Net other operating income increased by 192 kEUR to 1,971 kEUR compared to 1,779 kEUR for the fourth quarter of 2016. Excluding the impact of the ACTech acquisition, net other operating income decreased by 193 kEUR. Net other operating income consists primarily of withholding tax exemptions for qualifying researchers, development grants, partial funding of R&D projects and currency exchange results on purchase and sales transactions.
Operating result decreased to 1,466 kEUR from 1,915 kEUR for the same period in the prior year. Excluding the impact of the ACTech acquisition, operating result amounted to 990 kEUR. This decrease was the result of the 19.1% increase in operating expenses, which was offset in part by the 15.0% increase in gross profit. The operating result was also negatively affected by depreciation expenses, which increased to 4,488 kEUR (2,894 kEUR excluding the impact of the ACTech acquisition) from 2,280 kEUR for the fourth quarter of 2016, and by 343 kEUR of expenses related to the acquisition of ACTech.
Net financial result was (356) kEUR compared to 253 kEUR for the prior-year period. The financial result included (269) kEUR net financial expenses related to ACTech. Excluding the impact of the ACTech acquisition, the variances primarily reflected increases in interest expense on the company's financial debt and variances in the currency exchange rates, primarily on the portion of the company’s IPO proceeds held in U.S. dollars versus the euro.
Net profit for the fourth quarter of 2017 was 1,528 kEUR (1,253 kEUR excluding the impact of the ACTech acquisition) compared to net profit of 620 kEUR for the same period in 2016. The decrease in operating profit of 449 kEUR was offset by an increase of 777 kEUR in the company’s share in the result of a joint venture, and an increase of 1,189 kEUR in income tax. Total comprehensive income for the fourth quarter of 2017, which includes exchange differences on translation of foreign operations, was 1,319 kEUR compared to 685 kEUR for the same period in 2016.
At December 31, 2017, we had cash and equivalents of 43,175 kEUR compared to 55,912 kEUR at December 31, 2016. Cash flow from operating activities in the fourth quarter of 2017 was 7,368 kEUR compared to 4,180 kEUR in the same period in 2016.
Net shareholders’ equity at December 31, 2017 was 77,515 kEUR compared to 79,033 kEUR at December 31, 2016.
Full Year 2017 Results
Total revenues for the year ended December 31, 2017 increased 24.5% to 142,573 kEUR compared to 114,477 kEUR for the year ended December 31, 2016. Excluding the impact of the ACTech acquisition, revenues increased 15.8% to 132,608 kEUR. Adjusted EBITDA for the year ended December 31, 2017 was 15,138 kEUR, an increase of 60.1% compared to 9,458 kEUR for the year ended December 31, 2016 (an increase of 38.2% to 13,067 kEUR excluding the impact of the ACTech acquisition). The Adjusted EBITDA margin increased to 10.6% (9.9% excluding the impact of the ACTech acquisition) for the year ended December 31, 2017 from 8.3% for the year ended December 31, 2016. This increase was primarily the result of the combination of a 24.5% revenue growth (of which 8.7% was from ACTech), a 17.7% improvement in gross profit (of which 3.9% was from ACTech) and an increase of 14.5% (of which 3.4% was from ACTech) in operational costs in R&D, S&M and G&A, and a decrease in net other operating income of 581 kEUR.
Revenues from our Materialise Software segment increased 18.8% to 35,770 kEUR for the year ended December 31, 2017 compared to 30,122 kEUR for the year ended December 31, 2016. This growth was driven by a 23.8% increase in OEM sales and 15.1% increase in recurrent revenues from annual and renewed licenses and maintenance fees. The segment EBITDA margin was 38.9% in 2017, compared to 33.6% in 2016.
Revenues from our Materialise Medical segment grew by 13.0% for the year ended December 31, 2017 to 42,841 kEUR from 37,910 kEUR for the year ended December 31, 2016. Medical software growth was 16.5%, and revenues from medical devices and services increased 11.1%. The segment EBITDA margin increased to 10.3% from 2.4%, primarily as a result of the combination of revenue growth and limited increases in operating expenses, as well as increased other operating income.
Revenues from our Materialise Manufacturing segment increased 37.3% to 63,712 kEUR (15.8% to 53,747 kEUR excluding the impact of the ACTech acquisition) for the year ended December 31, 2017 from 46,406 kEUR for the year ended December 31, 2016. Revenue from end parts increased by 34.4%. The segment EBITDA margin decreased from 8.3% in 2016 to 7.8% in 2017. Excluding the impact of the ACTech acquisition, the segment EBITDA margin decreased to 5.4%, primarily as a result of the lower gross margin and the increase in operating expenses.
Net loss improved from (3,019) kEUR for 2016 to a net loss of (1,656) kEUR for 2017.
Mr. Leys concluded, “The additive manufacturing market continues to
evolve, particularly in the direction of end part production, and we
intend to continue positioning Materialise to benefit from this
promising growth market in the coming years. In 2018, we intend to give
particular attention to the significant partnerships that we have
entered into and to the strategic initiatives that we have launched over
the previous years. Simultaneously, in 2018 we will continue to sustain
our leadership position in software through continued innovation and
strategic partnerships; to drive the next stage of growth in our medical
segment, including by entering into partnerships and rolling out our
software and planning backbone; and to continue increasing our
manufacturing of complex and unique parts. We anticipate delivering
sales and Adjusted EBITDA margin expansion in 2018 while reinvesting
efficiency gains in selected business development initiatives.