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Materialise fiscal 2018 results show “age of 3D printing services” is now

Revenues increase by 30% and stocks are going up

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When 3D printing stocks peaked in 2013 it was just a temporary bubble driven by the public discovering this technology for the first time. While stocks of 3D printing hardware companies dropped in the aftermath, those of 3D software companies like Dassault and Autodesk continued to rise: it may have been too early for hardware but it was just the right time for software. Now the time has come – in the next phase of organic growth predicted by Gartner – for 3D printing services to rise. And results by the leading global AM service bureaus, such as Protolabs and Materialise, appear to be confirming this trend.

With stocks solidly trading above the IPO value of $12, Materialise is now reporting very healthy results in fiscal 2018 (which closed in December 2108). Total revenue increased by 29.6% to €184 million from €142 million in 2017. Adjusted EBITDA also increased by 61% to €23.5 million for 2018 from €14.6 million for 2017. Net profit for 2018 was €3 million, or €0.06 per diluted share, compared to a loss of €2 million last year.

Executive Chairman Peter Leys commented: “2018 has been a good year for Materialise. Our annual revenues grew by 30% […] our Adjusted EBITDA grew by 61% […], and our deferred revenue from license and maintenance fees increased by 3,8 million euro to over 22 million euro, all at the higher end of the range we forecasted at the beginning of the year. In addition, cash flow from operating activities in 2018 was 28 million euro compared to 9.9 million euro in 2017, and, as a result of the capital we raised in 2018, our cash and cash equivalents at the end of 2018 totaled 115 million euro compared to 43 million at the end of last year. This financial strength positions us well to capture new growth opportunities going forward, even if the macro-economic conditions become less favorable.”

Services booming

Interestingly enough, during Materialise’s full fiscal year revenues from the Software segment (which has always been the company’s strongest segment) increased only by 4.5% (it even decreased by 4.1% in Q4), while Medical (+22%) and especially Manufacturing  (+49%) both grew significantly.

This positive trend for AM services was also confirmed recently by leading AM market analysis firm SmarTech Publishing, highlighting the five reasons why companies are increasingly turning to 3D printing service bureaus (especially for metal AM) in a recent editorial. According to SmarTech, additive manufacturing of metal is popular, but some end-user companies are reticent about in-house printing of metals parts. “This is, we believe, is a powerful factor creating opportunities for metal AM service bureaus,” says the company. A similar interpretation can be applied to polymer 3D printing services, as adoption spreads wider to new end-users.

Materialise Fiscal 2018

2019 Guidance

Mr. Leys concluded: “The additive manufacturing market continues to evolve, as new applications gradually find their way to the market, and we intend to continue positioning Materialise to benefit from this promising growth market in the coming years. In 2019, Materialise will dedicate significant attention to the partnerships that we have entered into and to the strategic initiatives that we have launched over the previous years. In our Materialise Software segment, we intend to maintain our leadership position through innovation and strategic partnerships; in our Materialise Medical segment we will drive the next stage of innovation, including by launching initiatives in new growth areas; and in our Materialise Manufacturing segment, we will increasingly focus on the manufacturing of complex and unique parts. For fiscal 2019 – Mr. Leys concluded – we expect to report consolidated revenues between €196 million and €204 million and adjusted EBITDA between €29 million and €33 million.”

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Davide Sher

Since 2002, Davide has built up extensive experience as a technology journalist, market analyst and consultant for the additive manufacturing industry. Born in Milan, Italy, he spent 12 years in the United States, where he completed his studies at SUNY USB. As a journalist covering the tech and videogame industry for over 10 years, he began covering the AM industry in 2013, first as an international journalist and subsequently as a market analyst, focusing on the additive manufacturing industry and relative vertical markets. In 2016 he co-founded London-based VoxelMatters. Today the company publishes the leading news and insights websites VoxelMatters.com and Replicatore.it, as well as VoxelMatters Directory, the largest global directory of companies in the additive manufacturing industry.

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