Renewed Manufacturing Growth Helps Materialize Achieve Record Quarterly Third Quarter Revenue
Belgian 3D printing software and services provider Materialize (MTLS) announced record revenues in the third quarter of 2021.
The company’s financial data shows that in the quarter it brought in 52 million euros, which is not only 28% more than the 41 million euros announced in the third quarter of 2020, but the figure highest ever in the third quarter. Despite a decline in automotive and aerospace demand, Materialize says it has been able to drive sales by applying its 3D printing offering selectively and through a broader market recovery.
During the third quarter of 2021, the best third quarter in the company’s history also enabled it to post a net profit of 9 million euros or 0.15 € per diluted share, which was positively received by shareholders, who have boosted its shares by 14% since the results came out.
“Our manufacturing segment has been suffering from COVID for much longer,” Fried Vancraen, CEO of Materialize, told analysts and investors during the company’s earnings call. “Today we see that as the market rebounds we are also able to generate healthy numbers in the manufacturing segment. In large part, this is due to the transition of our manufacturing segments to more and more certified manufacturing projects. “
Materialize third quarter 2021 results
Materialize reports its revenue in three divisions: Software, Medical, and Manufacturing, and while each segment recovered significantly from last year, its industry was the star of the show in the third quarter of 2021. The division, which includes revenues from the company’s 3D printing, as well as its vacuum and investment casting offerings, raised 23 million euros, up 61% from the third quarter of 2020.
According to Vancraen, the segment was able to continue the recovery that began in the second quarter of 2021, thanks to Materialize’s strategy of seeking “significant applications” and “certified manufacturing projects”. In doing so, he told analysts the company has been able to boost growth in its apparel and medical business, and mitigate the decline in its demand for automotive and aviation prototyping.
The company’s medical division also grew 10% between Q3 2020 and Q3 2021, grossing € 19 million, and it was the only area of business that exceeded its revenue levels from before the pandemic. While Materialize’s healthcare devices and services revenue increased 8.5% year-over-year, its medical performance was also bolstered by a 31% increase in sales of related software and software. efficiency gains.
Finally, the Firm’s Software activity generated 10 million euros in the third quarter of 2021, an improvement of 10% compared to the 9 million euros published in the third quarter of 2020, but down 9% compared to 11 million. euros generated in the third quarter of 2019. This decrease is somewhat lower. to an increase of 0.5 million euros in its prepaid license and maintenance revenue, and Materialize maintains that the division’s cross-sales now represent 31% of its total.
|Materialize Income (€)||Q3 2020||Q3 2021||Difference (%)||Q3 2019||Q3 2021||Difference (%)|
Focus on “significant applications”
During the third quarter, there were many signs of a recovery in Materialize manufacturing, as the company’s 3D printing offering found new applications in the aviation and cycling industries. In one of these use cases, the company was commissioned to 3D print 2,000 bike parts for Pinarello’s “Dogma F”, while in another, they worked with EOS to create components. ready-to-fly SLS printouts for Airbus.
On the company’s conference call, Vancraen also revealed that its services were adopted as part of a similar aviation-focused transport aircraft project. Throughout the R&D of the company’s “Hexa” drone-type electric taxi, Materialize helped design and print 89 end-use parts for the craft, which would have reduced its build time by eliminating the need for support structures.
Going forward, Vancraen added that the company will continue to target “meaningful applications” where it “can step into the skin” of customer workflows to deliver tangible results. He therefore stressed that growth would not necessarily require an increase in its capacity.
“The point of Materialize is not to over-invest in capacity, because we’ve always seen that we need to focus our manufacturing on high-end 3D printing applications,” Vancraen said on the call for results. “Rather than filling [our order book] with volume we prefer to go for applications where we believe serious value can be made. So there is no plan to increase capacity significantly. “
Instead, the company says it intends to “gradually add additional machines” to its portfolio, while expanding its business in the new plant it opened in Bremen earlier this year. The company also attributes much of its third quarter success to improvements in Magics and Mimics, as well as its MES, CMS and wearable initiatives. It therefore intends to continue its level of R&D spending, which increased by 13% during the quarter.
The “comfortable” projections of Materialize
Vancraen closed Materialize’s earnings call by reiterating that he expects the company’s auto demand to remain weak for the remainder of the year, but he remains “comfortable” setting a forecast for the year. financial year 2021 from 197 to 200 million euros. Due to the number of transactions the company has underway, he said it had “good control” of its projected profits, so he said the results would be “in the upper end” of its range.
Materialize also has a strong cash position heading into the fourth quarter of 2021, with 194 million euros in liquid capital, in part thanks to the public offering of four million shares it made in June. , which brought in 11.4 million euros more than expected, after JP Morgan Securities chose to take its option as underwriters of the transaction to buy an additional 600,000 shares.
Looking ahead, Vancraen added that the company is targeting other green applications of its technologies, having successfully assisted Lift Aircraft with its “eVTOL” power project, in line with its own plans to halve its carbon footprint. ‘by 2025.
“EVTOL is a new generation of vehicles that should be a growing market and open up a new mode of mobility,” Vancraen concluded. “The unique advantages of additive manufacturing are really crucial to building reliable systems that are so light that they can only take passengers with electric power, and that’s the kind of market we really believe in fundamentally. . “
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The image shown shows Materialize’s brand new Metal Competence Center in Bremen, Germany. Photo via Materialize.