Revenio Group Oyj

Sunny, Helsinki, Finland, and welcome to Revenue Group's second quarter earnings call. My name is Jouni Toijala, and I'm the CEO of Revenue Group. In addition to me, we also have our CFO Robin Pulkkinen joining today. So I'm going to start by talking through the second quarter highlights, and after that, Robin is going to go through a bit more thoroughly the financial numbers. Let's start with the sales. So excellent quarter for us, especially supported by the growth of imaging devices. So the sales was up at 37.9%, so heading to the 18.9 million euros. And really, if looking and comparing to the past performance, so we actually had the best quarter ever what comes to the imaging device sales. So we are actually up about 20% even to the pre-COVID numbers. Then when we go back to the tonometers and probe sales, so in addition to the imaging device sales, also probes, where the probe sales was growing steadily, also the tonometers during the second quarter, also during the first half. And if we do a bit more deeper dive to the products, so DRS Plus on the imaging side, growth was extremely strong. Also Aden family, so the whole family of the products, there were a lot of growth as well. And then also the perimeters and the micro perimeters. That business was growing during the second quarter. And that was valid across almost all the key markets where we are present. So then if we go to the bottom line, so the EBIT part, so the EBIT performance was 4.4 million, up 28.7%. But there we actually missed the consensus. So Robin is going to go a bit more deeper on that side. But the couple of items to mention there, so one reason for that one was a sales mix. Then for the personal costs, we had one of personal costs in, a bit of a hit from the foreign chase rate. And then I would like to remind also that we closed the Okulo acquisition during April. So as we stated earlier, we are going to invest to the Okulo SaaS platform. in terms of the relative profitability. So during this year and next year, the relative profitability is going to be lower compared to the previous years because of the investments going to the software platform. Then if we go a bit to the product side, so the product, from the product perspective, the second quarter was very active. for us in the first half. So we launched a new iCare Home 2 tonometer, and there are a couple of significant improvements. So we improved the easiness of the use of the actual devices, so it's much more easier to do the measurements. Then compared to the older home device, so we actually had to use the cables in order to transfer the results from device then to the cloud, so now we are using the wireless connectivity. And then we also support the iOS app. And the feedback that we have been so far received from the device, so that's very good. And it's actually already on the market in Europe, and we are in the process of applying the FDA approval for the USA. what comes to the imaging device side. So we also have a new product coming out, so-called ADON ultrawide field fundus imaging device and also the lens, so that we are able to upgrade the functionality of the devices which are already in the field. So with that, feature we are able to capture and increase the angle. So 120 degrees with a single shot. And then if we use the mosaic functionality, so the field of the views is going to be extremely large, around 200 degrees. And then as stated many times before, so we are continuing to receive a really good feedback related to DRS+. So currently, if looking from the product portfolio point of view, so good feedback coming across the board for the imaging product, which is then providing the long-term growth for us as well. So we believe, even though that we are sure that there has been some pent up demand, especially on the imaging side. during the first half of this year. But definitely, the growth rate has been so high on the imaging side, that we are definitely also gaining market share as well. But with these words, I would hand over then speech to Robin. So, over to you, Robin.

Hello, everybody. My name is Robin Pulke. I'm the CFO for Revenue Group. So go through the numbers a bit more. Like Jooni mentioned, second quarter, 18.9 million in revenue. And like we stated, and Jooni mentioned, that the FX has been playing against us quite a bit. So it's nearly a $1 million hit that we took on the top line on the second quarter. So without that, we would have been quite close to 20 million in revenue. And the growth would have been actually over 40%, so 43% to be exact. For the first half as a whole, the growth has been extremely strong. So 35.6 million in revenue with a 39.2% growth. And with the currency adjustments, 43.7% growth. On the EBITDA and the EBIT line, we have also the adjusted numbers here. For the second quarter, there wasn't much adjustments to be done. So the adjustments we have here, are basically the costs related to the acquisition of Okulo. So the kind of the transaction costs. For the second quarter, there was less than 50K that we had. But for the first half as a whole, it's almost 700,000 that we have in the costs. And those have been adjusted out here. So the adjusted EBIT for the second quarter, 4.5 million, up nearly 30% from year over year. It's 23.7% out of the revenue. And for the first half, 9.7 million and 27.3% out of revenue with a growth of 65.7%. Like Jooni mentioned, the consensus and the expectation was probably a bit higher for the profitability for us. So just to open a few items, the FX almost a million on the top line, but also that hit our bottom line by over 400,000 euros for the quarter. Also, the product mix, the imaging devices have been growing really fast in the second quarter, and their share of the total sales were actually quite high. And that, as we've stated earlier and quite commonly known, is that the imaging devices have a bit lower gross margin, and kind of that product mix hit when you look at the year back is also quite significant when it comes to profitability. Then we had certain one-time personal costs, which will not continue going forward. And then, of course, the Okulo transaction that took place. And the numbers for Okulo have been consolidated since the 28th of April. And so we have pretty much two months in the numbers here. Some of the key figures, our equity ratio continues to be very strong. Cash flow for the first half was very strong, actually up 80% from last year. The drivers for that were basically the increase in net profit and the changes in the working capital. Also, when you look at the net gearing maybe there, where the bigger changes is actually related to the Okula transaction, which we paid in cash. The transaction itself was 18.5 million Australian dollars. And in the purchase price allocation, we've allocated about 2.5 million euros to the intangible assets and then 9.5 million to Goodwill. And all this was paid in cash, which resulted in a lowering of the net gearing. So kind of our cash and cash balances went down quite significantly during the quarter. Main shareholders, there's not been much change over the last months. The biggest change in kind of the go back 12 months from now or nine months from now are kind of the US ownership, which has been going up a lot. So on the top 10, we have Columbia Threadneedle, Capital Group, Vanguard, BlackRock, some of the world's largest investors who've joined our ride over the last year. So that's kind of one of the bigger changes that's been taking place over the last year. Other than that, we have pretty familiar names on the list here. And then yesterday, we updated our guidance. So I just want to highlight here again that it's a full year guidance. So even though we now updated it, it's actually still for the full year. So the first half, we grew extremely strong, so 40% growth. But when you go back and look at last year, there was a COVID year. The first half and second quarter especially was quite weak. So it wasn't one of the best quarters for us. But when we look at the second half last year, our performance was extremely good already there. So I would be As an investor, I would not assume to expect similar growth from us for the second half that we've been seeing now in the first half. So, the guidance here, even though it's a positive change, it's still a guidance for the full year. And that's it from me. Now we'll go to the questions.

Thank you, Robin. So, we received plenty of time for the questions. So, the floor is open for the questions, please.