Preliminary unaudited full-year 2023 results. Just a little bit of housekeeping before we begin. I guess that those that are on the call now know that there will be a much longer and detailed event here in Zurich, starting at 3:00 P.M., for which we have provided webcast links. We're gonna have many people from Cosmo management team that will be presenting and will be ready to answer to any questions you might have. So I don't think that this call right now is gonna be the right venue to answer many of the questions that may come, because we would like the other managers and other people involved to answer it more in detail and with the breadth and the depth that is required in order to explain exactly how our business is faring and what are the developments on the way.
So here in this specific venue, in today's call, now at 11, we will be happy to take questions that are mainly technical and related to accounts, so that we can talk about business, products, and perspective much more in detail in the afternoon event. As you see, we're calling this presentation of today a great leap forward because indeed we are progressing amazingly on all fronts. We are very, very happy about how things are unfolding, and we believe that the business could not be better than what it's actually doing right now. In terms of perspectives and company strategy, now briefly, because I'm assuming that there will be questions later on, I just want to remind you that we are active in three areas: gastroenterology, health tech, and dermatology.
We're doing a lot of progress in our AI business, but we don't want anyone to mistake Cosmo as Cosmo becoming an AI company. Cosmo is a pharmaceutical company with a growing and flourishing AI business, but it's a pharmaceutical company, as you will see more in details in today's afternoon presentation. We believe that we have five investment strengths that we would like to stress for the benefit of everyone. We have a growing revenue stream that comes from our established business. We have two revolutionary growth drivers launched in large markets and entrusted to world-class partners, and clearly talking about GI Genius and Winlevi. We have an exciting development pipeline full of catalysts, and as you will see, and we will explain better in the afternoon, we keep adding very interesting opportunities to our pipeline. We have very strong financial position.
We are debt-free, and we have a meaningful cash position, plus treasury shares that we own, as you will see in a while. We've been profitable with dividends. Dividends being distributed in 2022, distributed in 2023, and now proposed dividend for distribution in 2024. Something that we have said many times during our conversations with investors and analysts, we continue to believe that we are the only company our size that can claim so many approved products. The company's been relentlessly successful in bringing its own developments to market, and we continue to make no exceptions. Our growth drivers, as said, are GI Genius and Winlevi. You will see in detail how the franchise of Winlevi has been expanded worldwide, and how many things we are expecting to happen in respect to Winlevi as well, but also in respect of GI Genius.
You have heard about our new agreement with Medtronic, signed in December 2023, and what all this will bring. Again, this will be explored in great depth in our afternoon conversation. The pipeline is also a rich pipeline. Our development team, driven by our Chief Scientific Officer, will explain you in detail what is happening there. But again, company our size, not only that breadth of products on the market, but also that breadth of assets under developing under development. The results, as said, are preliminary and unaudited. We've tried to explain, at best of our capacities in our press release, why these are preliminary, unaudited, and why we believe that what we're presenting today, right now, is a true and fair representation on how the company has performed in 2023.
So we've had revenues of EUR 96.7 million, an EBITDA of EUR 26.5 million, an operating profit of EUR 12.2 million, and a profit before tax of EUR 7.6 million. This is a detail of the breakdown of the revenue by product. You see the total is EUR 96.7 million. We have decided that we're not gonna provide any specific breakdown between upfronts, milestones, and royalty and manufacturing revenues. These are the four components of our revenue structure, and they will continue be such, and probably this distinction is a little bit of artificial, then we have people concentrating on one versus the other. For us, the only thing that matter is the total. So from now on, we won't be providing disaggregate information there, but just... revenue that's been generated by each of the product that we develop.
We want to stress the strong cash generation, which means, I believe, that the business is run in an appropriate fashion, because out of EUR 96.7 million revenue, we've been able to generate net cash inflow from operation of EUR 33.6 million, which again, I believe, is quite meaningful. And to give an idea of how strong the financial position of the company is, we had EUR 50 million cash at the end of December after the full reimbursement in cash of our bond. And thanks to the fact that Medtronic then executed the first payment of EUR 100 million in February, as we speak, we have a net cash position of EUR 142 million. In the meantime, we have been strongly supportive of our shares.
We have continued to purchase our own shares, and we continue to believe that this is, for the company, one of the best possible investments. You can see that by the end of the year, our net position in treasury shares was 1,490,000 which has grown also in the first two months and a half of the year by another 7,000. So that if you look at yesterday's share price, the treasury shares which we own, and you couple them with the cash, you end up with the company having a cash and treasury shares position amounting to EUR 245 million. I believe this is quite sizable and respectable, especially if you compare it with the current market cap of the company.
We have been saying in the past that it was the intention of Cosmo to adopt a strong dividend policy, clearly, correlated with the evolution and the expansion of the business. So you can see that in 2022, we have paid over the financial year 2021, a EUR 0.95 dividend. We have paid in 2023 over the results of 2022 EUR 1.5 dividend, and now the board will be proposing to the next AGM, which is due, I believe, around the 24th of May. In the Netherlands, the distribution of a dividend of EUR 2 per share, which represents a 90% increase in respect of last year dividend. Our guidance for 2024 is as depicted in this slide. We're expecting operating profit and revenue to make a very meaningful jump.
We're figuring out a total revenue in the range of EUR 260 million-EUR 270 million, so you can really perceive how the business is developing, and an operating profit of EUR 155 million-EUR 165 million. So again, very, very meaningful. For the first time, we have decided to provide the market also with what we call an outlook for 2025 in terms of revenue objectives. We've been, we've, we've been told that we need to give more visibility to what we believe is coming next, and therefore, we have decided that it was about time to inform about the revenue objective.
So the revenue objective for next year is gonna be between EUR 240 million and EUR 260 million, which again, we believe is quite sizable, and especially if you see the progression of our revenue growth over the last couple of years. We are open now to Q&A. This is the end of the presentation, so I'll sit back to the table, and we'll be happy to answer to any question you might have. Thank you.
We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and One on their touchtone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press Star and Two. Questioners on the phone all requests use only handsets. Anyone who has a question may press Star and One at this time. The first question comes from the line of Henriette Rumberger with AWP. Please go ahead.
Good morning. I have two, three questions, actually. So maybe, first of all, you said you will, in the future, what exactly are you going to change about the, sales, in, in which way are you planning to to present them? So not as, as a sum overall, just separated into Winlevi and, and GI Genius or how exactly do, do I have to understand that? And talking about your growth assets, I remember that last year, no, in 2022, they sort of were, like the shining, shining stars, and, this year you say they developed according to expectations. So what exactly are your expectations? I don't really get that, to be quite honest, developing well or not so well. And, certainly in terms of your figures,...
Sales were lower than 2022. Earnings were lower than 2022.
Sorry, we cannot hear you.
Excuse me?
We cannot hear you.
Sorry, Henriette, I think the conversation broke several times, so, I must say-
Oh!
Sorry, we were not in a position to understand-
There is an echo.
Your question. Can we handle them one by one, please? The connection was-
Okay.
Connection was very bad.
Mm-hmm. Okay, then I will just start again. The sales, you said, how are you going to prevent them in the future?
Sorry. Sorry, there is an echo.
You know what? I will just write them, so maybe that's easier.
Yeah, Henriette. There's an echo, so we really don't... we cannot understand, I'm sorry, what you're saying.
Mm-hmm.
Can you maybe send the question on the webcast, so we will be able to read it?
Yeah, will do.
Thank you. Sorry. Can we maybe, in the meantime, answer to somebody else's question?
Yes, the next question comes from the line of Laura Hindley with Berenberg. Please go ahead.
Hi, Laura from Berenberg. Are you able to hear me okay?
One question at a time, please, so that we can better monitor.
Okay. And you can hear my questions?
Yes.
Okay, perfect. So I just want to be really clear on what's included in your guidance ranges for 2024, and then your 2025 outlook. Is the only upfront or milestone payment in 2024 the EUR 100 million upfront from Medtronic, or are you also counting the EUR 100 million potential milestone payment for application development within that guidance range? And are there any other products that are also contributing through upfront or milestones in 2024?
Okay, so-
And then I'll move to my next question.
Yes. Well, thank you. This, I think, should be relatively easy, I hope, to understand. The agreement with Medtronic now has been effective in the year 2024 because the effectiveness of the agreement with Medtronic was subordinated to a condition, which was the approval from the U.S. Federal Trade Commission for antitrust law. The okay from the U.S. Federal Trade Commission came at the end of February, I believe it was the 20th of February, 2024, so the agreement with Medtronic became effective on that date. There has been discussion whether that revenue should have been booked in 2023 or in 2024. We then established that it should have been booked in 2024, and Medtronic has already paid that amount. That was an upfront, so Medtronic has paid that amount, and that is the reason why you see the increase in the cash position.
The rest of the payments, which will be done by Medtronic, are related to work that will be done by the company in the meantime, and we expect that we will be able to accomplish all this in the course of 2024. This is the reason why you see a guidance between EUR 260 million and EUR 270 million, because EUR 100 million has already been cashed. The rest, and we're providing no aggregate, sorry, not no disaggregate there, will just come from business of the company, will be considered operating revenue, and we are 100% confident that we will be able to cash within 2024 all those revenues. So we're expecting our operating business to generate between EUR 160 million and EUR 170 million revenue because EUR 100 million has already been paid as an upfront by Medtronic.
The agreement with Medtronic provides, at this stage, EUR 100 million that's been paid, and the second EUR 100 million in payments that will be done in the course of 2024 as the business progresses. The outlook in 2025 does not take into account any of these, clearly, but just takes into account the evolution that we expect from the business. The business is growing. We have a lot of development programs that are coming to maturity, so we are expecting that that will be the overall revenue figure in 2025. I hope that this has answered the question in a sufficiently clear fashion.
Yes, that was helpful. So just to confirm then, in 2024, there's $200 million of either upfront or milestones that you have to work towards, and then 2025 is purely underlying, and there's no upfront for Breezula included within that revenue guidance?
... What progress is being made in the clinical development of Breezula? You will see detailed assumption on how that business will unfold, and I believe that it is gonna be very clear at the end of this afternoon presentation, what our expectations are there. Breezula is a very, very meaningful asset. We are confident that the clinical development will advance as we foresee, and therefore, that is something that clearly contributes to our expectations in terms of revenue generation.
... Okay, thank you. And then one final question is: when can we expect your audited annual report to be published? Thanks.
Thank you. Well, we have certain deadlines that we have to meet. We are, our AGM is scheduled, as I said, for May 24, 2024, and therefore, we expect that that issue will be by far and large solved within that date. As you have seen, in our press release, actually, the matters that are still under discussion are particularly narrow, very, very well defined, and actually, even though it might look that they're two, they're effectively only one. The issue is the following: we have to make certain payments to the former Linkverse shareholders, which are subordinated to Medtronic agreement being effective and subordinated to Medtronic executing certain payments.
Therefore, our position is that if the Medtronic agreement is effective in 2024, which we can live with, we have already lived with that, as you see from our figures, then also the related cost and disbursement provided for the benefit of the former of some of the former Linkverse shareholders need to be accounted in 2024. There has to be a correlation between the revenue and the cost. In 2023, the agreement with Medtronic was not effective, but we expect that this is gonna be solved, as I said, by before, by or before our shareholders meeting. Does this answer the question?
Yes, that's helpful. Thank you very much.
Thank you.
Okay, we have the first questions from the webcast, from Ms. Rumberger, Henriette, AWP. What exactly are you changing on the way you will present sales in the future?
Excuse me, what exactly is? Can you-
What exactly are you changing on the way you will present sales in the future?
We have decided that it is quite confusing to continue making a distinction between our four sources of revenues. I will repeat what these four sources are. We manufacture our own products, so we have manufacturing revenues. We license out our products, and therefore, we have royalties that are paid on the net sales. We have revenues coming from upfronts and revenues coming from milestones. We have decided that we have to present just aggregate numbers because people continue to think, when we speak about upfronts and we speak about milestones, that these are one-off contributions to our P&L. This is not the way that we see the company. These are not one-off because we are a development company that does not have a commercial infrastructure.
So our business is selling our ideas and our developments to other parties, and therefore, every time I make a deal with a partner, and the deal, and then the partner pays me an amount, it's not one-off. It's exactly by my business model in play. Clearly, if when a company has its own commercial distribution, the license is more, let's say, of a sort of an exceptional nature. That I understand, but this is not our case. We do this as a living. This is the real part of our business. So, the fact that notwithstanding our effort to explain, we continue to hear, "Okay, one-off, but when do you streamline your business? When do you stop receiving up fronts and milestones?" We don't want to stop that. We want to continue doing it. Take the example-
Maybe, Alex-
Please, go ahead.
In the afternoon, can be clearer this point, when we will talk around the Innovation Center in AI. You can easily see that does no sense to break down always this part of the company, the royalty, the production, and the services, because since scratch, we have this business model. I know that it's very difficult for analysts because we have no peers are comparable. But sorry, how you can call again a one-off, when we have accounted 51 milestone and payment that we got from our partners? I believe that is ridiculous, that anytime we have to answer in one-off. It's one sample, not one-off. It's our business model. I know that it's difficult to understand, but try to do this.
We can help you just in the afternoon because you can easily understand what does it mean, what we are creating in the AI field.
But also, to add to that, what we are creating in the pharmaceutical developments.
No, our involvement.
It's the business. Once, hopefully, Breezula will conclude the clinical trial, we will license that out, because we're not gonna sell it ourselves. Is that gonna be a one-off? No, it's exactly the results of many, many years of development. It's not something that happens by chance. It happens because we have decided to do it.
By the way, this story told this, and the story is exactly you can go through the story to our story, and you can easily see that it's completely misleading, considered one-off. It's every for each year, for each year there is a one-off. It's our business model. The other question?
The second question from Henriette Rumberger says: In your press release, it says, "Growth assets Winlevi and GI Genius are developing within the range of expectations. In 2022, you sounded more enthusiastic. Can you explain the different wording, please?
Well, you know, I'm sorry, we didn't compare the wording. We are overly enthusiastic about Winlevi. You will see this again in detail in the afternoon presentation, when you will see clearly depicted the ramp-up of the potential and what we are seeing is happening around the world. Really, I don't wanna steal the scene from the person that will present in the afternoon. I think everybody will be or should be very surprised, and we'll see how this is going is becoming really a worldwide franchise under the same trademark and brand name, which is another very interesting thing. Normally, when you license out, people, company, they choose their own brand name in each single country, and you get kind of confused.
Winlevi is gonna be global and will be global, as you will see. So, we didn't check language in respect of 2022, but I can confirm we're super enthusiastic about that.
There was a third or?
Yeah, third question.
Yes, the third question is: 2023 figures were all lower than 2022. Could you please explain lower earnings, please? And also, where does the rise in SG&A costs come from? Thank you.
Okay, this is again easy to understand. In the course of 2023, we started the negotiation with another large company about our ongoing applications being developed for AI, and we-
Sorry, application. It's important to underline this-
Application
... because, so in the afternoon, you can understand, what different it is, in the reality, in the reality, GI Genius, because in the perception of the people, believe me, they know only the minimal part of the story. The story is not detection, is, you can see this afternoon, and I'm sure when we will talk about the innovation center, you can see... you can have a very larger view. Because, so once again, just to give you the answer, in the year 2023, in April, exactly in April, we were very close to sign the agreement with the strong Medtronic, for only for application. The guys of Medtronic asked us to renegotiate the agreement that we have in place at the time, because the agreement will expire in 2026.
At the end of the day, we decided to change completely our strategy, to stop the negotiation with the other company, and to, let me say, marry the Medtronic because you could see in the afternoon that now the agreement is more, more, and more than before. Because, once again, the detection is only one application of the long journey. A colonoscopy could be only one positioning in something that we can enlarge in robotic rather than in laparoscopy. But I would not to fire the meeting of this afternoon, and I hope that we answer, and I hope that you can be satisfied. The rest in the afternoon.
As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question comes from the line of Nicolas Pauillac with Kepler Cheuvreux. Please go ahead.
Hi, thanks for the presentation. So, maybe two questions on my side. The first one would be regarding the cash position that you now have. It's starting to be quite substantial, so do you plan to do, like, any big thing with that, meaning that you want to go for higher investment in one M&A? And then the second question will be around the buying of shares. You mentioned that you were still increasing the number of shares held through the beginning of the year. At what point do you think that the company will be fair value, and you will stop buying these shares? Thanks.
Well, thanks. First, to answer the first question, I think something that we have always said, and we will keep to repeat, is that we believe that one of the task of management is making shareholders happy. And Cosmo has stated repeatedly in the past that it wants to adopt a strong dividend policy. So I think that investors should expect increased payouts if things continue to progress the way that we are forecasting. That's, that's one thing. The second thing is that we do have a lot of ideas, really not short of ideas on how to continue development, and therefore, we intend to deploy a meaningful portion of our cash resources to further expand the business. So answer is very linear. Expect us to follow up with our dividend policy, and expect us to make meaningful investments in our opportunities.
You will see in the afternoon that we are pursuing meaningful opportunities in pharma as well, and we are expecting those to continue to grow. If there's something that we're not short of, is ideas and new development that are all conceived in-house. This is very, this is very important. We don't pay others to give us ideas. We have enough of our own. In respect to the shares buyback, I also believe we always said that we were buying shares because we thought it was a very, very good investment, so we never bought shares with the intention of canceling them. We bought shares with the purpose of eventually placing them back at a point where this will be very convenient for the company. So we will choose the appropriate moment in time to monetize, and we will see.
That will depends also how, in general, market cap and share price unfold, but we will see. We are in no hurry at all to do anything as such.
Okay, thanks.
That was the last question.
Then I thank you all very, very much for your time, and I hope I'll be able to see-
We await you in the afternoon, huh?
Some of you at least live in the afternoon. Thank you very much.
Bye-bye.
Bye-bye.