Revenio Group Oyj

From sunny Helsinki, welcome to Revenue Group Earnings Call. My name is Jouni Toajala, I'm the Group CEO, and with me we have here as well our Group CFO, Robin Pulkkinen. Today we are going to go through the highlights of the Q2. So I'm going to go through those. Then Robin is going to cover the financials and the shareholder structure change plus the financial guidance. So let's jump to the Q2. So good second quarter for us, exactly according to the plan. Net sales 25.4 million euros, so up 14.2% from the last year Q2. And the currency adjusted growth was 13.5%. So we got a bit of a tailwind. from the US dollar. Operating profit, 5.3 million, 20.6% from the net sales, up 12.6%. We had the write-off regarding to Ventica here, so Robin is going to go through the adjusted numbers A bit more in detail. EBITDA, really good level, so up 25.6%. And as well as in the Q1, so Q2, net cash from operations was extremely good, so 6.5 million and earnings per share up 6%. to 0.155%. If looking at the whole first half, so net sales, 49.1 million. It's an increase of 7.9%. On currency adjust terms, 6.1%. EBIT 10.4 million, slightly down from the last year. EPID up to the 13.3 million. And Nest gas flow extremely good, so from 0.1 million to 11.2, and of course reflecting then to slightly increased earnings. Then if we go back to the business highlights for the second quarter 2024, so the sales development in second quarter of the year was strong. And sales growth in the US, strong. And if we go for the Europe, Middle East, Africa and APAC, so the sales growth was very strong. If you look at the segments a bit more carefully, so sales of the fundus imaging devices, that was very strong. Also tonometers were developing and selling strongly during the Q2. Then if you go further into the devices, which were leading the sales. So IC200, including the probes, sold particularly well. Then DRS Plus, plus the Aden family, was selling really well as well. And then, if you recall, back to the Q4 last year, so we also updated the new software version for our fundus perimetry called Compass. So we saw nice growth percentages on the fundus perimetry side as well. Then we launched a new product called iCare Tonovet Pro. So that was launched during the Q2 and sales is picking up nicely on that one as well. And I let Robin to go through the financial part and also cover in more detail the Ventica write-off. So over to you, Robin.

Thank you, Jouni. So Jouni covered slightly the numbers that are earlier in the earlier slides. Maybe I'll give some more color here. So the sales up 14.2% in the second quarter. When going down to the second line, look at the gross margin, actually very much in line with the top line growth. So both growing for the full first six months in the second quarter in line with the top line. and gross margin also being very much in the similar level than it was last year. So there's actually very little surprises there on the margin side. We did have, so I only mentioned about the write-off. So during the quarter, we did the write-down for all the non-strategic capitalizations that we had in the balance sheet, mostly related to Ventica. and that was 730 000 so so looking at the operating income operating profit uh the adjusted the numbers maybe a better better line to look at if you want to get the get the pure business view how the performance has been uh coincidentally also last year in the same quarter we had the 800 000 one-time project costs that had an impact on the numbers then so Both of those numbers have been adjusted on the adjusted operating profit line. So 6 million for the second quarter and 5.5 for the 2023 Q2. Growth approximately 9%. And for the whole year, for the whole first six months, there's a small decline still on the adjusted EBIT number. I'll go through the other numbers in the later slides in more detail. So basically a good quarter, very much like I think we and the market expected. So we've also said earlier that we going into the year Q1 and Q4 were challenging from a comparable point of view. And then Q2, Q3 were the months or quarters where we saw that there's potential for better growth. So basically, looking at the numbers, how they came in, it was very much according to our initial and internal thinking also how we thought the year would be going. So year to date so far, going as planned. FX adjusted growth, 13.5, like Jooni mentioned. And also nice to see that the Q2 top line also coming back to the closer to the trend line. Q2 often has been actually below the trend line in the earlier years as well. 22 being one year where that was not the case, so exceptionally good year, 22 standing out here also in the graph. So looking at the profitability also with a bit of a longer tail. Now going back from 5.1 million to 6 million in the second quarter. And basically, typically looking at back in the earlier years, the second quarter is always stronger or has been stronger than the first quarter for us from a profit point of view. Last year was an exception there. So you can see here also that last year the Q2 was kind of soft from a performance point of view. So this year, just as a reminder, the cost side for us, the personal expenses are expected to grow this year, mainly due to the fact that for the 23 performance, there was very little bonus accruals in the numbers. So hopefully this year, we will will deliver as we plan and have guided so most likely those costs would go up and also we do have the the like we mentioned earlier the 1.5 to 2 million clinical trial costs planned this year still a bit open how that's going to play in the second half there was very little in Q2, quite a bit in Q1. So towards the end of the year, probably we'll have some costs hitting our numbers on the clinical trials. But those plans are still a bit open and we don't have full visibility into yet how that's gonna play out in the coming months. Cash flow, excellent. Looking at last year, Q1, 0.3 or 300,000 positive. Q2 was negative actually. This year we're above 11 million for the same two quarters. There's basically a few reasons. Looking at last year, typically in Q1, the incentive payments are paid out for the whole company. So that typically brings down the Q1 number. This year there was a lot lower payments related to those. Also, the working capital has been improved. The SEC Q2 pure results or net income was higher. than the comparable period playing into there. But maybe one, just a reminder from last year, the Q2 23 cash flow was impacted also by the Italian subsidiary income tax payments. So the tax system is a bit different there, and we did have some payments related to the earlier years. So not 23 payments, but for 22 also that hit the Q2 numbers last year. But overall, very good. if not record good first half for cash flow. The balance sheet remains to get stronger and stronger over the last quarters, approaching 75 percent equity ratio, net gearing below zero. We paid out the dividend, so based on the AGM on 4th of April, the dividend of 38 cents was paid out. The dividend payout ratio was slightly above 50 percent, and also that kind of is one of the reasons why the equity ratio has continued to grow. Shareholders, not much change here. William Demant bought some more shares, not a lot, but basically the foreign ownership has grown by 0.7 or 0.8% from Q1, end of Q1. First five companies' owners are in the same order, and same companies than Q1, a little bit different order from six to 10, but the ownerships there are also on a very similar level. And there's only one clear major shareholder being William Demant, and then the ownership splits into a lot smaller pieces after that. And our guidance. remains the same, so revenue group exchange rate adjusted net sales are estimated to grow 5-10% from the previous year and profitability excluding non-recurring items is estimated to remain at a good level.

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