Materialise NV (NASDAQ:MTLS) has reported financial results for the second quarter of 2017, and business is booming.
Headquartered in Leuven, Belgium the company is one of the pioneers in the 3D printing industry having written early software to improve additive manufacturing.
Materialise now reports revenue across 3 segments – software, medical and manufacturing. All segments have shown a year-on-year increase, with manufacturing growing the fastest. For the three months ended June 2017, Materialise posted €33.42 million in total revenue, a 21% increase on the comparative figure.
Revenue from software sales and end parts accounts for 81% of the Q2 2017 figures.
The company’s operating profit position improved by €0.86 million, with a loss of €0.3 million for the period. Adjusted earnings before interest, taxes, depreciation, and amortization were €2.7 million (€1.03M), a 164% increase on the comparative.
Executive Chairman Peter Leys said, “Materialise turned in another sound quarter, delivering strong revenue growth in all our segments, particularly Manufacturing, where, driven by a surge in end part manufacturing, revenue rose 32.5%.”
The latest results for the Manufacturing segment also beat reported final quarter growth of 19.4% for 2016.
| € Million | Variance | ||
| Q2 2017 | Q2 2016 | € Million | |
| Revenue | 33.61 | 27.6 | 6.01 |
| Operating profit | -0.295 | -1.151 | 0.856 |
| Net income | -0.955 | -0.436 | -0.519 |
| Adjusted EBITDA | 2.732 | 1.034 | 1.698 |
| Basic EPS | -0.02 | -0.01 | |
Data via Materialise NV.
Expanding capacity
The strong numbers reflect, “the pick-up in the demand environment for 3D printing this year, revenue from our Software segment increased 19.0%, while Medical rose almost 10% on the strength of solid software revenues,” Leys continued.
The company increased revenue while undergoing a period of expansion, opening new manufacturing facilities in Leuven and Poland. Gradual “scale effects and efficiency gains” from the expanded capacity are anticipated for the third quarter.
Although generating an operating loss, the latest quarter is an improvement on prior year figures – with a €295k loss compared to €1.15 million. Materialise says,“This improvement was the result of a combination of an increase in gross profit of 19.3% and an increase of only 9.0% in R&D, S&M and G&A expenses.”
| € million | Variance | |||
| Revenue by segment | Q2 2017 | Q2 2016 | € million | % |
| Software | 8.31 | 6.98 | 1.33 | 19.05% |
| Medical | 10.65 | 9.71 | 0.94 | 9.68% |
| Manufacturing | 14.46 | 10.91 | 3.55 | 32.54% |
| Total | 33.42 | 27.6 | 5.82 | 21.09% |
Segment revenue analysis for Q2 2017. Data via Materialise
Full year results will be at high-end of guidance
However despite increasing revenue, the net loss position at the company widened by €519k. This movement can be accounted for by tax income of €639k in the 2016 quarter and related to deferred taxes.
Materialise also reiterated previous earnings guidance for the year. Previously the company had stated an expectation of consolidated revenue in the range of €128 million to €134 million and Adjusted EBITDA between €10.5 million – €13.5 million for 2017.
“Based on the company’s first-half 2017 results, management now expects revenue and Adjusted EBITDA to be at the high end of these ranges.”
Materialise NV trades as an ADR on the NASDAQ index. At the time of writing the market had received the latest financial results in a favourable manner with gains on 8% on prior day.
The increase in revenue from the manufacturing division, “illustrates good – but still early stage – adoption of AM technology for end part production.”
Materialise says their, “end goal to build a neutral backbone – including production, software and services – that enable the entire industry”, is progressing.
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Featured image shows Fried Vancraen, CEO and founder of Materialise, watching the opening of the 2017 Materialise World Summit. Photo by Michael Petch.
