Materialise reports Q2 & H1 2019 financial results, experiences continued strength in 3D medical

Medical software and 3D printing service provider Materialise has reported its financial results for the second quarter and first half of of 2019. Headline revenue for the three months ended June 30, 2019 was reported at €48.4 million, an increase of 7.4 percent compared to the same period in 2018 which was €45 million. For the six months ended June 30, 2019, revenue was reported at €95.5 million, compared to €88.9 million in H1 2019. Deferred revenue from annual software sales and maintenance was reported at €24.8 million, increasing 9.7 percent from deferred revenue at the end of 2018 which was €22.6 million.

Materialise Medical, the company’s segment for supplying custom 3D printed devices and software services to the healthcare industry, is credited as the main driver of Q2 revenue growth, alongside Materialise Manufacturing.

Materialise revenue by segment and gross profits

Materialise revenue is reported in three business segments: Software, Medical and Manufacturing. Of the total revenue for Q2 2019, Materialise Manufacturing accounts for the largest share of earnings, contributing €24.5 million in revenue, compared to €23.3 million in Q2 2018. Materialise Medical was the second strongest segment for the company in Q2 2019, reporting a revenue of €14.5 million, an increase of 17 percent compared to the same period in 2018 which was €12.4 million. Materialise Software revenue for Q2 2019 was reported at €9.3 million, compared to €9.1 million in Q2 2018. This growth, as stated by Executive Chairman Peter Leys, was below expectations “as a number of sales were pushed out to the second half of the year.”

Gross profit for the quarter was reported at €26.5 million, constituting 54.8 percent of total Q2 revenue. In Q2 2018, gross profit represented 55 percent of total revenue for the quarter.

Revenues Q2 FY2019 Q2 FY2018 Variance € millions %
Materialise Software 9,320 9,131 189 2.07%
Materialise Medical 14,546 12,400 2,146 17.31%
Materialsie Manufacturing 24,550 23,387 1,163 4.97%
Unallocated -11 158 -169 -106.96%
Total segments 48,405 45,076 3,498 7.39%

In the first half of FY2019, again Materialise Manufacturing led revenue at €48.7 million. Materialise Medical revenue for H1 2019 was reported at €28.1 million, and Materialise Software reported €18.6 million in revenue for the six month period.

Gross profit for H1 2019 was reported at €52.1 million, 54.6 percent of the overall revenue so far. In 2018, H1 revenue was reported as €48.7 million, 54.8 percent of the revenue for the period.

The company made an operating profit in Q2 2019 of €36 thousand, compared to an operating profit of €928 thousand in Q2 2018. For H1 2019, operating profit was reported at €1.5 million, compared to €2.1 million in H1 2018.

The company ends H1 2019 with €108.8 million in cash and cash equivalents.

Building 3D healthcare

In Q2 2019 Materialise has gone from strength to strength in the medical sector securing FDA clearance for cardiovascular 3D toolkit Mimics Enlight, and investing in respiratory imaging specialist Fluidda. Commenting on the recent introduction of the Mimics Enlight platform, Materialise CEO Fried Vancraen, told analysts that early customer feedback has been “extremely positive.” This is based, he added, on the company’s collaboration with Henry Ford Health System in Detroit that is reportedly helping the company produce “better results than in competition.” A full commercial launch of Mimics Enlight in the U.S. is planned for later in August 2019.

Further substantiating its prominence in healthcare, in Q3 2019 Materialise also acquired a 75 percent stake in Brazil-based medical device manufacturer Engimplan. Vancraen shared that Engimplan previously reported a revenue of €6.2 million in 2018 further, he added, “We expect the Engimplan business to grow somewhere [in the] high single digits/low double digits in 2019 and we will consolidate those numbers as of August 1st 2019.”

Engimplan implants. Image via Materialise.
Engimplan implants. Image via Materialise.

Concluding comments on results for Q2 and H1 2019 Leys said, “In spite of a macro-economic environment that continues to be challenging, Materialise reported another quarter of top-line growth […]”

“Our outlook for 2019 remains within our previous guidance range, with our results now including expected contributions from our August acquisition of a 75 percent stake in Engimplan. This investment, which will enable us to introduce the benefits of Materialise’s patient-specific 3D printing implants and expertise to the fast-growing Brazil market, is part of our strategy to accelerate our growing presence in the additive manufacturing ecosystem through carefully selected acquisitions and partnerships.”

Materialise financial earnings for the second quarter and first half of 2019 can be found in full here.

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Featured image shows an anatomical 3D printed heart model made by Materialise and HP. Photo via Materialise.