Revenio Group Corporation, Stock Exchange Release, August 6, 2020 at 9.00
Revenio Group Corporation: Half-year Financial Report H1/2020
Figures in brackets refer to the same period in the previous year, unless otherwise stated.
Strong quarter despite the Covid-19 pandemic.
· Net sales totaled EUR 13.7 (11.8) million, showing reported increase of 15.6%
· Operating profit was EUR 3.4 (0.9) million
· Operating profit for the reference period was weighed down by non-recurring acquisition costs amounting to EUR 1.82 million. Operating profit adjusted by non-recurring acquisition costs was EUR 2.7 million in the reference period. In relation to the adjusted operating profit for the reference period, operating profit grew by 27.7% in the reporting period.
· EBITDA was EUR 4.1 (1.4) million
· EBITDA for the reference period was weighed down by non-recurring acquisition costs amounting to EUR 1.82 million. EBITDA adjusted by non-recurring acquisition costs was EUR 3.2 million in the reference period. In relation to the adjusted EBITDA for the reference period, EBITDA grew by 27.4% in the reporting period.
· Gross margin was EUR 9.8 (7.6) million, an increase of 28.6%
· Cash flow from operating activities totaled EUR 2.9 (3.2) million, a decline of 10.7%
· The currency-adjusted growth of net sales in April-June was 15.2%, or 0.4% percentage points weaker than reported
· Product development projects have been continued as planned throughout the quarter
· On 2 April 2020, Revenio withdrew its financial guidance for the current year due to the uncertainty caused by the coronavirus outbreak. The company is assessing its outlook for the rest of 2020 as part of its Half-year Financial Report instead of providing financial guidance
· On May 18, 2020, Jouni Toijala was appointed CEO of the Revenio Group
· Undiluted earnings per share came to EUR 0.097 (0.018)
· The Annual General Meeting confirmed a dividend of EUR 0.30 (0.28)
· Net sales totaled EUR 25.6 (20.3) million, showing reported increase of 26.4%
· Operating profit was EUR 5.9 (3.5) million
· Operating profit for the reference period was weighed down by non-recurring acquisition costs amounting to EUR 2.1 million. Operating profit adjusted for non-recurring acquisition costs was EUR 5.5 million in the reference period. In relation to the adjusted operating profit for the reference period, operating profit grew by 6.0% in the reporting period
· EBITDA was EUR 7.2 (4.3) million
· EBITDA for the reference period was weighed down by non-recurring acquisition costs amounting to EUR 2.1 million. EBITDA adjusted by non-recurring acquisition costs was EUR 6.4 million in the reference period. In relation to the adjusted EBITDA for the reference period, EBITDA grew by 13.1% in the reporting period
· Gross margin was EUR 18.3 (13.9) million, up by 31.4%
· Cash flow from operating activities totaled EUR 2.6 (3.8) million, a decline of 32.4%
· The currency-adjusted growth of net sales in January-June was 25.5%, or 0.9% percentage points weaker than reported
· The effects of the Covid-19 pandemic began to appear towards the end of the first quarter. April was a clear low point for sales in the first half of the year, with the market gradually starting to recover thanks to the dismantling of the restriction measures in May
· The Annual General Meeting confirmed a dividend of EUR 0.30 (0.28)
· Undiluted earnings per share came to EUR 0.172 (0.105)
Key consolidated figures, EUR million
Apr-Jun/ Apr-Jun/ Change Jan-Jun/ Jan-Jun/2019 Change %
2020 2019 % 2020
Net sales 13.7 11.8 15.6 25.6 20.3 26.4
Operating 3.4 0.9 291.5 5.9 3.5 70.1
Operating 25.2 7.4 17.7 22.9 17.0 5.9
EBITDA 4.1 1.4 191.3 7.2 4.3 68.3
EBITDA, % 30.1 11.9 18.2 28.1 21.1 7.0
Return on 3.7 1.6 2.1 6.4 6.5 -0.1
Return on 4.1 1.4 2.7 7.3 7.0 0.3
Earnings per 0.097 0.018 0.172 0.105
Jun 30, Jun 30, 2019 Change, %
Equity ratio, 57.6 53.4 4.2
Net gearing, % 14.8 18.2 -3.4
Outlook for 2020
On April 2, 2020, Revenio withdrew its financial guidance for 2020 due to the uncertainty caused by the coronavirus outbreak. Due to the uncertainty and general downward economic trend caused by the Covid-19 pandemic, market conditions have become very exceptional, resulting in a significant decline in the predictability of financial development. As it is not yet possible to assess the full impact of the situation towards the end of the year, Revenio Group Corporation withdrew the financial guidance for 2020 issued on February 20, 2020. Visibility to the end of the year remains weak, which is why Revenio expects that it will not be able to provide guidance for 2020. In the second half of the year, the company expects its business and operating environment to develop as follows:
· Visibility towards the end of the year is still weak due to a possible second wave of the pandemic, , but the company estimates that net sales for the rest of the year will increase from the previous year.
The company's earlier financial guidance for 2020 was:
Revenio Group's reported net sales are estimated to grow very strongly from the previous year and profitability excluding non-recurring items is to remain at a healthy level.
CEO Jouni Toijala comments on the first half of 2020:
"The general global uncertainty caused by the Covid-19 pandemic and the significant decline in economic predictability in the first quarter of the year began to clear up for Revenio's business during the spring. The second quarter turned out to be strong in relation to the circumstances, particularly due to the growth in demand for tonometers and probes. It should be noted that the CenterVue figures were not consolidated until May 1, 2019.
Some of our markets, such as Japan, the United Kingdom, and Canada, have been the fastest to show signs of recovery. In the United States, clinics are gradually reopening, and we have already agreed on the first product presentations for imaging devices. Regional differences in the US remain considerable, however, and there are significant uncertainties due to the Covid-19 pandemic in the market, which we are following closely.
Demand for tonometers started to grow during May-June, as did demand for single-use, sterile probes. The World Glaucoma Association has recommended avoiding traditional air-puff technology, as it is suspected of causing droplets, which enables the spread of viruses During the spring, Icare has also actively campaigned for the safe use of tonometers using the "stay protected" theme, which has produced excellent results.
In the United States in particular, interest in the Icare HOME tonometer has grown strongly both among doctors and their patients. In our view, it is quite possible that the remote digital monitoring of patients will receive a significant boost as healthcare professionals need to devise new methods to monitor the health of patients without meeting the patient.
As for sales growth in retinal imaging devices, we will likely have to wait for the wider lifting of the Covid-19 restrictions, as the devices are capital goods and require in-person meetings for both sales and installation. In many countries, clinics and hospitals have been either closed or banned for outsiders. Deliveries of devices already ordered were also suspended for a long time during the spring, but, most importantly, orders were not cancelled, and deliveries were gradually started at the end of the review period. In our view, we are also well positioned with our retinal imaging devices vis-à-vis our competitors when the restrictions caused by the pandemic are eased.
Sales of the DRSplus retinal imaging device launched in Europe at the end of 2019 has started, and the launch of the product in the United States will start in earnest as soon as the country's pandemic situation calms down. The product has been very well received, and deliveries halted due to the pandemic were started in June. DRSplus is particularly suitable for the detection of diabetic retinopathy. The product has obtained approval from the United States Food and Drug Administration FDA and is CE-certified in Europe.
The supply chain situation has been good throughout the first half of the year, and we have not observed any problems. We are still aiming to raise the stock levels of all our products to ensure the start of deliveries at full capacity as the pandemic-related restrictions are lifted.
We have successfully completed audits under the new Medical Device Single Audit Program (MDSAP) both in Finland and Italy, and, in June, Icare Finland obtained MDSAP certification. The new audit program will bring both financial and time savings, as we can in future replace audits for the ISO 13485:2016 standard according to the individual national requirements in the US, Australia, Japan, Canada, and Brazil by a single audit. The new European Medical Device Regulation (MDR) was originally due to enter into force in May 2020, but the Covid-19 pandemic caused the deadline to be postponed to May 2021. Our preparations for the transition to MDR are progressing well within the transition period.
In addition to ophthalmic diagnostic solutions, Revenio's development portfolio includes the Research function, which is currently working on two product concepts. Clinical tests related to the Ventica® and Cutica systems have been halted due to the Covid-19 pandemic, but we aim to continue them in the coming months as clinics gradually reopen
We have continued to work in Finland, Italy, and the United States throughout the first half, taking into account official guidelines. We have favored remote working to the extent feasible and used remote meeting tools efficiently. Our employees have remained healthy, for which I am extremely thankful. We have not needed to resort to temporary or permanent layoffs and our entire organization, from sales to production, warehouses, quality assurance, product development, and administration, have been working at full speed throughout the spring.
I started as CEO of Revenio Group during an exceptional period when great flexibility, creativity, and perseverance was required of our entire organization. I am truly impressed with our products and the skills, professionalism, and commitment of our people. I have been very well received and already feel that I am part of the team. For this, I owe my thanks to my predecessor, Timo Hildén, who has supported me in taking on my role.
We have launched the update work of our strategy, focusing especially on ophthalmic diagnostic solutions and our role as a global pioneer in this area. We will report on this work in more detail at the end of the year.
I wish our personnel, customers, distributors, partners, and shareholders good health and a safe summer.
This report contains certain statements that are estimates based on the management's best knowledge at the time they were made. For this reason, they involve a certain amount of inherent risk and uncertainty. The estimates may change in the event of significant changes in general economic conditions.
Revenio Group Corporation
Board of Directors
For further information, please contact:
CEO Jouni Toijala, tel. +358 50 484 0085
Robin Pulkkinen, CFO, tel. +358 50 505 9932
Nasdaq Helsinki Oy
Financial Supervisory Authority (FIN-FSA)
The Revenio Group in brief
Revenio is a health tech group operating on the international market and a global leader in ophthalmological devices. Revenio Group's ophthalmic diagnostic solutions include intraocular pressure measurement devices under the Icare brand and retinal imaging devices. The main tools for the detection and diagnosis of glaucoma and its monitoring during treatment are intraocular pressure measurement (tonometry), retinal imaging, and visual field tests (perimetry).
The Revenio Group comprises Icare Finland Oy, Icare USA Inc., Revenio Italy S. R. L, CenterVue SpA, 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 profit standing at 25.5%. Revenio Group Corporation is listed on Nasdaq Helsinki.
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