Revenio Group Oyj

Welcome to Revenue Group earnings call for Q1. My name is Jouni Toijala, and I'm the group CEO. And with me here, as normally we have as well, our CFO, Robin Pulkkinen. Agenda for today. So I'll start with the highlights for the Q1. Then Robin is going to go through the financials, shareholder structure, plus reiterate the guidance. So, let's move on to the Q1. So, the Q1 started slightly softly, as expected. However, the cash flow was strong. So, net sales ended up to 23.6 million, reported growth 1.8%. If we look at the currency adjusted number, so that was slightly down, 0.5%. EBIT down from 6.2 to 5.1. The biggest contributor for that one was the FDA approval related costs. And Robin is going to do a bit more deeper dive to the cost side in his part of the presentation. Cash flow was strong, so 4.6 million for the Q1, and the big contributor for the good cash flow was related to the non-payment for the long-term incentive scheme, plus also really, really minor payments for the short-term incentive schemes. So, if going to the business highlights for the Q1, so sales in the U.S. and Europe, Middle East, and Africa was strong. A couple of highlights from the product side, IC200 continued to sell really well, like during the Q4. Also, the DRS Plus sales was really good during the Q1. Then, as mentioned earlier, so we have started to work with the FDA approval related to the DRS+, iCare, iLoom, Cloud Platform, plus the AI, and that cost occurred partly during the Q1. this year, so roughly 600,000 euros. Then, if going back to the Q2, Q3 last year, so we had lots of headwind from the private equity-owned optometry sector in the USA. So, on the positive note, we saw some increased activity now during the Q1 from the private equity driven optometry. So that's clearly the positive side. On the product side, iCareMy and MicroPerimeter is progressing according to the plan. So based on the current plan, we have intention to launch the product towards the end of Q4 this year. And then As in all quarters, so lots of activities, of course, related to sustainability themes, and especially now during the Q1, lots of activities around the double materiality assessment. So that's working according to the plan as well. But over to you, Robin.

Thank you, Jani. So, Like Jooni mentioned, Q1 sales, slightly soft. Of course, just looking at the numbers, you may say it's well, that's what we think when we say that it's soft, but then we did have tough comparables and the good news is also that it did go pretty much like we planned. So we were not. internally surprised it has no impact on our longer term guidance. So we knew Q1 is going to be challenging. Q2, Q3 are the ones quarters where we are having easier comparables. And then, of course, Q4, again, we have challenging comparables. So I think the Q1 and Q4 also internally were expected to be a bit softer year over year. Gross margin we were able to protect well, so not a big change there, so 70.3%. And like Jooni mentioned, the profitability is down, driven by the FDA approval-related costs. We did highlight at the end of the last year, or the Q4, that we do have some cost headwinds this year, so the FDA trials for the new products were expected to be roughly 1.5 to 2 million euros this year. And then, of course, the salary side, where we did pay record low incentives this spring, but those, of course, were accrued last year. So, in the costs in the books for last year, but the cash flow impact this year. Earnings per share, 13.7 cents, and the net gearing, minus seven versus minus 13 last year. So here you can see a bit more of the sales trend. The Q1, again, slightly below the trend line, but that's been the case for every Q1 also earlier. So the 1.8% reported growth, slight decline on the FX adjusted, and especially the EMEA and the US sales were performing really well. And then the profitability side. So that we can see here that it did come down, but we did kind of anticipate this to happen also. So the FDA costs, I think, seems to be a bit higher than maybe the market was expecting for the first quarter. The analyst reports, I think they were, in average, expecting a lower cost for Q1. We haven't really specified what quarter these costs are coming in this year, and I think it's fair to expect that there will be quite a bit of quarterly fluctuations in how those costs come in. Of course, looking at the profitability for this year, like I mentioned, the bonus accruals last year were quite small. Looking at this year, expecting to remain within the guidance, the payroll costs will be higher this year compared to last year. Cash flow, record high. I think we haven't been even close to this level in the earlier years for many years going back. So, traditionally, all the STI and LTI incentive programs are paid out in first quarter. And now that those payments were smaller, that is the main reason for the increase in the operating cash flow. Of course, then also, we did pay taxes less than the comparable period, and then the trade receivables came down, which we also, at the end of Q4, discussed that the AR was quite high due to a really strong end of the year. So, the AR coming down was also pretty much what we have planned and foreseen earlier. The balance sheet remains strong. So the equity ratio almost 75%. It's up actually more than 10% year over year. One big reason there is that last year, I think the dividend was paid in Q2 like this year, but the AGM was in March. So the equity postings for the dividends were already in the balance sheet. So that was one reason. So Q2 this year will also have the dividend payment in the equity, so the equity ratio probably will come down slightly. So, 38 cents of dividend paid based on the AGM decision on April 4th, and those payments went out around mid-April this year. Shareholders, a couple changes here. The forums seem to be noticed also that the demand to invest has increased their ownership, so went from slightly below 18% at the end of the year to 18.73% now at the end of Q1. And then also we have a new, not new shareholder, but Berenberg Funds. They have been our shareholders for already a long time back, but then have now increased their ownership and become the sixth largest shareholder. on the top 10 list, so other than that, all the others are in the same order and pretty much in the same level as they were at the end of the year. Foreign ownership also now slightly above 50% again after being just under 50 at the end of the year. The country split hasn't much changed, so nothing really to highlight there. The guidance remains the same. Revenue group exchange rate adjusted net sales are estimated to grow five to ten percent from the previous year, and profitability excluding non-recurring items is estimated to remain at a good level. No change here. Good. And I think we're good for questions.

Yes. Thank you, Robin. And it's time for questions, please.