Materialise NV — FY2022 Form 20-F Summary
Reporting period: Fiscal year ended December 31, 2022; filed April 17, 2023. Although the request refers to 2022 Q4, this is an annual report and does not provide a clear standalone Q4 results summary. Financial statements are prepared under IFRS as issued by the IASB. Amounts below are in euros unless noted.
Business context and key financial metrics
Materialise provides additive-manufacturing software, medical software and devices, and 3D-printing and manufacturing services through its Software, Medical and Manufacturing segments.
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue | €232.0 million | €205.5 million |
| Gross profit / gross margin | €128.8 million / 55.5% | €118.2 million / 57.5% |
| Operating profit (loss) | (€2.9 million) | €12.2 million |
| Net profit (loss) | (€2.2 million) | €13.1 million |
| Adjusted EBITDA | €19.0 million | €32.5 million |
| Operating cash flow | €22.3 million | €25.8 million |
| Cash and cash equivalents at year-end | €140.9 million | €196.0 million |
| Loans, borrowings and lease liabilities | €81.0 million | €99.1 million |
Revenue increased 12.9%, while cost of sales rose 18.3%, reflecting higher volumes, subcontracting costs and inflation in energy, materials and compensation. Gross margin contracted by 2.0 percentage points. Adjusted EBITDA is a company-defined non-IFRS measure.
- Software: revenue €43.7 million, up 1.8%; segment Adjusted EBITDA €1.5 million, versus €15.7 million, with margin falling to 3.5% from 36.6%.
- Medical: revenue €84.8 million, up 15.6%; segment Adjusted EBITDA €18.8 million, versus €20.7 million, with margin declining to 22.2% from 28.2%.
- Manufacturing: revenue €103.5 million, up 16.0%; segment Adjusted EBITDA €8.2 million, versus €6.3 million, with margin improving to 8.0% from 7.0%.
Cash flow, debt and liquidity
Investing cash outflow was €53.9 million, including €29.3 million for the Link3D and Identify3D acquisitions and €24.8 million of capital expenditures. Financing cash outflow was €22.5 million, including €21.1 million of loan and lease repayments. Cash fell by €54.1 million during the year. Year-end cash exceeded reported loans, borrowings and lease liabilities by approximately €59.9 million, a simple arithmetic comparison.
Of €81.0 million in loans, borrowings and lease liabilities, €20.0 million was classified as current. The company had an undrawn €50 million KBC delayed-draw facility and stated that it expected sufficient liquidity for operating requirements over the next 12 months. It reported compliance with all debt covenants at year-end. Capital expenditures increased from €11.7 million in 2021 to €24.8 million in 2022, principally for a U.S. metal-production facility, German capacity expansion and digital transformation.
Material changes, outlook and risks
- Net results shifted from profit to loss as operating expenses rose: R&D increased 39.7% to €37.6 million and sales and marketing increased 26.4% to €62.1 million. Management attributed spending growth in part to investment in CO-AM and integration of Link3D and Identify3D.
- Management said it prioritized sustainable revenue growth over near-term EBITDA, and expects the transition toward cloud-based software and subscription models to affect near-term revenue. It described plans to develop CO-AM, expand personalized medical offerings and invest in certified additive-manufacturing capacity. The filing provides no quantified FY2023 revenue or earnings guidance.
- Inflation increased labor, energy, materials and freight costs. Price increases did not fully or immediately offset them; management warned inflation could continue to affect margins and net income in 2023.
- The company had more than 400 collaborators associated with its Kyiv office. It described ongoing operational uncertainty, possible service disruption and additional costs from replacing or relocating resources amid the war in Ukraine.
- Link3D and Identify3D were acquired in 2022 to support CO-AM; acquisition-related goodwill increased to €44.2 million from €18.7 million. Integration, customer adoption and the commercial success of the cloud platform remain important execution risks.
- One customer represented €31.3 million of 2022 revenue, about 13.5% of total revenue, in the Medical segment.
- Zimmer Biomet arbitration concerns an alleged contractual indemnification obligation related to its settlement of a patent dispute. Materialise disputes the claim; no loss was accrued. The filing said a final award was scheduled by May 2, 2023.
- Other items include €5.1 million of amortization of acquired intangibles, a €0.7 million impairment of capitalized cloud-platform development, and German COVID-related grant income of €0.7 million. The company reported that its 2021 internal-control material weakness was remediated and that controls were effective at year-end 2022.
Important facts for investors to verify
- Review subsequent filings for the Zimmer Biomet arbitration outcome and any resulting financial impact.
- Track CO-AM customer adoption, recurring software revenue, migration from legacy products and Software segment profitability.
- Assess whether pricing and productivity gains offset inflation and whether gross margins recover.
- Monitor cash conversion, working-capital needs, investment spending, acquisition integration and the use or terms of the KBC facility.
- Evaluate concentration in the Medical segment’s largest customer and the operational and financial effects of the Ukraine conflict.