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Materialise NV (MTLS) Q1 2021 Earnings Call Transcript

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MTLS earnings call for the period ending March 31, 2021.

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Materialise NV (MTLS -6.90%)
Q1 2021 Earnings Call
Apr 30, 2021, 8:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Hello, ladies and gentlemen, and welcome to the Q1 2021 Materialise Financial Results Conference Call. [Operator Instructions]

I would now like to turn the conference over to your host, Harriet Fried of LHA.

Harriet C. Fried -- SVP

Thank you for joining us today for Materialise's quarterly conference call. With us are Fried Vancraen, Founder and Chief Executive Officer of Materialise; Peter Leys, Executive Chairman; and Johan Albrecht, 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 first quarter of 2021. To access the slides, please go to the Investor Relations section of the company's website.

The earnings release that was issued earlier this morning 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 certainties 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 could impact the company's 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-IFRS measures on today's call.

A reconciliation table is contained in the earnings release and also at the end of the slide presentation. With that introduction, I'd like to turn the call over to Peter Leys. Peter?

Peter E. Leys -- Executive Chairman

Hi, Harriet, thank you. And thank you, everyone, for joining us today. You can find the agenda for our call on Slide 3. As the first item on our agenda, I will summarize the highlights of our financial results for the first quarter of 2021. After that, I'll give you a bird's eye view of the company's current strategy and approach to market. Then I will pass the floor to Fried, who will give you more context about the Link3D transaction that we announced earlier this month. After that, Johan as always, walk you through our first quarter numbers in more detail. And finally, I will come back to give you some observations about what we currently believe the near-term future may bring. When we've completed our prepared remarks, we will be happy to respond to questions.

So let's turn to Slide 4, which summarizes the highlights of our financial results. While just like the last three quarters of 2020, the results of our first quarter this year was -- were impacted by the COVID-19 pandemic, we are continuing to see signs of a steady recovery of our business. First, our revenue of EUR45.5 million this quarter came close to the revenue level of EUR46.2 million that we posted in the first quarter of 2020, which was, as you know, only slightly impacted by the crisis.

Importantly, both our Medical and Software segments showed growth again of 3.7% and 4.1%, respectively. Second, our adjusted EBITDA margin was 11.7% compared to the 7.8% margin that we realized in the same period last year before the crisis kicked in. Importantly, as we navigated through the crisis, we did not lose sight of the engines of our future growth. Therefore, in the quarter, our R&D spending represented a solid 14.3% of total revenue. And we strengthened and secured our leading position in the additive manufacturing software markets for the coming years by gearing up for an upcoming acquisition of Link3D, a provider of additive manufacturing execution systems. Fried will explain the Link3D transaction in more detail. Before he does so, we thought it could be worthwhile to remind you of the overall strategy of Materialise. Therefore, we summarized our positioning and vision on the two subsequent slides, five and 6. So let's turn to Slide 5.

First, Materialise enables the users of AM technology to be more productive, more cost efficient and more sustainable. We call this our horizontal or backbone strategy. We bring solutions to the markets that are typically fairly neutral, if not off the shelf, and that can be used regardless of the specific application that the 3D printing technology is used for. As a result, our horizontal products have a broad addressable market, but typically only represent a relatively small part of the value chain that our customers are active in.

As many of you know, our two key horizontal products are our two flagship software platforms: the Magics Software platform and the Mimics Innovation Suite. Our Magics Software platform includes both functionality that increases the productivity of an individual true printer as well as solutions that automate and control an entire 3D printing facility. Our Magics platform is neutral. It integrates with the technology of virtually all manufacturers of industrial printers both in plastics and in metal. We support customers with 3D print prototypes, so-called in many out facilities as well as customers who print larger batches of end parts, and customers that engage in so-called mass customization projects. Our Magics Software platform is brought to the market by Materialise Software. As the adoption of AM in general increases, we believe that Materialise Software will continue to grow accordingly.

Our collaboration with Link3D will, in our opinion, accelerate the growth of Materialise Software further. Fried will, in a minute, explain that in more detail. Second flagship, the Mimics Innovation Suite, helps researchers, medical device companies and hospitals to engineer on the human anatomy. Mimics visualizes the human anatomy in three dimensions: allowing its users to plan individual surgeries and design customized medical devices, which may subsequently be 3D printed. Mimics can be used by a very wide variety of medical applications, ranging from dental to orthopedic and cranium maxillofacial to cardiovascular applications to name only a few.

Our Mimics Innovation Suite is brought to the market by Materialise Medical. The performance -- the strong performance of Materialise Medical, both on its top and bottom line, it's partially in the results of the success of our Mimics Innovation Suite, including the successful introduction of software planning tools in the hospital market. Now moving to Slide 6. I'd like to go over the way that in addition to enabling the use of AM as such, Materialise also empowers specific meaningful applications of the 3D printing technology.

These solutions, which we internally call our verticals are more tailored to specific use of the AM technology, and typically includes a complex mix of customized software solutions, dedicated engineering support and complex 3D printing services. As a result, the addressable market of these solutions is more focused, but we are involved in a larger part of the value chain. Our most widely accepted vertical solutions today are brought to the market by Materialise Medical. These includes our customized surgical knee guide in the orthopedic market and our customized instruments and implants in the CMF markets. Both these verticals, and in particular, our CMF vertical contributed to the good performance of Materialise Medical over the last couple of quarters, both in terms of revenue and in terms of profitability.

More recently, Materialise Manufacturing started incubating new verticals, which includes our eyewear and footwear initiatives. Each of these wearable initiatives draws on the experience we gained in Materialise Medical and makes use of the Materialise Software Magics platform. While the revenues of each of these variable initiatives are currently still fairly modest, we believe that they are well-chosen drivers for future long-term growth. Now if you look back at the major initiatives that we have announced over the last 18 months, you will note that they perfectly match the strategy that I have just outlined. The acquisition of Engimplan expands our vertical CMF portfolio and market reach.

The acquisition of RSscan or Sprint fits in our vertical footwear initiative. In the recently announced transaction with Link3D strengthens our horizontal Magics Software platform. With this overall introduction and background, I'd like to give the floor to Fried, who will give you more color on our excitement with respect to the Link3D opportunity. Fried?

Wilfried Vancraen -- Founder, CEO & Director

Thank you, Peter. Good morning, and good afternoon, everyone. Turning to Slide 7. I would like to talk about the transaction with Link3D that we announced just a few weeks ago. When we announced our Q3 2020 results, last fall, we discussed the ambition of Materialise Manufacturing to incubate and grow meaningful applications of 3D printing in the food and in markets and the analogy of those initiatives to the successful verticals that the horizon and a medical launch in the orthopedic center animation markets. Empowering meaningful applications of 3D printing is as Peter just explained, only one part of our strategy. Materialise also empowers.

Through our software segment mainly the use of pensive manufacturing as such. And we believe that the cooperation with and the potential acquisition of Link3D will accelerate its strategic growth significantly. 3D printing continues to transform the factory floor as companies increasingly turn to 3D printing for large-scale production. As they scale their 3D printing processes and integrate the operations with existing production infrastructures, they are confronted with increasingly diverse, complex and distributed manufacturing environment. Both Materialise and Link3D, offers MAS solutions that help these organizations gain control over their manufacturing floor. By combining both companies' cutting-edge technology, software development expertise and client basis, we will be in an even better position to help customers scale their additive manufacturing capability across complex supply chains with greater operational excellence.

In addition to enhancing and accelerating our MES and workflow operating automation offerings, we believe our work with Link3D will accelerate Materialise Software platform strategy, which offers companies cloud-based access to our unified software offering. Materialise outlined an ambitious road map to evolve its entire offering to a subscription model, offering its customers' cloud-based access to a complete platform of software tools to manage and control the 3D printing process more efficiently. As you may remember, we recently announced several cloud-based software solutions including Magics Software, a full e-commerce and CRM solution in one platform. And the Process Tuner, an intuitive online platform that helped speed up the optimization of process parameters that is required for mass manufacturing to depleted parts. Link3D has developed a suite of mission-critical tools and applications for customers in the aerospace, automotive, medical and other competitive and highly regulated industries that can significantly enhance and accelerate the rollout of the Materialise Software platform.

The cloud-based software platform that combines the APIs that both Materialise and Link3D has already developed and it will build further on the combined expertise of both companies will provide customers seamless and cost-efficient access to Materialise and Link3D complete and integrated 3D printing software suite. It's a future-proof way to always benefit from the latest software innovations and allow companies to scale up or down their operations based on their current needs. We are excited that the people of Link3D decided to team up with Materialise.

Throughout our discussions, we learned that we shared a telomerase for from a structural perspective, the collaboration kicks in immediately. But Link3D will continue to operate as an independent company until we exercise the option to acquire the company, which we are currently intending to do in the course of this year's fourth quarter. And with this, I pass the floor back to Johan.

Johan Albrecht -- Executive VP & CFO

Thank you, Fried. I'll begin with a brief review of our consolidated revenue on Slide 8. Please note that unless otherwise stated, all comparisons in this call are against our results for the first quarter of 2020. Revenue was EUR45.6 million for the period, 1.5% below the level for both the same period last year. The positive growth of our Software and Medical segments both by 4%, but still offset by Manufacturing. Despite a steady and promising sequential growth since Q3 2020 and a strongly higher order intake in the first quarter of this year, Manufacturing still remained 8% below the pre-pandemic level of last year's Q1. Deferred revenues from software license and maintenance fees increased by EUR1.9 million, reflecting the strong sales performance of our Software and Medical segment in this first quarter.

For this first quarter, Materialise Software accounted for 22% of our total revenue, which realized Medical for 36% and Materialise Manufacturing for 42%. And Cross-segment revenue from software products increased to 34% of our total revenue. Moving to Slide 9, you will see our consolidated adjusted EBITDA numbers for the first quarter 2021. Consolidated adjusted EBITDA amounted to EUR5,341,000, an increase of EUR1.7 million or 48% compared to Q1 last year. This increase is the effect of the reduced variable costs, productivity improvement results and of the medical saving initiatives we implemented in the course of last year. This -- while our R&D expenses remained at the same high level as last year. And we continue to invest in our internal digital transformation program, which will include a new e-commerce portal and new CRM and ERP systems.

Slide 10 summarizes the results of our Materialise Software segment. Here, revenue picked up with growth again. Revenue effectively increased 4.1% and was at the same level of the seasonally high Q4 with net deferred revenue also grew an additional EUR0.5 million. Recurrent revenue decreased 6.3% from the same period last year. Nonrecurring revenue increased 20%, driven by new perpetual license fees and royalty income. EBITDA increased 30% to EUR3.4 million compared to EUR2.6 million. In fact, while revenue grew 4%, cost containment measures in SG&A resulted in a decrease of 10%, and R&D efforts increased 13%. The EBITDA margin was 33.6% compared to 26.9%. Moving now to Slide 11. You will see that total revenue in our Materialise Medical segment was EUR16.2 million, up 3.7% compared to Q1 2020. Revenue from Medical Device Solutions increased 3.2%, with growth from both partners and direct sales. Revenue from medical software sales accounted for 32% of the total segment revenue. Adjusted EBITDA increased 85% to EUR4.5 million from EUR2.5 million in last year's period.

As a combined result of continued top line growth with productivity improvements and lower operating expenses, the EBITDA margin increased to 28% from 16% in the prepandemic first quarter of last year. This all while we continued executing all of our R&D programs. Now let's turn to Slide 12 for an overview of the Q1 performance on Materialise Manufacturing segment. This later this quarter, manufacturing revenue included the activities from our footwear business line, representing EUR1.3 million this quarter. Manufacturing revenue reported a sequential growth since Q3 2020 and reported a strongly higher order intake this first quarter.

These positive elements though could not prevent a decrease of 8% below the prepandemic level of Q1 last year. We did see positive signs in our order intake from the automotive and industrial sector in general in our tech, easy tech and fixture business lines, in particular. Despite the mitigating effects of lower variable expenditures and continued labor cost reduction efforts, gross profit of Materialise Manufacturing was still significantly negatively affected because of the fixed cost of unused capacity. Savings measures resulted in a decrease of operating expenses of 8% or EUR600,000. As a combined result, adjusted EBITDA was negative EUR144,000 compared to a positive result of EUR1.1 million last year. Slide 13 provides the highlights of our income statement for the first quarter. Revenue was EUR700,000 or 1.5% below -- lower than the same period last year.

Gross profit margin grew to 53.9% from 53.3%. The solid margin was entirely due to the increased revenue and productivity improvement of our Medical segment, offsetting the negative effects in our Manufacturing segment with the cost of unused capacity weight on the margin. Our operating expenses increased EUR one million or 3.6%, an increase entirely due to the rollout of the ongoing internal digital transformation project that we discussed in our Q3 earnings call. Our sales and marketing spending decreased 9.7%. G&A expenditures increased by 3.4%. And R&D -- and research and development expenses amounted to EUR6.5 million at the same high level as last year's quarter in line with our stated strategy. This quarter's net operating income was EUR1.1 million compared to EUR700,000 last year. And as a result of all of these elements, the group's operating result was positive EUR290,000 compared to a negative result of EUR1.1 million in last year's period.

Net financial cost was EUR4.1 million and included the impairment of a loan to Ditto for EUR3.3 million. Because the business objectives that were defined as a condition for Ditto to continue to draw under the credit facility were not met, we decided to extend earlier portion of the remaining amount that was available under this credit facility to Ditto. Ditto is addressing the situation, but we currently have insufficient visibility on the nature and outcome of these initiatives. Importantly, this impairment from an accounting perspective does not impact our continuing belief in the technology platform that Ditto has built, and in the potential of the collaboration between ditto and Materialise.

Income tax expense amounted to an income of EUR155,000, positive due to deferred taxes, mainly from temporary loss positions. Net loss for the fourth quarter was EUR3,667,000 compared to a net loss of EUR2.9 million for the 2020 period. Balance sheet and cash flows. In the first quarter of 2021, our balance sheet remains strong. Cash amounted to EUR107.6 million compared to EUR111.5 million at December 31. While our proteins position decreased by EUR4.6 million to EUR110.5 million. Only EUR15.8 million over debt for short term at March 31. Equity decreased EUR3.1 million to EUR130 million as a combined result of mainly the first quarter net loss amounting to EUR3.7 million on the one hand, and positive conversion differences of approximately EUR0.5 million on the other hand.

Total deferred revenue amounted to EUR37.6 million as compared to EUR34.9 million as of December 31. Of the EUR37.6 million, EUR32.1 million related to annual software sales and maintenance contracts versus EUR30.2 million as of December 31, 2020. Cash flow from operating activities for the first quarter of 2021 were EUR4.2 million compared to EUR7.3 million for the 2020 period. This quarter, our operating cash flow consisted of EBITDA of EUR5.1 million, while our working capital decreased EUR0.9 million as a result of increasing activities. In last year's quarter, EBITDA was only EUR3.4 million, and we then had adverse positive effects in working capital of EUR3.9 million.

Capital expenditures for the quarter amounted to EUR two million and were not financed. On February 4, 2021, Materialise entered into a working capital loan agreement, and we paid $700,000 to Link3D during the first quarter. After quarter end, Materialise entered into a call option agreement to acquire 100% of the equity interest of Link3D Inc. with a call purchase price of $2 million. The call option can be exercised during the month of November 2021.

The call option exercise price equals the maximum amount of USD33.5 million against which the call option purchase price of $2 million will be credited. Peter?

Peter E. Leys -- Executive Chairman

Thank you, Johan. Please turn to Slide 15. Before opening the floor to questions, we would like to try and give some insights about what the remainder of 2021 may bring. As I mentioned earlier, the ongoing COVID-19 crisis continues to impact our business, and it does so in a fairly diverse way across our various segments and regions.

As a result, our outlook is too conditional to provide meaningful quantitative guidance for our consolidated performance for the rest of 2021 at this stage. Today, we do want to share some of our expectations for what the second quarter of 2021 may bring. We currently expect that both our Software and Medical segments will continue to perform well and that our Manufacturing segment will start to recover more significantly in the current quarter.

As a result, we currently estimate that our consolidated revenues in the second quarter of 2021 will continue to grow sequentially and have the potential to represent sequential growth of up to 10% compared to the previous quarter. In line with our strategy, we will continue and may even accelerate investing in our R&D programs and internal infrastructure, which will continue to weigh on our EBITDA during the remainder of 2021, but which will, we believe, offer many longer-term benefits for our company.

This concludes our prepared remarks. Operator, we are now ready to open the call to questions.

Questions and Answers:

Operator

[Operator Instructions] Your first response is from Jason Celino of KeyBanc. Please go ahead.

Jason Vincent Celino -- KeyBanc Capital Markets Inc., Research Division -- Senior Research Analyst

Take my question. Encouraging to see that Manufacturing and Software segments grow sequentially in the quarter. But can you provide some detail on the Medical segment? Were there any dynamics that prevented this segment to see the same level of sequential growth as the other two segments?

Wilfried Vancraen -- Founder, CEO & Director

Well, I have to say that our Medical segment is also doing very well. We have there really positive results, but Q4 was a very strong quarter with a lot of sales of mainly RCMS medical devices, which typically have a cyclical nature and then also of our software projects, which also tend to have a cyclical nature and have a very strong performance in Q4.

So overall, we were very happy with the first quarter result, which was higher than last year. As we said, we go with And on a 2-year basis, had a 14% growth compared to 2019. So we are really very positive about the further growth of our Medical segment because the second quarter is also normally such a cyclical quarter where a lot of CMF surgeries are taking place.

Jason Vincent Celino -- KeyBanc Capital Markets Inc., Research Division -- Senior Research Analyst

Okay. Excellent. And maybe for my second question, when you're expanding your Software portfolio, like as in the case with Link3D, what goes into your process regarding the decision to either make or buy that functionality?

Peter E. Leys -- Executive Chairman

In the given circumstance with Link3D, it is, to a large extent, a matter of timing. As we explained in our prepared remarks, we have a very ambitious road map to bring our entire portfolio to the cloud. We have yes, solutions embedded in our Streams products. But if we looked at the progress or at the solutions that Link 3D has developed and is currently developing.

We quickly came to the conclusion that a combination of the two companies would bring a very strong and combined product portfolio to the market. Probably one to two years earlier than what we would be able to do if we were to do this on our own. And what we have also learned during the pandemic is that if you want to really grab the growth opportunities that should present themselves in the markets, you should not be ready to do that in the next three to four years. But let's say, the next one to three years will most likely be crucial.

So from a timing perspective, we came to the conclusion that a combination made significant sense and should allow us to grab quite a few opportunities that we expect will come to the market in the next, let's say, 12 to 36 months.

Jason Vincent Celino -- KeyBanc Capital Markets Inc., Research Division -- Senior Research Analyst

Excellent. Thank you.

Peter E. Leys -- Executive Chairman

You are welcome Jason.

Operator

[Operator Instructions] Your next response is from Troy Jensen of Lake Street Capital.

Troy Donavon Jensen -- Lake Street Capital Markets, LLC, Research Division -- Senior Research Analyst

Hey, Gentlemen. Thanks for taking my questions here. Peter, just summarize on healthcare. I mean, obviously, CMF has been the driver in growing. I thought you said there was a second healthcare application that grew sequentially? And I'm just curious to know if knees I'd expect were flat to down-ish but are you expecting a bigger recovery needs due to selective surgeries coming back.

Peter E. Leys -- Executive Chairman

Hey Troy. Troy, I think the key drivers for the Medical segment has indeed been our devices really strong CMF portfolios. And secondly, really the Mimics innovation suite that I have been talking about earlier and then more in particular, the point of care applications and the attraction of those software solutions that we find in the hospital market. I think those are really the key drivers of our growth.

Troy Donavon Jensen -- Lake Street Capital Markets, LLC, Research Division -- Senior Research Analyst

Okay. All right. Then Manufacturing, I guess, I got a question for each sector here, but is down a fair amount, especially if you look organically, taking off the footwear business. I mean, I'm assuming this is probably below plan for you guys in the quarter. Was this just all due to European lockdowns? And I guess, starting to grow now, but do you feel like there's anything kind of structurally harder in the service grow business currently?

Wilfried Vancraen -- Founder, CEO & Director

Yes, Troy, the -- indeed, the European market as a whole has been in our overall performance, the weakest part. And that's certainly also related to the corona situation. But you will remember that the automotive sector as a whole was already entering the crisis in Europe before the corona pandemic is. And we have indication that we see a rise in the order intake especially in the automotive sector, which we hope will even further increase in the second half of the year.

That's -- so we will have some support from the revitalization of the automotive market. On top of that, you were referring to our -- yes, nonorganic growth, as you called it, that has to do with variable initiatives. And there, we are also very positive that we will continue to grow. So that should really bring our Manufacturing segment by the end of the year, that contract.

Troy Donavon Jensen -- Lake Street Capital Markets, LLC, Research Division -- Senior Research Analyst

Okay. Good. Good to hear. How about then software for Redwall I got you. Can you just give us a competition update? If you go back through time, we were worried about CAD guys coming in, we're worried about start-ups, we're worried about other equipment vendors entering the space. Just curious to know if you're any more or less concerned on competition in software?

Wilfried Vancraen -- Founder, CEO & Director

Well, we have indicated before that through the 30 years of existence of Materialise, our software and low-end experience completion and now a new way because this is what and just some difference is one that we have been preparing already quite a while by transferring all of our legacy algorithms to highly performance cloud-based APIs that make use on the strongest possibilities of the Internet like parallel processing, like making use of graphical card capabilities and things like that.

So they are really converted based on a long-term experience from the past to the future, which is in our opinion, cloud base. And that transition has been accelerated. The transition of Streamics was a bit later on our road map. And in order to catch up there and to be able to offer our customers the full solution in cloud, we partnered within 3D.

Troy Donavon Jensen -- Lake Street Capital Markets, LLC, Research Division -- Senior Research Analyst

And how about that, that gets me to my last question for Johan. Could you just -- any more information we can get on Link3D? If I heard you right, you said the acquisition, if you spend it all is going to be $35 million, correct me if I'm wrong, but anything on size or revenues or opex that you could share with us?

Johan Albrecht -- Executive VP & CFO

I apologize. Troy, can you say that again? Is it -- I heard you saying something about $35 million, but I didn't hear the rest of the sentence.

Troy Donavon Jensen -- Lake Street Capital Markets, LLC, Research Division -- Senior Research Analyst

Yes. So the first half was the purchase price of Link3D. You went through it in your prepared remarks. I thought I heard a $35 million. Just could you clarify how much you totally pay for Link3D?

Johan Albrecht -- Executive VP & CFO

Yes. So we paid $2 million for the option. And then finally, in November, we can think the full acquisition of the equity for $33.5 million, of which we deducted $2 million from the option price.

Troy Donavon Jensen -- Lake Street Capital Markets, LLC, Research Division -- Senior Research Analyst

Okay. Perfect. And then anything you guys can share about size, revenues or opex of Link3D?

Johan Albrecht -- Executive VP & CFO

That's what we cannot disclose at this moment.

Troy Donavon Jensen -- Lake Street Capital Markets, LLC, Research Division -- Senior Research Analyst

Alright. Understood, guys. Well, congrats on QT looking better, and hopefully, it's kind of additive manufacturing to starting up here, but congrats on tax.

Wilfried Vancraen -- Founder, CEO & Director

Thank you, Troy.

Operator

Your next response is from Arvind Ramnani of Piper Sandler.

Arvind Anil Ramnani -- Piper Sandler & Co., Research Division -- MD & Senior Research Analyst

A question on Medical segment, when the broadest or and can you talk about pipeline this position-[Technical Issues]

Wilfried Vancraen -- Founder, CEO & Director

Well, we anticipate that indeed the pipeline will strengthen as in multiple countries we still experience that the hospitals are not taking elective cases. And as we have said before, all of our products are related to elective cases rather than drama cases in the hospitals. So given that in a country like Brazil, for instance, at this very moment, all hospital facilities are flooded with COVID patients. This really impacts the amount of our revenue in that country. In Europe, we paid several of the loans that are similar difficulties as well. So we believe that the structural take-up is also possible in the medical market.

Arvind Anil Ramnani -- Piper Sandler & Co., Research Division -- MD & Senior Research Analyst

Perfect. Can you provide -- the second question for me is, can you provide us a little bit more color on EBITDA? And if possible, can you also quantify how we should kind of model EBITDA over the next couple of quarters?

Johan Albrecht -- Executive VP & CFO

Arvind, yes, I just refer to what we have disclosed in the previous earnings call, but where we have announced that we would that we expect as from Q1 on better results than we have seen in the past on a sequential basis. And we continue believing that, but the point is that already in Q1, we already had better results than we could anticipate at the moment that we had our earnings call.

So the trends that we have anticipated on already in Q4, this is what we can confirm again. That's what Peter is saying also in his outlook for Q2. Of course, there is not clear visibility of what the circumstances will be related to COVID-19, how that will further evolve. But our outlook in general is getting slightly better. And as we've mentioned, on a sequential basis.

Operator

I am showing no further questions at this time. I would like to turn the conference back over to Peter Leys.

Peter E. Leys -- Executive Chairman

Thank you, operator, and thank you all again for joining us today for this call. We look forward to continuing, as always, our dialogue with you through investor conferences or in one-on-one virtual meetings or calls. So please feel free to reach out if you have not already done so. Thank you again, and goodbye for now. Bye.

Operator

[Operator Closing Remarks]

Duration: 46 minutes

Call participants:

Peter E. Leys -- Executive Chairman

Wilfried Vancraen -- Founder, CEO & Director

Johan Albrecht -- Executive VP & CFO

Harriet C. Fried -- Lippert/Heilshorn & Associates, Inc. -- SVP

Jason Vincent Celino -- KeyBanc Capital Markets Inc., Research Division -- Senior Research Analyst

Troy Donavon Jensen -- Lake Street Capital Markets, LLC, Research Division -- Senior Research Analyst

Arvind Anil Ramnani -- Piper Sandler & Co., Research Division -- MD & Senior Research Analyst

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