This quarter saw a huge impact of the COVID-19 pandemic and it is evident from its second quarter financial results that record significant losses. But at the same time the company has decided to continue some of its strategically important research and development programs to maintain its market leadership.
HIGHLIGHTS – MATERIALISE SECOND QUARTER FINANCIAL RESULTS 2020
- Total revenue decreased 21.3% to 38,117 kEUR for the second quarter of 2020 compared to the 2019 period.
- Total deferred revenues from annual software sales and maintenance fees were 28,240 kEUR compared to 27,667 kEUR at December 31, 2019.
- Adjusted EBITDA decreased 33.1% to 3,382 kEUR for the second quarter of 2020 compared to the 2019 period.
- Net loss for the second quarter of 2020 was (1,932) kEUR, or (0.04) EUR per diluted share, compared to (297) kEUR, or (0.01) EUR per diluted share, for the 2019 period.
- Total cash was 125,454 kEUR at the end of the quarter; net cash was 3,905 kEUR, an increase of 2,947 kEUR compared to December 31, 2019.
Speaking about the Second Quarter 2020 Results, Executive Chairman Peter Leys commented, “In the second quarter, our business suffered materially from the COVID-19 pandemic, with revenues decreasing more than 21% compared to last year’s period. We were able to realize cost savings in both sales and marketing and general administrative expense at a higher percentage rate than the revenue decline but maintained our strategically important research and development programs. These programs will position us to leverage interest in additive manufacturing, which is increasing in part due to the many 3D printed solutions that have addressed new market needs so expeditiously during the pandemic. Our balance sheet remains strong, with total cash of 125,454 kEUR and short-term debt of only 17,827 kEUR as of June 30, 2020. While our R&D programs and financial strength give us a solid platform from which to expand our existing business and take advantage of new growth opportunities when conditions improve, we draw equal confidence from the many examples of resilience, creativity and discipline that our workforce has shown worldwide throughout this difficult period.”
MATERIALISE SECOND QUARTER 2020 RESULTS
- Total revenue for the second quarter of 2020 decreased 21.3% to 38,117 kEUR compared to 48,404 kEUR for the second quarter of 2019. Adjusted EBITDA decreased to 3,382 kEUR from 5,059 kEUR. The Adjusted EBITDA margin (Adjusted EBITDA divided by total revenue) for the second quarter of 2020 was 8.9% compared to 10.5% for the second quarter of 2019.
- Revenue from our Materialise Software segment increased 2.4% to 9,540 kEUR for the second quarter of 2020 from 9,320 kEUR for the same quarter last year. Segment EBITDA increased to 3,756 kEUR from 2,055 kEUR while the segment EBITDA margin was 39.4% compared to 22.1% for the prior-year period.
- Revenue from our Materialise Medical segment decreased 19.3% to 11,735 kEUR for the second quarter of 2020 compared to 14,546 kEUR for the same period in 2019. Compared to the second quarter of 2019, revenues from our medical software grew 6.7% and revenues from medical devices and services decreased 31.8%. Segment EBITDA decreased to 1,139 kEUR compared to 2,738 kEUR while the segment EBITDA margin was 9.7% compared to 18.8% for the second quarter of 2019.
- Revenue from our Materialise Manufacturing segment decreased 31.7% to 16,777 kEUR for the second quarter of 2020 from 24,550 kEUR for the second quarter of 2019. Segment EBITDA decreased to 650 kEUR from 2,835 kEUR while the segment EBITDA margin was 3.9% compared to 11.5% for the second quarter of 2019.
- Gross profit was 19,986 kEUR, or 52.4% of total revenue, for the second quarter of 2020 compared to 26,527 kEUR, or 54.8% of total revenue, for the second quarter of 2019.
- Research and development (“R&D”), sales and marketing (“S&M”) and general and administrative (“G&A”) expenses decreased, in the aggregate, 18.5% to 22,705 kEUR for the second quarter of 2020 from 27,861 kEUR for the second quarter of 2019. Specific cost reduction initiatives in S&M and G&A resulted in decreases compared to the second quarter of 2019 of 22.9% and 24.3% respectively, while R&D expenses decreased only 0.9%.
- Net other operating income was 892 kEUR compared to 1,370 kEUR for the second quarter of 2019.
- Operating result decreased to (1,827) kEUR from 36 kEUR for the second quarter of 2019.
- Net financial result was (295) kEUR compared to (190) kEUR for the second quarter of 2019. The share in result of joint venture amounted to 0 kEUR compared to (82) kEUR for the same period in 2019.
Mr. Leys concluded, “With the continued spread of COVID-19 in many parts of the world and the increased disruption to the global economy, we expect the pandemic’s impact on our operations to be even more pronounced in the third quarter and to continue throughout the entire second half of the year. While we anticipate today that Materialise Medical will gradually pick up in the third quarter of the year, we expect that our Materialise Software and Materialise Manufacturing businesses will continue to be significantly impacted. Our overall goal remains to limit the impact of the COVID-19 crisis, including the associated cost-saving measures we take, on our long-term plans, in particular on our ongoing research and business development programs. Accordingly, we expect the third quarter impact of the crisis on our Adjusted EBITDA will be significant.”
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