Revenio Group Oyj (FRA:R0V) Q1 2025 Earnings Call Highlights: Strong Sales Growth and Strategic ...

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Wed, Apr 30, 2025, 1:07 AM 4 min read

Net Sales: EUR 26.1 million, up 10.5% from the previous year (EUR 23.6 million); currency adjusted growth of 12%.
EBIT: EUR 6.6 million, representing 25.4% of revenue.
Operating Profit: EUR 6.6 million, up 28.6%, and above 25.4% of revenue.
Gross Margin: Higher due to changes in IFRS accounting, with less than 1% impact.
Cash Flow: Operating cash flow impacted by EUR 2.5 million in short-term incentive payouts in Q1.
Interest Bearing Debt: Reduced from EUR 16.6 million last year to EUR 11.3 million at the end of Q1.
Equity Ratio: Above 80% for the first time since the acquisition of Center View.
Shareholder Changes: Ownership increased by 7 out of 10 largest owners during the quarter.
Guidance: Exchange rate adjusted net sales estimated to grow 6% to 15% from the previous year; profitability excluding non-recurring items to remain at a good level.

Warning! GuruFocus has detected 2 Warning Signs with SDA.

Release Date: April 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Revenio Group Oyj (FRA:R0V) reported a strong Q1 2025 with net sales of EUR 26.1 million, marking a 10.5% increase from the previous year.
The company achieved an EBIT of EUR 6.6 million, representing 25.4% of revenue, indicating strong profitability.
Sales growth was observed across all regions, including the US, APAC, Europe, Middle East, Africa, Latam, and Canada.
The launch of the new TONOVET pro version and the DRS plus business contributed positively to the company's performance.
Revenio Group Oyj received FDA approval and CE Certification for its micro perimeter, enhancing its product offerings and market reach.

Negative Points

The company faces potential impacts from US tariffs, estimated to affect earnings by EUR 0.8 million to EUR 1.4 million in Q3 and Q4 2025 if no mitigating actions are taken.
Fixed costs increased by 10% year-on-year, partly due to changes in IFRS reporting and increased personnel costs.
The company is experiencing FX headwinds, which could impact sales and margins.
There is uncertainty regarding the timeline and costs associated with clinical trials for the eye care (Ilo) based screening solution.
The SD 500 product, while having good initial reception, is not yet contributing significantly to sales compared to other products like the IC 200.

Q & A Highlights

Q: How significant were the one-off deals in your Q1 sales? A: The one-off deals were larger than usual but not as significant as previous large deals. They were less than a million euros, not reaching the seven-digit mark.

Q: Have you noticed any changes in demand due to the US tariffs, and was there any pre-buying ahead of the tariffs? A: There was no pre-buying observed in the US. The sales pipeline remains strong, and we haven't seen a decrease in demand due to the tariffs.

Q: What is the expected impact of tariffs on earnings, and how do you plan to mitigate it? A: The estimated impact is EUR 0.8 million to EUR 1.4 million on earnings if no actions are taken. We plan to mitigate this by increasing prices in the US, which should cover the tariff costs.

Q: How do you anticipate the price increases due to tariffs will affect demand? A: We expect minimal impact on demand as we plan to implement single-digit price increases. Our competitors are also likely to increase prices, and we offer strong value for the price.

Q: Can you provide insights into the geographical growth, particularly in China? A: China experienced growth in the hundreds of percentages, contributing significantly to our success in the quarter, alongside strong growth in India.

Q: What is the status of the SD 500 device, and when do you expect it to contribute more significantly? A: The SD 500 is gaining traction, particularly in ophthalmology workflows. While it is not yet moving the needle as much as other products, we expect it to contribute more significantly later this year or next year.

Q: How does the increase in personnel costs affect your financial outlook for the year? A: Personnel costs in Q1 are representative of the year, with some expected increases due to new hires and salary adjustments. However, these are factored into our financial planning.

Q: Are there plans to transfer some assembly to the US to mitigate tariff impacts? A: We are evaluating options but have not committed to moving production. Currently, we are managing the situation with increased inventory and planned price adjustments.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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