21 July 2014 Americas/United States Equity Research Electrical Equipment Materialise (MTLS) Rating OUTPERFORM* [V] Price (18 Jul 14, US$) 12.46 INITIATION Target price (US$) 15.00¹ 52-week price range 14.46 - 11.50 Market cap. (US$ m) 601.47 Software Play with Exposure to Key 3D Growth *Stock ratings are relative to the coverage universe in each analyst's or each team's respective sector. Engines: Medical & Increasing Production Use ¹Target price is for 12 months. [V] = Stock considered volatile (see Disclosure Appendix). Materialise is a provider of additive manufacturing software and on-demand parts printing headquartered in Belgium. We initiate coverage with a $15 target Research Analysts price and an Outperform rating; the justification for our view is as follows. Jonathan Shaffer 212 325 1259 ■ Company Revenues Likely to Grow with Overall 3D Market: We currently
[email protected] forecast medium-term 3D printer market growth of ~25%, with some OEMs Julian Mitchell guiding for organic growth of 30%-plus. The increasing installed base of 212 325 6668 production printers directly drives demand for MTLS software, and peer on-
[email protected] demand parts data suggest this market will remain quite strong. Charles Clarke 212 538 7095 ■ Why Materialise over Other 3D Plays? MTLS is a hardware-agnostic play
[email protected] on 3D printing market growth; its software is compatible with nearly all printer types, alleviating the need for investors to pick technological winners and losers. MTLS has high exposure to key industry drivers such as medical devices, shifting mix toward production parts, and less cyclical software.