Revenio Group Oyj

Finland and welcome to Revenio Group Q2 2025 earnings call. My name is Jouni Toijala, I'm the Group CEO and with me as always we have here Robin Pulkkinen, our CFO. Let's go through the agenda first. So I'll start with the highlights for the Q2 2025. And then also I'm going to cover the summary of the first half. Then Robin is going to do a bit more deeper dive to the Q2 financial part plus the shareholders and then reiterate the guidance for 2025. And then, of course, we finalize the day with the Q&A. Back to Q2, so April, June highlights. So, Given all turbulence on the tariff side, geopolitical side, Q2 went reasonably well in our mind. Top line sales growth was 4.2% reported, leading to the 26.5 million. Currency adjusted growth was 7.2%. On the positive side, the trend continued. All the regions, APAC USA, Europe, Middle East, Africa, so all the regions grew during the Q2. Also, all the product categories, so tonometers, finders, imaging, micro-perimetry and the software side of the business, so all the segments grew as well. If you look a bit more deeper to the regions, so the APAC growing nicely. We had a highlight in APAC, which was India. Then in the Europe, France and Germany growing very strongly as well. And then we have been able to improve also the profitability. So the EBIT level is 6.1 million euros and up. roughly 16%. And as I said earlier, Robin is going to cover these ones in more detail. Then looking back to the first half, so net sales for the first half was 52.6 million, up 7.2% reported, currency adjusted, which is relevant for the full year guidance, so that's up 9.6%. Also, the profitability nicely up compared to the previous year or so, 22.3% leading towards the roughly bit less than 13 million euros. Then during the first half, we also got the micro-perimeter out, and also the marketing authorizations from the main markets, and then we have been extremely active and successful on the Loom side as well, so the screening solution has been selling well, including the increase on the hardware side of the business. Then moving towards the tariff, so I think everyone has been wondering what's the current status on the tariff side. So if you go back to the April timeline when we announced our Q1 results, so we estimated if we don't do anything, the 10% tariff impact is going to be roughly from 800k euros to 1.4 million euros. What we have been doing earlier or the late last year, earlier this year, so we have been increasing the inventory levels and now the tariffs have settled down to the 15%. We did the new estimate, so with the 15% tariff level, if we don't do anything, the impact for the remaining part of the year is roughly from half a million to one million euros. And here, of course, we are going to check our pricing. So we have been bit increasing the prices for the probes during the, towards the end of the Q2, and then inventory levels are currently looking quite So when we are starting to run the inventory, or when the inventory starts to run out, then we are going to adjust also the pricing in the USA according to that. But I'm done. So over to you, Robi.

Thank you, Jooni. So let's have a quick look at the numbers in a bit more detail. So the development was good, like Jooni mentioned. Sales were up. Also gross margin over 70%. So looking at the profitability and gross margin, they have been growing actually faster than the top line for this year. The FX has a play here. I'll come back to that a bit more later. If you look at the EBITDA line, so 7.2 million up slightly from last year. And then we do have the reported operating profit. Maybe here just a reminder that last year we had the Ventica write-downs slightly over 700,000 euros. And this year we had these one-off project costs, 0.5 million. So basically if you look at the adjusted operating profit line, so that's growing roughly 10% in Q2, almost 20% in the first half. That's probably if you want to see how we're doing operationally, that's the better number to look at. The EPS is actually, some have noticed that it looks a bit weak compared to the other numbers. So there are quite a bit of unrealized foreign exchange losses in the financials expense in our P&L. Roughly 2.5 million of those for the first half are unrealized, so had no cash flow impact. And it doesn't hit the EBIT, but the EPS shows that kind of impact on those costs. I'll come back to the other numbers in the coming slides. So our sales growth mentioned now many times, so 7.2 currency adjusted, quite good for the second quarter. In the past, we've also said that almost half of our sales are in the U.S. dollars now for the first half. Our dollar-based sales were 44% of our total sales. So as many of you know, of course, we have operations in the US. We don't do any hedging by banking instruments, but we do have quite a bit of natural hedging in our costs. looking at the US-based operations, roughly 40% of the revenue we have kind of offsetting costs in the country. So you're left with 60% above that in the sales versus costs. And then if you look at our variable costs, out of our globally sold products, more than 20% of the components and the materials costs for our products are dollar-based priced. If you kind of add those together, there's slightly around 60% or slightly above of natural hedging against the dollar sales that we have in the group. And if you consider US being roughly 44% of our sales, that then kind of means that on a group level, there's under 18% of our group sales are open for kind of or are not hedged in a way. Operating profit improved. So looking at the EBIT, it's up year over year. the second quarter and for the first half of the year also in absolute numbers in euros uh also relatively uh so so we've been been kind of having a tighter look at the cost base but also the fx impacts uh our cost base uh for the operating cost going down with the us dollar weakening but also just a reminder we do have our software development in australia and also the Australian dollar against Euro has weakened some 15 to 20% over the last year. So that in a way shows us less costs. And we don't have Australian-based sales, Australian dollar-based sales. So the cost savings in a way show up in the group. Cash generation. solid. So for the second quarter, there's actually a couple of things. So the working capital management was quite good, so had a positive impact on it. But then there's a timing thing on the Italian taxes. So we pay our taxes in Italy on the last day of the second quarter. Last year, that payment hit a weekend. So that date on the end of June last year was on a weekend. So the payment hit our Q3 numbers. So in a way, the comparable number is... Not wrong, but it's not kind of how it's supposed to be. So when you go into Q3, we'll have the kind of the tax payment last year there. So in a way, the comparable number is now slightly better than it should be in normal life. And the foreign exchange losses and the unrealized foreign exchange losses actually had no impact on the cash flow for the group. Balance sheet, no really surprises here. It normally comes down in Q2 due to the dividend payments that go out. So we're still now at the end of the second quarter higher than the second quarters in prior years. So overall, the balance sheet remains quite unchanged over the last quarter. Shareholders, looking at how this was at the end of the year, there's maybe one bigger change. So if you look at the Finnish versus foreign ownership, that's more or less exactly the same as it was at the end of the year. Finland ownership is basically the same. Denmark and Sweden are up. US and France are slightly down. Looking at the top 10 ownership list, the Demant Invest has actually increased their ownership from 19.6% at the end of the year to 21.8% now. And then the top 10 list is more or less the same, just small changes like Ilmarinen and Swedbank have switched places. Varma is slightly up, Elo is slightly down, and then we have Handelsbanken, which has been shifted to Evli. So other than that, all the companies or the investors are the same. And the guidance we reiterate, so we expect our exchange rate adjusted net sales to grow 6-15% 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 the Q&A.