Revenio Group Oyj (FRA:R0V) Q2 2024 Earnings Call Highlights: Strong Sales Growth and ...

GuruFocus News

Wed, Oct 9, 2024, 3:29 PM 4 min read

Net Sales: EUR25.4 million, up 14.2% from last year's Q2; currency-adjusted growth of 13.5%.
Operating Profit: EUR5.3 million, representing 20.6% of net sales, up 12.6%.
EBITDA: Increased by 25.6% in Q2.
Net Cash from Operations: EUR6.75 million in Q2.
Earnings Per Share: Increased to 0.155%.
First Half Net Sales: EUR49.1 million, a 7.9% increase on currency-adjusted terms.
First Half EBIT: EUR10.4 million, slightly down from the previous year.
First Half EBITDA: EUR13.3 million.
First Half Net Cash Flow: Improved from EUR0.1 million to EUR11.2 million.
Write-off: EUR730,000 related to Ventica non-strategic capitalizations.
Adjusted Operating Profit: EUR6 million for Q2.
Dividend: EUR0.38 per share, with a payout ratio slightly above 50%.
Equity Ratio: Approaching 75%.
Net Gearing: Below zero.
Guidance: Exchange rate-adjusted net sales estimated to grow 5% to 10% from the previous year; profitability excluding non-recurring items to remain at a good level.

Warning! GuruFocus has detected 5 Warning Sign with FRA:R0V.

Release Date: August 08, 2024

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 Q2 with net sales of EUR25.4 million, up 14.2% from the previous year.
The company's EBITDA increased by 25.6%, indicating strong operational performance.
Sales growth was particularly strong in the US, Europe, Middle East, Africa, and APAC regions.
The company launched a new product, iCare TONOVET Pro, which is seeing positive sales momentum.
Revenio Group Oyj maintained a strong cash flow position, with net cash from operations reaching EUR6.75 million in Q2.

Negative Points

The company had to write off EUR730,000 related to non-strategic capitalizations, impacting financial results.
Despite overall growth, the adjusted EBIT showed a slight decline compared to the previous year.
Personnel expenses are expected to grow due to increased bonus accruals, potentially impacting future profitability.
There is uncertainty regarding the timing and cost of clinical trials, which could affect financial outcomes in the second half of the year.
The competitive landscape, particularly in tonometers, is seeing aggressive pricing from competitors, which could pressure margins.

Q & A Highlights

Q: You mentioned increasing momentum in PHP clients, but larger orders haven't materialized yet. How does this segment compare to two years ago, and when do you expect larger deliveries? A: A year ago, the segment was at a standstill. Two years ago, it was quite active. Currently, there's more activity with smaller orders being placed, but it's not at the level of two years ago. We expect growth in this area, but it hasn't significantly impacted Q2 results yet.

Q: How does the demand environment in Q3 compare to Q2? A: We are executing according to plan for Q3, similar to Q1 and Q2. There have been no significant changes or issues so far.

Q: Have you seen increased price competition in tonometers, and has it affected your sales? A: In Europe, competition has been present for two years with no impact on sales. In the US, competition began in Q2, but it hasn't affected our numbers despite aggressive pricing by competitors.

Q: Can you provide a rough quantification of growth between fundus imaging and tonometers? A: Fundus imaging experienced very strong growth, with products like DRSplus and EIDON selling well. Tonometers, particularly the IC200, also saw strong growth. The ILLUME and HOME segments are growing but contribute less compared to the base business.

Q: Does the strong Q2 imply that the upper end of the 5% to 10% revenue growth guidance is achievable for the full year? A: We haven't disclosed specific targets, but the business is scalable, and historically, the second half has been stronger, particularly Q4, which typically contributes significantly to annual profits.

Q: What is the status of the FDA trial for ILLUME, and are you still expecting marketing approval in H2 2025? A: We aim to ensure DRSplus works with all dominant AI platforms, with progress expected by Q1 2025. We plan to submit the FDA application for ILLUME DRSplus plus Thirona Retina AI, targeting approval in the second half of 2025.

Q: Can you provide an update on the EUR8 million contingent liability? A: We plan to provide more information by October with the Q3 earnings release. It's currently off the books and not in the balance sheet.

Q: How has the proportion of recurring revenues, such as probes, software, and AI, changed compared to a year or two ago? A: Probes remain the majority of recurring revenues, historically growing by about 2% annually. While we no longer report exact figures, the share of recurring revenues continues to increase.

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

This article first appeared on GuruFocus.

Terms and Privacy Policy

Your Privacy Choices

Utah Privacy Notice

More Info