Q4 2023 Materialise NV Earnings Call
Good day, and thank you for standing by and welcome to Q4, 2023 material last 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.
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Please be advised that today's conference is being recorded I would like now to turn the conference Overcharged first speaker today, Let me please introduce Harriet freed up L. H eight. Please go ahead.
Thank you everyone for joining us today for Materialise. This quarterly conference call with us on the call, but he tested that chief Executive Officer.
Couldn't vouchers Chief Financial Officer.
Today's call and webcast are being accompanied by a slide presentation that reviews, Materialises strategic financial and operational performance for the fourth quarter of 2023 as well as the year 2023 as a whole to.
To access the slides if you've not done so already please go to the Investor Relations section of the company's website at Www Dot materialize Dot 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 companys plans expectations and growth prospects among other things.
These forward looking statements are subject to known and unknown uncertainties and risks.
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 managements estimates as of today and should not be relied upon as representing their estimates as of any subsequent date.
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 companys future business or financial results can be found in the company's most recent annual report on form 20-F filed with the SEC.
Finally management will discuss certain non <unk> measures on today's call. A reconciliation table is contained in the earnings release and also at the end of the slide presentation.
And now I'd like to turn the call over to proceed to Tibet Brigitte Huh.
Good morning, and good afternoon, and thank you everyone for joining us today I'm very pleased to present, our quarter four and full year 2023 results today you.
You can find the agenda for our call on slide three.
Now as you know I took over the role of the CEO of Materialise on January 1st.
So before we go into the official agenda I actually will start sharing my first observations six weeks into this role.
I will then summarize the highlights of our financial results for the fourth quarter and the full year 2023, and it will dive deeper into some key achievements, we realized in the past year.
Then I will pass the floor to Horton.
We will go into more detail through our fourth quarter numbers.
Finally, I will come back and explain what we expect 2024 to bring.
When we've completed the RP battery remarks, we'd be happy to respond to questions.
So to start with.
Over the last couple of weeks I've spent a lot of time listening and learning from customers partners and industry stakeholders and our employees that materialize.
First.
Let me reflect on what I heard about the market for additive manufacturing.
No 2023, and in particular Q4 has been a challenging year for many players in this market.
Rising geopolitical instability in combination with increased economic uncertainties and high interest rates makes companies more hesitant to invest in new technologies.
The R&D efforts were often also reduced resulting in less prototyping demand.
That being said.
The fundamentals of the market are sound driven.
Driven by the demand for flexible sustainable and cost effective production methods.
A M is the go to technology for prototyping and this market is very mature.
At the same time the shift from prototyping to end use product is well underway and additive manufacturing is being adopted in more and more sectors and applications.
So this shift is especially clear in end use parts at our customized suggests.
So just a personalized products for medical applications.
And as the adoption of personalized information increases this market will continue to grow.
Next to this we are also seeing an increased adoption of additive manufacturing facility will end use parts.
We can clearly see this for example in the Irish space sector.
Our space is a good example, where leading companies have adopted three D. Printing is a critical competence to maintain their competitive edge in the industry, enabling the production of bonds that could not be traditionally manufactured.
M allows for the creation of more robust reliable structures that are both cost cost and weight efficient and it speeds up to these items manufacturing doses.
Moreover, am aligns with our commitment of leading players in this segment to sustainability.
Less energy and resources, creating fewer emissions.
For ease of recycling and reuse of waste materials and as the technology matures, we will see more and more meaningful applications over him and we believe this market is bound to continue to grow.
Now talking to many customers partners and industry stakeholders.
It is clear that materialize is a leading player in this industry.
We are strategically well positioned with our deep know how just all the understanding of the customer needs and the unique combination of software hardware and mindful here.
We are well placed to drive and benefit from the market trends.
Just described.
First as additive manufacturing is increasingly used for cereal end use parts I believe we are well placed to benefit with our software suite, enabling efficient high quality M operations at scale.
And with our differentiating printing services.
Ablin companies, making the shift to end use parts.
And second is the adoption of personalized and use products increases we will see growth in our medical and wearable business.
Now looking specifically at our results for 2023 summarized on page four we can see this potential reflected in our 2023 numbers.
Despite the difficult market conditions that I referred to.
Grew our revenue over the year by 10% with growth across all segments.
Our total revenue increased 10, 4% to $256 1 million.
Adjusted EBITDA increased 65% to $31 4 million Euro from 19 million Euro in 2022.
Net results turned into a net profit of.
A $6 7 million from a net loss of $2 2 million in 2022.
And our cash position as well.
And was $127 6 million euro.
Now for the fourth quarter, specifically, our revenue increased four 1% to $65 3 million Euro.
Deferred revenue from maintenance and licenses fees grew to $44 9 million Euro and adjusted EBITDA, almost doubled to $8 5 million or 13% of revenue.
Net loss was minus your important 5 million Europe.
Minus one <unk> per share, including the impact from impairment on goodwill tangible and intangible assets of minus $4 2 million.
Boonville either birth elaborate further on these results in his remarks later in this call.
Moving to slide five I would now like to share some specific highlights by segment.
Starting with our software segment.
Our software suite is an essential tool kit in the am industry.
And with the additions and improvements made in 2023, we are helping to accelerate the shift to end use products that I described.
Our Korean platform pleasing, particularly critical role in this shift is it enables companies to run a M production at scale.
With 2023, we have continued to onboard partners and add functionality to OEM in.
In the fourth quarter alone, we announced important partnerships with HP and ounces.
We added functionality that helps monitoring production and ensures the quality of parts.
Also for matrix, we have released new functionality, specifically targeted at metal production, which obviously plays a critical role in the production for end use parts.
And last but not least.
We released the next generation I'll go build processors massively increasing machine performance and ultimately reducing cost of parts critical and the adoption of am and the production of end use parts.
This continued investment in the software segment.
Strengthens our future position in the market for end use parts even further.
And while the top line growth in 2023 was soft due to the general economic uncertainty, we feel well positioned for the moment when the market recovers.
Continuing now with all our manufacturing segment.
Oh I am services are what a well established provider of prototyping services and we continue to perform well in this market. Despite a very challenging environment due to the macroeconomic and geopolitical uncertainty.
At the same time and services can help customers make first steps into a M for end use parts and this market is going in selected segments, such as Rsp's medical equipment and Wearables.
Realizing that there's a growth opportunity for us in this market. We have established our certified manufacturing services offering customers documented invalidated box production, which clearly differentiates us in the market.
It's one of the largest and most complete <unk> facilities in Europe, we are well versed in scaling production to the next level for our customers.
With a comprehensive range of production grade materials and technologies, a team that knows how to use them political unmet polymer and metro competence centers and more.
We can fully support customers that want to embrace a M for end use products.
And while the second half of 2003 was challenging given the market circumstances. We are proud to have made progress in some of the key market segments, such as the aerospace segment.
We announced a number of important partnerships for example, with GKN aerospace a leading multi technology tier one aerospace supplier and later in the year a three year partnership a three party partnership with proponent of large independent Rfps distributor in Sterling dynamics are certified aerospace design.
In addition in those partnerships, we will leverage the combined expertise the expertise to enhance the adoption of three D printing for final parts in aerospace industry.
We also continue to make investments in our motion and eyewear business positioning us for further revenue growth in the future in the wearable segment.
Last but not least I want to talk about some highlights of our medical segment.
At Scone will show in the numbers, we continue to see very healthy growth in our medical segment.
We have now surpassed the threshold of 100 million revenue and while we felt the impact of the difficult economic climate in the software sales towards medical device companies and David used the R&D programs and postponed investments in additional software licenses. We continue to grow the number of cases deliver to patients around the world.
And managed to increase revenue by almost 20% for the full year.
In addition, we made progress in some of our strategic programs positioning us very well for our future growth.
Particularly I would like to highlight the opening of our metal manufacturing plant in the U S. This is a significant milestone as it will enable us to further reduce our lead times to deliver cases opening up new markets such as the use of personalized products with chroma patients. These patients cannot afford to wait for weeks to have the product delivery.
Yeah.
I would also like to highlight the limited launch of mimics flow of case management solution now offered to hospitals to streamline and organize their point of gas we did printing less.
The adoption of <unk> printing in hospitals at the point of care increases customers needed tools to handle this increased amount of cases in an efficient way to collaborate in an easier way between clinicians, it's really lap leaders and engineers and to enforce quality management within that three D. Workflows. This is what mimics.
<unk> dos, thereby enabling and accelerating the increased adoption of personalization is an extension of our offering and will provide growth opportunities in the future.
It is a limited launch and we will take the year 2024 to learn more about the potential of moving slow and expand to launch two other segments.
<unk> it.
25.
In summary.
Our medical segment illustrates the potential of a smart combination of hardware and software with a thorough understanding of the customer's needs.
Now over to <unk> for more details on our financial results.
Thank you Brito.
I'll begin with a brief review of our consolidated revenue on slide six.
As a reminder, please note that unless otherwise stated I will discuss fourth quarter and full year 2023 results to comparable periods of 2022.
And the last quarter of the year, we increased our revenue by four 1% to $65 3 million Euro.
Less favorable market conditions continued and mainly impacted our manufacturing segments and to a lesser extent also our software segment, resulting in a revenue decrease of 2% and 4% respectively.
Materialise medical on the other hand continued to grow by double digits and increased its revenue by 15%.
Materialise software accounted for 17% of our total revenue.
Serialized manufacturing for 14th in Materialise medical for 43%.
Deferred revenues from software maintenance and license fees grew again in the last quarter of 2023 by $4 8 million, bringing the total amount carried on our balance sheet to $44 9 million at the end of the year.
For the full year, our revenue grew to $256 1 million, representing an increase of 10, 4% compared to 2022.
We saw growth in all three of our business segments during the year with largest growth coming from medical which posted a 20% year on year growth rates. Our manufacturing segment grew its revenue by almost 7% and software by 2%.
Moving now onto slide seven you will see our consolidated adjusted EBITDA numbers for the fourth quarter as well as for the full year.
Consolidated adjusted EBITDA for the fourth quarter amounted to $8 5 million euro doubling from the $4 3 million Euro in 2022.
Our adjusted EBITDA margin reached 13% compared to six 8% the prior year.
Full year adjusted EBITDA ended at $31 4 million compared to 19 million Euro in 2022, representing an increase of 65%.
Our adjusted EBITDA margin for the full year reached 12, 3% compared to eight 2% last year.
Slide eight summarizes the results of our Materialise software segment.
In the fourth quarter software revenue decreased as mentioned by almost 4% to $11 3 million Euro but included more revenue deferral.
Our recurring revenue from software maintenance and license sales, including co am increased again by 5%.
On the other hand, non recurrent revenue further decreased by 16% driven by the transition from perpetual license sales to cloud and subscription based agreements, but also by lower demand from OEM machine sales.
Adjusted EBITDA increased to $1 3 million euro representing an adjusted EBITDA margin of 11, 2%.
On a full year basis, our software segment increased its revenue by 2% to $44 4 million Euro which translated into a significantly higher adjusted EBITDA of seven 5 million Euro.
Representing an adjusted EBITDA margin of 16, 8%.
Moving now onto slide nine you will notice that the quarter's total revenue in our Materialise medical segment increased 15%.
This solid growth rate was realized both by medical software and by revenue from medical device sales, which grew respectively by 13% to 60%.
Adjusted EBITDA grew to $9 4 million compared to $6 4 million Euro last year. The EBITDA margin increased to 33, 6% as a result of scaling effects.
On a full year basis, our medical segment surpassed the 100 million Euro thresholds, realizing now $101 4 million Euro of revenue, which is being translated into an adjusted EBITDA of $26 5 million Euro.
Presenting an adjusted EBITDA margin of 26, 2%.
The share for medical software revenue remained stable around 31% of the total segment's revenues.
But due to the softer sales is explained by the to hit the earlier. This software revenue was deferred to future periods compared to the prior year.
Now, let's turn to slide 10 for an overview of the performance of our Materialise manufacturing segment.
In the fourth quarter manufacturing continued to operate in a difficult market environment with lower prototyping demand as a result thereof revenue decreased by 2% to $26 2 million Euro.
Accordingly also adjusted EBITDA dropped to <unk> 6 million Euro at an adjusted EBITDA margin of two 1% compared to five 6% margin last year.
On a full year basis manufacturing still grew its revenue by 7% to 110 million Euro realizing seven 5 million euro or adjusted EBITDA, which represents an EBITDA margin of six 8% slightly down from 8% in the prior year.
Yes.
Slide 11 provides the highlights of our income statement for the fourth quarter and the full year.
For the fourth quarter of 2023, our gross profit margin was 57 five.
5% up from 56, 9% last year.
For the full year the margin was 56, 7% of <unk> up from 55 point.
5% over 2022.
Continued cost focus helped us to reduce our operating expenses also in the fourth quarter by $2 5 million euro or six 5% compared to last year's quarter.
For the full year operating expenses R&D aggregate, one 4% lower than prior year.
Our net operating income was negative in the quarter by $3 3 million compared to a positive <unk> 6 million Euro last year. This quarter included Nevertheless, a nonrecurring impact of $4 2 million euro for impairments related to goodwill tangible and intangible assets.
Of engine plant in Brazil, and have materialized motion.
As a result of these elements. The group's operating result was negative in the quarter by $1 1 million compared to a loss of $1 5 million Euro last year's periods.
For the full year. The operating result was positive, though by $5 6 million compared to a loss of $2 9 million Euro last year.
In Q4, net financial expenses amounted to <unk> 2 million euro, including a currency exchange loss of 1 million, mainly reflecting the change to U S dollar euro position.
First income of $1 3 million from our cash reserves and interest expense on our financial depth of around <unk> 4 million Euro.
Income tax in the quarter amounted to a positive effect of <unk> eight.
<unk> 8 million compared to 1.4 million last year.
Net loss for the fourth quarter was <unk> 5 million, representing a minus one euro cent per share compared to a net loss of $4 6 million euro or eight euro cents per share for the 2022 periods.
For the full year, we realized a net profit of $6 7 million Euro presented resulting in an 11 euro cents per share.
Compared to a net loss of 2.2 million euro or minus four euro cents per share last year.
Now please turn to slide 12 for a recap of balance sheet and cash flow highlights.
Also in the fourth quarter of 2023, our balance sheet remains strong our cash reserve amounted to around 128 million Euro at the end of the year compared to 141 million Euro at the end of 2022.
Loan repayments of 17 million euro reduced our gross debt to 64 million Euro.
Our resulting net cash position at the end of the year and a 63 million euro.
By 3 million compared to a year earlier.
Cash flow from operating activities for the full year amounted to $20 2 million compared to $22 3 million Euro last year.
The higher contribution from P&L components was offset by growing working capital requirements.
Capital expenditure for the quarter amounted to 2.5 million Euro into 11 8 million euro for the full year.
None of these were externally financed.
And with that I'd like to handover the call to preheat again, thank you everyone.
Now, let's turn to page 13 to take a look at the outlook for 2024.
In 2024, we expect the uncertain macroeconomic and geopolitical environment to continue at least for a large part of the year.
In this environment. It remains important that we stay focused on our key priorities.
First of all it is critical that we maintain the momentum in our medical segment through continued product innovation and leveraging our manufacturing facility in the U S to deliver cases with shortened lead times and address those new market segments that I talked about earlier.
Second in our software segment, we need to remain focused on capturing the growth opportunities in particular in the market for end use parts.
Last but not least in our manufacturing business, we need to capture the growth in selected market segments in order to drive revenue in 2024 as part of this plan, we will open a new manufacturing plant for uptick towards the end of this year to capture the opportunities we see in coffee.
I'll conclude my remarks on slide 14, with a discussion of our full year 2020 for guidance.
We expect revenues in 2024 to be in the range of 265 to 275 million euro representing a healthy growth. Despite the continued uncertainty of the macroeconomic and geopolitical environment.
With our guidance reflects this uncertainty we believe materialize is ideally positioned in the market for additive manufacturing software and services in the market for personalized products.
Thanks to our strong product portfolio, our continued investments in innovation and our strong financial Foundation.
We expect growth in all three of our segments.
The growth of all materialize software revenue will be further temporarily impacted by the transition towards the cloud based subscription business model that we are continuing to implement.
As you will have noticed going forward, we will be providing guidance on adjusted EBIT.
We believe our consolidated adjusted EBIT is a more useful guidance measure as it includes the periodic cost of capitalized tangible and intangible assets used in generating revenue in our business and as such will allow for a better assessment of our expected performance and profitability.
However, we will continue to report the segment adjusted EBITDA of our three business segments.
The expected revenue growth will result in an adjusted EBIT, which we currently anticipate to total between 11 and 14 million Euro for 2024.
This guidance reflects our strive towards profitable growth.
What we believe will remain an uncertain macroeconomic and geopolitical environment.
This concludes our prepared remarks, operator, we're now ready to open the call to questions.
Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced.
And to withdraw your question. Please press star one again, please standby, while we compile the Q&A roster.
The first questions come from Jacob Steven with Lake Street Capital markets. Your line is now open.
Hey, guys. Thanks for taking my question congrats on the solid revenue growth year over year.
You talked a little bit about your Michigan facility here.
Just curious to hear how.
How is that facility ramps over the last few months here and how do you think about your capacity utilization there currently.
Yes.
So I can take that question Jacob it's good to talk to you again, yeah. So we are very pleased actually with the ramp up of the Michigan facility.
Opening up a new metal facility is never easy.
But we're very proud that first of all in the preparation of the opening we did stick to our timelines all the way through.
Opening the facility in August.
And we also managed to ship first cases.
In August.
According to our plan the.
The ramp up is going very well and we are therefore in 2024 already considering additional investments in that facility.
We are very pleased with the resolve there.
As I mentioned earlier, the big advantage is that with these shorter lead time, we're able to opening up new patient segments.
The new segments of the market and that is driving our growth and we will continue to do so in 2024.
Okay Awesome, that's great to hear.
Maybe just a touch deeper on the 2020 for guidance.
Im curious, how youre thinking about kind of growth in the manufacturing segment.
You have referenced prototyping weakness over the last couple of quarters here, but are you expecting that weakness to continue it sounds like you are.
Finding some nice partnerships in the aerospace market, which we've heard has been strong but I'm just curious how youre thinking about kind of the prototyping market.
Where that same center in 'twenty four.
Yeah. So so.
I always like to differentiate between the prototyping any end use parts up market because the dynamics are indeed different now if I look at our manufacturing segment as a whole and a market that we serve in the AD. The prototyping market has been under pressure and it's mainly related to the macroeconomic difficulties.
Some other market dynamics I would expect those to stay difficult throughout the year 2020 for at least for a good part of the year 2024.
The dynamics in the end use parts are slightly different in AR.
The geopolitical environment.
Macroeconomic uncertainties impact as well, but we need to take a more granular look in that segment, where we can find pockets of investment that do exist in that market and I mentioned, the OSB segment, which has been a successful one for us and many other players over the last couple of years and they are.
Others that we will be focusing on so it's really for us in our manufacturing segment.
The more troubled market environments.
Many of us will still be in I believe in the growth by focusing on those selected segments.
You could benefit from prototyping as such.
Chris.
Specifically go to that the market will stay difficult.
Now immediately.
I'm very convinced that with our differentiating position than in 2024, we can continue to grow on that side as well.
Okay.
And just one last one for me here on software.
You could talk a little bit about your strategy and maybe how is your distribution strategy changed are you kind of sticking with the directional sort of sales force.
Are you using a reseller model here I'm, just curious how do you kind of adapt and over the last.
Thanks.
12 months here.
And that is on the software segment specifically.
Yes.
So I'll just talk to your segment, specifically, we've always used a multitude of channels. So we have a direct sales model combined with a channel model.
The a close partnership with our OEM partners as well.
Will help us up with a product in the market.
And we have continuously been doing that over last couple of years.
I expect us to follow that same mix.
Our strategy going forward.
Okay, great. Thanks for all the color best of luck going forward here.
Thank you Jacob.
Please standby for the next question.
The next question comes from Alexandra Kramer with Kepler Chevron Your line is open.
Congratulations crew members using the whole team on the coffee this year I was just.
Interested in I have two questions. So one was on the capacity expansion in the U S and Asia tick.
On the Asia took facility don't you think that the capacity that is coming home life and H two this year.
At least it was planned that way it originally will not that will put extra pressure on the margins and then next to that I would also ask how much capacity, we need to for seafood. These plants both in the U S. M. A C tech in 2024, and then maybe in the extension of that question, maybe how are you.
Need to look at the free cash flow generation this year, including the working cap.
Thank you for that.
Okay. So that's a lot of questions of all the I'll take the first one.
Talking about the <unk> investments, specifically, Evan so Alex I know, you're obviously right on the short term debt.
Any additional investments always adds on the short term some pressure on the margin.
At the same time, we I think you all know us as a player that invest in the long term. So we believe in the potential of that business.
We actually see that we have missed opportunities because of lack of capacity in the past.
That's what we want to rectify with additional investments so beyond the startup phase.
The pressure on the on the margin that should be equalized on mute your line.
So that was for the first question.
Maybe I can pick up on your second part of the question Alexander and I'm going to split it into two parts the free cash flow impact of the facility expansions and then coming back to the working capital evolution.
As to answer the question.
Regards to free cash flow evolution. Indeed in the year 2024, we will see a heavy investment phase, especially with the <unk> plants that we will bring into into production.
There is already a part of the investments that we have taken.
In 2023 and even before.
But indeed, a fair chunk of the of the amount will come in the first half of 2024 and that will indeed impact our overall free cash flow generation this year.
Which.
Based on the current numbers.
<unk> will be will be negative temporary Leah just because we do this huge investment and then we will see out of the second half of the year, we will see the cash flow coming in gradually from startup.
The facility now as to the metals USA plant debt investment was already taken in the past there is a sort of hit the indicators.
We're contemplating to do further investments in the plant, but that will be two minor amounts compare to the initial investment that certainly compared to active.
Second question with regards to working capital evolution that is certainly something that we will be monitoring more closely going forward as we are growing we see an increased need for.
Working capital requirements, but we do want to focus further on this in order to keep a healthy operating cash flow and support further our free cash flow generation in the coming months and years.
Yes.
I hope that answers your question, yes, okay. Thank you very much.
Thanks Alexandre.
Please standby for the next question.
The next question comes from Troy Jensen with Cantor Fitzgerald. Your line is open.
Hey, Thank you for letting me ask the question and congrats on the nice results here.
Maybe start with the with regard to hear so I know you've been onboard now for three months.
At sometimes to go.
Some time to look at different aspects of the business here I'm just curious what would you change now or potentially do better versus what <unk> was doing in freedom Peter's leadership, and I know, they're listening so be careful what you say [laughter]. Thank you Troy.
And thanks for joining the call today.
So well first of all I want to stress that it's been six weeks in the new role. So it's still very early days.
I knew you were going to ask the question, which is why I also added some remarks.
On the on how I look at things and also clearly highlighted the priorities for us in 2024 after my first.
Look at how things are going.
I mean, it's clear.
That's a three part is clearly our.
Medical.
Both that look we want to keep the momentum in medical so to growth.
The potential is there and we wanted to make sure that we realize that.
On the software and the manufacturing side and I mentioned that we want to focus on capturing the opportunities and it's maybe to answer your question a bit more specifically what is the biggest change it may be a bit more of a focused approach.
Now focusing on there, where we do see growth opportunities.
Despite the environment that we see and with that focus.
Generating or driving the growth.
The growth in revenue.
And that will see critical that we stay focused on that because our growth ambition is is there and it's real and I think.
It's based on the potential that we have in the market. So I hope that answers your question.
Yeah, no very good.
Let me hit just the medical business too. So if you look at total guidance, you're up 4% kind of at the midpoint, but you said all three segments are going to grow any medical has been killing it right. So you just had record revenues you had record EBITDA margins I'd be curious to know the applications that are driving it currently and then if you go.
Growing 15 18, 20% the last three years in this medical business. It seems like you are forecasting that to slow down. So is that just conservative guidance or some thoughts please.
More specifically towards <unk>.
Guidance going forward.
Now let me ask let me answer the second one.
Second part of your question first.
All of us on the on the first part of your question.
So I highlight that are in our in our current results into 2023 results that we saw a softball software sales to medical device companies, which is an important segment for us.
And that will weigh on our revenues in 2024, so that plays into our guidance for 2023 for 2020 for specifically for the medical segment. The same obviously accounts for our wholesale segment, but that has an impact on them.
<unk> segment.
Now when it comes to a couple of the segments in which we see the growth.
The nice thing for US is that it's really a healthy mix of different segments.
Which makes it balanced and therefore takes a bit of risk hopefully out of the equation as well and.
And we really see a combination of our mature segments, playing a very important go there youre feeding segment is still a very important segment for us the CMS segment is big.
An important role there.
And despite the fact that we saw softness in our medical sales is couldnt highlighted in his remarks, we are still seeing growth there as well less than previous years, but we still see ingalls there towards the research and engineering markets are in a in a broader way.
So it's a healthy mix.
Perfect Alright, Thank you for the explanation and good luck going forward.
Thank you.
I show no further questions at this time I would now like to turn the call back to break out the for closing remarks.
Thank you and thank you all for joining us today.
You've heard materializes, many initiatives underway to leverage and accelerates the growing adoption of additive manufacturing.
We all look forward to continuing our dialogue with you throughout the upcoming investor conferences or 101 virtual meetings.
<unk>.
If you do have any other questions. Please feel free to reach out to us. Thank.
Thank you all and goodbye for now.
This concludes today's conference call. Thank you for participating you may now disconnect.
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Okay.
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