Revenio Group Corporation: Financial Statement Bulletin, January 1 - December 31, 2019

Stock Exchange Release, February 20, 2020 at 9.00 am

Financial Statement Bulletin, January 1 - December 31, 2019

This release is a summary of Revenio Group's January-December 2019 financial statement bulletin. The complete report is attached to this release as a pdf-file. The stock exchange release is also available on the company's website at www.reveniogroup.fi/en

Revenio ended the year with very strong growth driven by the successful CenterVue acquisition

October-December 2019

· Net sales totaled EUR 14.9 (8.7) million, up 72.2%
· Operating profit was EUR 5.2 (3.0) million, up 72.9%
· EBITDA was EUR 5.8 (3.2) million, an increase of 81.6%.
· EUR 1.0 million was recorded in other income as a non-recurring adjustment of the purchase price
· The currency-adjusted growth of net sales in October-December was 70.1%, or 2.1 percentage points weaker than reported
· As a result of strong cash flow, the Group is again almost net debt free
· Undiluted earnings per share came to EUR 0.143 (0.100)

· Timo Hildén, former President & CEO of Revenio, became temporary President & CEO after the CEO term of Mikko Moilanen (August 5-November 25, 2019)

January-December 2019

· Net sales totaled EUR 49.5 (30.7) million, up 61.4%
· Operating profit was EUR 12.6 (10.2) million, up 23.4%
· EBITDA was EUR 14.6 (10.8) million, up 36.0%
· Operating profit and EBITDA were weighed down by non-recurring acquisition costs amounting to EUR 2.8 million and the impact of the acquisition cost of CenterVue's inventories
· Operating profit adjusted by non-recurring acquisition costs and the impact of the acquisition cost of CenterVue's inventories was EUR 15.4 million, an increase of 50.5%
· Adjusted operating profit was 31.0 (33.3) % of net sales
· EBITDA adjusted by non-recurring acquisition costs and the impact of the acquisition cost of CenterVue's inventories was EUR 17.4 million, an increase of 61.7%
· The currency-adjusted growth of net sales in January-December was 58.6%, or 2.8 percentage points weaker than reported
· Undiluted earnings per share came to EUR 0.365 (0.339)
· Revenio signed a contract in April 2019 to acquire the entire share capital of Italian company CenterVue SpA. The acquisition was completed at the end of April 2019
· The company carried out a directed share issue for selected institutional investors in an accelerated bookbuild offering, whereby the company collected new capital totaling EUR 41.2 million after costs
· In addition, the company took out a bank loan amounting to EUR 30 million to finance the acquisition
· The Board of Directors will propose to the Annual General Meeting of March 19, 2020 that a per-share dividend of EUR 0.30 (0.28) will be paid

Key consolidated figures, EUR million

  Oct-Dec/ Oct-Dec/ Change Jan-Dec/ Jan-Dec/ Change
2019 2018 % 2019 2018 %
Net sales 14.9 8.7 72.2 49.5 30.7 61.4
Operating 5.2 3.0 72.9 12.6 10.2 23.4
profit, EBIT
Operating profit 34.9 34.8 0.2 25.5 33.3 -7.8
-%, EBIT
Adjusted 5.2 3.0 72.9 15.4 10.2 50.5
operating
profit, EBIT
Adjusted 34.9 34.8 0.2 31.0 33.3 -2.2
operating profit
-% EBIT
EBITDA 5.8 3.2 81.6 14.6 10.8 36.0
EBITDA, % 38.6 36.6 2.0 29.5 35.1 -5.5
Adjusted EBITDA 5.8 3.2 81.6 17.4 10.8 61.7
Adjusted EBITDA 38.6 36.6 2.0 35.1 35.1 0.1
-%
Return on 9.4 17.6                           
investment 22.6 59.5
(ROI), %
Return on equity 9.0 14.0   22.7 47.6  
(ROE)*, %
Earnings per 0.143 0.100   0.365 0.339  
share, undiluted
             
        Dec 31, Dec 31, Change,
2019 2018 %
Equity ratio, %       58.6 81.8 -23.2
Net gearing, %       3.4 -55.6 59.0
                         

* The reference figures for return on investment, % (ROI) and return on equity, % (ROE) have been updated since the company has shifted its calculation to review period specific (3 months / 12 months) earnings of key figures.
 

Financial guidance for 2020

Revenio Group's reported net sales are estimated to grow very strongly from the previous year and profitability is to remain at a good level without non-recurring items.

Timo Hildén, CEO, on the year 2019:

"Revenio is a global pioneer in ophthalmic diagnostic solutions. The year 2019 was a year of extremely strong growth for us and, in many ways, an important new beginning. Our net sales increased by 61.4% and our EBITDA adjusted by non-recurring acquisition costs for the same period grew by 61.7%, totaling EUR 17.4 million. We significantly strengthened our market position and role in the eye diagnostics value chain through the strategic CenterVue acquisition, which has fully met our expectations. We can now provide our customers with all the modern products need to diagnostics of glaucoma. CenterVue's imaging products will also allow Revenio's product portfolio to be expanded beyond glaucoma into diabetic retinopathy and other macular diseases, such as age-related macular degeneration. The acquisition therefore also considerably increased our market potential.

I am very pleased that the acquisition process, has been successfully completed and the integration work has progressed in a highly positive spirit. All the major integration-related projects have proceeded smoothly and will be completed during the first half of 2020. CenterVue's organization has welcomed the new owner with open arms. The ability and willingness to work together across organizational and national boundaries has been admirable. The next major step is to define our brand strategy together.

The year 2019 was another strong year for Icare, which makes devices for measuring intraocular pressure. A major event was the launch of the new ic200 intraocular pressure measurement device in Europe, Australia, Canada, and Japan. The product is the result of long-term product development and uses a new patented method that allows the basic Icare probe to be used for downward measurements without the probe dropping off. The device provides physicians with a new way of measuring patients in a lying position, for example, or challenging pediatric patients. The product was granted a sales permit in the United States after the end of the review period in January 2020. The Medicare coverage obtained for the Icare HOME tonometer during the period was important to us, and we expect it to have a positive impact on product sales in the US. We strongly believe in the Icare HOME device, but as a pioneer in at-home eye pressure measurement, we understand that it will require a good deal of efforts and time to create a new significant market.

It is extremely important for us to keep our product portfolio viable. All our current products are less than five years old, which indicates that our product portfolio is up-to-date. We invest heavily in the lifecycle of our products. A good example of this is the Eidon FA fundus imaging device, launched in early 2019, which provides ultra-high-resolution images and videos of fundus fluorescein angiography. At the end of the year, we launched a new-generation fundus imaging device in Europe and the United States called DRSplus, which is particularly suitable for the detection of diabetic retinopathy. We believe that we have developed the best product on the market in this segment, bringing to the market unsurpassed image resolution and quality for its price range.

Major changes in EU regulatory requirements and audit practices have kept us as well as other companies in our industry busy. The new European Medical Device Regulation (MDR) Decree will take effect in May 2020. We successfully completed audits under the new Medical Device Single Audit Program (MDSAP) in the fall both in Finland and Italy. The changes have required significant investments from us, but they will bring both financial and time savings, as the separate audits previously required in five countries (the US, Japan, Canada, and Brazil) can in future be replaced by a single audit.

In 2019, we also defined our corporate responsibility priorities, which are based on our strategic guidelines and the value we create for stakeholders, society, the environment, and the climate. In every aspect of our operations, we take into account the special characteristics of the business and operating environment in the field of health technology and support the UN's sustainable development goals.

Our outlook is positive. At the start of the new year, we will continue to focus on closely monitoring the progress of various elements of integration. Our aim is to further strengthen our position in ophthalmology. Our strong product development program and new products create an excellent foundation for future growth. We believe that the synergies achieved through the acquisition, especially in terms of sales and marketing and the supply chain, will allow us to further strengthen both our competitiveness and market position. I would like to express my thanks for our success in 2019 to our highly motivated personnel, customers, partners, trusted distributors, owners, and other stakeholders, who have all helped build the foundation for our growth."

Results briefing

Revenio's President & CEO Timo Hildén and CFO Robin Pulkkinen will present the report in a live webcast, which can be followed from 9.30 a.m. at https://revenio.videosync.fi/2019-financial-statements/register. The event will be held in English. Questions will also be taken in Finnish. A recording of the webcast will be available on Revenio's website at https://www.reveniogroup.fi/en/investors/audiocast later on the same day.

Revenio Group Corporation

Board of Directors

For further information, please contact:

Timo Hildén, CEO, tel. [phone]

[e-mail]

Robin Pulkkinen, CFO, tel. [phone]

[e-mail]

www.revenio.fi

DISTRIBUTION:

Nasdaq Helsinki Oy

Financial Supervisory Authority (FIN-FSA)

Principal media

www.revenio.fi

The Revenio Group in brief

Revenio is a health tech group operating on the international market and a global leader in ophthalmological devices.

The Revenio Group comprises Icare Finland Oy, Icare USA Inc., Revenio Italy S. R. L, CenterVue SpA, CenterVue Inc., Revenio Research Oy, and Oscare Medical Oy.

The common denominators of Revenio's business operations include patient-led screening, follow-up and the global need to make cost savings in health care via preventive measures. Revenio seeks vigorous growth in health technology. Revenio aims to develop even more efficient and easily adopted methods for the early-stage detection of diseases with significance for public health. The goal is to create better quality of life through health technology solutions that enable more efficient diagnostics. The focus of the Group is on the early detection of glaucoma, diabetic retinopathy, and macular degeneration, and the monitoring of these during the treatment process. Revenio Research focuses on the commercialization of systems that support the diagnosis of skin cancer and asthma and planning their treatment.

In 2019, the Group's net sales totaled EUR 49.5 million, with its operating margin standing at 25.5%. Revenio Group Corporation is listed on Nasdaq Helsinki.

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