically. Overall, I am proud of the progress that we made throughout 2024. Progress achieved despite the difficult climate throughout the year, and in particular in the fourth quarter, impacting our financial results. I will now pass the floor to Koen to summarize the financial results of the fourth quarter and the full year.