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Revenio Group Oyj

Interim / Quarterly Report Aug 6, 2018

3236_ir_2018-08-06_8eccba80-6533-4468-95ef-43c05298b242.pdf

Interim / Quarterly Report

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Revenio Group Corporation: Half-year financial report 1.1.-30.6.2018

Strong second quarter, net sales growth 13.4%

April–June 2018 in brief, continuing Group functions

  • Net sales totaled EUR 7.6 (6.7) million, showing an increase of 13.4%
  • Operating profit was EUR 2.5 (2.3) million, representing 33.0% of net sales, an increase of 10.7%
  • Earnings per share, undiluted EUR 0.085 (0.074)
  • The currency-adjusted growth of net sales in April-June was 12.7%, or 0.8% percentage points weaker than reported
  • An application for a CE marking for the new-generation Icare ic200 for professional use was submitted in May

January–June 2018 in brief, continuing Group functions:

  • Net sales amounted to EUR 14.6 (12.7) million, up 14.6% from the previous year
  • Operating profit was EUR 4.6 (4.0) million, representing 31.8% of net sales, an increase of 17.2%
  • Probe sales amounted to EUR 4.6 (3.8) million, representing an increase of 20.4% (27.0%)
  • Earnings per share, undiluted EUR 0.154 (0.133)
  • By a decision of the annual general meeting, the shareholders were issued with free new shares in relation to ownership, with two new shares being issued for every share held (a so-called share split).
  • The currency-adjusted growth of net sales in January-June was 17.7%, or 3.1% percentage points stronger than reported

Key figures, continuing operations, EUR million

Apr 1 – Jun
30, 2018
Apr 1 – Jun
30, 2017
Change
%
Jan 1 – Jun
30, 2018
Jan 1 – Jun
30, 2017
Change
%
Net sales, Group 7.6 6.7 13.4 14.6 12.7 14.6
Operating profit, Group 2.5 2.3 10.7 4.6 4.0 17.2
Net sales, Health Tech 7.6 6.7 13.4 14.6 12.7 14.6
Operating profit, Health Tech 3.2 2.8 14.8 5.9 5.0 17.0
Earnings per share, undiluted 0.09 0.07 0.15 0.13
Cash flow from operating
activities
1.9 2.1 3.6 3.8
Jun 30,
2018
Jun 30,
2017
Change,
% points
Equity ratio, %
Net leveraging, %
81.9
-31.7
73.2
-34.3
8.7
2.6

Financial guidance for 2018

Net sales growth is expected to remain strong. Profitability is expected to remain at a healthy level despite relatively increasing growth investments.

Timo Hildén, CEO, comments on Q2/2018:

Our net sales for April-June were 7.6 (6.7) million, growing by 13.4%, and our operating profit was 2.5 (2.3) million, an increase of 10.7%.

The new generation tonometer, the Icare ic100, was granted a sales permit in China in May and in Mexico in June. The first deliveries went to China in June. To ensure efficiency and coverage, in China the Icare ic100 will be distributed through a wider distribution network than that of the previousgeneration product, the TA01. As expected, the launch of the new generation product slowed down sales of the previous generation device during the review period, as distributors ran down their stocks of the TA01. We expect the first major orders of the ic100 from China only later in the year.

During the review period, we decided to move to larger premises in Raleigh, USA. Almost 10 employees are already working in our office and the new facilities allow future growth. The move into the new premises will occur in September.

A CE marking application for the new generation of tonometers for professionals, the Icare ic200, was submitted at the end of May this year. We expect to receive the sales permit during the third quarter. Based on the product feedback we have already received, we expect high demand for the product in Europe as soon as sales work begins. The product will replace the Icare PRO, which has been a popular product among ophthalmologists who perform surgery. A sales license application will be submitted for the product in the United States as soon as clinical trials have been completed.

Additional research results are appearing on a continuous basis on the importance of 24-hour eye pressure monitoring to the identification and treatment of glaucoma and the role of Icare HOME. This is important in establishing new treatment practices. The latest study was published in Australia and revealed how almost 10% of patients had significantly elevated intraocular pressure outside clinic hours and optical nerve damage in the fundus oculi. The study clearly shows how important it is to determine potential daily fluctuations in intraocular pressure and the effectiveness of drug treatment after diagnosis.

We launched direct sales of Icare HOME tonometers for consumers in Finland in May and opened the silmanpaine.fi website in support of sales. An increasing number of ophthalmologists are serving as reference clinics for Icare HOME users.

The asthma Product Ventica® has undergone clinical trials based on an improved algorithm, for which we have received good results. The commercial launch of the product in Europe is scheduled for the autumn and the product will be displayed in venues such as the Congress of the European Respiratory Society in Paris, where we will also give a scientific presentation of Ventica in the treatment of asthma in pediatric patients.

The hyperspectral camera for skin cancer, Cutica®, is progressing as planned and our goal is to apply for a sales permit on the basis of the CE Mark in Europe in early 2019. There has been growing interest in the product among dermatologists.

During the early part of the year, we have been working on meeting the requirements of the EU Data Protection Regulation (GDPR) which entered into force in May. I am pleased to note that to our understanding, we achieved readiness to fulfil the terms of the regulation in May, in accordance with the schedule set by the authorities.

Business review, January 1–June 30, 2018, continuing operations

Revenio Group's net sales totaled EUR 14.6 million (12.7) million, an increase of 14.6%. During the review period, sales went well in the USA, China, UK, Germany, France, the Nordic countries and India in particular.

Device sales saw strong year-on-year growth, particularly due to the 2017 launch of Icare HOME and the Tonovet Plus tonometer, designed for the measurement of intraocular pressure in animals. Continuous research is being conducted on the importance of 24-hour monitoring of intraocular pressure in glaucoma cases, which, due to positive results, has achieved acceptance among research communities, as can be seen in sales of the Icare HOME tonometer.

Strong sensor sales continued throughout the review period and were about 20% higher than at the corresponding time in the previous year. The strong trend in sensor sales reflects the active use of the equipment on the markets. In the US, sensor sales have been further boosted by the accelerating shift to online sales.

The development of Cutica®, for skin cancer screening, by Revenio Research Oy is progressing, as planned, towards a commercial product and a CE Mark application should be filed in early 2019. The asthma product Ventica® is progressing towards its launch in the fall, in one of this year's major events in the industry.

Financial review January 1–June 30, 2018, continuing operations

Net sales, profitability and result, continuing functions

Revenio Group's consolidated net sales from continuing operations for the period January 1–June 30, 2018 totaled EUR 14.6 (12.7) million. This represented net sales growth of 14.6%. Earnings before taxes totaled EUR 4.7 (3.9) million, a growth of 20.9% from the preceding year. The decline of the dollar against the euro in January–June had a decreasing effect on net sales. As a result, the currency-adjusted organic growth of net sales in January–June was 17.7%, or 3.1% percentage points stronger than reported.

Consolidated operating profit totaled EUR 4.6 (4.0) million, up 17.2% from the previous year. Undiluted earnings per share from continuing operations came to EUR 0.154 (EUR 0.133). Equity per share was EUR 0.57 (0.51).

In January–June 2018, the net sales of the Revenio Health Tech segment totaled EUR 14.6 million (12.7), up 14.6% from the previous year. In January–June 2018, the operating profit of the Revenio Health Tech segment totaled EUR 5.9 (5.0) million, up 17.0% from the previous year.

Balance sheet, financial position, and investments

The consolidated balance sheet total stood at EUR 16.7 (16.7) million on June 30, 2018. Consolidated shareholders' equity amounted to EUR 13.7 (12.2) million. At the end of the reporting period, interestbearing liabilities amounted to EUR 0.3 (0.3) million and leveraging stood at -31.7% (-34.3%). The consolidated equity ratio was 81.9% (73.2). The Group's liquid assets amounted to EUR 4.7 (4.7) million on June 30, 2018.

The Group's financial position remained stable during the review period. The consolidated goodwill recorded on the balance sheet on June 30, 2018 was EUR 1.2 (1.2) million.

Cash flow from operations in January-June totaled EUR 3.6 (3.8) million. The Group's purchases of PPE and intangible assets totaled EUR 0.8 (0.4) million. Investments focused mainly on product development.

Personnel, management, and administration

The annualized average number of personnel employed by the Group in continuing operations during the period amounted to 44 (44). The number of personnel grew by 0 during the period and was 44 (44) at the end of the review period.

Number of personnel during the period by segment:

Jun 30, Jun 30, December
2018 2017 31, 2017
Revenio Health Tech 38 39 36
Parent company 6 5 5
Total 44 44 41

During the review period, the total paid wages and fees have been EUR 1.9 million

Shares, share capital, and management, and employee holdings

On June 30, 2018, the Revenio Group Corporation's fully paid-up share capital registered with the Trade Register was EUR 5,314,918.72 and the number of shares totaled 23,947,905.

The Annual General Meeting on March 20, 2018 approved the Board's proposal for a free share issue. The new shares were issued to shareholders free of charge in relation to ownership, with two new shares being issued per share (a so-called share split). A total of 15,958,812 new shares were issued. The new shares were registered in the Trade register on March 22, 2018.

During the review period, the number of shares increased by 9,687 following subscriptions made on the basis of the 2015A stock option scheme. Series 2015A option rights were used to subscribe for 9,687 shares. Following these subscriptions, the number of shares and votes of Revenio Group Oyj increased to 23,947,905.

The company has one class of share, and all shares confer the same voting rights and an equal right to dividends and the company's funds. On June 30, 2018, the President & CEO, members of the Board of Directors and their related parties held 9.13% of the company's shares, or 2,186,679shares and 19.5% of the option rights.

The Annual General Meeting of Revenio Group Corporation held on March 20, 2018 decided that 40% of Board members' emoluments will be settled in the form of company shares. Accordingly, as announced on May 3, 2018, Revenio Group Corporation transferred a total of 4,164 to Board members shares as follows: A total of 1,388 shares were transferred to Board Chair Pekka Rönkä, as a result of which his ownership of instruments issued by the company amounts to 5,768 shares. A total of 694 shares were transferred to Board member Ari Kohonen, as a result of which his personal and his related parties' ownership of instruments issued by the company amounts to 1,028,251 shares. A total of 694 shares were transferred to Board member Pekka Tammela, as a result of which his ownership of instruments issued by the company amounts to 75,115 shares. A total of 694 shares were transferred to Board member Kyösti Kakkonen, as a result of which his personal and his related parties' ownership of instruments issued by the company amounts to 1,061,674 shares. A total of 694 shares was transferred to Board member Ann-Christine Sundell, as a result of which her ownership of instruments issued by the company amounts to 3,871 shares. As a result of these transfers, the share-based Board member fees have been settled in full. After the transfers, Revenio Group Corporation holds 6,213 of its own shares.

In late 2015, the employees of Revenio Group established a personnel fund, into which any bonuses earned by employees working in Finland on the basis of incentive schemes can be paid. All employees are included in the performance-based bonus scheme.

Authorization to purchase own shares

The AGM authorized the Board to make the decision to buy back a maximum of 2,393,821 of the company's own shares in one or several tranches using the Company's non-restricted equity capital. The company may buy back shares to develop its capital structure, to finance and implement any corporate

acquisitions or other transactions, and to implement share-based incentive plans or otherwise transfer or cancel them.

The company may buy back shares in public trading on marketplaces whose rules and regulations allow the Company to trade in its own shares. In such a case, the Company will buy back shares through a directed purchase, that is, in a proportion other than its shareholders' holdings in Company shares, with the consideration for the shares based on their publicly quoted market price. This will be done in such a manner that the minimum price of the purchased shares equals the lowest market price quoted in public trading during the authorization period, and, similarly, their highest price equals the highest market price quoted in public trading during that period.

This authorization will be valid until April 30, 2019. This authorization shall supersede the buyback authorization granted at the AGM of March 22, 2017.

The company has not purchased own shares during the review period.

Option schemes

Based on the share issue authorization granted by the Annual General Meeting of March 19, 2015, Revenio Group Corporation's Board of Directors decided, on August 10, 2015, to implement a new option scheme comprising a maximum of 150,000 option rights. One option right entitles its holder to subscribe for three shares. New shares subscribed for via the option program entitle the holder to a dividend from the year of subscription onwards. The option rights will be allocated, as determined by the Board of Directors, to key personnel employed or to be employed by the Revenio Group in accordance with the terms and conditions of the option scheme.

These option rights are divided into three series: Series A (50,000), Series B (50,000), and Series C (50,000). The subscription periods for options are as follows: Series A: May 31, 2017–May 31, 2019; Series B: May 31, 2018–May 31, 2020; and Series C: May 31, 2019–May 31, 2021. The share subscription price for Series A options will be the trade-weighted average price of Revenio share quoted on Nasdaq Helsinki Oy during the period September 1 – October 15, 2015 plus 15 per cent, for Series B options the trade-weighted average price of Revenio share quoted on Nasdaq Helsinki Oy during the period September 1 – October 15, 2016 plus 15 per cent, and for Series C options the trade-weighted average price of Revenio share quoted on Nasdaq Helsinki Oy during the period September 1 – October 15, 2017 plus 15 per cent. At the moment, the subscription prices for the options are as follows: Series A: EUR 8.23; Series B: EUR 10.12; and Series C: EUR 13.06.

Management incentive scheme

On March 20, 2018 the Board of Directors of Revenio Group Corporation decided on two share-based long-term incentive schemes directed towards the Management Team of Revenio Group. Long-term incentive schemes form part of the company's remuneration program for key personnel and are aimed at supporting the implementation of the company's strategy and harmonizing the objectives of key personnel and company shareholders in order to grow the company's value.

Performance share plan 2018-2020

A program for the earning years 2018-2020 was launched as part of the long-term share-based incentive scheme.

The Board of Directors shall decide separately on the minimum, target and maximum bonus of each participant, as well as performance criteria and the related targets.

The amount of bonus payable to the participants depends on the achievement of the pre-set targets. No bonus will be paid if the targets are not met, or if the participant's work or employment relationship ends before the bonus is paid. The performance share plan shall cover a maximum of 10 persons and the objectives of the plan shall be related to the absolute total yield of the company's share and the cumulative operating result over a period of three years.

If the targets of the incentive scheme are met, the bonuses will be paid in the spring of 2021 in the year following the earning period. The total amount of share bonus to be paid on the basis of the program earning period shall not exceed around 50,000 shares in Revenio Group Corporation. The number of shares in question is gross earnings minus the amount of cash required to cover taxes due on the share bonus and any other tax-like payments, after which the remaining net bonus shall be paid in shares. However, in certain circumstances the company has the right to pay the entire bonus in cash.

Restricted share plan 2019–2021 for the President & CEO

The purpose of the restricted share plan is to secure the commitment of the President & CEO and complement his performance share plan. The limited share bonus scheme covers only the company's President & CEO and consists of a single, three-year restriction period.

The restricted share plan will begin from the beginning of the year 2019 and any share bonus payable under the plan shall be paid in three parts. The total number of shares to be paid under the restricted share plan in 2019–2021 shall not exceed 10,188 shares, 25% of which shall be payable in spring 2020, 25% in spring 2021 and 50% in spring 2022, provided that the President & CEO's employment relationship is valid at the time of each bonus payment. The number of shares in question is gross earnings minus the amount of cash required to cover taxes due on the share bonus and any other taxlike payments, after which the remaining net bonus shall be paid in shares.

Flagging notifications

On 21 March 2018, Revenio was notified of a change in shareholder ownership, in accordance with Chapter 9, Section 5 of the Securities Market Act, in which the number of shares and votes in Revenio Group Corporation held by Joensuun Kauppa and Kone Oy fell under the 5% limit to 4.41%.

On 30 January 2018, Revenio was notified of a change in shareholder ownership, in accordance with Chapter 9, Section 5 of the Securities Market Act, in which the number of shares and votes in Revenio Group Corporation held by Evli Pankki Oyj fell below the 5% threshold to 4.75%.

Trading on Nasdaq Helsinki

During the period January 1–June 30, 2018, Revenio Group Corporation's share turnover on the Nasdaq Helsinki exchange totaled EUR 44.9 (53.3) million, representing 3.4 (4.8) million shares or 14.2 (19.9) per cent of all shares outstanding. The highest trading price was 15.68 (13.80) and the lowest EUR 11.35 (9.74). At the end of the period, the closing price was EUR 15.32 (12.20), and the average share price for the period was EUR 13.16 (11.16). Revenio Group Corporation's market value stood at EUR 366.9 (292.0) million on June 30, 2018.

Summary of trading on Nasdaq Helsinki January 1–June 30, 2018

January-June Turnover, Value Highest, EUR Lowest, Average Latest, EUR
2018 number of total, EUR EUR price, EUR
shares
REG1V 3,408,710 44,850,826 15,68 11,35 13,16 15,32
Jun 30, 2018 Jun 30, 2017
Market value, EUR 366,881,905 292,046,260
Number of shareholders 9,148 9,038

Risks and uncertainty factors

Revenio Group's major business risks and uncertainty factors are presented in their entirety in the 2017 annual report released on February 27, 2018, available at www.revenio.fi.

Revenio Group's risks are divided into strategic, operational, trade cycle, hazard, and financial risks.

The Group's strategic risks include competition in all sectors, the threat posed by new competing products, and any other actions of the company's rivals that may affect the competitive situation. Another strategic risk is related to the ability to succeed in R&D activities and to maintain a competitive product mix. The Group develops new technologies under the name, Revenio Research Oy, and any failure in the commercialization of individual development projects may result in the depreciation of capitalized development expenses, with an impact on the result. Strategic risks in the Group's segments that require special expertise are also associated with the successful management and development of key human resources and the management of the subcontractor and supplier network.

Corporate acquisitions and the purchase of assets with growth potential related to health tech are part of the Group strategy. The success of these acquisitions has a significant impact on the achievement of growth and profitability targets. Acquisitions may also change the Group's risk profile.

Strategic risks and the need for action are regularly assessed and are monitored in connection with dayto-day management, monthly Group reporting, and annual strategy updates.

Operational risks are associated with the retention and development of major customers, the operations of the distribution network, and success in extending the customer base and markets. In the Revenio Health Tech segment especially, operational risks include factors related to expansion into new markets, such as various countries' regulation of sales licenses for medical instruments imposed at national level and the related official decisions concerning the health care market. Success in health tech R&D projects launched in accordance with the strategy can also be classified as an operational risk.

The operational risks related to the manufacture, product development, and production control of medical instruments are estimated to be higher than average in the Revenio Health Tech segment, because of that sector's requirements concerning quality.

Hazard risks are covered by insurance. Property and business interruption insurance provides protection against risks in these areas. The business pursued is covered by international liability insurance.

Financial risks can be further categorized into credit, interest-rate, liquidity, and foreign exchange risks. To manage credit loss risks, the Group has taken out credit insurance that covers all companies in the Group. Every month, and more frequently if necessary, the Board, in its meetings, assesses matters related to financial issues. If required, the Board provides decisions and guidelines for the management of financial risks concerning interest-rate and currency hedging, for instance. The liquidity risk can be affected by the availability of external financing, the development of the Group's credit standing, the trend in business operations, and changes in the payment behavior of customers. Liquidity risks are monitored by means of cash forecasts, which are drawn up for periods of 12 months at the most at a time.

Annual General Meeting and Board authorizations in effect

Decisions by the Annual General Meeting of Revenio Group Corporation on March 20, 2018

1. Financial statements, Board and auditors

The AGM confirmed the company's financial statements for the financial year January 1–December 31, 2017, and discharged the members of the Board of Directors and the Managing Director from liability.

The Annual General Meeting decided to elect five members to the Board of Directors. Ari Kohonen, Pekka Rönkä, Kyösti Kakkonen, Ann-Christine Sundell, and Pekka Tammela were reelected as Board

members. At its organization meeting, held after the Annual General Meeting, the Board of Directors elected Pekka Rönkä as Chairman of the Board.

The AGM decided that the Chair of the Board be entitled to an annual emolument of EUR 48,000 and the other Board members to an annual emolument of EUR 24,000.

A total of 40% of Board members' emoluments will be paid out in the form of company shares, while 60% will comprise a monetary payment.

The AGM appointed Deloitte Oy, Authorized Public Accountants, as the company's auditors, with Merja Itäniemi, Authorized Public Accountant, as the principal auditor. The AGM decided to compensate the auditors upon the presentation of a reasonable invoice.

2. Annual profit distribution and dividend distribution

The AGM decided to accept the Board's proposal on profit distribution, according to which the parent company's profit for the financial period, EUR 4,929,308.74, will be added to retained earnings, and a dividend of EUR 0.78 per share will be paid. The dividend payment date was March 29, 2018.

3. Bonus issue (stock split)

In accordance with the Board's proposal, the AGM decided on a bonus issue. On the basis of the total number of shares on the date of the notice (7,979,406), 15,958,812 new shares will be issued. The shares will be issued to those shareholders who, on the record date of the share issue, March 22, 2018, are entered as shareholders on the Company's shareholder register held by Euroclear Finland Ltd. The new shares do not entitle the holder to the dividend referred to in section 8 above. In accordance with the terms of the company's option program 2015, the Board of Directors shall change the terms of the option program to correspond to the bonus issue.

4. Authorizing the Board of Directors to decide to repurchase the Company's own shares

The AGM approved the Board's proposal that the Board be authorized to decide on the acquisition of up to 2,393,821 own shares and to cancel the authorization given by the AGM of March 22, 2017. This authorization will be valid until April 30, 2019.

5. Authorization to the Board of Directors to decide on a share issue and on the granting of stock options and other special rights giving entitlement to shares

The AGM approved the Board's proposal that the Board be authorized to decide on a share issue of up to 2,393,821 shares, and to grant special rights related to shares in one or more instalments and cancel the authorization previously granted by the AGM on March 22, 2017. This authorization will be valid until April 30, 2019.

Major events after the review period

No major events.

Alternative growth indicators used in financial reporting

Revenio has adopted the guidelines of the European Securities and Market Authority (ESMA) on Alternative Performance Measures. In addition to the IFRS-based key figures, the company will publish certain other generally used key figures that may, as a rule, be derived from the profit and loss statement and balance sheet. The calculation of these figures is presented below. According to the company's view, these key figures supplement the profit and loss statement and balance sheet, providing a better picture of the company's financial performance and position.

Revenio Group's net sales are strongly affected by fluctuations in the exchange rate between the euro and the U.S. dollar. As an alternative growth indicator, we also present our net sales with the exchange rate effect eliminated.

Alternative growth indicator
(thousand euros)
01-06´2018 01-06´2017
Reported net sales € 14,584 € 12,725
Effect of exchange rates on net sales € 639 € 207
Net sales adjusted with the effect of exchange rates € 15,223 € 12,932
Growth in net sales, adjusted with the effect of exchange rates 17.7%
Reported net sales growth % 14.6%
Difference, % points 3.1%

Financial reporting in 2018

The interim report Q3/2018 will be published on October 25, 2018.

Major shareholders on June 30, 2018

No. of
shares %
1. Joensuun Kauppa ja Kone Oy 1,056,600 4%
2. Gerako Oy 1,020,000 4%
3. Evli Finnish Small Cap investment fund 716,070 3%
4. Merivirta Jyri 600,000 3%
5. Ilmarinen Mutual Pension Insurance Company 554,001 2%
6. Eyemaker's Finland Oy 420,000 2%
7. Evli Finland Select investment fund 311,458 1%
8. Alpisalo Mia Elisa 308,524 1%
9. Siik Rauni 306,000 1%
10. Fennia Mutual Insurance Company 269,466 1%

Formulas

Earnings per share: net profit for the reporting period
average number of shares during the reporting period
Profit before taxes: operating profit + financing income - financing expenses
Equity ratio %: balance sheet equity $+$ non-controlling interest
100x balance sheet total - advance payments received
Net gearing, %: 100x interest-bearing debt - cash & equivalents
total equity
Return on equity %: profit for the financial period
100x shareholders' equity + non-controlling interest (average during period)
Return on investment %: profit before taxes + interest and other financial expenses
100x
balance sheet total – non-interest-bearing debt (average during period)
Average share price: total value of shares traded during the period, in euros
total number of shares traded during financial period
Gearing %: 100x interest-bearing net debt
total equity

TABLE SECTION JANUARY 1–JUNE 30, 2018

Statement of accounting policies

The financial statement bulletin or interim report has been prepared in compliance with IAS 34 Interim Financial Reporting. As of January 1, 2016, the Group has implemented the new or revised standards and IFRIC interpretations published by IASB and specified in the Group's accounting principles in 2015 that are applied both in financial statements and interim reports.

The figures of the interim report are unaudited.

IFRS standards

The IFRS standards which entered into force on January 1, 2018, have no material impact on the result for the reporting period.

Consolidated comprehensive income statement Jan– Jan– Jan–
(MEUR) Jun/2018 Jun/2017 Dec/2017
NET SALES 14.6 12.7 26.8
Other operating income 0.1 0.1 0.2
Materials and services -3.6 -3.3 -6.9
Employee benefits -2.7 -2.3 -4.2
Depreciation, amortization, and impairment -0.2 -0.4 -2.1
Other operating expenses -3.5 -2.8 -5.6
OPERATING PROFIT, CONTINUING OPERATIONS 4.6 4.0 8.1
Financial income and expenses (net) 0.0 -0.1 0.2
PRE-TAX PROFIT, CONTINUING OPERATIONS 4.7 3.9 8.3
Income taxes -1.0 -0.8 -1.4
Net profit from continuing operations 3.7 3.1 6.8
Net profit from discontinued operations 0.0 0.0 0.0
NET PROFIT 3.7 3.1 6.8
Other comprehensive income items 0.0 0.0 0.0
Taxes on other comprehensive income items 0.0 0.0 0.0
Other comprehensive income items
after taxes 0.0 0.0 0.0
TOTAL COMPREHENSIVE INCOME 3.7 3.1 6.8
Net profit attributable to:
Parent company shareholders 3.7 3.2 6.8
Non-controlling interests 0.0 -0.1 0.0
Total comprehensive income attributable to:
Parent company shareholders 3.7 3.2 6.8
Non-controlling interests 0.0 -0.1 0.0
Earnings per share, undiluted, EUR, continuing operations 0.154 0.133 0.29
Earnings per share, diluted, EUR, continuing operations 0.15 0.13 0.29
Consolidated comprehensive income statement
(MEUR)
Apr–
Jun/2018
Apr–
Jun/2017
Jan–
Dec/2017
NET SALES 7.6 6.7 26.8
Other operating income 0.0 0.0 0.2
Materials and services -1.9 -1.7 -6.9
Employee benefits -1.4 -1.1 -4.2
Depreciation, amortization, and impairment -0.1 -0.2 -2.1
Other operating expenses -1.7 -1.4 -5.6
OPERATING PROFIT, CONTINUING OPERATIONS 2.5 2.3 8.1
Financial income and expenses (net) 0.0 -0.1 0.2
PRE-TAX PROFIT, CONTINUING OPERATIONS 2.6 2.2 8.3
Income taxes -0.5 -0.5 -1.4
Net profit from continuing operations 2.1 1.7 6.8
Net profit from discontinued operations 0.0 0.0 0.0
NET PROFIT 2.1 1.7 6.8
Other comprehensive income items 0.0 0.0 0.0
Taxes on other comprehensive income items 0.0 0.0 0.0
Other comprehensive income items
after taxes 0.0 0.0 0.0
TOTAL COMPREHENSIVE INCOME 2.1 1.7 6.8
Net profit attributable to:
Parent company shareholders 2.1 1.8 6.8
Non-controlling interests 0.0 -0.1 0.0
Total comprehensive income attributable to:
Parent company shareholders 2.1 1.8 6.8
Non-controlling interests 0.0 -0.1 0.0
Earnings per share, undiluted, EUR, continuing operations 0.09 0.07 0.29
Earnings per share, diluted, EUR, continuing operations 0.08 0.07 0.29
December
Consolidated balance sheet (MEUR) Jun 30, 2018 Jun 30, 2017 31, 2017
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 0.9 0.9 0.8
Goodwill 1.2 1.2 1.2
Intangible assets 3.5 4.2 3.0
Deferred tax assets 0.6 0.5 0.9
TOTAL NON-CURRENT ASSETS 6.2 6.8 5.9
CURRENT ASSETS
Inventories 1.8 2.2 2.0
Trade and other receivables 4.0 3.0 3.2
Cash and cash equivalents 4.7 4.7 8.0
TOTAL CURRENT ASSETS 10.5 9.9 13.2
Non-current assets of
discontinued operations 0.0 0.0 0.0
TOTAL ASSETS 16.7 16.7 19.0
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital 5.3 5.3 5.3
Share premium 0.0 2.4 0.0
Fair value reserve 0.3 0.3 0.3
Invested unrestricted capital reserve 7.2 4.7 7.1
Retained earnings 0.8 0.4 3.3
TOTAL EQUITY, attributable to
holders of parent company equity 13.7 13.1 16.0
Non-controlling interests 0.0 -0.9 0.0
TOTAL SHAREHOLDERS' EQUITY 13.7 12.2 16.0
LIABILITIES
NON-CURRENT LIABILITIES
Deferred tax liabilities 0.0 0.0 0.0
Provisions 0.0 0.0 0.0
Financial liabilities 0.3 0.8 0.3
TOTAL NON-CURRENT LIABILITIES 0.3 0.8 0.3
CURRENT LIABILITIES
Trade and other payables 2.7 3.6 2.7
Financial liabilities 0.0 0.0 0.0
TOTAL CURRENT LIABILITIES 2.7 3.7 2.7
Non-current liabilities
from discontinued operations 0.0 0.0 0.0
LIABILITIES 3.0 4.5 3.1
TOTAL SHAREHOLDERS' EQUITY AND
LIABILITIES 16.7 16.7 19.0

Consolidated statement of changes in equity (MEUR)

Non-controlling
Share Share Other Retained interests Total
capital premium reserves earnings Total interests equity
5.3 0.0 7.4 3.3 16.0 0.0 16.0
0.0 0.0 0.0 -6.2 -6.2 0.0 -6.2
0.0 0.0 0.1 0.0 0.1 0.0 0.1
0.0 0.0 0.0 0.1 0.1 0.0 0.1
0.0 0.0 0.1 0.0 0.1 0.0 0.1
0.0 0.0 0.0 3.7 3.7 0.0 3.7
5.3 0.0 7.5 0.8 13.7 0.0 13.7
Non-controlling
Share Share Other Retained interests Total
capital premium reserves earnings Total interests equity
Balance, Jan 1, 2017 5.3 2.4 4.9 3.1 15.7 -0.8 15.0
Dividend distribution 0.0 0.0 0.0 -5.9 -5.9 0.0 -5.9
Purchase of own shares 0.0 0.0 0.1 0.0 0.1 0.0 0.1
Other direct entries to retained
earnings 0.0 0.0 0.0 0.0 0.1 0.0 0.1
Used option rights 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total comprehensive income 0.0 0.0 0.0 3.2 3.2 -0.1 3.1
Balance, Jun 30, 2017 5.3 2.4 5.0 0.4 13.1 -0.9 12.2
Consolidated cash flow statement (MEUR) Jan–
Jun/2018
Jan–
Jun/2017
Jan–
Dec/2017
Net profit 3.7 3.1 6.8
Adjustments to net profit 0.2 0.5 2.1
Taxes 1.0 0.8 1.4
Change in working capital -0.1 0.1 0.2
Interest paid 0.0 0.0 0.0
Interest received 0.0 0.0 0.0
Taxes paid -1.1 -0.6 -1.3
CASH FLOW FROM OPERATING ACTIVITIES 3.6 3.8 7.9
Cash flow from discontinued operations 0.0 0.0 0.0
Proceeds from sale of subsidiary/associated company
less cash and cash equivalents at time of sale 0.0 0.0 0.0
Purchase of
assets -0.2 -0.1 -0.2
Purchase of intangible
assets -0.6 -0.3 -0.6
CASH FLOW FROM INVESTING ACTIVITIES -0.8 -0.4 -0.8
Cash flow from discontinued operations 0.0 0.0 0.0
Share subscription through exercised options 0.1 0.0 0.0
Acquisition of own shares 0.0 0.0 0.0
Dividends paid and capital repayment -6.2 -5.9 -5.9
Repayments of loans 0.0 0.0 -0.1
Loans drawn 0.0 0.1 0.0
Payments of finance lease liabilities 0.0 0.0 0.0
CASH FLOW FROM FINANCING ACTIVITIES -6.1 -5.9 -6.1
Cash flow from discontinued operations 0.0 0.0 0.0
Total cash flow -3.3 -2.4 1.0
Cash and cash equivalents at beginning of period 8.0 7.1 7.1
Cash and cash equivalents at end of period 4.7 4.7 8.0

Segment net sales and profit (MEUR), continuing operations

Parent
Revenio Health Tech company Group
Net sales, 1-6/2018 14.6 0.0 14.6
Net sales, 1-6/2017 12.7 0.0 12.7
Change (%) 15 0 15
Segment's operating profit, 1-6/2018 5.9 -1.2 4.6
Segment's operating profit, 1-6/2017 5.0 -1.1 4.0
Change (%) 17 16 17

Key figures, continuing operations, EUR million

Jan– Apr– Jan– Apr– Jan–
Jun/2018 Jun/2018 Jun/2017 Jun/2017 Dec/2017
Net sales, continuing operations 14.6 7.6 12.7 6.7 26.8
EBITDA, continuing operations 4.9 2.6 4.3 2.5 10.2
EBITDA %, continuing operations 33.5 34.6 34.2 37.1 38.2
Operating profit, continuing operations 4.6 2.5 4.0 2.3 8.1
Operating profit %, continuing operations 31.8 33.0 31.2 33.9 30.3
Pre-tax profit, continuing operations 4.7 2.6 3.9 2.2 8.3
Pre-tax profit %, continuing operations 32.0 33.6 30.4 32.7 30.9
Net profit from discontinued operations 0.0 0.0 0.0 0.0 0.0
Net profit, continuing operations 3.7 2.1 3.1 1.7 6.8
Net profit %, continuing operations 25.3 27.2 24.1 25.5 25.6
Gross capital expenditure 0.8 0.3 0.4 0.3 0.8
Gross capital expenditure, % of net sales 5.8 4.5 2.8 4.0 3.0
R&D costs 1.7 0.9 1.1 0.6 2.4
R&D costs, % of net sales 11.3 11.3 9.0 9.3 8.9
Net leveraging, % -31.7 -31.7 -34.3 -34.3 -47.6
Equity ratio, % 81.9 81.9 73.2 73.2 84.0
Return on investment (ROI), % 62.1 67.5 55.4 63.2 53.2
Return on equity (ROE), % 49.8 55.9 45.2 50.4 44.3
Undiluted earnings per share, EUR,
continuing operations 0.15 0.09 0.13 0.07 0.29
Diluted earnings per share, EUR, continuing
operations 0.15 0.08 0.13 0.07 0.29
Equity per share, EUR 0.57 0.57 0.51 0.51 0.67
Average no. of employees, continuing
operations 41 44 41 42 41
Cash flow from operating activities 3.6 1.9 3.8 2.1 7.9
Cash flow from discontinued operations 0.0 0.0 0.0 0.0 0.0
Cash flow from investing activities -0.8 -0.5 -0.4 -0.3 -0.8
Cash flow from financing activities -6.1 -0.9 -5.9 -0.9 -6.1
Total cash flow -3.3 0.4 -2.4 0.9 1.0

General statement

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: Timo Hildén, CEO, tel. +358 40 580 4774 [email protected] www.revenio.fi

DISTRIBUTION:

Nasdaq Helsinki Oy Financial Supervisory Authority (FIN-FSA) Principal media www.revenio.fi

The Revenio Group in brief

Revenio is a Finnish, globally operating health technology corporation whose worldwide success is based on a strongly patented intraocular pressure measurement technology. The Revenio Group consists of Icare Finland Oy, Revenio Research Oy and Oscare Medical Oy. The common denominators of Revenio's business operations include 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 focus of Revenio's screening technology is on the early detection of glaucoma, osteoporosis, skin cancer and asthma, and the monitoring of these during the treatment process.

In 2017, Revenio Group's net sales totaled MEUR 26.8, with its operating margin for continuing operations standing at 35.5%. Revenio Group Corporation is listed on Nasdaq Helsinki.

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