Revenio Group Corporation: Half-year financial report, 1.1.-30.6.2019
Revenio Group Corporation, Stock Exchange Release, August 15, 2019 at 9.00
Revenio Group Corporation: Half-year financial report H1/2019:
Figures in brackets refer to the same period in the previous year, unless otherwise stated.
Revenio acquired the entire share capital of Italian company CenterVue SpA at the end of April, 2019. The purchase price of EUR 59 million was paid in cash, for which Revenio had secured debt financing subject to customary conditions. In addition, the parties agreed on an arrangement whereby Revenio will pay an additional purchase price of EUR 1 million if the conditions agreed on by the parties for the additional purchase price are met by the end of 2020.
To carry out the transaction, Revenio established an Italian subsidiary, Revenio Italy S.R.L., which purchased the acquired company’s shares. In the purchase agreement, Revenio guaranteed the subsidiary’s payment obligations relating to the purchase price. The acquisition was financed with debt financing subject to customary conditions from Danske Bank A/S, Finland Branch (“Danske Bank”) and a share issue. In April 2019, Revenio carried out a directed share issue for a limited number of institutional investors in deviation from the shareholders’ preemptive subscription rights, offering a maximum of 2,350,000 new Revenio shares for subscription.
A separate acquisition cost calculation related to the acquisition is presented on page 23 of this interim report.
Revenio takes a major growth leap with strategic acquisition
- Net sales totaled EUR 11.8 (7.6) million, showing an increase of 55.4%
- EBITDA was EUR 1.4 (2.6) million, representing 11.9% of net sales, a decrease of 46.3%
- EBITDA was weighed down by non-recurring acquisition costs amounting to EUR 1.82 million. EBITDA adjusted by non-recurring acquisition costs was EUR 3.2 million, or 27.3% of net sales, an increase of 22.8%.
- Operating profit was EUR 0.9 (2.5) million, representing 7.4% of net sales, a decrease of 65.0%
- Operating profit was weighed down by non-recurring acquisition costs amounting to EUR 1.82 million. Operating profit adjusted by non-recurring acquisition costs was EUR 2.7 million, or 22.8% of net sales, an increase of 7.3%The currency-adjusted growth of net sales in April-June was 56.3%, or 0.9% percentage points stronger than reported.
- Undiluted earnings per share came to EUR 0.018 (0.085)
- Undiluted earnings per share adjusted by non-recurring acquisition costs amounted to EUR 0.091
- Revenio signed a contract on April 2019 to acquire the entire share capital of Italian company CenterVue SpA. The acquisition was completed at the end of April 2019
- CenterVue's business has developed well and the integration work is progressing as planned
- The company carried out a directed share issue for selected institutional investors in an accelerated bookbuild offering, whereby the company collected new capital totaling EUR 41.2 million after costs
- In addition, the company took out a bank loan amounting to EUR 30 million to finance the acquisition.
- Mikko Moilanen, M.Sc. (EE), was appointed as the CEO of Revenio Group Corporation and has started in his position on August 5, 2019.
- Net sales amounted to EUR 20.3 (14.6) million, up 38.9% from the previous year.
- EBITDA was EUR 4.3 (4.9) million, representing 21.1% of net sales, a decrease of 12.5%. EBITDA was weighed down by non-recurring acquisition costs amounting to EUR 2.1 million. EBITDA adjusted by non-recurring acquisition costs was EUR 6.4 million, or 31.4% of net sales, an increase of 30.3%.
- Operating profit was EUR 3.5 (4.6) million, representing 17.0% of net sales, a decrease of 25.7%
- Operating profit was weighed down by non-recurring acquisition costs amounting to EUR 2.1 million. Operating profit adjusted by non-recurring acquisition costs was EUR 5.5 million, or 27.3% of net sales, an increase of 19.2%
- The currency-adjusted growth of net sales in January–June was 36.6%, or 2.3% percentage points weaker than reported.
- Undiluted earnings per share came to EUR 0.105 (0.154)
- Undiluted earnings per share adjusted by non-recurring acquisition costs amounted to EUR 0.189
|Apr 1-Jun 30, 2019||Apr 1-Jun 30, 2018||Change-%||Jan 1-Jun 30, 2019||Jan 1-Jun 30, 2018||Change-
|Operating profit, EBIT||0.9||2.5||-65.0||3.5||4.6||-25.7|
|Operating profit - %, EBIT||7.4||33.0||17.0||31.8|
|Return on investment, % (ROI)||1.6||16.9||6.5||31.1|
|Return on equity, % (ROE)*||1.4||14.0||7.0||24.9|
|Earnings per share, undiluted||0.018||0.085||0.105||0.154|
|Jun 30, 2019||Jun 30, 2018||Change, %-points|
|Equity ratio, %||53.4||81.9||-28.5|
|Net leveraging, %||18.2||-31.7||49.9|
* return on investment, % (ROI) and return on equity, % (ROE) figures from the prior year have been updated to match the reporting period
Financial guidance for 2019, updated
As a result of the CenterVue acquisition, Revenio’s net sales growth is very strong. EBITDA, adjusted with the non-recurring acquisition costs, is expected to be at a good level.
The previous financial guidance for 2019, published in connection with the financial statements on February 14, 2019, was: Net sales is expected to show strong growth compared to the previous year and profitability is expected to remain at a strong level.
President and CEO Mikko Moilanen:
“Our net sales in the first half of 2019 increased by 38.9%, totaling EUR 20.3 million. Our EBITDA adjusted by non-recurring acquisition costs for the same period increased by 30.2%, amounting to EUR 6.4 million. In the second quarter, CenterVue's net sales and profit grew very favorably compared to the same period last year.
I have assumed the position of President and CEO of the Revenio Group from the beginning of August in a very interesting phase, where the most significant acquisition in the Group has been completed and integration is well underway. The CenterVue personnel have been very positive about the new owner and the opportunities we will have together in the future. The atmosphere is very enthusiastic, positive and full of work. Based on the feedback we have received from our distributor network, they see it as a positive opportunity as Revenio is able to offer a wider range of products in the future. Many of them have already expressed their interest in discussing a broader cooperation with us.
The CenterVue acquisition, the related integration work and the development of other business have kept the entire organization busy during the review period. After the review period, we have submitted a sales permit application for the Icare Ic200 to the US FDA. The Medicare substitutability Icare HOME received during the review period was also important to us and we believe it will have a positive impact on product’s sales in the US. In addition, the commercial measures of our Ventica® product has started and we have invested in distributor cooperation during the review period.
Revenio is a company in excellent condition and with a strong position in the global market for diagnostics of the eye. For our customers, this means reliability and the capability to deliver the key modern devices for the detection of eye diseases and their monitoring during treatment on a one-stop-shop basis.
My task is, above all, to pave the way for the next phase of Revenio’s market-oriented development and profitable growth. Our strong market position, world-class operations, skilled and committed team, and our technology and quality expertise create an excellent framework for continued growth.
I would like to extend my warmest thanks to my predecessor, Timo Hildén, for his hard work for the success of Revenio and Icare. During his term as CEO, Timo has built the company into a success story from the perspective of customers, staff, investors and other stakeholders. This is a solid base on which to systematically develop our operations further.
This report contains certain statements that are estimates based on the management’s best knowledge at the time they were made. For this reason, they involve a certain amount of inherent risk and uncertainty. The estimates may change in the event of significant changes in general economic conditions.
Revenio Group Corporation
Board of Directors
For further information, please contact:
Robin Pulkkinen, CFO, tel. +358 50 505 9932
Nasdaq Helsinki Oy
Financial Supervisory Authority (FIN-FSA)
The Revenio Group in brief
Revenio is a health tech group operating on the international market and a global leader in ophthalmological devices.
The Revenio Group comprises Icare Finland Oy, Icare USA Inc., Revenio Italy S. R. L, CenterVue SpA, CenterVue Inc., Revenio Research Oy, and Oscare Medical Oy.
The common denominators of Revenio's business operations include patient-led screening, follow-up and the global need to make cost savings in health care via preventive measures. Revenio seeks vigorous growth in health technology. Revenio aims to develop even more efficient and easily adopted methods for the early-stage detection of diseases with significance for public health. The goal is to create better quality of life through health technology solutions that enable more efficient diagnostics. The focus of the Group is on the early detection of glaucoma, diabetic retinopathy, and macular degeneration, and the monitoring of these during the treatment process. Revenio Research focuses on the commercialization of systems that support the diagnosis of skin cancer and asthma and planning their treatment.
In 2018, the Revenio Group's net sales totaled EUR 30.7 million, with its operating margin standing at 33.3%. Revenio Group Corporation is listed on Nasdaq Helsinki.