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Published: 2021-06-09 16:20:38 ET
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EX-99.1 2 d188810dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

INDEX TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Condensed Consolidated Interim Financial Statements as of and for the three months ended March 31, 2021 and 2020

 

Condensed consolidated income statements (unaudited)

     2  

Condensed consolidated statements of comprehensive income (unaudited)

     3  

Condensed consolidated statements of financial position (unaudited)

     4  

Condensed consolidated statements of changes in equity (unaudited)

     5  

Condensed consolidated cash flow statements (unaudited)

     6  

Notes to the condensed consolidated financial statements (unaudited)

     8  


Condensed consolidated income statements (unaudited)

 

            For the three month
period ended March 31,
 
in 000€, except per share data    Notes      2021     2020  

Revenue

     14.1        45,554       46,245  

Cost of sales

        (20,986     (21,660

Gross profit

        24,568       24,585  

Research and development expenses

        (6,536     (6,527

Sales and marketing expenses

        (11,310     (12,627

General and administrative expenses

        (7,552     (7,197

Net other operating income

     14.3        1,120       683  

Operating profit (loss)

        290       (1,084

Financial expenses

        (4,701     (1,820

Financial income

        589       500  

Share in loss of joint venture, after tax

        —         (39

Profit (loss) before taxes

        (3,822     (2,443

Income tax benefit / (expense)

        155       (457

Net profit (loss) for the period

        (3,667     (2,899

Net profit (loss) attributable to:

       

The owners of the parent

        (3,667     (2,841

Non-controlling interest

        —         (58

Earnings per share attributable to the owners of the parent

       

Basic

     15        (0.07     (0.05

Diluted

     15        (0.07     (0.05

Notes 1-19 form an integral part of these condensed consolidated interim financial statements.

 

2


Condensed consolidated statements of comprehensive income (unaudited)

 

     For the three month period ended
March 31,
 
in 000€    2021     2020  

Net profit (loss) for the period

     (3,667     (2,899

Other comprehensive income (loss)

    

Recycling

    

Exchange differences on translation of foreign operations

     492       (4,157

Other comprehensive income (loss), net of taxes

     492       (4,157

Total comprehensive income (loss) for the period, net of taxes

     (3,175     (7,056

Total comprehensive income (loss) attributable to:

    

The owners of the parent

     (3,175     (6,353

Non-controlling interest

     —         (703

Notes 1-19 form an integral part of these condensed consolidated interim financial statements.

 

3


Condensed consolidated statements of financial position (unaudited)

 

            As of
March 31,
     As of
December 31,
 
in 000€    Notes      2021      2020  

Assets

        

Non-current assets

        

Goodwill

        20,572        20,342  

Intangible assets

     4        32,457        32,981  

Property, plant & equipment

     5        86,435        88,267  

Right-of-use assets

     5        10,436        10,996  

Deferred tax assets

        264        201  

Investments in convertible loans

     12        3,372        6,203  

Investments in non-listed equity instruments

     12        3,842        3,842  

Other non-current assets

        4,552        4,093  

Total non-current assets

        161,930        166,925  

Current assets

        

Inventories and contracts in progress

        10,292        10,043  

Trade receivables

        31,899        30,871  

Other current assets

        8,472        8,290  

Cash and cash equivalents

     6        107,568        111,538  

Total current assets

        158,231        160,742  

Total assets

        320,162        327,667  

Notes 1-19 form an integral part of these condensed consolidated interim financial statements.

 

            As of
March 31,
    As of
December 31,
 
in 000€    Notes      2021     2020  

Equity and liabilities

       

Equity

       

Share capital

        4,096       4,096  

Share premium

        141,306       141,274  

Retained Earnings

        (11,062     (7,395

Other reserves

        (4,379     (4,871

Equity attributable to the owners of the parent

     7        129,961       133,104  

Total equity

     7        129,961       133,104  

Non-current liabilities

       

Loans & borrowings

     9        84,669       90,502  

Lease liabilities

     9        6,689       7,086  

Deferred tax liabilities

        6,450       6,805  

Deferred income

     10        4,948       5,327  

Other non-current liabilities

        604       398  

Total non-current liabilities

        103,360       110,118  

Current liabilities

       

Loans & borrowings

     9        15,841       13,984  

Lease liabilities

     9        3,328       3,539  

Trade payables

        19,024       17,698  

Tax payables

        977       974  

Deferred income

     10        32,692       29,555  

Other current liabilities

     11        14,979       18,695  

Total current liabilities

        86,841       84,445  

Total equity and liabilities

        320,162       327,667  

Notes 1-19 form an integral part of these condensed consolidated interim financial statements.

 

4


Condensed consolidated statements of changes in equity (unaudited)

 

            Attributable to the owners of the parent               
in 000€    Notes      Share
capital
     Share
premium
     Retained
earnings
    Other
reserves
    Total     Non-
controlling
interest
     Total
equity
 

At January 1, 2021

        4,096        141,274        (7,395     (4,871     133,104       —          133,104  

Net loss for the period

        —          —          (3,667     —         (3,667     —          (3,667

Other comprehensive income / (loss)

        —          —          —         492       492       —          492  

Total comprehensive income (loss)

        —          —          (3,667     492       (3,175     —          (3,175

Equity-settled share-based payment expense

     8        —          32        —         —         32       —          32  

At March 31, 2021

        4,096        141,306        (11,062     (4,379     129,961       —          129,961  

 

            Attributable to the owners of the parent              
in 000€    Notes      Share
capital
     Share
premium
     Retained
earnings
    Other
reserves
    Total     Non-
controlling
interest
    Total
equity
 

At January 1, 2020 as reported

        3,066        138,090        (211     (1,378     139,567       3,107       142,675  

Restatement 2019 - Engimplan PPA*

     2        —          —          (61     —         (61     169       107  

At January 1, 2020 Restated*

        3,066        138,090        (272     (1,378     139,506       3,276       142,782  

Net loss for the period

        —          —          (2,841     —         (2,841     (58     (2,899

Other comprehensive income / (loss)

        —          —          —         (3,512     (3,512     (645     (4,157

Total comprehensive income (loss)

        —          —          (2,841     (3,512     (6,353     (703     (7,056

At March 31, 2020

        3,066        138,090        (3,113     (4,889     133,153       2,573       135,726  

 

*

The year 2019 has been restated to reflect the completion in 2020 of the accounting for the business combination with Engimplan. See additional information on this restatement in Note 2.

Notes 1-19 form an integral part of these condensed consolidated interim financial statements.

 

5


Condensed consolidated cash flow statements (unaudited)

 

            For the three month
period ended March 31,
 
in 000€    Notes      2021     2020  

Operating activities

       

Net profit (loss) for the period

        (3,667     (2,899

Non-cash and operational adjustments

       

Depreciation of property, plant & equipment

     5        3,803       3,646  

Amortization of intangible assets

     4        1,277       1,115  

Share-based payment expense

     8        (415     (75

Loss (gain) on disposal of property, plant & equipment

     5        (32     108  

Movement in provisions

        —         (3

Movement in reserve for bad debt and slow moving inventory

        (2     241  

Financial income

        (589     (500

Financial expense

        4,701       1,821  

Impact of foreign currencies

        18       2  

Share in loss of joint venture (equity method)

        —         39  

Income taxes and deferred taxes

        (156     457  

Working capital adjustment and income tax paid

       

Decrease (increase) in trade receivables and other receivables

        (931     1,581  

Decrease (increase) in inventories and contracts in progress

        (329     (4

Increase in trade payables and other payables

        400       2,300  

Income tax paid

        —         (589

Interest received

        153       33  

Net cash flow from operating activities

        4,231       7,273  

Notes 1-19 form an integral part of these condensed consolidated interim financial statements.

 

6


Condensed consolidated interim cash flow statements (unaudited)

 

            For the three month
period ended March 31,
 
in 000€    Notes      2021     2020  

Investing activities

       

Purchase of property, plant & equipment

     5        (1,242     (2,567

Purchase of intangible assets

     4        (768     (478

Proceeds from the sale of property, plant, equipment and intangibles (net)

     5        183       70  

(Convertible) loan granted

        (1,122     (300

Net cash flow used in investing activities

        (2,949     (3,275

Financing activities

       

Repayment of loans & borrowings

     9        (3,918     (2,585

Repayment of leases

     9        (1,066     (1,024

Interest paid

        (536     (634

Other financial income (expense), net

        136       (138

Net cash flow used in financing activities

        (5,384     (4,381

Net increase/(decrease) of cash and cash equivalents

        (4,102     (383

Cash and cash equivalents at beginning of the period

     6        111,538       128,897  

Exchange rate differences on cash and cash equivalents

        132       (1,379

Cash and cash equivalents at end of the period

     6        107,568       127,135  

Notes 1-19 form an integral part of these condensed consolidated interim financial statements.

 

7


Notes to the condensed consolidated interim financial statements

 

1

Corporate information

Materialise NV is a limited liability company with its registered office at Technologielaan 15, 3001 Leuven, Belgium. These condensed consolidated interim financial statements comprise Materialise NV (the “Company” or “Parent”) and its subsidiaries (collectively, the “Group”). See Note 19 for a list of subsidiaries of the Company.

The Group is a leading provider of additive manufacturing (AM) software and of sophisticated 3D printing services. The products and services of the Group are organized in the three segments: Materialise Medical, Materialise Software and Materialise Manufacturing. The Group sells its products in Europe, the Americas, Africa and Asia-Pacific.

The condensed consolidated interim financial statements as of March 31, 2021 were approved and authorized for issue on June 4, 2021 in accordance with a resolution of the Parent’s Board of Directors. The condensed consolidated interim financial statements should be read together with the consolidated financial statements of the Group as of and for the year ended December 31, 2020 which were approved and authorized for issue on April 28, 2021 in accordance with a resolution of the Parent’s Board of Directors.

 

2

Basis of preparation

The condensed consolidated interim financial statements of the Group for the three month period ended March 31, 2021 were prepared in accordance with IAS 34 “Interim financial reporting” as issued by the International Accounting Standards Board (IASB). The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements as of and for the year ended 31 December 2020, which have been prepared in accordance with the International Financial Reporting Standards (IFRS) as issued by the IASB (“IFRS”). They do not include all of the information required for a complete set of financial statements prepared in accordance with IFRS. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group’s financial position and performance since the last annual financial statements.

These condensed consolidated interim financial statements have been prepared on a historical cost basis, except for the assets and liabilities that have been acquired as part of a business combination, which have been initially recognized at fair value, and certain financial assets such as the non-listed equity instruments and the convertible loan receivables which are both included in the other non-current assets, the share appreciation rights, and the written put option of Rapidfit which are measured at fair value.

The condensed consolidated interim financial statements are prepared on a going concern basis.

The condensed consolidated interim financial statements have been prepared on the same basis as the most recent annual financial statements, unless otherwise stated.

The condensed consolidated interim financial statements are presented in thousands of euros (K€ or thousands of €) and all “currency” values are rounded to the nearest thousand (€000), except when otherwise indicated.

The preparation of financial statements in compliance with IFRS requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group’s accounting policies. The areas where significant judgment and estimates have been made in preparing the condensed consolidated interim financial statements and their effect are disclosed in Note 3

New standards, interpretations and amendments adopted by the Group

The accounting policies adopted in the preparation of the condensed consolidated interim financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended 31 December 2020, except for the adoption of new standards effective as of 1 January 2021. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. Several amendments apply for the first time in 2021, but do not have an impact on the condensed consolidated interim financial statements of the Group.

Interest Rate Benchmark Reform – Phase 2: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 The amendments provide temporary reliefs which address the financial reporting effects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR); these amendments had no impact on the condensed consolidated interim financial statements of the Group.

The Group has not early adopted any standards, interpretations or amendments that have been issued but that are not yet effective.

Restatements in the reporting year 2019

As set out in Note 2 to the Group’s consolidated financial statements as of and for the year ended December 31, 2020, as of July 16th, 2020, we completed the fair value analysis of the Engimplan business combination, with corresponding adjustments to goodwill, property, plant and equipment and non-controlling interest as if the accounting for the business combination had been completed at the acquisition date. The impact has been accounted for as retrospective adjustments to our consolidated statement of financial position as of December 31, 2019 and our consolidated income statement for the year ended December 31, 2019.

 

8


3

Summary of significant accounting policies

Basis for consolidation

The condensed consolidated interim financial statements comprise the financial statements of the Group and its subsidiaries.

No changes took place during the three month period ended March 31, 2021 in the consolidation scope of the Group. Nevertheless, on 9 November 2020, the Group acquired the remaining 50% of shares of RSPrint Powered by Materialise NV (“RSPrint”). Whereas the Group accounted for its interest in RSPrint under the equity method of accounting prior to November 9, 2020, the Group fully consolidates RSPrint as from that date.

Accounting policies

For information regarding our significant accounting policies, reference is made to Note 3 of the Group’s consolidated financial statements as of and for the year ended December 31, 2020.

 

9


Significant accounting judgements, estimates and assumptions

When preparing the condensed consolidated interim financial statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results. The judgements, estimates and assumptions applied in the condensed consolidated interim financial statements, including the key sources of estimation uncertainty, were the same as those applied in the Group’s last annual consolidated financial statements for the year ended December 31, 2020.

 

10


4

Intangible assets

The changes in the carrying value of the intangible assets can be presented as follows for the three month period ended March 31, 2020 and March 31, 2021:

 

in 000€    Patents
and
licenses
    Software     Acquired
customers,
technology
    Developed
technology
and
software
under
construction
    Total  

Acquisition value

          

At January 1, 2020

     4,436       10,667       28,681       1,652       45,436  

Additions

     67       15       —         396       478  

Disposals

     (19     (8     —         —         (27

Currency translation

     (1     (46     (833     —         (880

At March 31, 2020

     4,483       10,628       27,848       2,048       45,007  

At January 1, 2021

     4,662       11,494       35,484       4,658       56,298  

Additions

     357       16       —         395       768  

Disposals

     (10     —         —         —         (10

Transfer between accounts

     55       —         —         (54     1  

Currency translation

     2       (8     175       (2     167  

At March 31, 2021

     5,066       11,502       35,659       4,997       57,224  

 

in 000€    Patents
and
licenses
    Software     Acquired
customers,
technology
and
backlogs
    Developed
technology
and
software
under
construction
    Total  

Amortization

          

At January 1, 2020

     (2,798     (7,740     (7,503     —         (18,041

Amortization charge for the period

     (60     (561     (494     —         (1,115

Disposals

     12       8       —         —         20  

Currency translation

     1       13       208       —         222  

At March 31, 2020

     (2,845     (8,280     (7,789     —         (18,914

At January 1, 2021

     (3,051     (7,721     (10,433     (2,112     (23,317

Amortization charge for the period

     (93     (480     (679     (26     (1,278

Disposals

     5       —         —         —         5  

Transfer between accounts

     —         (41     —         —         (41

Currency translation

     —         —         (136     —         (136

At March 31, 2021

     (3,139     (8,242     (11,248     (2,138     (24,767

Net carrying value

          

At March 31, 2021

     1,927       3,260       24,411       2,859       32,457  

At March 31, 2020

     1,638       2,348       20,059       2,048       26,093  

Patent and licenses include only the directly attributable external costs incurred in registering the patent and obtaining the license. Software relates to purchased software for internal use only except for software development on certain application interfaces that were almost fully funded by a third party. The remaining amortization period is 1.7 years for the main software purchases and 5.5 years for the main patents and licenses.

 

11


The ‘Acquired customers and technology’ have been recognized as part of the acquisition of RS Print, Engimplan, ACTech, E-Prototypy, OrthoView, and Cenat (see Note 4). At March 31, 2021, the remaining amortization period for the acquired customers is 14.42 years for RS Print, 8.33 years for Engimplan, 16.50 years for ACTech, 3.50 years for OrthoView, fully amortized for E-Prototypy and 4.00 years for Cenat (March 31, 2020:9.33 for Engimplan, 17.50 for ACTech, 4.50 years for OrthoView and 5.00 years for Cenat). At March 31, 2021, the remaining amortization period for the acquired technology and contracts is 6.42 years for RS Print.

The Group did not capitalize any internal development costs in the three month period ended March 31, 2021.

The total amortization charge for Q1 2021 is K€1,278 (Q1 2020: K€1,115).

 

12


5

Property, plant & equipment

The changes in the carrying value of the property, plant & equipment can be presented as follows for the three month period ended March 31, 2020 and March 31, 2021:

 

in 000€    Land and
buildings
    Plant and
equipment
    Right-of-use
assets
    Construc-
tion in
progress
    Total  

Acquisition value

          

At January 1, 2020

     42,893       89,078       21,646       4,414       158,031  

Additions

     19       1,073       698       1,475       3,265  

Disposals

     —         (931     (1,252     —         (2,183

Transfers

     (85     3,724       (3,155     (569     (85

Currency translation

     (600     (1,496     (267     (28     (2,391

At March 31, 2020

     42,227       91,448       17,670       5,292       156,637  

At January 1, 2021

     42,417       94,420       20,147       8,639       165,623  

Additions

     —         651       456       591       1,698  

Disposals

     —         (1,173     (336     (13     (1,522

Transfers

     31       67       (60     (38     —    

Currency translation

     (66     (87     8       —         (145

At March 31, 2021

     42,382       93,878       20,215       9,179       165,654  

Depreciation

          

At January 1, 2020

     (6,839     (38,540     (11,060     —         (56,439

Depreciation charge for the period

     (299     (2,525     (822     —         (3,646

Disposals

     —         715       1,252       —         1,967  

Transfers

     (45     (2,903     2,960       —         12  

Currency translation

     97       549       56       —         702  

At March 31, 2020

     (7,086     (42,704     (7,614     —         (57,404

At January 1, 2021

     (8,007     (49,202     (9,151     —         (66,360

Depreciation charge for the period

     (325     (2,540     (933     —         (3,798

Disposals

     —         1,052       324       —         1,376  

Transfers

     —         48       (12     —         36  

Currency translation

     (11     (18     (7     —         (36

At March 31, 2021

     (8,343     (50,660     (9,779     —         (68,782

Net book value

          

At March 31, 2021

     34,039       43,218       10,436       9,179       96,872  

At March 31, 2020

     35,141       48,744       10,056       5,292       99,233  

 

13


The investments in property, plant & equipment and right-of-use assets in Q1 2021 amounted to K€1,698 (Q1 2020: K€3,265). They are mainly related to new machines and installations (K€353), land and buildings (K€517), IT equipment (K€270) and leased assets (K€455). The investments in Q1 2020 related to new machines and installations in (K€1,157), land and buildings (K€743), IT equipment (K€244) and leased assets (K€698).

The Group realized a net gain on disposal of property, plant and equipment of K€32 in Q1 2021 (Q1 2020: a net loss of K€108). No impairment on property, plant and equipment was recorded in Q1 2021 (Q1 2020: none).

The right of use assets can be presented as follows:

The carrying value of Right-of-Use assets at March 31, 2021 was K€10,436 (at December 31, 2020: K€10,996). Right-of-Use Equipment assets are mainly related to 3D printing machines with a carrying value of K€1,371 at March 31, 2021 (December 31, 2020: K€1,480) and for which depreciation of K€120 was recorded in Q1 2021 (Q1 2020: K€149). New leases in Q1 2021 amount to K€456 of which K€289 relate to leased motor vehicles (Q1 2020:K€521).

 

in 000€    Buildings      Vehicles      Equipment      Total  

Acquisition value

           

At January 1, 2021

     7,574        4,555        8,018        20,147  

Additions

     144        289        23        456  

Disposals

     (264      (68      (4      (336

Currency translation

     15        (1      (7      7  

Transfers

     —          (60      —          (60

At March 31, 2021

     7,469        4,715        8,030        20,214  

Depreciation

           

At January 1, 2021

     (2,657      (1,891      (4,603      (9,151

Depreciation charge for the period

     (459      (302      (173      (934

Disposals

     264        57        4        325  

Currency translation

     (15      —          8        (7

Transfers

     —          50        (62      (12

Other

     —          1        —          1  

At March 31, 2021

     (2,867      (2,085      (4,826      (9,778

Net book value

           

At March 31, 2021

     4,602        2,630        3,204        10,436  

 

14


6

Cash and cash equivalents

Cash and cash equivalents include the following:

 

     As of
March 31,
     As of
December 31,
 
in 000€    2021      2020  

Cash at bank

     104,603        108,399  

Cash equivalents

     2,965        3,139  

Total

     107,568        111,538  

Cash at banks earns interest at floating rates based on daily bank deposit rates. Cash equivalents include short-term deposits, which are made for varying periods between one day and three months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.

There were no restrictions on cash at March 31, 2021 and December 31, 2020.

 

15


7

Equity

Share capital

The share capital of the parent company Materialise NV consists of 54,169,257 ordinary nominative shares at March 31, 2021 with no nominal but par value of €0.076 for a total amount of K€4,096. This is unchanged compared to December 31, 2020.

 

in 000€, except share data    Total
number of
ordinary
shares
     Total
share-
holders’
capital
     Total
share-
premium
 

Outstanding at January 1, 2021

     54,169,257        4,096        141,274  

Equity settled share-based payments expense

     —          —          32  

Outstanding on March 31, 2021

     54,169,257        4,096        141,306  

Share premium

In Belgium, the portion of the capital increase in excess of par value is typically allocated to share premium.

The carrying value of the share premium is K€141,306 at March 31, 2021 (as at December 31, 2020 it was K€141,274). The change in the first quarter of 2021 is the result of the share-based payment expense of K€32.

Reserves

The nature and purpose of the reserves is as follows:

 

     As of
March 31,
     As of
December 31,
 
in 000€    2021      2020  

Legal reserve

     279        279  

Other reserves

     2,574        2,573  

Equity-settled share-based-payment expense

     72        72  

Other Comprehensive Income (Loss)

     (7,304      (7,796

Reserves

     (4,379      (4,872

Based on the statutory result and after final result allocation approved by the annual shareholders meeting the legal reserve is increased by reserving 5% of the yearly statutory profit until the legal reserve reaches at least 10% of the shareholders’ capital. The legal reserve cannot be distributed to the shareholders.

The Group did not pay any dividend during the first quarter of 2021 nor during 2020.

Other comprehensive loss

Other comprehensive loss decreased by K€492 to K€ (7,304) a result of Currency Translation Adjustments during the first quarter of 2021.

 

16


8

Share-based payment plans

Share-based payment plans of the parent

The changes of the period for the warrant plans are as follows:

 

     2021  

Outstanding at January 1*

     407,722  

Granted

     —    

Forfeited / Cancelled

     (1,924

Exercised

     —    

Outstanding at March 31*

     405,798  

Exercisable at March 31

     121,381  

 

*

The Group’s share-based payment plans are all equity-settled except for the IPO warrants that have been granted to certain employees in certain countries due to legal requirements which are cash-settled. The outstanding amount includes number of stock appreciation rights (“SARs”) issued under cash-settled share-based payment plans.

The number of outstanding warrants has been adjusted to reflect the 1-to-4 stock split decided in June 2014. The 2013 warrant plan gives a right to four shares for each warrant, whereas under all other warrant plans one warrant gives a right to one share. For presentation purposes the tables reflect the number of shares the warrants give right to across all plans.

Equity-settled share-based payment plans

The Group has several plans in place (2013 warrant plan, IPO warrant plan and 2015 warrant plan) which have similar terms except for the exercise price, except for the 2015 warrant plan.

2013 warrant plan: All warrants are exercised or forfeited / cancelled during 2020 or earlier.

IPO warrant plan

The status of the IPO warrant plan at March 31 is as follows:

 

     2021  

Outstanding at January 1

     236,726  

Granted

     —    

Forfeited / Cancelled

     (366

Exercised

     —    

Outstanding at March 31

     236,360  

Exercisable at March 31

     95,209  

No warrants were exercised during Q1 2021.

Warrant plan 2015

The status of the 2015 warrant plan at March 31 is as follows:

 

     2021  

Outstanding at January 1

     133,900  

Granted

     —    

Forfeited / Cancelled

     (1,400

Exercised and converted into shares

     —    

Outstanding at March 31

     132,500  

Exercisable at March 31

     13,700  

In Q1 2021, a number of employees exercised 1,350 warrants, representing 1,350 shares, however the funds in connection with the exercise of these warrants were received on April 15, 2021. The share capital will be raised by deed before the notary in May 2021.

 

17


Fair value

The fair value of the warrants is estimated at the grant date using the Black-Scholes option pricing model, taking into account the terms and conditions upon which the warrants were granted.

The expense arising from share-based payment transactions for the warrants plans mentioned above was K€32 in Q1 2021 (Q1 2020: K€102)

The weighted average remaining estimated life of the warrants outstanding as of March 31, 2021 is 4.06 years (December 31, 2020: 4.31 years). The weighted average fair value for the warrants outstanding at the end of March 31, 2021 was €3.30 (December 31, 2020: €3.29). The weighted average exercise price for the warrants outstanding at the end of March 31, 2021 was €7.93 (December 31, 2020: €7.92).

Cash-settled share-based payment plans

The Group has issued 215,688 SARs in July 2014 towards certain employees in certain countries due to legal requirements with similar terms and conditions as the IPO warrant plan except that the SAR will be settled in cash. The exercise price of the SAR is €8.81.

The status of this plan is as follows:

 

     2021  

Outstanding at January 1

     37,096  

Granted

     —    

Forfeited / Cancelled

     (158

Exercised

     —    

Outstanding at March 31

     36,938  

Exercisable at March 31

     12,472  

The fair value of the SAR is estimated at each reporting date using the Black-Scholes option pricing model, taking into account the terms and conditions upon which the warrants were granted.

The following table lists the input used for the Black-Scholes model:

 

     March 31,
2021
    December 31,
2020
 

Return dividend

     0     0

Expected volatility

     96     84

Risk-free interest rate

     0.00     -0.34

Expected life

     0.50       0.25  

Exercise price (in €)

     8.81       8.81  

Stock price (in €)

     30.65       44.20  

Fair value SAR (in €)

     21.98       35.38  

The profit arising from share-based payment transactions for the SAR’s plan was K€447 in Q1 2021 (Q1 2020: K€1,242 as expense).

The carrying value of the liability at March 31, 2021 amounts to K€787 (December 31, 2020: K€1,223). The total intrinsic value of the liability for warrants currently exercisable at March 31, 2021 amounts K€272 (December 31, 2020: K€447).

 

18


9

Loans and borrowings and lease liabilities

The loans and borrowings include the following:

 

     As of
March 31
     As of
December 31
 
in 000€    2021      2020  

K€35,000 EIB bank loan

     34,167        35,000  

K€28,000 acquisition bank loan

     17,869        18,621  

K€18,000 secured bank loans

     16,908        17,013  

K€12,300 bank loans ACTech

     9,893        10,470  

K€9,050 other facility loans

     2,512        2,910  

Bank investment loans - top 20 outstanding

     16,289        17,280  

Bank investment loans - other

     2,487        2,681  

Lease liabilities

     10,017        10,624  

Institutional loan

     235        353  

Related party loan

     150        158  

Total loans and borrowings

     110,527        115,110  

Current

     19,169        17,523  

Non-Current

     91,358        97,588  

K€35,000 EIB bank loan

On December 20, 2017 the Group entered into a finance contract with the European Investment Bank, or EIB, to finance future research and development programs. As part of a first tranche, an amount of K€10,000 was drawn in the course of 2018. A second tranche of K€25,000 was drawn in the course of 2019.

As set out in Note 15 to the consolidated financial statements as at and for the year ended December 31, 2020, certain of the covenants attached to the EIB bank loan have been temporary waived or adjusted for measurement periods up to December 31, 2022.

K€28,000 Acquisition loan

This bank loan has been concluded in October 2017 to finance the acquisition of ACTech.

K€18,000 secured bank loans

The K€18,000 loan has been concluded in 2016 in two agreements to finance the construction of new facilities in Leuven (Belgium) and in Poland, both maturing in 2032.

K€12,300 bank loans

In March 2018, three bank loans originating from the acquired ACTech Group were refinanced entirely for the amount of K€9,300, with adjusted maturity to May 2025 and first reimbursements in August 2020. In addition, a new investment credit of K€3,000 was obtained in June 2018, repayable as from January 2019.

K€9,050 - Other facility loans

Three facility loans were contracted in 2005, 2006 and 2012 for the construction of Leuven office and production facilities (K€2,000, K€300 and K€5,000, respectively) and another loan for the Czech Republic offices in 2008 (K€1,750). The balance of the four loans amounts to K€2,512 per March 31, 2021.

Miscellaneous investment loans

The 20 largest of these loans outstanding as at March 31, 2021 amount to a balance of K€16,289. These loans were concluded in 2021 and in prior years finance various investments in machinery, printers, equipment, and software tools. The vast majority of the loans have a reimbursement period over seven years, and are at fixed interest rates with weighted average below 1%.

 

19


K€10,017 Lease liabilities

The Group has several lease obligations mainly with financial institutions and related to the financing of buildings and various other items of plant and equipment such as 3D printers. As at March 31, 2021 the balance of these lease agreements amounts to K€10,017, and are mostly at fixed interest rates with weighted average below 2%.

K€2,000 institutional loan

This loan was contracted with a governmental institution in Germany to finance the production operations of Materialise Germany for a maximum amount of K€2,000. As at March 31, 2021 K€2,000 has been drawn with an outstanding balance of K€235.

Related party loan

Lunebeke NV has granted Materialise a fixed rate loan that matures in 2025. The purpose of the loan is to finance the purchase of a building in France. The amounts outstanding as of March 31, 2021 is K€150 (December 31, 2020: K€158). The interest expense until the three month period ended March 31, 2021 is K€2 (Q1 2020:K€3).

 

10

Deferred income

Deferred income consists of the following:

 

in 000€    March 31,
2021
     December 31,
2020
 

Deferred maintenance & license

     32,130        30,242  

Deferred (project) fees

     5,135        4,555  

Deferred government grants

     375        85  

Total

     37,640        34,882  

current

     32,692        29,555  

non-current

     4,948        5,327  

The deferred maintenance and license revenue consist of maintenance and license fees paid up-front which are deferred and recognized in earnings over either the maintenance period or the duration of the license. With an increase of K€ 1,197, mainly deferred maintenance fees increased as at March 31, 2021 compared to December 31, 2020. The deferred (project) fees consist of one-time and advance payments received which are deferred in accordance with the revenue accounting policies. The deferred government grants are recognized as income under “Net other operating income”.

 

11

Other current liabilities

Other current liabilities include the following:

 

in 000€    March 31,
2021
     December 31
2020
 

Payroll-related and non-income tax payables

     11,426        14,169  

Other current liabilities

     3,553        4,526  

Total

     14,979        18,695  

The decrease by K€ 3,716 is mainly due to covid initiatives from the government in the different countries. In Belgium the social security payables of the last two months of 2020 were paid in 2021 for K€ 2,584. In the UK there is a postponement of the VAT payables for K€ 413.

 

20


12

Fair value

Financial assets

The carrying value and fair value of the financial assets as of March 31, 2021 and December 31, 2020 can be presented as follows:

 

     Carrying value      Fair value  
in 000€    March 31,
2021
     December 31,
2020
     March 31,
2021
     December 31,
2020
 

Financial assets

           

Debt instruments measured at amortized cost

           

Trade receivables (current)

     31,899        30,871        31,899        30,871  

Other financial assets (non-current)

     544        712        544        712  

Other current non-trade receivables

     1,660        1,618        1,660        1,618  

Cash & cash equivalents

     107,568        111,538        107,568        111,538  

Loans granted

     583           583     

Total debt instruments

     142,254        144,739        142,254        144,739  

Financial assets at fair value through profit or loss

           

Derivatives

     —          23        —          —    

Convertible loan

     3,372        6,203        —          —    

Total financial assets measured at fair value

     3,372        6,226        —          —    

Equity instruments designated at fair value through OCI

           

Non-listed equity investments

     3,842        3,842        —          —    

Total Equity instruments designated at fair value through OCI

     3,842        3,842        —          —    

The fair value of the financial assets has been determined on the basis of methods and assumptions which are consistent with those applied as at 31 December 2020:

 

   

The carrying value of the cash and cash equivalents and the current receivables approximate their fair value due to their short term character;

 

   

The fair value of the derivatives was determined based on a mark-to-market analysis prepared by the bank based on observable market inputs (level 2 inputs);

 

   

Other current non-trade receivables are being evaluated on the basis of their credit risk and interest rate. Their fair values do not differ from their carrying value both as at March 31, 2021 and as at December 31, 2020;

 

   

The non-listed equity investments, mainly representing the investment in Essentium Inc for K€3,535 and AM Flow (via an investment in AM Danube, one of the shareholders of AM Flow) for K€307, are measured at fair value. Management considers that assumptions for both investments (level 2 inputs) applied as at 31 December 2020 are still relevant as at March 31, 2021 and accordingly their carrying value as at March 31, 2021 has remained unchanged from their carrying value as at December 31, 2020;

 

   

The convertible loan granted to Fluidda is measured at fair value and management has considered the fair value assumptions (level 3) to be still relevant as at March 31, 2021 and no fair value adjustment has been applied. The increase of the asset relates to accrued interest during Q1 2021 for an amount of K€ 62.

The Group’s judgements, estimates and assumption regarding the following convertible debt instruments for Ditto have evolved as described below compared to those made for the annual consolidated financial statements for the year ended December 31, 2020:

 

   

Although Ditto was already loss-making during 2020, management’s analysis through year-end 2020 was that no indications existed that the convertible loan receivables would not be recoverable. However, the business environment evolved negatively during the first quarter of 2021. This led Materialise management to conclude in the course of April 2021 that due to a series of events and circumstances that arose subsequent to December 31, 2020, it is no longer likely that Ditto will be able to achieve its business plans, based on which Materialise had initially granted the convertible loan.

 

   

Because the business objectives that were defined as a condition for Ditto to continue to draw under the facility were no longer met in 2021, Materialise decided in April 2021 to only extend a portion (USD 0.5 million) of the remaining amount that was available under the credit facility to Ditto. For the reasons set out above, Materialise currently does not intend to extend further financing to Ditto.

 

   

Despite the matters set out above, Materialise continues to believe in the potential of the technology platform that Ditto has built, and in the potential of the collaboration between Ditto and Materialise.

Taking into account the events and circumstances that have arisen since December 31, 2020 as set out above, Materialise noted the following in performing its fair value analysis:

 

   

The criteria for recognition of revenue from royalties owed by Ditto and services rendered to Ditto are no longer met and consequently, Materialise did not recognize any such revenue during the three month period ended March 31, 2021.

 

21


   

As at March 31st, 2021, we recognized an impairment on trade accounts receivable versus Ditto in the amount of EUR K€326. This amount is included within Net other operating income in the condensed consolidated interim income statement for the three month period ended March 31, 2021.

 

   

We estimate that, as a result of the combination of the lower than forecasted revenues and the unavailability of the remaining credit facility, Ditto may need additional funding to finance its operations and we currently have no clear visibility as to whether Ditto will be able to access such additional financing. As a result, uncertainty has arisen about Ditto’s capacity to reimburse the previously extended loans and accrued interest according to the terms of our agreement with them. Therefore, a downward remeasurement of fair value has been accounted for as at March 31, 2021 for an aggregate amount of K€ 3,201, representing the outstanding principal amount of the convertible loans, the accrued interests, and other receivables that had previously been converted to convertible notes. This charge has been included within Financial expenses in the condensded consolidated interim income statement for the three month period ended March 31, 2021.

In February 2021, Materialise granted a working capital loan to Link3D, Inc. (“Link3D”) in the amount of k€ 583. This loan receivable is measured at amortized cost. We also refer to Note 18 which discussed further agreements concluded between Materialise and Link3D subsequent to March 31, 2021, which also affect the terms and conditions of this loan.

Financial liabilities:

The carrying value and fair value of the financial liabilities as of March 31, 2021 and December 31, 2020 can be presented as follows:

 

     Carrying value      Fair value  
in 000€    March 31,
2021
     December 31,
2020
     March 31,
2021
     December 31,
2020
 

Financial liabilities measured at amortized cost

           

Loans & Borrowings and lease liabilities

     110,527        115,110        111,929        116,843  

Trade payables

     19,024        17,698        19,024        17,698  

Other liabilities excl. written put option on NCI

     1,013        1,275        1,013        1,275  

Total financial liabilities measured at amortized cost

     130,564        134,083        131,966        135,816  

Financial liabilities measured at fair value

           

Cash settled share based payments

     787        1,223        —          —    

Written put option on NCI

     875        875        —          —    

Derivatives

     113        140        —          —    

Total financial liability measured at fair value

     1,775        2,238        —          —    

Total non-current

     92,314        98,543        —          —    

Total current

     40,025        37,778        —          —    

The fair value of the financial liabilities have been determined on the basis of the following methods and assumptions which are consistent with those applied as at 31 December 2020:

 

   

The carrying value of current liabilities approximates their fair value due to the short term character of these instruments;

 

   

Loans and borrowings are evaluated based on their interest rates and maturity date. Most interest bearing debts have fixed interest rates and their fair value is subject to changes in interest rates and individual creditworthiness. Their carrying value approximates their fair value;

 

   

The fair value of the derivatives has been determined based on a mark-to-market analysis prepared by the bank based on observable market inputs (level 2 inputs);

 

   

The fair value of the written put option on non-controlling interest has been determined based on the present value of the redemption amount (level 3 inputs). The fair value of this written put option was determined to be unchanged as at March 31, 2021 compared to December 31, 2020.;

 

   

The fair value of the cash-settled share based payments has been determined based on a Black-Scholes model using inputs that are level 1 (stock-price and risk-free interest rate) as well as level 2 (e.g. volatility).

 

22


Fair value hierarchy 3 evolution

 

Convertible Loans to Ditto & Fluidda    Fair Value Evolution  
in 000€    Q1 2021  

As at 1 January 2021

     6,203  

Addition

     247  

Remeasurement

     (3,201

Capitalized interests

     123  

As at 31 March 2021

     3,372  

 

Written Put Option on NCI RapdFit+    Fair Value Evolution  
in 000€    Q1 2021  

As at 1 January 2021

     875  

Remeasurement

     —    

As at 31 March 2021

     875  

 

23


13

Segment information

For management purposes, the Group is organized into segments based on their products, services and industry and has the following three reportable segments:

 

   

The Materialise Medical segment, which develops and delivers medical software solutions, medical devices and other related products and services;

 

   

The Materialise Manufacturing segment, which delivers 3D printed products and related services; and

 

   

The Materialise Software segment, which develops and delivers additive manufacturing software solutions and related services.

The measurement principles used by the Group in preparing this segment reporting are also the basis for segment performance assessment and are in conformity with IFRS. The Chief Executive Officer of the Group acts as the chief operating decision maker. As a performance indicator, the chief operating decision maker monitors the performance by the Group’s revenue and adjusted EBITDA.

The following table summarizes the segment reporting for each of the reportable periods. Corporate research and development, headquarters’ function, financing and income taxes are managed on a Group basis and are not allocated to operating segments. As management’s controlling instrument is mainly revenue-based, the reporting information does not include assets and liabilities by segment and is as such not available per segment.

 

in 000€    Materialise
Software
    Materialise
Medical
    Materialise
Manufacturing
    Total
segments
    Unallocated     Consolidated  

For the three month period ended March 31, 2021

            

Revenues

     10,219       16,231       19,114       45,564       (11     45,553  

Segment Adjusted EBITDA

     3,429       4,541       (144     7,826       (2,486     5,341  

Segment Adjusted EBITDA %

     33.6     28.0     -0.8     17.2     —         11.7

For the three month period ended March 31, 2020

            

Revenues

     9,821       15,645       20,815       46,281       (36     46,245  

Segment Adjusted EBITDA

     2,645       2,455       1,118       6,218       (2,615     3,603  

Segment Adjusted EBITDA %

     26.9     15.7     5.4     13.4     —         7.8

The segment Adjusted EBITDA is reconciled with the consolidated net profit (loss) for the period as follows:

 

     For the three
month period
ended March 31,
 
in 000€    2021      2020  

Segment Adjusted EBITDA

     7,826        6,218  

Depreciation, amortization and impairment

     (5,081      (4,760

Corporate research and development

     (692      (747

Corporate headquarter costs

     (2,648      (2,293

Other operating income (expense)

     855        575  

Share based payments

     415        (75

M&A

     (385      —    

Operating profit

     290        (1,084

Financial expenses

     (4,701      (1,820

Financial income

     589        500  

Income taxes

     155        (457

Share in loss of joint venture

     —          (39

Net (loss) profit

     (3,667      (2,899

The Group has no customers with individual sales larger than 10% of the total revenue in Q1 2021 (Q1 2020: none).

 

24


Entity-wide disclosures

The revenue by geographical area is as follows:

 

     For the three month
period ended
March 31,
 
in 000€    2021      2020  

United States of America

     13,497        11,881  

Americas other than USA

     980        1,517  

Belgium

     1,718        2,421  

Germany

     5,390        8,308  

France

     4,445        4,795  

Switzerland

     3,407        3,225  

United Kingdom

     2,358        3,417  

Italy

     3,237        1,747  

Netherlands

     1,582        1,998  

Other Europe

     4,116        2,519  

Asia Pacific

     4,824        4,416  

Total

     45,554        46,244  

The total revenue realized in the country of domicile (Belgium) in Q1 2021 amounts to K€1,718 (Q1 2020: K€2,421).

The total non-current assets, other than financial instruments, deferred tax assets, by geographical area is as follows:

 

     March 31,      December 31,  
in 000€    2021      2020  

United States of America (USA)

     3,479        3,441  

Americas other than USA

     3,145        3,454  

Belgium

     61,444        62,810  

Germany

     57,817        58,305  

Poland

     12,822        13,437  

Rest of Europe

     9,307        9,087  

Asia-Pacific

     1,886        2,052  

Total

     149,900        152,586  

The totals of the above table includes goodwill, intangible assets and property, plant & equipment and Right-of-Use Assets as disclosed in the condensed consolidated interim statements of financial position.

 

25


14

Income and expenses

14.1 Revenue

14.1.1 Disaggregated revenue information

 

     For the three month period ended March 31, 2021  
in 000€    Materialise
Software
     Materialise
Medical
     Materialise
Manufacturing
     Total
segments
     Unallocated     Consolidated  

Geographical markets

                

United States of America (USA)

     2,727        8,568        2,202        13,497        —         13,497  

Americas other than USA

     100        860        20        980        —         980  

Europe (without Belgium) & Africa

     4,425        4,944        15,164        24,533        —         24,533  

Belgium

     145        348        1,236        1,729        (9     1,720  

Asia Pacific

     2,822        1,510        492        4,824        —         4,824  

Total revenue from contracts with customers

     10,219        16,230        19,114        45,563        (9     45,554  

Type of goods or service

                

Software revenue (non-medical)

     10,219        —          —          10,219        —         10,219  

Software revenue (medical)

     —          5,250        —          5,250        —         5,250  

Medical devices and services

     —          10,980        —          10,980        —         10,980  

Manufacturing

     —          —          19,114        19,114        —         19,114  

Other

     —          —          —          —          (9     (9

Total revenue from contracts with customers

     10,219        16,230        19,114        45,563        (9     45,554  

Timing of revenue recognition

                

Goods/Services transferred at a point in time

     4,636        11,640        18,161        34,437        (9     34,428  

Goods/Services transferred over time

     5,583        4,590        953        11,126        —         11,126  

Total revenue from contracts with customers

     10,219        16,230        19,114        45,563        (9     45,554  

 

     For the three month period ended March 31, 2020  
in 000€    Materialise
Software
     Materialise
Medical
     Materialise
Manufacturing
     Total
segments
     Unallocated     Consolidated  

Geographical markets

                

United States of America (USA)

     3,267        7,329        1,285        11,881        —         11,881  

Americas other than USA

     141        1,187        190        1,518        —         1,518  

Europe (without Belgium) & Africa

     3,652        4,329        18,028        26,009        —         26,009  

Belgium

     36        1,355        1,066        2,457        (36     2,421  

Asia Pacific

     2,725        1,445        245        4,415        —         4,415  

Total revenue from contracts with customers

     9,821        15,645        20,814        46,280        (36     46,244  

Type of goods or service

                

Software revenue (non-medical)

     9,821        —          —          9,821        —         9,821  

Software revenue (medical)

     —          5,007        —          5,007        —         5,007  

Medical devices and services

     —          10,638        —          10,638        —         10,638  

Manufacturing

     —          —          20,814        20,814        —         20,814  

Other

     —          —          —          —          (36     (36

Total revenue from contracts with customers

     9,821        15,645        20,814        46,280        (36     46,244  

Timing of revenue recognition

                

Goods/Services transferred at a point in time

     3,865        11,889        20,212        35,966        (36     35,930  

Goods/Services transferred over time

     5,956        3,756        602        10,314        —         10,314  

Total revenue from contracts with customers

     9,821        15,645        20,814        46,280        (36     46,244  

 

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The revenue per type of good or service is as follows:

 

     For the three month
period ended March 31
 
in 000€    2021      2020  

Software revenue (non-medical)

     10,219        9,821  

Software revenue (medical)

     5,250        5,007  

Medical devices and services

     10,980        10,638  

Manufacturing

     19,114        20,814  

Other

     (9      (36

Total

     45,554        46,244  

14.1.2 Contract balances

The following table provides information about receivables, contracts in progress (contract assets) and deferred income (contract liabilities) from contracts with customers.

 

     As of
March 31,
     As of
December 31,
 
in 000€    2021      2020  

Trade receivables, included in ‘trade and other receivables’

     33,446        32,345  

Contract assets / contracts in progress

     920        749  

Contract liabilities / deferred income

     37,640        34,797  

Non-current deferred income, representing mainly maintenance contracts with terms more than one year and certain contracts with up-front fees which are allocated to performance obligations that will be satisfied over more than one year, may be recognized as revenue between one to three years.

14.2 Payroll expenses

The following table shows the breakdown of payroll expenses for the three months ending March 31, 2021 and 2020:

 

     For the three month
period ended
March 31,
 
in 000€    2021      2020  

Short-term employee benefits

     (21,159      (23,201

Social security expenses

     (4,304      (3,821

Expenses defined contribution plans

     (317      (328

Other employee expenses

     (949      (2,532

Total

     (26,729      (29,882

Total registered employees at the end of the period

     2,205        2,196  

 

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14.3 Net other operating income

 

     For the three month
period ended March 31,
 
in 000€    2021      2020  

Grants

     1,103        1,036  

Other income

     509        523  

Doubtful debt expense

     29        (250

Depreciation PPA intangibles

     (396      (490

Other operating charges

     (125      (140

Total

     1,120        679  

At March 31, 2021, management performed its quarterly update of the expected credit losses on trade receivables, resulting in a favorable impact on the doubtful debt expense for the period.

 

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15

Earnings per share

Basic earnings per share amounts are calculated by dividing the net profit (loss) for the period attributable to ordinary equity holders of the parent company by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share amounts are calculated by dividing the net profit (loss) attributable to ordinary equity holder of the parent company by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on conversion of all warrants and the weighted average number of ordinary shares that would be issued on conversion of the convertible debt. If there is a net loss after taxes, the number of diluted shares is equal to the basic shares.

The net profit (loss) attributable to holders of ordinary shares used in the calculation of basic and diluted earnings per share for Q1 2021 was k€ (3,667) (Q1 2020: k€ (2,841).

All outstanding warrants are non-dilutive as per March 31, 2021 given the net loss for the period. There were no other potential shares outstanding as at March 31, 2021. The following reflects the share data used in the basic and diluted earnings per share computations:

 

     For the three month
period ended
March 31,
 
in 000    2021      2020  

Weighted average number of ordinary shares for basic earnings per share

     54,169        53,172  

Effect of dilution:

     

Share options

     —          —    

Convertible loan

     —          —    

Weighted average number of ordinary shares adjusted for effect of dilution

     54,169        53,172  

The earnings per share are as follows:

 

     For the three
month period
ended
March 31,
 
     2021      2020  

Earnings per share attributable to the owners of the parent

     

Basic

     (0.07      (0.05

Diluted

     (0.07      (0.05

 

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16

Commitments and contingent liabilities

No significant changes occurred during the first 3 months of 2021 relating to the mortgages and pledges nor in respect of litigations and commitments which have been disclosed in Note 24 to the 2020 consolidated financial statements.

 

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17

Related party transactions

During the quarter ended March, 31 2021, Materialise entered into arrangements with a number of its subsidiaries and affiliated companies in the ordinary course of its business. These arrangements relate to service transactions and financing agreements and were concluded at market prices. Transactions between the Company and its subsidiaries, which are related parties, have been eliminated in the consolidation and are accordingly not disclosed in this note. None of the related parties have entered into any other transactions with the Group that meet the requirements of IAS 24, ‘Related party disclosures’. We refer to Note 19 of these condensed consolidated interim financial statements for an overview of the subsidiaries.

 

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18

Events subsequent to the statement of financial position date

Ditto

As set out in Note 12, events and circumstances arose in the course of March and April 2021 that have caused Ditto to no longer meet the criteria associated with the loan agreement with Materialise, and that have created uncertainty about Ditto’s capacity to reimburse the previously extended loans and accrued interest according to the terms of Materialise’s agreement with them. Management determined that these events and circumstances provided additional evidence with respect to conditions that existed at March 31, 2021. Management therefore determined that these events and circumstances needed to be reflected in the determination of the fair value of the convertible note receivables for purposes of the interim financial information as at and for the three month period ended March 31, 2021 as detailed in Note 12.

Warrant exercises

In connection with the exercise of 1,350 warrants, representing 1,350 shares, from the 2015 warrant plan in the course of March 2021, the share capital was raised for the amount of €102.09 and the share premium was raised for the amount of €8,605.41 by deed before the notary on May 5th, 2021.

Impact of coronavirus

As of the date of this report, we are unable to predict the duration and severity of the spread of the coronavirus and the political and economic responses thereto and, as a result, we are unable to assess with certainty its impact on our business and operations, results of operations, financial condition, cash flows and liquidity during 2021 and beyond.

Link3D

On April 9, 2021 Materialise entered into a call option agreement to acquire 100% of equity interests of US based Link3D Inc., an additive workflow and manufacturing execution systems (MES) company. An acquisition would extend Materialise’s ability to help companies gain control of their manufacturing floor as they scale up their additive manufacturing (AM) capability into volume production and would allow Materialise to accelerate its roadmap to offer cloud-based access to its integrated software platform. An acquisition would also broaden Materialise’s industrial customer base across North America, Europe and Asia Pacific, and offer Link3D customers a seamless connection to Materialise’s Magics 3D print suite.

Under the terms of the agreement, the call option purchase price amounts to US$ 2 million. The call option can be exercised during the month of November of 2021. The call option exercise price in exchange for the 100% of the Link3D equity interests, equals the maximum amount of US$ 33.50 million against which the call option purchase price of US$ 2.0 million will be credited. In case Materialise elects not to exercise the call option, the option purchase price is not reimbursable.

Simultaneously with the call option agreement, Materialise and Link3D entered in an interim loan agreement, allowing Link3D to borrow additional funds up to US$ 1.8 million. Furthermore on basis of this interim loan agreement, the Working Capital Loan Agreement Materialise and Link3D entered into on February 4, 2021 pursuant to which Materialise loaned an aggregated amount of US$ 0.7 million to Link3D in the first quarter of 2021 has been extended together with the accrued interest up to April 9, 2021.

There are no other significant events subsequent to the statement of financial position date that would require adjustments or disclosures to the condensed consolidated interim financial statements.

 

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19

Overview of consolidated entities

 

Name    Country of incorporation    % equity
interest*
 
          2021  

Materialise NV

   Belgium      100

Materialise France SAS

   France      100

Materialise GmbH

   Germany      100

Materialise Japan K.K.

   Japan      100

Materialise Czech Republic SRO

   Czech Republic      100

Materialise USA, LLC

   United States      99

Materialise UK Limited

   United Kingdom      100

OBL SAS

   France      100

Materialise Austria GmbH

   Austria      100

Materialise Malaysia SDN. Bhd.

   Malaysia      100

Materialise Ukraine LLC

   Ukraine      100

RapidFit NV

   Belgium      83

Meridian Technique Limited

   United Kingdom      100

OrthoView Holdings Limited

   United Kingdom      100

Materialise SA

   Poland      100

Materialise Colombia SAS

   Colombia      100

RSPRINT powered by Materialise NV

   Belgium      100

Materialise Shanghai Co.Ltd

   China      100

Engimplan Engenharia de Implante Industria & Comércio Ltda

   Brazil      100

Engimplan Holding Ltda

   Brazil      100

Materialise Limited

   South-Korea      100

Materialise Australia PTY Ltd

   Australia      100

Materialise S.R.L.

   Italy      100

ACTech GmbH

   Germany      100

ACTech Holding GmbH

   Germany      100

ACTech, Inc

   United States      100

 

*

The overview provides the equity interest held as of 31 March 2021.

Materialise Limited (South Korea) was newly established October 30th, 2020.

 

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