Revenio Group Oyj

Finland and welcome to Revenue Group earnings call. My name is Jouni Toijala and I'm the CEO of Revenue Group and with me today we also have here our Group CFO Robin Pulkkinen. I'm going to start to go through by going through the Q4 highlights and also 2021 highlights. After that, Robin is going to go through a bit more details on financials, and then we are going to end up with the Q&A. So Q4 was a record quarter for us. Net sales totaled 23.8 million euros. It's an increase of 20.7%. And it's a really good result compared to really tough comparison from the last quarter from the last year. Operating profit was 7.1 million euros, which is 29.9% of the net sales. This also includes roughly 0.6 million impairment related to the kutika. The cash flow was very strong during the Q4, resulting at the 11 million euros, and that's up from 6.2 million euros from last year. And the EPS was good slightly below the last year. So if going full year numbers for the 2021, so net sales totaled 78.8 million euros. So that's an increase of 29%. Operating profit was 22.1 million. 28.1% from the net sales, that's also a good increase. Then if you look at the adjusted numbers and adjusted EBITDA, so we had the acquisition costs related to Okulo 1.7 million and then the Kutica impairment 0.6 million euros, so adjusted EBIT was 23.4 million euros. Then if we go to the cash side, so the cash generated from operating activities was also up from 15.2 million to the 21.5 million and the EPS went up from 0.505 to the 0.652. So in nutshell, extremely good year for us. So if looking bit behind the numbers, so what was the reason behind the good numbers? So we were successful on the sales and marketing side. So the sales activities, digital marketing activities, We're going really well during 2021. Then if looking at the product side of the business, so we saw the same trend during the Q4, what we saw in the Q3. So the imaging sales was extremely strong for us. Tonometers were growing as well, but not as rapidly. base as the imaging side of the product. But if looking the tonometer side, so it's worthwhile of noticing that actually we did over 30 million patient measurements during 2021. So that's a lot. Then we also managed to gain new openings, so we managed to start getting the footholds from the larger optical retail chains and the global customer accounts, which was really good. really happened also during the Q4. Then almost the whole year, we also struggled with the component shortages, but we were able to tackle the issues as they arised really well with our manufacturing partners and with our operations department. But we really see that it's going to be challenging times also on the component side during 2023. So a couple of highlights also from the product perspective. So we launched on March 2021, we launched a new generation Home 2 device with the related mobile phone applications plus the cloud software, and we also received After the 2021, so about two weeks ago, we also got the FDA approval for the Home2 device. Then on the April 2021, we acquired Australian software company called Okulo, and that gave us access to the software and solution market, which is going to be important growth area for us in the future. Then on the imaging product side, we also launched the ADON ultrawide field lens for our ADON family, and that has been well received among our clients. So also a strong year from the product perspective. But with these words, I give a floor to Robin,

Thank you, Jouni. So, let's go a bit more through the numbers. Jouni covered some of these already. But basically, the net sales, 23.8 million for the last quarter, and with a growth of over 20%. And here I also want to highlight what Jouni also covered a bit, that the comparison number from 2020 already included an organic growth of more than 35%. So the comparables we started off this last quarter was really tough, and still we were able to grow more than 20%. For the full year, 78.8 million growth and almost 30% growth with the 78.8 million in sales. We have the EBITDA numbers here. And also the adjusted EBITDA numbers. So looking at the last quarter, basically there is no adjustment for the EBITDA line for the last quarter of last year. So 8.6 million, 36% of sales with a growth of 3.2%. That's basically the same also for the adjusted line. For the EBITDA for the full year, 25.7 million, which is 32.7% of sales. with a growth of 18.6. And here, you can actually see on the adjusted EBITDA line that we've added back the 0.7 million of the Okula transaction costs on the adjusted line, where we get to 26.4 million in EBITDA, 33.5 percent of sales, and with a growth of almost 22 percent year over year. On the EBIT side, 7.1% for the last quarter. It's a bit down from last year. But here also the Kutica write-off was already, the impairment was playing a key factor. So basically when you add back the 0.6 million to the EBIT for last quarter, we get to 7.7 million, which is 32.6% of sales and up a little bit more than 1% year over year. Last year also, as some of you remember, our other income was extremely large. There was roughly a little bit over a $1 million contingent consideration released from the Centerville acquisition. So that also played into the profitability of the comparable numbers. Also this year, we did have some 800,000 of other income, which consisted of different R&D tax credits in the US and Australia and Italy, also in Finland. But also there was some other kind of COVID-related income, which is more related to the kind of sustainable management of the pandemic within the company. On the EBIT for the full year, 22.1 million. It's basically 28.1%, so the reported EBIT percent is actually the same in 2020 and 2021. When we look at the adjusted line, we've basically added back the 0.7 million acquisition costs and the 0.6 million impairment of kutika to the 21 numbers, where we get to 23.4 million, which is almost 30% of sales. And for the comparable numbers, you can see it going from 17.1 to 19.1. There in Q3 2020, if some remember, we actually did have an impairment on the kutika as well, which amounted for 1.9 million. So that's basically the adjustment for the comparable EBIT line. EPS, 0.65 cents for the full year. The board is proposing a dividend of 34 cents to the AGM. That's basically a little bit more than 50 percent payout ratio for last year. And then, yeah, let's jump to the next slide. Some of the other key figures, we've shown this slide earlier. So, basically, having the equity ratio is still very strong, actually improved year over year. If you look at the history a bit more, in 2019, that was the time where we bought acquired Centerview. And basically, the equity funding and the bank loans did have an impact on the balance sheet. So, the end balance of the balance sheet went from below 20 million to over 100 million. So, the whole structure changed a lot. So, that actually is the key driver of the bigger difference or change in the 2019 numbers. And then, looking at this year, we actually did add in Okulo to the numbers, but basically, it doesn't really show too much in the graphs here. Looking at kind of the net gearing, basically, still the cash flow for the full year was really good, like Jooni mentioned, and the kind of the net gearing after the Okula transaction was actually more than 20% positive. So considering that we're back to negative, it's quite a good end result, considering that the cash balance is basically close to the same where it was a year ago. Meanwhile, we'd paid more loans in 21 than 20. We paid more dividend in 21 than 2020. We paid for the Okkula transaction over 11 million in cash for the shares of the company. And also we've continued to develop the software solutions with the Ocola team, and we funded that for pretty much the whole year. And like we've said earlier, that's been cash flow negative for a couple of years. So basically still we're ending at almost at the same cash balance where we were a year ago. So kind of the cash flow has been extremely good for us. Also, some of you probably have noticed the balance sheet. has a quite large short-term liability, which is related to our bank loan that was repayable at the September-October timeframe this year. That's actually been renegotiated after the close or change of the year. So still in the financials, the year-end financials, because the paperwork was not done, it shows a short-term liability. But in reality, that that payment schedule has been pushed out. So we continue to pay down $1,050,000 per quarter for that loan. Yeah, and the next one. Some of the main shareholders basically December was the first month in the history of the company where the foreign ownership actually went above 50%. So it's the first time ever. The Finnish owners have always been more than 50%, but like we know, starting in 2015, the foreign ownership was somewhere around 5%, and it has been going up. quite rapidly from there, and now we're actually, the foreign ownership is more than 50%. Some of the bigger trends, I guess, in the changes for the last 12 months is that the larger American institutions have come on the list. They've increased their ownership. William de Montt has remained the major owner for our company. So basically, Demand is a Danish-based company, so Finnish ownership around 50%, American about 16-17%, Danish about 14%, Swedish ownership about 7%, and then it drops quite a bit before the next larger countries. And the financial guidance for this year, we expect our exchange rate adjusted net sales to grow strongly from the previous year, and profitability excluding non-recurring items is estimated to remain at a good level.

Thank you, Robin. I think it's time for questions, so please.