Good sunny afternoon from 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. I'll start with the highlights for the Q2 2025, and then also I'm going to cover the summary of the first half. 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. Of course, we finalize the day with the Q&A. Back to Q2, so April, June highlights. 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 EUR 26.5 million. Currency-adjusted growth was 7.2%.
On the positive side, the trend continued, i.e., all the regions, APAC, U.S.A, Europe, Middle East, Africa, so all the regions grew during the Q2. Also, all the product categories, so tonometers, fundus imaging, perimetry, microperimetry, and the software solutions side of the business, so all the segments grew as well. If you look a bit more deeper to the regions, the APAC growing nicely. We had a highlight in APAC, which was India. In Europe, France and Germany growing very strongly as well. We have been able to improve also the profitability, so the EBIT level is EUR 6.1 million and up roughly 16%. As said earlier, Robin is going to cover these ones in more detail.
Looking back to the first half, net sales for the first half was EUR 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, so 22.3% leading towards the roughly a bit less than EUR 13 million. During the first half, we also got the MAIA microperimeter out and also the marketing authorizations from the main markets. We have been extremely active and successful on the loan side as well, so the screening solution has been selling well, including the increase on the hardware side of the business. Moving towards the tariffs, I think everyone has been wondering what's the current status on the tariff side.
If you go back to April timeline when we announced our Q1 results, we estimated if we don't do anything, the 10% tariff impact is going to be roughly from EUR 800,000 -EUR 1.4 million. What we have been doing earlier, or late last year, earlier this year, we have been increasing the inventory levels, and now the tariffs have settled down to the 15%. We did the new estimate, with the 15% tariff level, if we don't do anything, the impact for the remaining part of the year is roughly from EUR 500,00-EUR 1 million. Here, of course, we are going to check our pricing. We have been a bit increasing the prices for the probes towards the end of Q2, and inventory levels are currently looking quite good.
When we are starting to run the inventory, or when the inventory starts to run out, we are going to adjust also the pricing in the U.S.A. according to that. I'm done, over to you, Robin.
Thank you, Jouni. Let's have a quick look at the numbers in a bit more detail. The development was good, like Jouni mentioned. Sales were up, also gross margin over 70%. 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, EUR 7.2 million, up slightly from last year. We do have the reported operating profit. Maybe here just a reminder that last year we had the Ventica write-downs slightly over EUR 700,000, and this year we had these one-off project costs, EUR [0.5] million.
If you look at the adjusted operating profit line, that growing roughly 10% in Q2, almost 20% in the first half, that's probably if you want to see how we are 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. There are quite a bit of unrealized foreign exchange losses in the financials expense in our P&L. Roughly EUR 2.5 million of those are for the first half unrealized. It had no cash flow impact. It doesn't hit the EBIT, but the EPS shows that kind of the impact on those costs. I'll come back to the other numbers in the coming slides. Our sales growth, mentioned how many times, 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. As many of you know, of course, we have operations in the U.S. 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 U.S.-based operations, roughly 40% of the kind of the revenue we have kind of offsetting costs in the country. You're left with 60% above that in the sales versus costs. If you look at our variable costs, out of our globally sold products, more than 20% of the kind 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. If you consider U.S. 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. Looking at the EBIT, it's up year over year for the second quarter and for the first half of the year, also in absolute numbers in euros, also relatively. We've been kind of having a tighter look at the cost base, but also the FX impacts our cost base from the operating cost going down with the U.S. dollar weakening.
Also, just a reminder, we do have our software development in Australia, and the Australian dollar against the euro has weakened some 15% - 20% over the last year. That in a way shows us less costs, and we don't have Australian dollar-based sales. The cost savings in a way show up in the group. Cash generation is solid. For the second quarter, there's actually a couple of things. The working capital management was quite good, so had a positive impact on it. There's a timing thing on the Italian taxes. We pay our taxes in Italy on the last day of the second quarter. Last year, that payment hit a weekend. That date on the end of June last year was on a weekend, so the payment hit our Q3 numbers.
In a way, the comparable number is not wrong, but it's not kind of how it's supposed to be. When you go into Q3, we'll have the kind of the tax payment last year there. In a way, the comparable number is now slightly better than it should be in normal life. 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. We're still now at the end of the second quarter higher than the second quarters in prior years. 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.
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. U.S. and France are slightly down. Looking at the top 10 ownership list, the Demand Invest has actually increased the ownership from 19.6% at the end of the year to 21.8% now. 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. Handelsbanken has been shifted to Evli. Other than that, all the companies or the investors are the same. The guidance, we reiterate, so we expect our exchange rate-adjusted net sales to grow 6% - 15% from the previous year. 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.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Nikko Ruokangas from SEB. Please go ahead.
Hello, this is Nikko Ruokangas from SEB. Thank you for the presentation. I have a couple of questions, and I'll go one by one. Starting with Q2 sales and products there. You indicated that the new MAIA microperimeters have been received well in the market. Did that already contribute to growth in Q2? Continuing that, regardless of the product type, did you have any kind of bigger deals affecting the sales in Q2?
If you look at all the product categories, if you start from the tonometers, tonometer sales was growing during the Q2. If you go for fundus imaging, that's DRS plus. That product category was growing. We count the perimetry plus the microperimetry in the same package, and MAIA contributed growth to that segment. We also have the software side sales, so that increased as well. That was in a way the logic. In all geographies, all the product categories were in a way growing.
No bigger.
No bigger deals.
Okay. Thank you. Kind of market environment. You said in the report that you expect the challenges in your operating environment to continue. As you say that you expect them to continue, have you seen these challenges in your market so far, or is this kind of a cautiousness regarding all the uncertainties in the market? At least you described that the Q2 went reasonably well.
Yeah. If looking forward, how would I say that if we look at the normal situation, we look at the normal order backlog, what it has been for years already. The normal order backlog is the visibility to order backlog is extremely short. The reason is that if somebody orders a tonometer, as an example, in the U.S.A. or in Europe, or probes, we usually ship in one to two days. Imaging products, we always ship from the inventory in a way. The order backlog visibility is extremely short. What comes to the outlook? Of course, if you think the tariffs and the current operating environment, also geopolitically, it's in a way not in a way in a normal level. If you think now Q2, Q4, sorry, Q3, Q4, I mean similar, we see it similarly than Q2. Currently, demand is stable.
No, we don't see any changes on that one compared to Q2. Talkable visibility, of course, is as always, it's limited.
Okay. Good. Thanks. One additional question from me. You said that you aim to increase prices of your devices in the U.S. when you run out of inventory there. How long do these inventories last? Do you think that you can transfer the tariff totally to prices despite now being 15%?
It depends on the product. I think we're all kind of eaten through the tariff-free probe inventory in the U.S. Like Jouni said, we increased those prices already. Some products, we do have inventory all the way through the year almost, or at least until the fourth quarter. There's not really a good single answer how it looks. I think all the products are a bit different. Definitely, the probes, we're already kind of selling the inventory, which is impacted by the 10% tariff. The price increases, Jouni, do you want to comment?
Yeah. We look product by product in the U.S.A. and also a bit case by case, depending on the deal size, how we are then going to price and what's the pricing policy. This is a normal situation.
If compared to the competition, we are, of course, in an extremely good position because the profitability is extremely high. If we look at the feature set, image quality compared to the price level, that's very competitive. We are already, in a way, we have been priced lower than the competition earlier. In that sense, it's good. We are going to look at the pricing. As I said, current estimation, if we don't do price increases, impact is EUR 500,000-EUR 1 million. The plan is to increase the prices when the tariff-free inventory is ending up. This is a product by product decision and case by case decision.
All right. This is some kind of a support mechanically, the reported sales growth in H2. If you start to increase price more.
Yeah. Yeah.
Okay. Thank you. That's all from me.
Cool.
The next question comes from Jack Reynolds-Clark from RBC Capital Markets. Please go ahead.
Hi there, guys. Thanks for taking the questions. I had a couple, please. I'll obviously do them one by one. Thinking about the strength in India and France and Germany, were there any kind of specific products that you would kind of call out as being particularly strong within those markets particularly? I mean, I know that you said that there was strength across kind of all the categories: tonometers, fundus , microperimetry, and on the software side. Anything you'd call out there specifically within those markets?
I think in general, of course, India is going strongly. We have all the imaging sales have been strong, and also tonometer sales have been going well in India. If you look at France and Germany, quite a lot of growth in those areas has been coming from the screening-based cases. That's a combination of software solutions plus the DRSp lus, I would say. As I said earlier, all the other product categories have been performing well as well. Those were the highlights for France, Germany, and India.
Okay. Great. Super. Thank you. My next question was on Home 2. I was wondering if you could update us on how your conversations with the U.S. players are going here.
First, to say from the Home 2, the growth is double-digit during Q2. That's a good sign. What comes to the reimbursement, we are now sitting still. We haven't started or restarted the reimbursement discussion at this stage. As said, globally, Home 2 growth is on the double-digit path, and the growth was double-digit during Q2.
Fantastic. Super clear. My last question was just on tariffs. Can I just confirm? I'm not sure if I fully understand. The EUR 500,000-EUR 1 million impact that you're expecting at this stage is without any offsets, but you are actually planning to implement offsets. The impact would be less than that or at the lower end of the range, or can you just clarify that?
Yeah. The range is basically kind of looking at our forecast, looking at how many units of tariff-free inventory we have in the U.S., and based on that, it's kind of the number that we have if we don't do anything, is somewhere in there in the middle. If the forecast changes, it might go up or down, and there's some buffer on both sides. It's our current view. If you just give one number, it's basically in the middle of that range. I think the price increases discussion is still open a bit, what we do.
The logic is that it's between EUR 500,000 and EUR 1 million if we don't increase the prices. The plan is to increase the prices after we have run out of the tariff-free stock.
Yeah. Perfect. Super clear. Thanks, guys.
Thanks. Thank you, Jack.
The next question comes from Daniel Lepistö from Danske Bank. Please go ahead.
Hi. It's Daniel Lepistö from Danske Bank. Thanks for the presentation. I also have a couple of questions. Maybe starting up with the gross margin, which clearly expanded in the first half compared to last year. Can you remind us what are the key drivers here? Does this relate to these external commissions you pay for the salespeople, or is there some mix-related things here playing a part? Thanks.
Yeah. I think definitely the one big change compared to last year, it's not the external commissions, but the internal people's commissions used to be posted in the variable cost. Now, starting from the end of last year, it's been posted in the cost of earning and the salaries in the OpEx side. That's one single quite large change. Less than a percentage comes from that. In the last year, we adjusted it in the last quarter based on the discussion with the IFRS specialists and the changed regulations. For the whole year, we had it in there. Like now in Q1 and Q2, it's quite a small number there still. That's one difference in the accounting in a way for the first half of the year. For the full year, it's still in line. Those are one bigger item there. The other part is we have done price increases.
Of course, the product mix, all the products have very different margins. Also now that the U.S. share has also changed a bit, it depends whether we sell direct or indirect. The direct sales have a lot higher margin.
Okay. Thanks. It's mainly all accounting related from the switch. No underlying improvement, maybe a bit from the pricing.
Yeah, for sure. I'd say it's probably around 0.5% or something, maybe the accounting change. I don't have the exact number in mind, but around there.
Okay. Thanks. Maybe if you could, then the next question, if you could give us sort of a maybe a bit of a sentiment update on these key customer segments, such as these private equity-backed vision chains, which were a big issue for you a couple of years back. How is the momentum there? Have you seen sort of these customers waking up with the investments?
Of course, we have been tracking that status. If we consider the U.S.A. in general, it has been surprisingly stable during Q2, also the visibility to Q3. Slightly picking up, more or less the same. I mean, now they have been ordering, and then we have also the other segments that have been active. I think that's the current status.
Okay. That's clear. I guess the final question regarding this APAC growth you highlighted, but you don't mention China in your discussion. Only India. Is the situation in China not developing as well as in the beginning of the year?
China growing as well, but India was growing really, really well. We put that one in a context.
Okay, all is good there. Momentum is.
Yeah. Yeah. Of course, we have to remember what comes to China. Of course, that status hasn't changed. They are really also focusing on giving the guidance that you have to buy the Chinese products. It's way easier for us to sell in China the tonometers compared to the imaging devices. I think that hasn't changed in China, but still it has been good. I mean, India, if you have to highlight one country from the APAC region, that's clearly India in terms of the growth and in terms of the positive demand. Anything, Robin, you would like to add on?
No, that's good.
All right. Thanks. That's all from my side.
Hey, thank you, Daniel.
The next question comes from Pia Rosqvist-Heinsalmi from DNB Carnegie. Please go ahead.
Hello, gentlemen. It's Pia from DNB Carnegie. A few questions, if I may. Firstly, I'm interested in understanding, do you see any difference in terms of sales growth between tonometers and fundus imaging devices? I mean, which one is currently growing slightly faster and which one slightly slower?
Overall, I think it was quite close. They were almost kind of at the same level of growth. Of course, different countries differ quite a bit, but the total growth was pretty similar in both of those main categories.
Adding and building on top of what Robin said, when we talk about the fundus imaging, we don't count the microperimetry on it.
If you add the microperimetry in the fundus imaging, then the fundus imaging grew faster. Yeah.
If you keep it separate under perimeters, then they were pretty evenly strong.
Good. Thank you for the clarification. I saw in the report that you mentioned something about price increases announced early in the year appeared to have shifted demand slightly towards Q1. Do I understand you correctly that you saw kind of maybe a boost in demand in Q1 and then slightly softer demand in Q2? My question is, first of all, is this a correct interpretation? Secondly, with this in mind, how has Q3 started now? Any change?
If we go back to this, we did the minor price increase, or we informed about the minor price increase during Q1. We have the terms and conditions so that we have to inform about one month before. We put the new minor price increases in place so that they are in effect starting from the 1st of April . What we were seeing is that the people or the customers and the distributors perhaps slightly ordered certain products like probes, as an example, most probably a bit to the stock still towards the end of March. That was behind our comment regarding Q2. Now, I mean Q3 is going according to the plan as we speak.
All right. Thank you. Maybe still looking back at the Q1 report, I think you were quite positive on the sales funnel and the opportunities in the U.S. Any update to this situation?
That's stable. Basically, no new update on that one. We were thinking during Q2 and wondering where all this tariff discussion is going to take us and take the sales funnel in a way. It has been resilient and it has been stable. Q3 executing as we have earlier planned.
All right. Thank you. Maybe a bit trickier regarding your ambition to grow through acquisitions. We haven't seen any news. Is there any change in your focus or is there any change to your target list? Any updates to this?
Yeah. We have been working on that. We spent quite a bit of time with Jouni and a few other people in the company on the MFA. We have spent time this year also. Mostly the target list is similar, but we have also been talking to a few new companies outside the original list. I think it's also something that we definitely want to be able to execute at some point.
I think, Pia, like we have been discussing also earlier, we would have been able to close during the last two years. If we start to dig down deeper the numbers and define what would be a good deal for the shareholders in terms of the valuation, we haven't found fully the match on the valuation side and the overall performance and the growth side. That's one of the biggest reasons why we haven't now closed yet.
If we want to close, we want to close also the deals so that they add clearly long-term shareholder value, and the valuation is on the right ballpark. Would you, Robin?
Yeah. I think us being a public company and people looking at our multiples doesn't make life always easier. I think it would have been a lot more successful if we're a private company and nobody knew how we were doing. It is always difficult when they start to look at our numbers and multiples.
Yeah, understandable. All right, that's all for me now. Thank you.
Yeah.
The next question comes from Joni Sandvall from Nordea. Please go ahead.
Hi. Thanks for the presentation. I was out for a couple of minutes. Hopefully, these were not answered yet. Follow-up question on still the MAIA ramp-up development. Do you have some timeline when you are, let's say, fully ramped so that you can orderly deliver from the backlog?
We have been delivering the, how would I say, the backlog. I mean, we have been able to deliver. We have been able to produce the devices and so forth. What we yet haven't done is that we haven't started aggressively marketing. We are not currently having a, as an example, marketing campaign. We are serving the existing order backlog and the existing clients. That's a big opportunity for us to really start the market and boost the next generation MAIA product. That's on the works.
Okay. That's clear. Is there any update on the FDA process that you are running?
Yes. There's an update then. Now we have a clear, during Q3, we clarified the path to go forward. That's going to be twofold. We do the pre-study at first. The reason for the pre-clinical study is that the image quality of the DRS plus with AI is on a higher level than the reference package, which is the combo with traditional fundus camera and then the human reading and creating the images. We basically detect better the images than the reference. That leads to the position towards the FDA that we see more cases, which are DR cases, i.e., it looks like we have more false positives. That leads to us not being able to get the clearance, even though in a way we are right and the package is correct. Now we have to run first a pre-study.
Based on the pre-study results, we have to fine-tune the algorithm so that it matches the reference and then run the second phase of the clinical study. Now everything is okay. We are moving forward, unfortunately, because we have to do this one. We look more towards the mid of 2027 now, the timeline. All this said, we have been extremely active on the screening side in the U.S.A. for a long time. We have many cases where we have been selling a lot of hardware, DRS pluses in the U.S.A., also during last year, during the first half. We are going to be selling for screening cases with the human grading also during the second half.
I think that's good to remember that even though we don't have an FDA clearance for DRS plus for the human grading purposes, we are selling a lot of DRSp luses for screening in the U.S.A.
Okay. Does that mean actually that you are, let's say, worsening your algorithm for this to be then approved by the FDA?
Yes, we have to have. Currently, we don't have that challenge in the other regions. Current cases we have, it's going to be the different version of the algorithm. Luckily, we have our own resources and we have our own algorithm in order to be able to do that one.
Okay. Maybe follow up for Robin of the costs related to that, minor costs now for the pre-study. I don't know, when it's mid-2026, more costs, or how should we view this?
The pre-study will generate some costs now for the second half in the hundreds of thousands. It will be a bigger ticket item than next year, which we will then probably clarify a bit more towards the end of the year.
Okay. Thanks. That's all from me.
Thank you, Jouni.
The next question comes from Nikko Ruokangas from SEB. Please go ahead.
Hello. This is Nikko Ruokangas from SEB again. I have one additional question regarding your answer where you described the process of price increases. You said that you needed to inform your clients one month before regarding kind of the ordinary price increases you made in the beginning of this year. Is the process similar when you now make kind of extraordinary price increases regarding tariffs? If so, have you already informed your clients regarding this?
Yes, of course. The process is the same because we have to follow up the contracts. Of course, the new cases, if we are selling and having new RFQs, RFIs, etc., we are, of course, able to quote the new price right away. For the existing customers in the U.S., if we have a contract with them, we have to inform earlier. We know well in advance already that when certain products are running out of stock, we inform earlier.
All right. No information yet?
No, because we, okay, probes, yes. The other products, no, because we still have a stock.
Yeah. Okay. Thanks for the clarification. That's all for me.
There are no more questions at this time. I hand the conference back to the speakers.
Thank you all. Have a nice end of the summer, and we come back during October. Thank you very much.
Thank you.