Good day and welcome to the second quarter and half year 2026 Materialized NV Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, you will need to press star 1-1 on your touchtone telephone. Please note this call may be recorded. I would like to turn the call over to Jody Burfening, Alliance Advisors and Best Relations. Please go ahead.

Thank you, Michelle, and thank you, everyone, for joining us today for Materialise's quarterly conference call. With us on the call are Brigitte de Vet-Veithen, Chief Executive Officer, and Koen Berges, Chief Financial Officer. Today's call and webcast are being accompanied by a slide presentation that reviews Materialise's strategic, financial, and operational performance for the second quarter and first half of 2026. To access the slides, if you have not already done so, please go to the investor relations section of the company's website at www.materialize.com. The earnings press release that was issued earlier today can also be found on that page. Before we get started, I'd like to remind you that management may make forward-looking statements regarding the company's plans, expectations, and growth prospects, among other things. These forward-looking statements are subject to known and unknown uncertainties and risks that could cause actual results to differ materially from the expectations expressed, including competitive dynamics and industry change. Any forward-looking statements, including those related to the company's future results and activities, represent management's estimates as of today and should not be relied upon as representing their estimates as of any subsequent day. Management disclaims any duty to update or revise any forward-looking statements to reflect future events or changes in expectations. A more detailed description of the risks and uncertainties and other factors that may impact the company's future business or financial results can be found in the company's most recent report on Form 20F filed with the SEC. Finally, management will discuss certain non-IFRS measures on today's conference call. A reconciliation table is contained in the earnings release and at the end of the slide presentation. With that, I would now like to turn the call over to Brigitte. Good morning, Brigitte. Good morning and good afternoon.

Thank you, everyone, for joining us today. You can find the agenda for our call on slide three. First, I will summarize the business highlights for the second quarter of 2026. Then I will pass the floor to Koen, who will take you through the second quarter and half-year financials. and finally I will come back and explain what we expect the remaining months of 2026 to bring. When we've completed our prepared remarks we'll be happy to respond to questions. Moving to slide four for the highlights of the second quarter 2026. I'd like to open by drawing your attention to our first half-year report now available on our investor relations website. This report reflects our compliance with the European reporting requirements. requirements that, as announced in our first quarter earnings call, led us to deliberately schedule this second quarter earnings release later in the quarter. I'm also pleased to announce some changes in our executive committee taking place as of early September. Those changes will further strengthen our leadership team and strategy execution. Annelies Misothen will join us as Chief Human Resource Officer to further strengthen our human resource agenda. Annelies brings more than 30 years of international HR leadership experience with a strong record in shaping people and organization strategies that support business growth, transformation, and employee engagement. Throughout her career, she has worked primarily in the life science sector as well as in telecom and fast-moving consumer goods in both Belgian and international environments. Most recently, Annelies served as CHRO at Galapagos, now a lakefront biotherapeutics, where she acted as a strategic advisor to the CEO and executive committee and led the HR function across all disciplines in an international setting. She played an important role in supporting the company through periods of growth, transformation, and organizational change, while also strengthening HR as a strategic partner to the business. She brings a wealth of experience, strong energy and a people-centered leadership style that will help us further our people agenda across the organization. Second, Filip Verlinde will join us in the newly created role as Chief Digital and Information Officer. This new role reflects the strategic importance of digital capabilities to simplify, scale and execute more effectively. Philip brings more than 35 years of experience in technology, digital, and transformation leadership. He spent 26 years at Philips, and most recently, he served as the Chief Digital and Information Officer at Barco, where he led IT and software across the global footprint. Throughout his career, he led large-scale technology, product, and digital transformation initiatives across engineering, consumer electronics, and healthcare technology, He brings deep experience in cloud and connected platform capabilities as well as AI to further drive our digital agenda across our units and markets. We are also making a leadership change in medical. Our medical unit is delivering strong results as evidenced by the strong growth this quarter. In addition, we see significant opportunities ahead. To fully capitalize on these opportunities, we have decided to look for a new leader for the medical segment, and Koen Peters will leave the company in September. The second quarter also marked the 30th anniversary of Materialise in the United States, a market that has been central to our growth strategy from the beginning. Over the years, we made several strategic acquisitions in the US, including OctoView, the market leader in orthopedic digital preoperative planning software, Link3D, an additive workflow and digital manufacturing software company, and Identify3D, a company that develops software to encrypt, distribute, and trace the flow of digital parts across complex supply chains. Today, we are one of the leading players globally, and our US office and team have been very instrumental in our global success. Looking now further at our business segment highlights at the second quarter on slide five. starting with medical. In the second quarter, we saw further evidence of the growing maturity of personalized theater and 3D printing during the eighth edition of our 3D planning and printing hospital forum in Høven, where we welcomed around 200 surgeons, radiologists, clinical engineers from hospitals across Europe and beyond to discuss the use of 3D printing in the hospital. What stood out in this year's discussion was the clear shift from what is the value of personalized 3D solutions to how can we scale this in clinical practice. The continued rise of in-house hospital 3D labs is evidence that 3D printing is becoming more established and operational. Now the discussions also confirm that Materialise is at the center of this trend. Not only as a software and service provider, but as a long-term partner helping hospitals integrate personalized care more broadly into daily practice. In the second quarter, we also announced an investment in Replasia, a Belgian medtech startup developing personalized 3D printed solutions and anatomical analysis software for hip preservation. Our goal is more personalized, less invasive orthopedic treatments that help patients maintain their natural anatomy and their quality of life for as long as possible. Our current hip portfolio is focused on replacement. Strategically, the investment in Replasia strengthens our position across the full spectrum of personalized hip care and complements our existing portfolio to hip preservation solutions. Preservation will play an important role as the market shifts towards less invasive approaches. A similar shift to less invasive approaches is happening in markets outside of orthopedics. One example in CMF, cranio-maxillofacial, is minimally invasive orthognathic surgery, or MIOT, a technique that allows surgeons to perform jaw surgery through smaller incisions. Smaller incisions mean that more patients will opt for surgery. At the same time, smaller incisions require a high level of precision during the surgery, and that is an area where materialize is well positioned with our software and device portfolio. The strong proof point of our position was the international MIOS meeting in Brazil in June, which brought together more than 200 maxillofacial experts from 13 countries, and where we trained surgeons in hands-on cadaver labs performed the surgeries in a safe and effective way. Turning now to software. In the second quarter, we officially released CoEM Pro to the market on May 15th, one month ahead of schedule. CoEM Pro is our cloud-based solution integrated with Magix that brings EM data management and build preparation together in one workflow, making it easier for teams to collaborate Standardize processes and automate recurring tasks. It centralizes AM data if it uses one source of the truth of the data across themes. We also formally released the GoEM Bricks offering, our automation platform that helps users reduce manual work, for example in the new product introduction process, and helps embed AM know-how more easily into their daily operations. Early customer onboarding since launch gives us encouraging initial validation of the offering. In addition, we have started the early adopter programs of CoEM NCI and CoEM Enterprise. Together, these steps mark the structural expansion of our metrics installed base into a connected platform that grows with customers over time. Turning to manufacturing now. Following the agreement we announced at the end of the first quarter, we completed the transfer of our RapidFed business to its management team on April 30th and the transfer of our iWare business on July 1st. With these closings, both businesses now continue independently under their existing leadership with greater focus and flexibility to pursue their next phase of growth. For materialized, These completed transactions are an important step in sharpening our portfolio and concentrating capital, resources, and leadership attention on the business lines with the strongest long-term scaling potential. In the case of eyewear, we retain a 20% minority stake, reflecting our continued confidence in the business. Looking at the second quarter results in manufacturing, aerospace remains a strong growth area of ours, with 40% revenue growth realized in the second quarter. This reflects our strong position in this space. A good example of our capabilities is a recent project with Lufthansa Technik. The project involved a small part in an aircraft cabin component that repeatedly failed in service and could not be sourced individually, meaning the entire assembly had to be replaced each time. By redesigning their part for additive manufacturing and producing it as a certified stand-alone component, Lufthansa Technik was able to turn a costly retiring replacement into a faster and significantly more cost-effective repair. Following this project, Materialise was named an official workbench for Lufthansa Technik Metal Parts, an important proof point of the trust we have built in certified aerospace production. Also, in the second quarter, we continued to build momentum in the defense market. Additive manufacturing can provide real value in defense by enabling spare parts and critical components to be produced closer to where they are needed, reducing dependence on vulnerable supply chains. With our combination of software and manufacturing capabilities, Materialise is well positioned to support that shift. In the second quarter, The Belgian Cyber Force and the Royal Higher Institute for Defence selected Materialise to lead a research consortium with Siris and InnoGom called Strike IT. The project focuses on secure and reliable digital manufacturing of spare parts, ensuring that digital files remain protected throughout the production process. Our identified 3D and QEM technologies will be instrumental in this project to build trust in additive manufacturing for mission-critical environments, like defects, and help make digital supply chains more resilient. Turning over to Koen now, who will present the financial results.

Thank you, Brigitte. Good morning or good afternoon to all of you on this call. I will begin with a brief overview of our key financial results for Q2 of 2026, shown on slide 6. In the second quarter, we delivered broad-based growth across the business, with consolidated revenue growing by more than 8% year-on-year to €70.1 million. Gross profit increased to €39.8 million, resulting in a gross margin of 56.8%. Importantly, profitability continued to scale faster than revenue, with adjusted EBIT reaching now 3.9 million euro and our adjusted EBIT margin expanding to 5.5%, reflecting stronger operating leverage across our business. Net profit for the quarter amounted to 3.3 million euro or 6 euro cents per share. Our balance sheet and cash generation remain key strategic strengths. supported by strong operating cash flow and continued debt reduction we increased our net cash position to 74.2 million euro up 3.4 million compared to the start of the year we also continued our share buyback program investing 5.2 million euro during the first half of 2026 I will now walk you through these results in more detail as a reminder All comparisons are versus the second quarter in the first six months of 2025. Slide 7 provides an overview of our consolidated revenue. In Q2 2026, ASEP consolidated revenue reached €70.1 million, up by 8% compared to the same period of last year. Growth continues to be led by medical with revenue increasing by more than 12% in another quarter of double digit expansion, reinforcing its position as our primary growth engine. Also, manufacturing grew by nearly 7% year over year, reflecting the benefits of our strategic repositioning towards higher value series manufacturing. Software, on the other hand, declined by 3%. reflecting cautious customer spending and extended sales cycles in the current industrial environments. Although the high level of recurring revenue continues to support resilience of our business model. As shown on the right hand side, medical represented 53% of total revenue in Q2 with manufacturing at 34% and software at 14%. For the half year 2026, our revenue totaled 36.3 million euro, up by nearly 4% compared to the same period last year. Our deferred revenue balance for software maintenance and license fees, coming from both medical and software, decreased in Q2 to 46.5 million, but in line with normal seasonal renewal patterns. The total deferred revenue reported on our balance sheet stood at 63 million at the end of the second quarter. Turning now to slide 8, I'd like to highlight the progress we continue to make in profitability. In the second quarter, adjusted EBITDA reached €9.6 million, an increase of almost 16% year-on-year, resulting in an adjusted EBITDA margin of 13.7%. Adjusted EBIT improved to €3.9 million compared to €3.1 million in the prior year quarter, resulting in a 5.5% adjusted EBIT margin. For the half year, adjusted EBITDA rose to €17.6 million, representing a margin of 12.9%, while adjusted EBIT increased sharply to €6.4 million, representing a margin of 4.7%. This clear margin expansion reflects revenue growth, disciplined cost management, operational efficiencies and a sharper focus on our core growth segments as we execute our strategy across our various business units. These results once more demonstrate the resilience of our business model and our ability to improve profitability despite the still challenging macroeconomic environment. Let me now turn to our business segments starting with materialized medical as shown on slide 9. Medical revenue increased by more than 12% year-on-year. That growth was primarily driven by medical devices, which grew 19% across our partner and direct sales channels, partly offset by a minus 4% realized in our medical software segments. Adjusted EBITDA increased to 11.6 million, representing a strong 31% EBITDA margin, while we continued to increase targeted R&D investments to support future growth opportunities. For the half year, medical segment revenue increased by nearly 10% to €70 million, with adjusted EBITDA reaching €20.8 million at a consistent margin of 30%. Slide 10 summarizes the results of our materialized software segments. In Q2 2026, software revenue decreased as set by 3% to 9.6 million euro. Reflecting the cautious customer spending and extended sales cycles, we continue to see the current industrial environments. During the quarter, 86% of our software revenue can now be considered to be recurring, while we are approaching the final stages of our transition from perpetual licenses to recurring subscription model. Adjusted EBITDA, EQ2 showed a decline to €1 million, reflecting the impact of low revenue combined with ongoing investments in our new product functionality. As already mentioned by Brigitte, EQ2 fully launched CoAM Pro ahead of plan, and this release marks an important strategic milestone for our future growth. For the half-year software segment, revenue totaled €19.2 million, 2% below 2025. Despite softer revenue, profitability improved with adjusted EBITDA for the first half reaching 2.1 million euro representing a margin of 10.9%. Turning now to slide 11, the slide covers art manufacturing segments. Manufacturing revenue increased nearly 7%. to 23.6 million euros despite the unfavorable revenue impact of the rapid fit divestment. The return to growth reflects continued traction in our strategic focus segments, particularly aerospace and defense. This growth in series manufacturing was still partly offset by continued weakness in prototyping the mounting Q2. Alongside top line growth, disciplined cost control drove an improved adjusted EBITDA, landing now at minus 0.3 million euro compared to minus 0.8 million euro in the prior year periods. This improvement demonstrates that our cost actions and portfolio optimization efforts are beginning to translate into improved operating performance. For the half year, the manufacturing revenue remains fairly stable. climbing only slightly to 47.1 million euro with an adjusted EBITDA improving to break even. During the quarter we successfully completed the divestment of Rapid Fit and announced also the sale of our eyewear business which in the meantime was successfully closed on July 1. The latter was recorded as an asset held for sale in our consolidated Q2 financials. with 0.7 million euro of asset impairments impacting that we adjusted for. These actions sharpen the strategic focus of our manufacturing segment and allow us to allocate our capital and resources towards core growth priorities. With the segment results now covered, slide 12 outlines our consolidated income statement, showing the drivers behind our improved profitability. Gross profit increased to 39.8 million euro with the gross margin remaining fairly stable at 56.8%. Operating expenses in the quarter increased by 3.9%, reflecting targeted growth investments while maintaining our overall cost discipline. We continue to invest in innovation with total R&D spending exceeding 12 million for the quarter. which reflects an increase of 11% year-on-year. For the half year, total operating expenses increased by only 2% compared to the prior year periods, with the increase again driven by higher R&D investments, while G&A and F&M remained stable. Other operating income decreased in the quarter to €0.8 million compared to €1.3 million last year, The Q2 2026 figure includes non-recurring charges of €0.7 million related to an asset impairment on the transfer of eyewear. As a result of all this, operating profit reached €2.8 million for the quarter. For the half year, this figure stood at €4.9 million versus €3.3 million in the first half of 2025. This improvement reflects the combined impact of revenue growth, stronger operational execution and disciplined cost management. The net financial income for the quarter was limited to €0.2 million, driven by interest income on cash balances and interest expense on debts. The impact from currency fluctuations remained limited in Q2 of this year. Income tax benefits amounted to €0.3 million. Overall, this resulted in an increased net profit of 3.3 million euro or 6 euro cents per share. For the half year, net profit totals 5.1 million euro or 9 euro cents per share. Finally, let's review now our balance sheet and cash flow position, which remains a key strength for MaterialEye on slide 13. Our cash reserve at the end of the quarter amounted to 133.7 million euro, while our gross debt was further reduced to 59.5 million euro. Our resulting net cash position increased to 74.2 million, up by more than 3.4 million euro compared to the beginning of this year, primarily driven by strong operating cash flow generation. At the same time, we invested 5.2 million euro over the first six months of this year to our share buyback program on Nasdaq, acquiring close to 1.1 million ADSs, representing 1.8% of our total share base by June 30, 2026. Compared to the balance sheet at year-end 2025, networking capital components increased by 3.9 million driven by higher inventory levels of finished products and work in progress, higher receivables and lower outstanding payables. Deferred income increased to 62.6 million, including 46.5 million euro related to software licenses and maintenance. As you can see from the graphs on the right side of the page, the operating cash flow in the second quarter amounted to more than 8 million euro. Capital expenditures total 2 million euro, almost all of which is recurring. Even with continued investments in growth initiatives, we again delivered solid free cash flow generation in this quarter, with cash flow after investing activities amounting to 5.6 million euro. For the half year, operational cash flow was 50 million euro, significantly up from the same period in 2025. Combined with lower CAPEX, this resulted in a free cash flow of more than €11.4 million, almost a double of last year. For the first half of 2026, CAPEX totaled €3.4 million and remained well below prior year levels. Recurring CAPEX of €2.7 million was primarily focused on machinery while non-recurring CAPEX fell to €0.8 million, primarily reflecting investments in our internal digital transformation programs. And with that, I'd like to hand the call back to Brigitte.

Thank you, Koen. Let's now turn to page 14. My remarks were the discussion of our full year 2026 guidance. Our solid first half-year performance reinforces our confidence in delivering on our financial targets. The strategic actions we are taking to sharpen our portfolio and to focus on strategic growth segments Combined with the targeted investments we are making across our three segments are enhancing operational performance and positioning materialized for profitable growth. Accordingly, we are reaffirming our full year 2026 revenue guidance of €273 to €283 million, fully absorbing the expected unfavorable revenue impact of the rapid fit and eyewear divestment. At the same time, We are increasing our fully adjusted EBIT guidance to 12 to 14 million euro from the earlier communicated range of 10 to 12 million euro, reflecting the strength of our execution and our continued discipline in managing costs and capital. This concludes our prepared remarks. Operator, we are now ready to open the call to questions.

Thank you. As a reminder, if you'd like to ask a question, please press star 1 1. If your question has been answered and you'd like to remove yourself from the queue, please press star 11 again. Our first question comes from Alexander Cremiers with Kepler Chevro. Your line is open.

Hey, good afternoon. Thank you for taking my question. So the first one would be on medical. So we saw a reacceleration to 12% year-on-year growth in Q2. and that came after that software Q1. So I'm wondering what changed sequentially and can we hold up this double digit growth? I know that's the target but can we expect it to be sustained in H2 and also in 2027 perhaps? And then maybe a related question on this would be if I look at the underlying drivers, you know, we see medical software Down 5% and then devices and services increasing 19%. So the question on this is how do we need to look at this? It is basically less customers trying to make the design themselves and opting to outsource the design service to you and hence there is less need for software. So that's the question on medical. Then the second question I have it would be on basically Thank you very much.

Good afternoon, Alexander. Thanks for your questions. I'll kick us off with a question on medical. I have previously always said that the structural growth rate for medical is double-digit but low-digit. So reasonably, a sustainable growth number that I would expect for medical is around 10%. which is essentially what you see for the first half of this year. And that is absolutely sustainable. And of course, you know, there can be quarter-for-quarter differences, which again, you know, it can be what you think, but it can be one into two numbers, and that purely has to do with a couple of timing impacts. Now your question on the underlying drivers. So we do indeed see software revenue, and stronger device and service revenue. There's a couple of elements that explain that. One of the primary elements is on the software side, We have an academic segment that we serve, and in particular in the US. So those are academic centers that use our software to train their students, but also to do research based on our products. In the US in particular, research grants have been reused for the last year. and we see the impact of that in our software sales. So that's the segment that we serve with our software portfolio but not with our device and service portfolio. So that's the structural difference between those two segments. The second aspect that we need to take into account is the domains in which we are playing and in which our software is used, which are slightly different from the market segments in which the device and services are positioned and are used. and of course these different market segments, and then I talk about the national metal areas, they are subject to different trends in reimbursement, hence also affordability. And our software products historically have been positioned a little more, very strongly on the orthopedic side, which is Again, particularly in the US, a segment where reimbursement changes have led to a bit more cautiousness from our customers' side, and that's what we feel in our software revenue. So those are the underlying drivers that differentiate our software segment from our device and services segment. and I'll hand it over for Koen to tackle your second question on the 2026 EBIT guidance and the fact that you mentioned that we already delivered 6.4 million in the first half of the year.

Alexander, good afternoon. To add to that, to answer that question I think indeed what we've been able to demonstrate the first half of this year I think that we have been able to improve our profitability expressed as EBIT or EBITDA percentage we believe that is also largely driven by the fact that we have been able to reduce our cost structure We are counting to continue them as well going forward. If you do an extrapolation of the current realized EBIT in the first half of the year, you would end somewhere in the middle of the guidance range that we put forward now. and there is of course some seasonality in the quarters the fourth quarter is typically a stronger quarter we hope to have that as well this year of course but on the other hand the summer quarter in the third quarter typically is then maybe a bit of a softer quarter typically if you look over the trend over the past years so by probably those will compensate each other to a certain extent and that's why we We see for ourselves a slamming in the range between 12 to 14 million euro of EBIT over the full year.

Does that answer your questions Alexander?

Yes, I'll leave it at that. Thank you both for answering my questions.

Thank you. Our next question comes from Guy Sips with KVC Securities. Your line is open.

Yes, first of all, congratulations with the very good results. You highlighted encouraging early adoption of QoAM professional and launched early adopter programs for QoAM NPI and enterprise and expanded your partnership with HP. Could you share how you see these initiatives contributing to software growth and recurring revenues over the next few years? Thank you.

Yes, thank you for your question, Keith. So it's a very valid question because the whole CoEM program is a strategic move, as you know, that we made a couple of years ago and that we are driving as we speak with those three offerings, the CoEM Pro, CoEM NPI, and CoEM Enterprise offering. Now, the way you need to look at this program and the shift that we are making is really on the basis of our installed base of magic, We bring additional capabilities to the market and are packaged in those three offerings, Pro, NPI and Enterprise. Now in particular, NPI and Enterprise for us will be growth drivers. Why? Because we position in those segments where companies have understood the value of additive manufacturing and are now in a need for capabilities to help them scale. And that is exactly what NPI and Enterprise are trying to do. So as an example, in the aerospace or defense segment, where the value of additive is well established users already have a base of additive manufacturing they now want to get to the next level scale do more and more parts with it that's where the NPI and the enterprise capable come in so those will be driving our growth going forward the pro offering is a step into the CoEM offering as a first step, which is a critical one because we want to get customers onto our cloud platform, but the major growth drivers will come from NPI in enterprise.

Does that answer your question?

Yes, thank you. Yes, thank you.

Thank you. I'm showing no further questions. I'd like to turn the call back over to Brigitte de Vet for closing remarks.

Thanks again for joining us today. We look forward to continuing our dialogue with you during VECFA conference or in one-on-one virtual meetings and calls. And in the meantime, please reach out if you have any questions. Thank you and goodbye for now.

Thank you for your participation. You may now disconnect. Good day.