Good afternoon from snowy Finland, and welcome to Revenio Group earnings call. My name is Jouni Toijala, and I'm the CEO of Revenio Group, and with me today, we also have here our group CFO, Robin Pulkkinen. I'm going to start to go through by going through the Q4 highlights and also 2021 highlights. After that, Robin is going to go through a bit more details on financials, and then we are going to end up with the Q&A. Q4. Q4 was a record quarter for us. Net sales totaled EUR 23.8 million. It's an increase of 20.7%, and it's a really good result compared to really tough comparison from the last quarter from the last year.
Operating profit was EUR 7.1 million, which is 29.9% of the net sales. This also includes roughly zero point six million impairment related to the Cutica. The cash flow was very strong during the Q4, resulting in the EUR 11 million, and that's up from EUR 6.2 million from last year. The EPS was good, slightly below last year. If going full year numbers for 2021, net sales totaled EUR 78.8 million, that's an increase of 29%. Operating profit was EUR 22.1 million, 28.1% from the net sales. That's also good increase.
If you look at the adjusted numbers and adjusted EBITDA, we had the acquisition costs related to Oculo, EUR 1.7 million, and then the Cutica impairment, EUR 0.6 million . Adjusted EBIT was EUR 23.4 million . If you go to the cash side, the cash generated from operating activities was also up from EUR 15.2 million- EUR 21.5 million, and the EPS went up from 0.505- 0.652. In a nutshell, extremely good year for us. If looking a bit behind the numbers, what was the reason behind the good numbers? We were successful on the sales and marketing side.
The sales activities, digital marketing activities, were going really well during 2021. If looking at the product side of the business, we saw the same trend during Q4 what we saw on Q3. The imaging sales was extremely strong for us. Tonometers were growing as well, but not as a rapid pace as the imaging side of the product. If looking the tonometer side, it's worthwhile of noticing that actually we did over 30 million patient measurements during 2021. That's a lot.
We also managed to gain new openings, so we managed to start getting the footholds from the larger optical retail chains and the global customer accounts, which was really good, and that really happened also during the Q4. Almost the whole year, we also struggled with the component shortages, but we were able to tackle the issues as they arose really well with our manufacturing partners and with our operations department. We really see that it's going to be challenging times also on the component side during 2023. A couple of highlights also from the product perspective.
We launched in March 2021, we launched a new generation HOME2 device, with the related mobile phone applications plus the cloud software, and we also received after the 2021, so about two weeks ago, we also got the FDA approval for the HOME2 device. On the April 2021, we acquired Australian software company called Oculo, and that gave us access to the software and solution market, which is going to be important growth area for us in the future. On the imaging product side, we also launched the EIDON Ultra-Widefield lens for our EIDON family, and that has been well-received among our clients. Also strong year from the product perspective. With these words, I give the floor to Robin.
Thank you, Jouni. Let's go a bit more through the numbers. Jouni covered some of these already, but basically, the net sales, EUR 23.8 million for the last quarter and with a growth of over 20%. Here I also want to highlight what Jouni also covered a bit, that the comparison number from 2020 already included a growth of, organic growth of more than 25%-35%. The comparables we started off this last quarter was really tough and still, we were able to grow more than 20%. For the full year, EUR 78.8 million growth and almost 30% growth with the EUR 78.8 million in sales. We have the EBITDA numbers here and also the adjusted EBITDA numbers.
Looking at the last quarter, basically there is no adjustment for the EBITDA line for the last quarter of last year. EUR 8.6 million, 36% of sales, with a growth of 3.2%. That's basically the same also for the adjusted line for the EBITDA for the full year, EUR 25.7 million, which is 32.7% of sales with a growth of 18.6%. Here you can actually see on the adjusted EBITDA line that we've added back the EUR 0.7 million of the Oculo transaction costs on the adjusted line where we get to the EUR 26.4 million in EBITDA, 33.5% of sales and with a growth of almost 22% year-over-year. On the EBIT side, 7.1% for the last quarter. It's a bit down from last year, but here also the Cutica write-off or the impairment was playing a key factor.
Basically when you add back the EUR 0.6 million to the EBIT for last quarter, we get to EUR 7.7 million, which is 32.6% of sales and up a little bit more than 1% year-over-year. Last year also, as some of you remember, our other income was extremely large. There was roughly a little bit over EUR 1 million contingent consideration released from the CenterVue acquisition. That also played into the profitability of the comparable numbers. Also this year, we did have some EUR 800,000 of other income which consisted of different R&D tax credits in the U.S. and Australia and Italy, also in Finland.
Also there was some other kind of COVID-related income which is more related to the kind of sustainable management of the pandemic within the company. On the EBIT for the full year, EUR 22.1 million, it's basically 28.1%. The re-reported EBIT percent is actually the same in 2020 and 2021. When we look at the adjusted line, we basically added back the EUR 0.7 million acquisition costs and the EUR 0.6 million impairment of Cutica to the 21 numbers, where we get to EUR 23.4 million, which is almost 30% of sales. For the comparable numbers, you can see it going from EUR 17.1 million- EUR 19.1 million.
Then in Q3 2020, if some remember, we actually did have an impairment on the Cutica as well, which amounted to EUR 1.9 million. That's basically the adjustment for the comparable EBIT line. EPS EUR 0.65 for the full year. The board is proposing a dividend of EUR 0.34 to the AGM. That's basically a little bit more than 50% payout ratio for last year. Let's jump to the next slide. Some of the other key figures, we've shown this slide earlier. Basically, the equity ratio is still very strong, actually improved year-over-year.
If you look at the history a bit more, in 2019, that was the time where we acquired CenterVue, and basically the equity funding and the bank loans did have an impact on the balance sheet. The end balance of the balance sheet went from below EUR 20 million to over EUR 100 million. The whole structure changed a lot. That actually is the key driver of the bigger difference or change in the 2019 numbers. Looking at this year, we actually did add in Oculo to the numbers, but basically it doesn't really show too much in the graphs here.
Looking at kind of the net gearing, basically it is still the cash flow for the full year was really good like Jouni mentioned. The net gearing after the Oculo transaction was actually more than 20% positive. Considering that we're back to negative, it's quite a good end result considering that the cash balance is basically close to the same where it was a year ago. Meanwhile, we'd paid more loans in 2021 than 2020. We paid more dividend in 2021 than 2020. We paid for the Oculo transaction over EUR 11 million in cash for the shares of the company.
We've continued to develop the software development and software solutions with the Oculo team, and we funded that for pretty much the whole year. Like we've said earlier, that's been cash flow negative for a couple of years. Basically, we're ending at almost the same cash balance where we were a year ago. Kind of the cash flow has been extremely good for us. Some of you probably have noticed the balance sheet has a quite large short-term liability, which is related to our bank loan that was repayable at the September-October timeframe this year. That's actually been renegotiated after the close of the year.
Still in the financials, the year-end financials, because the paperwork was not done, it shows as a short-term liability. In reality, that payment schedule has been pushed out. We continue to pay down EUR 1.05 million per quarter for that loan. Yeah, the next one. Some of the main shareholders, basically December was the first month in the history of the company where the foreign ownership actually went above 50%, so it's the first time ever. The Finnish owners have always been more than 50%, but like we know, starting in 2015, the foreign ownership was somewhere around 5% and it has been going up quite rapidly from there, and now the foreign ownership is more than 50%.
Some of the bigger trends, I guess, in the changes for the last 12 months is that the larger American institutions have come on the list. They've increased their ownership. William Demant has remained the major owner for our company. B asically Demant is a Danish-based company, so Finnish ownership around 50%, American about 16%-17%, Danish about 14%, Swedish ownership about 7%, and then it drops quite a bit before the next larger kind of countries. The financial guidance for this year, we expect our exchange rate-adjusted net sales to grow strongly 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 questions, so please.
Thank you. We will now begin the question and answer session. If you have a question for our speakers, please press zero and one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero and two to cancel. There will be a brief pause while questions are being registered. The first question we've received is from Daniel Lepistö, Danske Bank. Your line is now open. Please go ahead.
Thanks. It's Daniel Lepistö from Danske Bank, and I actually have a couple of questions. First of all, you gave out the nice number of over 30 million measurements made with the tonometers last year, and you mentioned that the probe sales have been continuing strong. Has there been any change on the number of measurements performed per device on average during the pandemic, or has the kind of growing installed base of the tonometers driven the impressive number here?
We have seen a couple of things happening. We have been able to grow the installed base of the devices during the pandemic. In certain regions, if you go as an example to certain countries in Southeast Asia, they were in some cases reusing the probes. I think that those things have been also now driving the probe sales as well, so that there's not so much reuse.
Okay, thanks. My second question is about the DRSplus, and maybe just if you can give some color on why the device is showing or how the device is showing this kind of strong, very strong demand this long? And if you can just give me some more information on if these devices are comparable to all of the other traditional fundus cameras on the market, or does it have some specific niche value proposition that it does very well?
Yep. Yep. I'm now taking perhaps a bit more broader spin at first, and then I come down to your detailed question. If you look now at the trend what we have had already many many quarters, is that the whole imaging portfolio which we have, so it means EIDON family. We have three devices there, EIDON AF, EIDON FA, and the normal EIDON. Those are the three ones. Then we have the DRSplus. Throughout all the quarters, so the demand has been strong, and we have been able to get the market share from the competitors throughout all the devices. I think that's good to know.
If you go for the DRSplus, that's a unique device in that very specific product category and price point. We use so-called TrueColor Confocal, and it's fully automated. It's a single button press and you get extremely high quality images in a really fast manner. That's a unique technology package with the great usability in that very specific price point. Hopefully that answered the question.
Yeah. Absolutely. Thanks. My third question is about iCare HOME, and as you mentioned that you successfully received the approval for the FDA. H ave you started the marketing, U.S.-based marketing already, and what sort of feedback you have received, and what kind of demand would you expect from the U.S.?
Yep. The FDA rules and regulations are quite tight. After getting the FDA approval, if we play by the books, then we are ready, and then we have a permission actually to start marketing and selling. We have done preparatory activities, and now moving into the implementation. Really the reason is that no chance to market and no chance to sell before the FDA approval, and not even market. That's the status and, based on the current feedback, the device usability plus then the new supported iOS versions of the application. That's we envision that that's going to be well-received also in the USA as in Europe.
All right. Thanks. My final question is about the kind of the overall product pipeline you have. How is your product development pipeline looking like? Anything for the tonometer side or imaging devices, perimeters, or you have something new coming?
I think if you look now at the performance of the company in the past years and we look how important it is really to have competitive products, and where you can actually now see this one, especially this year, is that we have been traditionally investing roughly 10% to the R&D. If we look at what's going to be the R&D investment this year, so it's going to be more than 10%. 2/3 of that one is going to the device side of the R&D. In a long run, keeping the tonometer product line competitive and keeping the imaging product line competitive, so 2/3 of the R&D investments are going to go there.
1/3 is going to go to Oculo and related software solutions, where the plan is to combine devices plus the software assets that we are having. I don't want to go in the details of what's in a pipeline, but there's things in a pipeline and the team R&D teams are working really hard to get and keep the roadmaps competitive and the products competitive in years to come.
Great. That's great to hear. That's all from me. Thanks for the answers.
Thank you.
Thanks, Daniel.
The next question is from Sami Sarkamies, Nordea Markets. Your line is now open. Please go ahead.
Hi. Firstly, starting from tonometers, could you elaborate on the growth rate you did experience in Q4? Regarding the outlook for this year, you're expecting the growth rate to return to pre-pandemic levels. Would this imply roughly 13%-15% growth? That was the group organic growth in 2018, 2019 before the pandemic.
Maybe I'll start with that one. The corona pandemic has been really put our numbers in a funny format in a way that 2020, our tonometer sales took off really well for the second half of the year, especially because of the hygienic benefits it had over the competitive technologies. Basically, going into the last quarter of 2021, the tonometer business was facing extremely tough comparables while the imaging business has been picking up all the way from early 2020. Kind of that's been more linear compared to tonometers. The imaging devices obviously grew extremely fast for the last quarter. Also the tonometer business was doing really well, significantly faster than the market in general. I guess for this year's 2020 growth, I'm not sure we want to disclose any exact percentages what we think where it's gonna kind of end up, but we'll stick to the guidance there.
Okay. Secondly, on the margin guidance, where you're expecting profitability to remain at a good level. If you look at last year, you know, there was some margin pressure about 1 percentage point. Are you assuming to see, you know, margin recovery this year? Or is it so that step up in growth investments like R&D, you know, and sales and marketing will actually sort of trigger similar margins to what you had last year?
Yeah, the guidance for the full year last year was for the profitability the exact same that the guidance is for 2020. Basically there's a big impact. Of course, the R&D investments are gonna be a bit bigger this year. We have some bigger projects in a more kind of money-eating phase this year, but not all that's going through the P&L. Kind of even with that, I think it's a big. The profitability is also dependent a lot where do we sell them, what products are selling, what the mix is. In the U.S., where we sell straight to the end users, our margins are better. It's also critical how the sales split goes between the kind of the U.S. versus the rest of the world. Kind of in general, the guidance for the profitability is the same than it was for 2021.
Yeah. Can you elaborate on what sort of operating expense increases you're planning in sales and marketing? I'm thinking about, you know, the Oculo launch in the U.S., thinking about, you know, the iCare HOME2 launch in the U.S. I mean, how material, you know, in investments you will be making this year?
Hard to come up with the exact numbers, but I think that there's couple of buckets here. We saw already travel increasing during the Q4. We also saw a bit more higher expense going to the trade shows. Then, of course, in order to get the launch activities well running in the USA for HOME2, then same for Oculo, it's of course eating money and we have to make investments for that one. If comparing that one as an example to 2021 where we launched the HOME, when we launched the EIDON Ultra-Widefield.
There's a constant run rate of cost budget related to sales and marketing, which in a way always is there because we launched the devices, we market the devices all the time. We have been having an investment second half of 2020 and during 2021 also for digital marketing. We have been increasing that part as well. In a way, it's hard to give an exact guidance because there's always quite big amount of money going regularly in every year to the sales and marketing.
Okay, thanks. I don't have any further questions.
Thank you.
Thanks, Sami.
The next question is from Pia Rosqvist, Carnegie. Your line is now open. Please go ahead.
Yes. Hello, thank you. It's Pia Rosqvist from Carnegie. I have a few questions. First of all, it's encouraging to hear that you've been successful with the larger optical chains, et cetera, during last year. How big a share of sales now comes from optical chains and larger direct customers?
That's a harder thing to say because we do certain sales directly by ourselves, then of course distributors are selling to the optical chains. I would perhaps say that it's increasing and then also the optical chains are then coming also more sophisticated from the eye examination point of view. It's also in the future going to be important for us in addition to addressing ophthalmologists and the clinics, also the optometry side of the business. Sorry, I don't have an.
Okay.
exact number because
Yeah. Yeah.
We don't fully know because of the setup related to the distributors as well.
Okay. Okay. Thanks. Discussing inflation, you say the supply chain issues continue, and we of course see inflation as a theme also spreading. You say, or at least I get the impression from your report, that you are confident that you can continue to push these inflationary pressures into your end prices. Am I correct here in my reading?
That's more difficult to answer. If you look at the kind of the normal consumer price index, then if we start to compare that one to the raw materials and the component prices in general, those are not fully comparable. What we did right last year, already on a springtime 2021, we did actually huge commitments to our manufacturing partners to actually order the devices like the DRSpluses, like the EIDONs. We really made commitments that whether we are going to sell them or not, we anyway have to buy them and get them into stock.
That has helped us also to manage the cost side of the things. This is actually if we go to our manufacturing partners or we go to our operations team, this is daily or if not daily, at least weekly battle that what kind of components, where we are able to source, what's the price and so forth. So far, we have been able to tackle the thing extremely well, and we can see that one from the cross-matching from the Q4. That was in good level, even better than the last year. The honest answer is that we try to do our best to get the components and we are trying to do our best to keep the costs down. We are envisioning that we have to increase the prices most probably this year as well. We did the increase on Q4 last year.
Okay. That's very kind.
The component thing is not going to be easing up, so at least in near future.
Mm-hmm.
That's for sure.
Okay. Then to costs, still, if I may ask, Robin, can you remind us how much of your R&D costs are capitalized or, and maybe particularly this year if you are increasing R&D costs? How much do you plan to capitalize on this increased investment?
The capitalization is not significant. We do have some projects in Italy and Finland that we do capitalize. All the labor, basically in the Finnish projects have gone through the P&L. For next year, there are some larger projects that there are items that we need to acquire from outside also or kind of prototypes and stuff. The kind of investments going on the balance sheet are gonna be in the some few million, I'd say.
Okay. Good. Thank you. If I may go back a couple of steps, to the time when you acquired Oculo. I think at that time you said that you expect investments in this software platform to burden your profitability by 3-4 percentage points in 2021. Now, I don't think this was visible or you performed much better than your initial thoughts. What are the main drivers behind that change? Is it purely sales mix and better gross margins? Or, what's the largest factors?
The cost of Oculo was actually between 3%-4%. The performance of the company did make up for it to be hidden in the numbers, I guess, more or less. We did actually incur a lot of cost with the Oculo during last year. It's a kind of a mix of everything. I think one big item is the U.S. has been doing extremely well, and kind of which is also a key player for the gross margin piece. Kind of.
Mm-hmm.
We get basically almost roughly double the ASP in the U.S. while we do of course have some costs there, and we do pay commissions for the sales reps, but still it's kind of bringing more bucks to the bottom line than distribution sales.
I think Robin is on the money with that one. If you look at the time at the acquisition, I think that we were not fully envisioning how aggressively the imaging sales would grow in the U.S. If you look at the overall growth rate of the imaging product market, it's less than 5%, roughly 4%, 3.9% or so. We have been growing extremely fast there compared to the market and especially in the USA. In the USA, our market share of the U.S. imaging business is less than 5%, so there's still a lot to take. I think we were not as optimistic about the imaging sales growth, which then impacted the better gross margin than what we were kind of envisioning. I think e xactly what Robin said.
Mm-hmm. Okay. Good. Then jumping still a bit backwards and forwards to Q4 and the other operating income you recognized, that seems, well, a bit odd. I mean, shouldn't that have been recognized as a non-recurring item or yeah, so in my eyes it seems quite non-recurring.
Yeah. Well, we didn't report the last year either, as non-recurring. We're talking about.
Mm-hmm.
Kind of non-recurring costs versus income.
Mm-hmm.
But kind of those are.
Mm-hmm.
Those are not. They haven't been categorized in the non-recurring bucket. What is it called in English?
Mm-hmm.
Either, basically.
Yeah. The comparables.
Yeah. Exactly.
Yeah.
Yeah.
All right. Yeah. All right. Okay. Good. That's all for me. Thank you.
Thank you, Pia. Any other questions?
No, there are no further questions at this time. I hand back to you.
Okay. I think we are done. Thank you for joining. Have an excellent springtime, and we come back to the earnings call on April then. Thank you all. Thank you. Bye.