Revenio Group Oyj

Good afternoon and welcome to Revenue Group Q1 2025 earnings call. My name is Jouni Toijala. I'm the Group CEO. And then, as always, we have here as well Robin Pulkkinen, our CFO. Plan for today is to go through the highlights for the Q1, and I'll cover that part, and then Robin is going to continue going through the financials for the Q1, and then shareholders and financial guidance for 2025, and then we finish up for the Q&A. But let's... kick off extremely good start for the first quarter. The Q1 was very strong for us in terms of the sales and profitability. Net sales was 26.1 million, up 10.5% from the previous year, 23.6 million euros. If we look the currency adjusted growth So that was 12%. EBIT on good level, 6.6 million, 25.4% out from revenue. If we then go more to the sales split. So imaging and tonometer business grew in every region during the Q1. So we got the growth from US, APAC, Europe, Middle East, Africa, LATAM and Canada. Then if we do a bit more deeper dive into the specific countries, so in APAC region, China grew very strongly, same for India as well. Then we got the good growth also from Europe and Canada. Then I'm sure that there's a lot of questions related to the outlook and the pipeline. So as of today, we see a healthy pipeline from the sales perspective in the USA as well. Then if going through a bit more detailed, the actual product lines. So from the tonometer perspective, Probes selling really well. I see 200 selling really well. And then we launched also the new Tonovet Pro version during the second half of 2024. So that has been performing extremely well as well. Then on the fundus imaging side, more or less the same story than in the last quarter. So DRS plus business growing well and the aid on product family growing extremely well as well. Then during the Q1, so all the growth was organic, so we didn't have microperimeter sales in at all. And from the microperimeter perspective, everything is looking extremely good. So we got the FDA approval during the Q1, and then actually we got also the CE approval. certification end of March 2025. So we are good to go in all the regions and we have been started the deliveries already and then we have a good order pipeline also for the coming months and coming quarters. From the software solution perspective, business is moving well forward as well. So if you look at the iCare iLoom screening business, and if you go in the details of the actual installed base and the sites, so we grew roughly 50% in terms of the live sites and live customers compared to the last quarter of 2024, and also the report amount has been increasing 30% year on year. And the plan is also, of course, to expand the business in other countries. Then I'm sure everybody is keen to understand where do we stand with the US tariffs. So let's cover this one. I'm sure there's a lot of questions as well. So let's be sure that all the questions are tackled during the Q&A. But a couple of words regarding When comparing us to the comparable companies, we are in extremely good and resilient position. If we look first at the macro trends, they are definitely backing us up still. In all the regions also during the Q1, we have been seeing increasing amount of patients. And if you look at the product portfolio perspective, so we are well positioned in terms of the value of the products compared to the price. And currently, as said earlier, so if you look at the pipeline in the USA and globally, so the pipeline is looking still very good. Also the profitability is in good level, so if the profitability in Q1 was 25.4% out from revenue, so for us this means that we are able to still invest and continue all our R&D projects as in the last couple of years. Then we have a good toolbox to tackle the tariffs, so let's go back to that topic. So what we have been doing already in order to be prepared, so we have increased inventory levels. already during the Q1 and even last part of the last year. And if you look the inventory in more detail, of course, it depends product by product, but we have, depending on the products, the inventory from two to six months. Of course, that's having a slightly impact also to the net working capital, but in a nutshell, We are well prepared from the inventory level perspective. Then we have been estimated the tariff impact to the bottom line. Robin is going to come back to that one. But if we look to Q2, Q3, Q4 2025, so the hit to bottom line, if we don't do anything, is roughly from 800,000 euros to 1.4. a million euros, and this is without any actions. And if we increase the prices, which is the plan, so then we have a strong view that we are able to mitigate the impact of the current level of the tariffs, which is, as of today, 10%. So this is where do we stand in terms of the tariffs, and then I let Robin to go through financials, and then we come back to this topic for sure in the Q&A.

Thanks, Jouni. So, Jouni went through the numbers there slightly. Great start for the year. Best quarter in Q1 in terms of profitability and top-line euros. 10.5% growth on top line, FX adjusted 12% growth. Now looking at, people remember that we did some changes in the balance sheet, restructured it a bit during the last quarter of the year. You can now see some of those FX impacts that we had before hitting the revenue line, now hitting the financial costs. And by doing so, there's actually roughly 500,000 of FX cost that is now hitting financial expenses instead of revenue so if we did not do those changes the top line would have been lower but of course the FX adjusted number would have fixed it but the reported number would have been lower. Gross margin also higher than what we're used to seeing for us. There's been some changes in the IFRS accounting, more related to how we treat our own personnel commissions. In the past, they've been posted to cost of goods sold, and nowadays, due to the changes, we are now posting them in the operating expenses, so it has a slight improvement on the margin line, less than 1% impact. the tariffs will then again go the other direction. So it's interesting to see how this line is going to continue to develop during the year. But in general, the Q1 average FX was 1.05 compared to 1.085 a year ago. And now that we can see that the FX is moving towards 1.14, this will also have some impacts on our numbers going forward. So operating profit 6.6 million, up almost 30%, 28.6%, and above 25.4% of revenue. And I'll come back to the other numbers a bit later. So Q1, a bit longer trend line here for the sales development. It's really good to see that the were able to grow quite well in the first quarter after having a quite flat Q1 last year. Also keeping in mind that we didn't have the new Maya in our product portfolio. So that will be now kicking in starting this quarter and the demand pipeline seems very strong for that. The sales team is very positive about the product and I think the operations team is Pulling out as many devices from the manufacturing line as they can and that capacity is also increasing quarter by quarter as we move towards the second part of the year. Operating profit also for the first quarter on a record level, 6.6 million. There were no significant extraordinary items or actually either clinical trial costs within the quarter, which would have had an impact on the profitability. So, for the bit more clarified from we've been expecting, I think the investors have also been expecting these clinical trial costs for the iCare ELUN-based screening solution to start kicking in, and that's been our original estimation also. last year. Currently, we're still kind of going through alternatives and the authorization process for the FDA and kind of reviewing clinical study alternatives for the authorizations. And our current expectation is that the trial costs will not start to run within the next two quarters either, so earliest Q4. Cash generation, very good. Looking at, if you look at last year, Q1, okay, it's flattish, but then it's good to keep in mind that all our employees have a short-term incentive program. In 24, we had very little payouts for that program. Now we're back to normalized levels this year. And then you can look at back to 22, Q1, the operating cash flow was basically zero, same for 23. So the 24 was actually quite exceptionally good due to the kind of not very or very low bonus payouts which is not the normal trend. So it's the first time in the last 10 years that it was close to zero. But that was a good reason for it. It's basically for the not so good performance in 2023. But this year, basically, what that difference is, is this year the payouts were roughly 2.5 million in the first quarter, and last year less than 500K during the same time. And if those were kind of set at the same level last year also, if the payouts were normal last year, our operating cash flow this year would have been almost 50% higher than a year ago. The balance sheet continues to get stronger. We're again above 80% equity. It's actually the first time since the acquisition of Centerview that we are reaching this level. So the interest bearing debt, it's actually down from 16.6 million last year after the Q1, down to 11.3 million at the end of Q1 this year. So we basically have twice as much cash in the bank than we have interest bearing debt In Q2, of course, the cash balance is going to go down due to the dividend payouts and the net gearing will go up slightly closer to the zero range. Shareholders, some actually changes here. So at the end of last year, demand was still around 19%, 19.6%. And now they actually flagged in Q1 that they went above the 20% ownership. And actually looking at the top 10 list, the logos are all the same. But seven out of 10 of the largest owners have increased their ownership of revenue during the quarter, which is, I can't remember such a positive movement in one quarter in any of the recent years at least. Overall, I think the Finnish ownership is slightly up, United States slightly down, Denmark slightly up, Sweden and France pretty flattish during the quarter. And the guidance remains the same. The exchange rate adjusted net sales are estimated to grow from 6% to 15% from the previous year, and profitability excluding non-recurring items is estimated to remain at a good level. And like we've said earlier, even though the range is quite large, we aim for the double-digit growth. But there is quite a bit of uncertainty in the market. So that's the reason for the wider range for this year, for now at least.

Great. Thank you, Robin. It's time for questions.