Revenio Group Oyj

Quarterly Report • Apr 20, 2018

Due to an amendment to the Securities Market Act, which came into force on November 26, 2015, the descriptive sections of Revenio's interim reports Q1/2018 and Q1-Q3/2018 will be shorter and more concise. The table sections will be reported in accordance with previous practices. The figures are unaudited.

Strongest first quarter in the company's history. Net sales up by 16%, currency-adjusted growth 24%. Operating profit up by 26%.

January–March 2018 in brief, continuing Group operations

• Net sales totaled EUR 7.0 (6.0) million, up 15.9%
• Operating profit was EUR 2.1 (1.7) million, up 25.9%
• The weakening of the US dollar had a significant impact on net sales growth. The currency-adjusted growth of net sales in January-March was 23.5%, or 7.6% percentage points stronger than reported
• The sales organization was strengthened in both the United States and EMEA
• Earnings per share, undiluted EUR 0.07 (0.06)

	Jan 1–Mar 31, 2018	Jan 1–Mar 31, 2017	Change %
Net sales, Group	7.0	6.0	15.9
Operating profit, Group	2.1	1.7	25.9
Net sales, Health Tech	7.0	6.0	15.9
Operating profit, Health Tech	2.7	2.3	19.4
Earnings per share, undiluted	0.069	0.059
Cash flow from operations	1.8	1.7
	Mar 31, 2018	Mar 31, 2017	Change, % points
Equity ratio, %	74.8	66.6	8.2
Net leveraging, %	-33.6	-31.7	-1.9

Key figures, continuing operations, EUR million

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.

CEO Timo Hildén comments on the first quarter of 2018:

"Year 2018 started very strongly and we achieved the best first-quarter growth in our history, even though the exchange rate of the dollar decreased net sales by about 8 percentage points. Our net sales increased to EUR 7.0 (6.0) million, year-on-year growth of 15.9%. When assessing our performance so far in 2018, it is noteworthy that there were some large individual deliveries in the first quarter, the kind we are not expecting to get later in the year.

Excellent sales growth was seen in the United States, as well as in the Nordic countries, UK, Canada, South-Korea and Russia.

Device sales were strong, thanks in part to the 2017 launch of the Tonovet Plus tonometer, designed for the measurement of intraocular pressure in animals, and sales of the Icare HOME tonometer. In addition, our cloud-based mHOME mobile application has attracted plenty of interest in the countries where it already has been launched.

We have stepped up marketing of the Icare HOME tonometer in all key markets. We have also started selling the product directly to patients in selected markets.

Towards the end of the year, we will launch the new ic200 tonometer for professional use, replacing the earlier model Icare PRO. Intended in particular for use by eye surgeons, we are applying for CE marking during the spring and will later seek FDA approval in order to begin sales.

Growth continued in probe sales, as before, thanks to the active use of the installed devices.

We have strengthened our export organization with two new regional managers, covering the Middle East, Africa and South America. In addition, we have hired a marketing manager for the US sales organization, who will primarily focus on promoting sales of the Icare HOME tonometer. We believe that these measures will generate additional sales during the current year.

Our hyperspectral camera for skin cancer detection has been named Cutica®. Development of the product is proceeding according to plan. We seek to complete the commercial model by the end of the year, after which we will apply for CE marking to start up sales work.

Further research on the asthma product Ventica® has produced valuable information. We seek to update the product algorithm and begin sales efforts during the current year."

Business review, January 1–March 31, 2018, continuing operations

Revenio Group's net sales amounted to EUR 7.0 (6.0) million, up by 15.9%. Sales performance in the review period was excellent, especially in the United States, the Nordic countries, UK, Canada, South-Korea and Russia.

Device sales saw strong year-on-year growth, particularly due to the 2017 launch of the Tonovet Plus tonometer, designed for the measurement of intraocular pressure in animals, and Icare HOME. The significance of all-day monitoring of eye pressure in the treatment of glaucoma has gained the undisputed acceptance of the research community, which can be seen in the sales figures of the product.

The development of Revenio Research Oy's Cutica® for the detection of skin cancer into a commercial product is progressing according to plan. Updates to the algorithms of the asthma product Ventica® are ongoing and it is expected that the product will be ready to be submitted for official approval during the current year.

Revenio Group's operating profit in the review period was EUR 2.1 (1.7) million, showing a yearon-year increase of 25.9%. The decline of the dollar against the euro in January–March had a decreasing effect on net sales amounting to about 8 percentage points. The currency-adjusted organic growth of net sales in January–March was 23.5%, or 7.6 percentage points stronger than reported.

The Annual General Meeting, held on March 20, 2018, reelected Ari Kohonen, Pekka Rönkä, Kyösti Kakkonen, Ann-Christine Sundell, and Pekka Tammela as members of the Board of Directors. At its organization meeting, held after the Annual General Meeting, the Board of Directors elected Pekka Rönkä as Chairman of the Board.

By a decision made at the Annual General Meeting, Deloitte Oy was appointed company auditor, with Merja Itäniemi, Authorized Public Accountant, as the principal auditor.

Financial review January 1–March 31, 2018

Consolidated key figures (MEUR)	Jan– Mar/2018	Jan– Mar/2017	Jan– Dec/2017
Net sales, continuing operations	7.0	6.0	26.8
EBITDA, continuing operations	2.2	1.9	10.2
EBITDA %, continuing operations	32.2	30.9	38.2
Operating profit, continuing operations	2.1	1.7	8.1
Operating profit %, continuing operations	30.5	28.1	30.3
Pre-tax profit, continuing operations	2.1	1.7	8.3

Pre-tax profit %, continuing operations	30.4	27.8	30.9
Net profit from discontinued operations	0.0	0.0	0.0
Net profit, continuing operations	1.6	1.4	6.8
Net profit %, continuing operations	23.3	22.6	25.6
Gross capital expenditure	0.3	0.1	0.8
Gross capital expenditure, % of net sales	5.0	1.5	3.0
R&D costs	0.9	0.5	2.4
R&D costs, % of net sales	12.3	8.6	8.9
Net leveraging, %	-33.6	-31.7	-47.6
Equity ratio, %	74.8	66.6	84.0
Return on investment (ROI), %	61.3	50.7	53.2
Return on equity (ROE), %	47.3	42.8	44.3
Undiluted earnings per share, EUR, continuing operations	0.07	0.06	0.29
Diluted earnings per share, EUR, continuing operations	0.07	0.06	0.29
Equity per share, EUR	0.48	0.44	0.67
Average no. of employees, continuing operations	41	39	41
Cash flow from operating activities	1.8	1.7	7.9
Cash flow from investing activities	-0.3	-0.1	-0.8
Cash flow from financing activities	-5.2	-4.9	-6.1
Total cash flow	-3.8	-3.3	1.0

Jan–

Jan–

Jan–

Consolidated comprehensive income statement (MEUR)

statement (MEUR)	Mar/2018	Mar/2017	Dec/2017
NET SALES	7.0	6.0	26.8
Other operating income	0.1	0.0	0.2
Materials and services	-1.7	-1.6	-6.9
Employee benefits	-1.3	-1.2	-4.2
Depreciation, amortization, and impairment	-0.1	-0.2	-2.1
Other operating expenses	-1.8	-1.4	-5.6
OPERATING PROFIT, CONTINUING OPERATIONS	2.1	1.7	8.1
Financial income and expenses (net)	0.0	0.0	0.2
PRE-TAX PROFIT, CONTINUING OPERATIONS	2.1	1.7	8.3
Income taxes	-0.5	-0.3	-1.4
NET PROFIT	1.6	1.4	6.8
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	1.6	1.4	6.8
Net profit attributable to:
Parent company shareholders	1.6	1.4	6.8
Non-controlling interests	0.0	0.0	0.0
Total comprehensive income attributable to:
Parent company shareholders	1.6	1.4	6.8
Non-controlling interests	0.0	0.0	0.0

Earnings per share, undiluted, EUR, continuing operations		0.07 0.06	0.29
Earnings per share, diluted, EUR, continuing operations		0.07 0.06	0.29
Consolidated balance sheet (MEUR)	Mar 31, 2018	Mar 31, 2017	Dec 31, 2017
ASSETS
NON-CURRENT ASSETS
Property, plant and equipment	0.8	0.9	0.8
Goodwill	1.2	1.2	1.2
Intangible assets	3.2	4.2	3.0
Deferred tax assets	0.7	0.5	0.9
TOTAL NON-CURRENT ASSETS	5.9	6.8	5.9
CURRENT ASSETS
Inventories	1.9	2.2	2.0
Trade and other receivables	3.2	2.9	3.2
Cash and cash equivalents	4.2	3.8	8.0
TOTAL CURRENT ASSETS	9.3	8.9	13.2
Non-current assets of
discontinued operations	0.0	0.0	0.0
TOTAL ASSETS	15.2	15.7	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	7.1	4.6	7.1
Retained earnings	-1.3	-1.4	3.3
TOTAL EQUITY, attributable to
holders of parent company equity	11.4	11.3	16.0
Non-controlling interests	0.0	-0.8	0.0
TOTAL SHAREHOLDERS' EQUITY	11.4	10.4	16.0
LIABILITIES
NON-CURRENT LIABILITIES
Deferred tax liabilities	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	3.5	4.4	2.7
Financial liabilities	0.0	0.0	0.0
TOTAL CURRENT LIABILITIES	3.5	4.4	2.7
TOTAL LIABILITIES	3.8	5.2	3.1
TOTAL SHAREHOLDERS' EQUITY AND
LIABILITIES	15.2	15.7	19.0

Consolidated statement of changes in equity (MEUR)

						Non-controlling
	Share	Share	Other	Retained		interests	Total
	capital	premium	reserves	earnings	Total		equity
Balance, Jan 1, 2018	5.3	0.0	7.4	3.3	16.0	0.0	16.0
Dividend distribution	0.0	0.0	0.0	-6.2	-6.2	0.0	-6.2
Other direct entries to retained earnings	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Total comprehensive income	0.0	0.0	0.0	1.6	1.6	0.0	1.6
Balance, Mar 31, 2018	5.3	0.0	7.4	-1.3	11.4	0.0	11.4
						Non-controlling
	Share	Share	Other	Retained		interests	Total
	capital	premium	reserves	earnings	Total		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
Acquisition of own shares	0.0	0.0	0.0	0.0	0.0	0.0	0.0
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	1.4	1.4	0.0	1.4
Balance, Mar 31, 2017	5.3	2.4	4.9	-1.4	11.3	-0.8	10.4

Consolidated cash flow statement (MEUR)	Jan– Mar/2018	Jan– Mar/2017	Jan– Dec/2017
Net profit	1.6	1.4	6.8
Adjustments to net profit	0.2	0.1	2.1
Taxes	0.5	0.3	1.4
Change in working capital	-0.1	0.2	0.2
Interest paid	0.0	0.0	0.0
Interest received	0.0	0.0	0.0
Taxes paid	-0.4	-0.3	-2.3
CASH FLOW FROM OPERATING ACTIVITIES	1.8	1.7	7.9
Proceeds from sale of subsidiary/associated company
less cash and cash equivalents at time of sale	0.0	0.0	0.0
Purchase of
PPE	-0.1	0.0	-0.2
Purchase of intangible
assets	-0.3	-0.1	-0.6
CASH FLOW FROM INVESTING ACTIVITIES	-0.3	-0.1	-0.8
Share subscription through exercised options	0.0	0.0	0.0

Acquisition of own shares	0.0	0.0	0.0
Dividends paid and capital repayment	-5.2	-5.0	-5.9
Repayments of loans	0.0	0.0	-0.1
Loans drawn	0.0	0.0	0.0
Payments of finance lease liabilities	0.0	0.0	0.0
CASH FLOW FROM FINANCING ACTIVITIES	-5.2	-4.9	-6.1
Total cash flow	-3.8	-3.3	1.0
Cash and cash equivalents at beginning of period	8.0	7.1	7.1
Exchange rate impact	0.0	0.0	-0.1
Cash and cash equivalents at end of period	4.2	3.8	8.0

Segment net sales and operating profit (MEUR), continuing operations

			Parent
		Revenio Health Tech	company	Group
Net sales, 1-3/2018		7.0	0.0	7.0
Net sales, 1-3/2017		6.0	0.0	6.0
	Change (%)	16	0	16
Segment's operating profit, 1-3/2018		2.7	-0.6	2.1
Segment's operating profit, 1-3/2017		2.3	-0.6	1.7
	Change (%)	19	0	26

Major shareholders on March 31, 2018

	No. of shares	%
1 Joensuun Kauppa ja Kone Oy	1,056,600	4.41
2 Gerako Oy	1,020,000	4.26
3 Evli Finnish Small Cap Fund	692,397	2.89
4 Merivirta Jyri Tapio	600,000	2.51
5 Ilmarinen Mutual Pension Insurance Company	554,001	2.31
6 Eyemaker's Finland Oy	453,000	1.89
7 Alpisalo Mia Elisa	324,000	1.35
8 Evli Finland Select Fund	320,454	1.34
9 Siik Rauni Marjut	306,000	1.28
10 Fennia Mutual Insurance Company	269,466	1.13

Events after review period

The Board of Directors of Revenio Group Corporation decided after the review period on March 20, 2018 on two new share-based Long-term Incentive Plans for the management team. The plan will form a part of Revenio Group Corporation's remuneration program for its key employees, and the aim of the plans is to support the implementation of the company's strategy and to align the objectives of key employees with the shareholders to increase the value of the company.

Alternative performance measures 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 revenue is impacted heavily by the fluctuations of the EUR/ USD exchange rate. As an alternative performance measure we have presented our revenue also with constant exchange rates.

Alternative performance measure	Q1´2018	Q1´2017
Statutory Revenue	€ 6,965	€ 6,008
Impact of foreign exchange movements	€ 505	€ 42
Foreign exchange rate adjusted revenue	€ 7,470	€ 6,050
Adjusted revenue growth % 23.5%
Statutory revenue growth % 15.9%
Difference	7.6%

IFRS standards

The new IFRS standards effective January 1, 2018, do not have a significant impact on the profit for the period.

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 %:	100x	balance sheet equity $+$ non-controlling interest
		balance sheet total - advance payments received
Net gearing, %:	100x	interest-bearing debt - cash & equivalents
		total equity
Return on equity %:	100x	profit for the financial period
		shareholders' equity + non-controlling interest (average during period)
Return on investment %:	100x	profit before taxes + interest and other financial expenses
		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

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 timo.hilden@revenio.fi 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 through preventive health care. 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, net sales of Revenio Group totaled MEUR 26.8, with an operating margin of 35.5%, excluding non-recurring expenses. Revenio Group Corporation is listed on Nasdaq Helsinki.