Good day. Thank you for standing by. Welcome to Materialise fourth quarter 2021 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question- and- answer session. To ask a question, you will need to press star one on your telephone. If at any time during the conference you need to reach an operator, please press star zero. I now would like to turn the conference over to Miss Harriet Fried. You may go ahead, ma'am.
Thank you for joining us today for Materialise's quarterly conference call. With us on the call 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 fourth quarter of 2021. To access the slides, if you haven't already done so, please go to the Investor Relations section of the company's website at www.materialise.com. The earnings 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 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 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 at the end of the slide presentation.
With that introduction, I'd like to turn the call over to Peter Leys. Go ahead, please, Peter.
Thank you, Harriet, and good morning and good afternoon, everybody. Before turning to slide four, which summarizes the highlights of our Q4 2021 full year financial results, I would like to emphasize that our thoughts and actions today are focused on the safety and well-being of our Ukrainian collaborators. Their lives and security are of utmost importance to us. Fried will address the actions we are taking to assist them during his remarks. Now, turning to our 2021 results. As some of you may remember, in the third quarter of 2021, Materialise posted all-time quarterly records, both in terms of revenues and in terms of EBITDA. Today, we can announce that none of the Q3 records are still on the books for the simple reason that they have been surpassed by the all-time high revenues and adjusted EBITDA that we posted in the fourth quarter.
Driven by a very robust revenue growth in each of our segments, our consolidated Q4 revenues increased by more than 25% to a quarterly all-time high of close to EUR 57 million. Our adjusted EBITDA for the quarter was EUR 10.5 million, representing a margin of 18.4%. Our net profit for the quarter was almost EUR 4.8 million. In particular, our Software and Medical segments realized very strong EBITDA margins in the fourth quarter. Software, more than 45%, and Medical, more than 30%. For completeness' sake, I should add that also for the full year 2021, our revenue, adjusted EBITDA and net profit are all-time records. Johan will fill you in on those numbers later.
These results show that our strategy of continuing to invest throughout the COVID-19 pandemic in our people in general, and in research and development in particular, was the right choice and is already paying off in the short term. I would like to now pass the floor to Fried, who will walk you through some of the key operational achievements of Materialise in 2021. Fried?
Good morning and good afternoon, everyone. Before turning to our operational achievements in 2021, I want to reiterate what Peter just said with respect to Ukraine. I am, together with other members of our executive committee, in daily contact with the leadership of our Ukrainian office, and we are trying to help our team members there as much as we can through a variety of different avenues. The assistance we offer includes providing alternative housing and office space both within and outside Ukraine. In spite of the hostilities they are facing, many of our collaborators continue to contribute to the projects they are working on by making maximum use of the flexible working conditions we installed during the Corona crisis. Simultaneously, many of our people around the globe are adjusting their activities and priorities and stepping in to assist wherever they can.
We want to express deep admiration and respect for the courage, dedication, and professionalism that our collaborators in Ukraine are showing in circumstances where their safety and the safety of their beloved ones is constantly at stake. In 2021, a year that was still dominated by COVID restrictions and impacted by supply chain issues, I am very proud of the collective performance of all Materialise employees. As Peter already outlined, we delivered a record performance, both in terms of revenue and profitability, and this for the second quarter in a row. In a world with many restrictions and tight budgets, we grew our top and bottom compared to not only 2020, but also to 2019, while also reducing our carbon footprint drastically in all our segments. Our global operations performed well in the new digital and work from home context.
Our production lines were all shown to provide safe and effective work environments for our workforce during the different waves of COVID infections. Most importantly, we did all this while maintaining our R&D spending in order to secure our future. Most of the new products that will ensure the company's future growth would not be possible without the sustained research and development effort. Overall, we believe our consistent performance during the crisis period has strengthened our position in the markets we serve, and has demonstrated to our customers and partners that Materialise is a sustainable company, one they can rely on for their long-term future. Let's look at some of the specific achievements at the level of our three segments. Our medical software for engineering on anatomy, the Mimics Innovation Suite, realized revenues of almost EUR 23 million in 2021.
That proves that the Mimics Innovation Suite is a workhorse for many engineers that want to develop or produce medical devices based on medical image data. The growth was driven by new models that either make use of artificial intelligence themselves, or that enable users to link with their own artificial intelligence developments. Similarly, the Mimics Innovation Suite has also become an engine to explore and develop new augmented reality and virtual reality applications in the medical field. This has led to growth in both the medical device company and the hospital markets, where we will be able to help support the medical treatments of the future. Our medical device activity had very strong growth, especially in craniomaxillofacial surgery and in an extremely volatile environment, with hospitals making sudden shifts in prioritization due to COVID, our design and production teams succeeded in providing constant service.
In addition, in the middle of the challenging COVID-related circumstances, we were one of the first companies to bring our mass customization of medical guides and implants fully in line with the new European Medical Device Regulation. This significantly increases the hurdles for new medical product introductions in the European market. On top of that, we managed to clear several CMF products in our subsidiary Engimplan for the European market. Finally, Engimplan itself became a 100% daughter company of Materialise, fully focused on CMF and osteosynthesis, as we spun out the spine line of the business to the former owners. Increased focus and stronger offering should enable us to capture additional market share both in Brazil and in Europe. Our Manufacturing is back on track with the highest growth numbers of all our segments.
Despite the production limitations in the civil aerospace on which we focused, we are seeing healthy growth thanks to the promising segment of eVTOLs, as explained during our Q3 call. A key driver in the recovery is the segment of business systems, where we focus a lot on healthcare equipment. There, we have been seeing a structural increase in the use of additive manufacturing for small production series. Thanks to our wide offering with engineering support and multiple AM technologies, Materialise is well-placed to support the companies in those markets for which we expect healthy growth and development in the near future. Finally, also important to the Manufacturing Segment's growth is the considerable growth in the eyewear and motion business. For motion, we integrated RSscan and RS Print into Materialise Motion and did the preparatory work to launch new product lines during 2022.
Our Software segment has launched a series of very impactful innovation initiatives from a strong base. The strong base is Magics, which consistently grew its user community during 2021. Even after being on the market for 30 years, Magics was chosen by the readers of 3DPrint.com as the AM software of 2021, and we are confident that the R&D initiatives we executed in 2021 are going to make it even stronger. We will launch Magics 26 in 2022 with a fully integrated Parasolid CAD kernel from Siemens. This will enable it to integrate even better with design and post-processing workflows. The new Magics will also be compatible with the Link3D MES system, and it is now in beta testing. The beta tests for Process Tuner and Workflow Automation are also running successfully, and as we speak, the beta testing of Storefront is being launched.
In short, after the serious development efforts of 2021, 2022 will be the year when multiple releases of new products fitting in our broader cloud strategy will take place. During our next earnings call with the official releases at AMUG and Rapid, I will provide further details on our cloud strategy.
Thank you, Fried. I begin with a brief review of our consolidated revenue on slide six now. As a reminder, when we refer to sales in our presentation, we mean revenues plus deferred revenues. Also, please note that unless otherwise stated, all comparisons in this call are against our results for the fourth quarter of 2020 and full year 2020. For the quarter, revenue increased 25.8% to EUR 57 million. The growth took place in all three segments. Our Software segment grew by 19%, Materialise Medical increased 20%, and revenue in Manufacturing rose by 35%. For the quarter, Materialise Software accounted for 22% of our total revenue, Materialise Medical for 36%, and Materialise Manufacturing for 42%. For the full year, revenue grew EUR 35 million or 20.5% to EUR 205.5 million.
The EUR 4 million increase over deferred revenue from software license and maintenance fees compared to December 2020, and that underscores the strong license sales performance of our Software and Medical segment. Cross-segment revenue from software products represented 32% of our total revenue for both the quarter and the full year. Moving to slide seven, you will see our consolidated adjusted EBITDA numbers for the fourth quarter. Consolidated adjusted EBITDA increased EUR 3.1 million to EUR 10.49 million compared to Q4 last year, and a new quarterly record. Our EBITDA margin grew to 18.4%, two percentage points above last year's 16.3%. Full-year EBITDA grew 15% from EUR 20.4 million in 2020 to EUR 32.5 million in 2021.
EBITDA margin for the full year reached 15.8% compared to 12% last year. This increase was the result of a variety of positive factors, our strong revenue growth, an improved gross margin triggered by increased insourcing and continuous productivity improvements, and disciplined spending, in particular with respect to overhead. Importantly, our EBITDA increase did not come at the expense of our R&D spending. In addition, the initiatives we previously described to enhance our internal business application platform continued and are on track. slide eight summarizes the results of our Materialise Software segment. Software revenue increased 19.3% to EUR 12.2 million. While recurring revenue was flat, non-recurring revenue grew 33.6%, driven by new perpetual license fees. EBITDA increased 43% to EUR 5.518 million.
The adjusted EBITDA margin grew to 45% as a result of the solid revenue growth and our operating expenses kept well under control, even as our digital transformation project continued. Moving now to slide nine, you will see that total revenue in our Materialise Medical segment increased 20.3% and for the first time broke the EUR 20 million barrier. Revenue from medical software sales grew 25%, while revenue from medical devices and services increased 18% compared to last year. Revenue from medical software sales accounted for 31% of the segment revenue. Adjusted EBITDA grew 31% to EUR 6,358,000 compared to EUR 4.8 million. The segment's adjusted EBITDA margin was 30.7% compared to 28.2% last year.
Now let's turn to slide 10 for an overview of the Q4 performance of our Materialise Manufacturing segment. Revenue increased 34.9% to EUR 24.1 million. Importantly, revenue was approximately EUR 5 million higher than in the first quarter of 2021 when we first noted the positive signs from the industrial goods and other business lines. Adjusted EBITDA for the quarter was EUR 1.2 million. EBITDA margin was only 5%, negatively impacted by temporary higher production variables in our additive manufacturing business lines. Full year adjusted EBITDA increased EUR 3.9 million to EUR 6.4 million, while EBITDA margin increased to 7.2% from 3.7% as a result of the revenue growth, optimized capacity usage, and improved production efficiencies.
Slide 11 provides the highlights of our income statement for the fourth quarter and the full year 2021. For the quarter, revenue increased EUR 11.7 million or 25.8%, and gross profit increased EUR 7 million or 26.9%. Gross profit was positively impacted by efficiency gains and the growing software and service portion in our revenue sales mix. As a result, gross profit margin increased half a percentage point to 58.3%. For the full year, this margin even increased 1.9 percentage point. Operating expenses increased 5.9% compared to last year's quarter. Our sales and marketing spending increased 22.7% as sales and marketing projects were revived.
G&A expenses increased 11.3%, an increase due to the rollout of the ongoing internal digital transformation project that we discussed in our previous earnings calls. In line with our strategy, research and development expenses increased 12.2% compared to Q4 if we exclude last year's EUR 2.1 million impairment cost of a Tractor Splint Program. This quarter, net operating income was EUR 1.26 million. As a result of these elements, the group's operating profit amounted to EUR 4.976 million compared to a loss of almost EUR 2 million in last year's period. For the full year, operating profit rose to EUR 12.217 million from a loss of EUR 4.639 million.
Net financial income was EUR 275,000 compared to a loss of EUR 596,000 last year. Income tax expense amounted to EUR 490,000 compared to a Q4 2020 positive tax income of EUR 531,000. Net profit for the fourth quarter was EUR 4,762,000 compared to a net loss of EUR 2,039,000 for the 2020 period. For the full year, net profit rose to EUR 13,145,000, resulting in EUR 0.23 per share from a net loss of EUR 7.2 million or minus EUR 0.13 per share. Now please turn to slide 12 for the recap of balance sheet and cash flow highlights. This fourth quarter, our balance sheet remains strong.
Cash amounted to EUR 196 million compared to EUR 111.5 million as of December 31, 2020. Over the same period, our borrowings decreased by EUR 16 million to EUR 99.1 million. Only EUR 21.3 million of our debt is short term as of December 31. Equity increased EUR 99.4 million to EUR 232.6 million as a combined result of the year-to-date net profit amounting to EUR 13.1 million. Including the June and July follow-on net capital increase of EUR 85.8 million.
The exercise of stock options for EUR 2.4 million, the impairment of a financial asset in Essentium of EUR 3.4 million over the year 2021 and positive conversion differences of EUR 1 million, mainly from the strong British pound and US dollar against euro. Total deferred revenue increased to EUR 38.3 million compared to EUR 34.9 million as of December 31, 2020. Of the EUR 38.3 million, EUR 34.3 million were related to annual software sales and maintenance contracts versus EUR 30.2 million as of December 31, 2020. Cash flow from operating activities for the full year amounts to EUR 25.8 million compared to EUR 30 million last year. The increased operating result was partly offset by unfavorable working capital requirements as a result of the strong activity growth.
Capital expenditures for the quarter amounted to EUR 4.5 million and to EUR 11.7 million for the year, and they were not financed. Our financial reports are excluding Link 3D, of which we acquired 100% of the shares on January 4, 2022. As a reference, in 2021, Link 3D realized revenue of approximately $2.3 million and a negative EBITDA of approximately $4.6 million. Peter?
Thank you, Johan. If you could kindly turn to slide 13. Encouraged by our very strong results in the second half of 2021, we believe our more mature business lines, in particular our Magics software suite, our Mimics Innovation Suite, and our personalized medical device business lines, all have the potential of continuing to scale solidly with a healthy margin. We plan to support these businesses accordingly in 2022. Simultaneously, we have the ambition to significantly increase our spending in 2022, especially in R&D and sales and marketing, with a view to accelerating the development of our new growth businesses, which includes our software cloud platform, including the newly acquired Link3D solutions and our Medical and wearable verticals.
We believe that the combined growth of our more mature and our newer business lines, including Link3D, will generate consolidated revenue growth in 2022 of at least 10% compared to the previous year. As we will be allocating significant portions of the expanding EBITDA margins of some of our more mature business lines towards increased investments in our newer growth businesses, in particular the Link3D product portfolio, we expect our consolidated adjusted EBITDA to decrease by approximately 10% compared to last year. This outlook for 2022 does not take into account the very recent events in Ukraine. As a reminder, we have no meaningful sales in Ukraine or in Russia. Our 430 collaborators in Ukraine are mainly active in engineering, software development and supporting IT and staff functions.
As Fried explained earlier, we believe that the impact of the war in Ukraine for our customers and for the continuity of our business will be minimal because many of our people in Ukraine continue to work whenever they can and Materialise colleagues with similar skills and competencies elsewhere in the world are stepping in to assist them whenever that is needed. Nonetheless, the recent onset of hostilities in Ukraine does add a level of complexity to our outlook for 2022, as we currently cannot assess how long they will last or how the global economy will react to the sanctions that are being imposed upon Russia. We hope to have more visibility on these events, which are very disturbing to all of us and their potential short-term impact on our business when we release our first quarter results.
On this note, I would now like to open the floor for questions. Operator, please go ahead.
Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Again, that's star, then the number one on your telephone keypad to ask a question. Our first question comes from the line of Troy Jensen from Lake Street Capital Markets. Your line is open.
Hey, gentlemen. Congrats on the great fourth quarter.
Thank you, Troy.
Hey, Peter, I guess I want to start out, you know, with Software. I guess I was happy to see that up nicely. It had been stuck kind of at about a $10 million quarterly level. Sounds like Mimics grew faster. I think it, when I read in the press or in the slides, it was 25% growth, but the segment was up 19%. I guess I just want to confirm that Magics and Streamics is still growing kind of high teens, is that correct?
Well, actually, the Magics growth is not high teens, but close to 10%. The Streamics is actually being replaced by Link3D in the future.
Mm-hmm.
We see a healthy growth in the sales. We expect that the new cloud platform will really become a growth driver in the future.
Right. I'm sure I hope so. How about just specifically to, like, Q1 and the healthcare segment, I think of you guys as fairly exposed to elective surgeries. Obviously with COVID kind of spiking back in kind of January, February, just the thought that Q1 may be seasonally weaker than we've historically seen.
Troy, we had that experience of elective surgeries being postponed for COVID-related treatments earlier. Frankly, the impact, as our numbers show, of COVID on businesses, on surgeries that we support being again picked up is minimal.
I was fearing Omicron spiking might have slowed that down. How about tier two R&D for medical point-of-care? I guess I hear more point-of-care applications for Medical. Is that something that you guys favor or you guys prefer more centralized? I guess to me it's good for Mimics sales but just thoughts on, you know, the implants and stuff like that.
Well, we have a balanced view. We favor point of care solutions, especially with respect to visualization models and
Mm-hmm.
surgery planning models and the like. We do believe that from the other side, on the implant side, a more centralized approach is the only feasible one if you want to comply with all regulatory requirements. We have proven that we can elaborate high volume patient-specific solutions of implants with a quality level that is similar to standardized implants. I think this is very difficult if you do this in a very distributed way of working.
Great. I'd agree with that. Okay. How about last question for me. You know, Manufacturing's been, you know, a great segment here, recently. Could you just call out again? I thought I heard you say maybe European auto was weak, but what was strong in the quarter for you guys on the Manufacturing side?
Well, we see in the segment of what we call industrial and healthcare equipment a strong use of 3D printing, and we believe this is a quite structural change. That for small series of complex pieces of equipment 3D printing is more and more considered. This is what we believe one of the areas where additive manufacturing has a serious growth potential and in a sustainable way.
Great. Okay, that sounds like it's more end part production applications driving the business than, correct?
Yep. Yeah.
Awesome. All right, guys, keep up the good work.
Thank you, Troy.
Thank you.
Your next question is from Jason Celino from KeyBanc Capital Markets. Your line is open.
Hi.
Hi, Jason.
This is Ashley. Hi. Hi, Peter. This is Ashley Devin on for Jason. First question I have is around your 2022 guidance. I know that there's a lot of near-term geopolitical uncertainty, but in terms of other macro factors like supply chain disruptions that you and your customers, particularly within auto and for the aerospace, have been working through in the past couple years, what is your expectation of kind of this macro challenge to trend in 2022? Do you expect some sort of improvement? Any coloring for that on that?
As Fried explained earlier, I mean, the strong growth in Manufacturing has been realized, I mean, to some extent by us being able to focus on other sectors than just the automotive. The business systems in general and then the healthcare applications in particular is something that we have focused on and that has helped us in restoring the growth. I mean that shifts to some extent allows us to already show strong growth now.
If automotive picks up in the course of 2022, we've been saying this for a couple of years now, but if it does pick up, that should only further foster strong performance of our Manufacturing in 2022. Let's wait and see.
Got it. No, that's helpful. Then maybe one more on gross margin. It's a nice step up to 57% in 2021. Just maybe any color you can provide on how we should think about that margin for 2022. I know Manufacturing rebounded nicely in 2021. Should we continue to expect a kind of gradual step up in margin as that segment grows and benefit from leverage?
Yeah, we expect quite a gradual improvement of the margins in Manufacturing. We had temporarily a lesser margin in the fourth quarter, but we counted in the next quarters those will improve again gradually.
Got it. Thanks guys, and congrats on the good results.
Thank you. Thank you, Harry.
We have a question from Noelle Dilts from Stifel. Your line is open.
Hi. Good morning. Congrats again on the strong quarter. I really only had one major question, which is, you know, I think the investments that you're talking about making in R&D and sales and marketing make a lot of sense, for 2022. I was hoping you could discuss sort of how we should think about, you know, the returns on those investments. Are you expecting to maintain higher levels of investment going into 2023 and 2024? How should we just think about this from a longer term business model perspective? Thanks.
Just for 2022 to begin with, I think.
Mm-hmm
You can expect an uptake of those investments more in the second half than in the first half of the year. As we are ramping up recruitment of the developers that we are currently looking for. These investments will not stop in 2023. We do expect that sales, and then in particular of the Link3D and more in general the Magics Cloud platform, we expect those to actually start showing up in our P&L more in 2023 than in 2022. 2022 will really be a year where it will be significant investment with not that much additional revenue coming from these investments, so hitting our P&L significantly.
As of 2023, and more importantly, the years thereafter, we expect that our investments in the Link 3D platform will actually show the recurring revenue that we are aiming for.
Okay. Thank you.
Thank you, Noelle.
Next question is from Gregory Ramirez from Bryan Garnier. Your line is open.
Hi, good afternoon, and thank you for taking my questions. Just a few on my side. First of all, on the Software division in Q4, how do we have to interpret the surge in Software revenues, not only on the retail product side, Magics, et cetera, but I would say as it is, it looks to be driven by new licenses. Is it related to specific orders on the side of 3D printing manufacturers? Do we have to consider it as a one-off, because it was the end of the year and maybe the 3D printing manufacturers had some orders, or is it some upgrades on existing machines?
I have another question regarding the structure of the growth which is expected for 2020 to the 10% plus. You mentioned that Software and Medical will continue to generate solid trends. What is, I would say, the specific situation of Manufacturing? What I understand is that it is partly maybe related to the situation in the automotive sector. Is there any specific reason which can make us believe that the growth will be significantly lower in the Manufacturing division in 2022? My further and last question is regarding the adjusted EBITDA guidance for 2022. What do we have to expect from the potentially negative contribution to EBITDA from Link3D?
Because it looks to be that most of the decline, the EBITDA decline in 2022 is specifically explained by the Link3D acquisition.
Yeah. Thank you, Gregory. Many questions. I hope we took good notes.
Yeah.
If not, please interrupt us. In short, your first question on the Software growth, close to 20% in Q4. Yes, I mean, Q4 is always a strong quarter for Software sales as you know. That is definitely the 20% growth that we posted in the last quarter is definitely to some extent linked to the fact that the quarter that we're reporting on is Q4, the last quarter of the year.
Mm-hmm.
Your second question relating to the growth that we expect in Manufacturing?
Yeah.
Well, I mean, Manufacturing posted a spectacular 35%+ growth this quarter. It's basically a significant growth because of the comparison with a previous quarter that was significantly weak because of the COVID-19 crisis. We're basically filling our capacity again. I mean, we will continue to fill our capacity in 2022. Once we get to that level, the focus will be on making the right choices and making sure we fill our capacity with products that generate the best possible margin. There, we believe that some of the healthcare applications that Fried alluded to earlier should help us in improving the margin of Manufacturing. It's basically rebounding, is what Manufacturing is currently doing.
That being said, as part of our Manufacturing segment, we are reporting also our wearables businesses, our eyewear and our Motion business. We believe they will contribute to some of the continued growth that we will intend to continue to report in 2022.
Mm-hmm. Okay.
Your last question related to the EBITDA profile for 2022 and the role that Link3D will play there. The short answer to your question is, yes, the bulk of the negative investments contributing negatively to our EBITDA in 2022 will be linked to the development of our software cloud platform, and that obviously includes continued investments also in the product portfolio that we acquired from Link3D.
Okay. Thank you. Just to come back on the first question. So do you confirm there is a, I would say, no specific one-off, in the almost 20% growth in Software in Q4?
There is no specific one-off. It's well distributed. Again, here we also have a bit of the effect that Peter mentioned for Manufacturing, that the reference year of 2020 was of course a weak year.
Mm-hmm. It's-
It's-
Thank you very much.
Normally a good Q4 compared, which is actually Q4 is good compared to a not so good Q4 last year, the year before.
Mm-hmm. Thank you very much.
Thank you, Gregory.
Thank you.
Our last question is from Paul Chung with JP Morgan. Your line is open.
Hi, this is Prina on for Paul Chung from JP Morgan. I have a couple of questions on the EBITDA margin, just going back. Can you talk a little bit about where you see that going in 2023? Do you see some of the return on investments on top line, and kind of how can you look at the margin outlook?
Yeah. We try to guide for the year. Guide for 2022, we're not really guiding for 2023. As I said earlier, while 2022 will be hit significantly with lots of investments and not that much additional revenue, we expect to still in 2023 to continue the level of investments, but we do expect already some revenue compensating those revenues in 2023. The bulk of the return, I mean, is more likely to come in the years thereafter.
As our core businesses will also continue to grow, that's as we said, we will having expanding margins and realizing scale effects. As we go back to the higher margins that we realized this year and on the longer term, continue evolving positively.
Yes. Thank you, Johan. My comment only related to basically investments in the software cloud platform, and not on the consolidated basis in general. Yes. Thank you.
I see. Kind of going to the revenue contribution, can you speak at all about what you expect Link3D to bring in in 2022, both on sales and also OpEx?
Okay. As it is not a material acquisition, we do not intend to continue to give separate numbers of Link3D also because we will be very quickly integrating the product. Roughly, we gave you the numbers of the revenue that Link3D generated in 2021. In terms of contribution by Link3D to revenue in 2022, we do not expect significant increases there.
Got it. Those were all my questions. Thank you. Congrats on the good quarter.
We do expect to increase. I mean, it was a negative EUR 4.6 million. We expect, just to be sure, to increase the "negative" EBITDA coming from that product line.
Got it. Thank you.
Sure.
There are no further questions at this time. I would now like to turn the conference back to Mr. Peter Leys.
Thank you, operator, and thank you again all for joining us today. We also want to thank our employees around the globe for their dedication and contributions. On behalf of all members of the Materialise family, I would like to convey the following closing message to our colleagues and friends in Ukraine. Dear colleagues, we admire your courage. You are an inspiration to all of us. We stand behind each and every one of you. Please take good care of yourselves. Thank you.
This concludes today's conference call. Thank you for joining. You may now disconnect.