Revenio Group Oyj

Good afternoon, and welcome to Revenue Group Q1 earnings call. My name is Jouni Toijala, and as always, we have Robin Pulkkinen, our CFO, in a call as well. Plan for today is to go through the highlights of the quarter. Then I'm going to cover that one. Then we have Robin covering in more detail the financial part, plus the current shareholder structure, and then the reiteration of the financial guidance. But let's start with the highlights of the quarter. So we saw very strong growth in sales, and especially in North America, UK, Germany, Finland, Italy, and Australia. And if coming back to the Q1 growth drivers, so tonometers, including the probes, started to grow in a double-digit manner, and there the leaders from the product perspective, where actually I see 200 and then the home two. Then exactly as in the earlier quarters, so we achieved very strong sales from the retinal imaging devices. And again, the same trend continued, so the ADON product family sold really well during the Q1. plus, of course, the DRS+. Then we have been able to move forward related to the iCare iLoom screening solutions. So we installed on the production use more systems during the Q1, plus then we also established new pilots there. as well during the Q1, so also the ILUM solution is moving forward as planned. From the market conditions, uncertainties point of view, not too much change on here. What we saw during the Q1 is that the component situations is now slightly better than in the end of the Q4. Then a bit on the client side, we are seeing a bit more cautious decision making. Our view is that it's because of the cost inflation, but otherwise Things are more or less looking the same as in Q4. Then if going through a bit more to the numbers, so Robin is going to cover numbers in more detail, but a couple of highlights here. So net sales 23. 0.2 million so that's up from the last year at 20.2 million so up roughly 15 percent then the ebit performance 6.2 million euros 10.9 percent growth and if we look the Q1 at 22. So we are slightly below. So out from the net sales, the EBIT was operating profit was 26.6%. And there's a couple of reasons for that one. So product mix was having an impact to the cross-marching and then a bit of a currency fluctuation in the numbers as well. But Robin is going to cover those in more detail. Then earnings per share came down slightly. So that was due to the financial costs and tax rate items. So Robin is going to cover those ones in a bit more detail. detailed as well. But I think at this stage, Robin, over to you.

Thanks, Joni. So like Joni mentioned, 15% growth roughly in the quarter, first quarter. Not that much FX impact. So basically the FX adjusted growth was 15.2%. Looking at the profitability level, EBIT came down less than 1%, like the EBIT percent compared to last year. The biggest reasons are basically the gross margin where the product mix and FX had an impact. But then when you look at operating expenses, basically last year our operating expenses were 41% of sales and this year they were 40% of sales. So we caught back a bit of that loss that we did in the gross margin and then back in the operating expense and ended up 26.6%. The earnings per share came down, like Joni mentioned. The financial expenses in Q1 were roughly 700,000 up or a little bit below that from last year. That's mostly unrealized FX. Of course, the interest were slightly up, but also the interest income was up. So those kind of more or less net off each other. So more or less the whole thing is from unrealized FX from currencies we have in the balance sheet. So US dollar and Australian dollar being the biggest part. In addition, also taxes that we paid were up 380k more related to which legal entities we actually had the profits coming in in the quarter. So in Q1, we had more profits coming in from Italy where the tax rate is slightly higher than Finland, 27.9% versus 20 in Finland. Net gearing I'll cover in the next slide a bit more. Equity ratio is slightly down. Here it's important to keep in mind that this year our AGM was in Q1, so the dividends were posted off the balance sheet or the equity side to the liability side at the end of the quarter, while last year our AGM was in Q2. So the dividends were still in equity at the end of Q1 last year. Cash flow from operations up by half a million. On the cash flow side, the beginning of the year is typically the worst quarter for us. We pay out all our annual short and long-term incentives for the whole company and as well the tax payments were quite high in the first quarter. Looking more on the graphical view. Net sales developed really well in the first quarter. Looking at kind of FX, last year we had very positive tailwind from the FX. I think all the signs, at least what we see now, are kind of giving the hint that the tailwind will not be as strong this year. So last year, the FX impact was roughly 6 million euros. So now that most likely we will not see that kind of positive support this year, at least not in Q1. The adjusted operating profit are actually still in the revenue, looking at the trend line. So you can see the first quarter typically drops below the trend line. So it typically is the the slowest quarter from a sales point of view for us. And then when we go towards the end of the year, then we're going to start to pick up and ending up the year with above the trade line. The Q2 is interesting, so looking at the The earlier years, we've kind of been close or slightly below the trend line. Last year, we were slightly above, mostly due to FX. But anyway, the last year number is very challenging. It puts the bar really high for us, where to target and try to get to this year. The operating profit, also like we've talked before, is a very scalable business model. So when the top line goes up, the profitability follows, so the operating expense are pretty fixed. On the cash flow, here you can see the first quarter typically is on average, if you look at the past years, it's been close to zero. Now we're slightly positive this year. Like mentioned, the short-term and long-term incentives and the taxes paid out, and then of course the lower Top line and bottom line in the first quarter are the reasons behind this typical trend. The equity ratio is still really strong. The balance sheet is in a really good solid condition. It did come down slightly like I mentioned earlier due to the AGM taking place in a different quarter than last year. The dividend of 36 cents was paid in April, so basically even though the AGM was in Q1, it didn't leave our balance sheet until Q2. On the shareholder side, no big changes. Basically, the top seven are still the same. The foreign ownership has gone up slightly, but in the bigger picture, really no major changes in the first quarter in the ownership. The guidance for 23 revenue groups, exchange rate adjusted net sales are estimated to grow strongly from the previous year and profitability excluding non-recurring items is estimated to remain at a good level. That's it. Thank you, Robin.

I think we are ready for the questions, please.