Revenio Group (Helsinki:REG1V) Q3 2026 Earnings Call

0:00 Good afternoon and welcome to Revenio Q3 earnings call. My name is Jouni Toijala, I'm the Group CEO and then again today we have Jukka Kainulainen, our CFO, in a call of course as well. Today's agenda is following, so I'm starting to recap the Q3 from the financial summary point of view. Then let's also spend a bit of time. Thank you very much. In all aspects, historic quarter for revenue. So during the Q3, we have doubled our scale.

1:12 We have kicked off the integration, of course. And if you look from the pure numbers perspective, so net sales 58.8 million during the Q3. So if you look the report numbers perspective, Jukka Kainulainen We had a extremely strong growth in our largest region, Emea-Latam, ending up to 34.3 million. If you look at the other regions, like APEC, that during the Q3 remained to be still soft. And then we have been focusing in the USA.

2:13 Our organization changed, especially on the sales and marketing side. I'll come back to that one. So we had a slight decline year on year if you compare it to the pro forma. in the USA, but I'll come back for that one. And really the reason for that one is that we reorganized the whole sales and marketing organization in order to be able to provide a long-term sustainable growth also in the USA. Adjusted EBITDA, 8.7 million compared to last year, so that's a 30% increase. And then also we started to... Thank you very much. and targeted 20 million EPIDA uplift.

3:29 Regarding the Q3, The focus of the organization has been really building the base for the long-term sustainable growth. So if we go and look back the old revenue where we were selling tonometers, fundus imaging devices, perimeters, probes, plus the software solutions like Illum. So now the company is totally different and the priorities are totally different. So during the Q3, we have been, of course, clarified the new combined company strategy. We communicated that during the CMD. And if you recall, so the strategy is geared around deleting the shift from vision care to the connected eye health.

4:22 And then we have put the totally new organization operative model in place. And here I want to emphasize the big revamp of the organizations in the USA. So that includes all the functions and of course, especially The US Sales and Marketing Department. So we organized the whole team now in a totally different way to the three regions. Then new team members in also there. So of course that's self-evident that it's having a slight impact also to the sales performance. In the USA, but why we did this one is of course that it enables us to grow then in a long run.

5:17 Then third topic is what I mentioned already regarding to the organization and related changes there, which are then of course having an impact to the OPEX side, especially in the USA. So we have been able to advance the integration extremely well on that front. And as of today, Jukka Kainulainen Then our net debt EBITDA ratio was quite high, a bit over five. So we have been working, of course, during the Q3 to secure the rights issue, which was oversubscribed.

6:14 So that went well. And after the review period, also the leverage is now higher. If we now start to look the Q4, start to look where the focus currently is, so we still have on our plans, we have activities and actions regarding to the OPEC synergies but we are shifting a bit more now also the focus to harness the forthcoming commercial synergies and what I mean with this one is that we already have clear active cross-selling plans in place starting to execute those ones. We have plans how to optimize the sales channels globally so the US part is done. and then of course putting more emphasis on key account coverage as we now have a way more wider product portfolio and with all these actions we really have a feeling that we are having a good momentum for 2027 as well.

7:27 Then we have been discussing as well quite many times in these calls that Are there any new products coming? How are we allocating the capital? And this is the latest case on that front. So during the Q3, we launched a new iCare Tonomir called IC1000, extremely well received among the distributor partners and then of course our partners and clinical clients. So we introduced the guide cam alignment. So you have a excellent alignment feature, including the full on automation and the camera on the screen. Then, of course, the smart cradle to and all the same tech which used to be still on the old ones so it's anesthesia free and of course uses the rebound tech and is going to long run also enable and the increased consumable sales. And then if you also look at the future, so the strategy is not going to change. So in the product categories what we have now as a combined company,

8:58 so we are going to continue to invest also Thank you. Thank you, Jouni.

9:22 And let's go to key figures. And as a reminder, of course, this is the now first quarter when we have whole VisionX in our numbers starting from the beginning of the quarter, because quarter two, we had only one month in our numbers. But when looking at the net sales growth with the reported numbers, like Jouni highlighted, almost 130% growth. So net sales has more than doubled when you look at quarterly numbers. Also, when looking at yesterday's numbers, 125 million net sales also growing almost 60%. So scale is totally different. And also when looking at companies and comparables, quite different company nowadays than one year back, as you see. Then when looking the profitability metrics going to adjusted EBIT A, 8.7 million euros compared to 6.6 million euros quarter three 2025, 14.7% of the net sales when in comparables it was 25.7%.

10:29 And it's good to note that in absolute terms, this adjusted EBITDA is more than 30% up when looking at the real euro. So the new scale is also seen in our earnings line. And then when looking at the leverage metrics, balance sheet metrics, equity ratio, Jukka Kainulainen Then let's go more in details to the net sales and net sales growth.

11:17 So quarter three net sales 58.8 million euros and when we look at organically and that means when we We compared it for the pro forma for combined company last year, quarter three 2025. Our growth was basically flat when looking quarter three, looking year to date. But when looking under the numbers, different regions, we had a really strong performance in EMEA and LATAM. and when we looked at organically it had a really strong growth driven by the big countries, Italy, France and our global customers as well and supported by this multimodal offering we have overall. And then like Jouni highlighted, the challenging market environment has continued in the APAC region and then in the North America the reorganization we did impacted on the sales numbers during the quarter 3, 2026.

12:16 And then let's look more in details our profitability and adjusted EBITDA, starting maybe first on the gross margin. So gross margin declined to 63.2% compared to 71.5%. and it has a like nine percentage point delusion impact coming from the Visionix lower margin profile. So now we have a Visionix in whole quarter numbers and that is visible also in the gross margin numbers as you see. And then a few other items impacting our profitability and gross margins. So Still the unit cost increases regarding the electronic components had the negative impact on our gross margin overall and also our sales mix. So those two together had around 2% point negative impact on the gross margin. But then at the same time, we had a positive impact coming from the North America business and tariff refunds over there had around 3% points positive impact on our gross margin for the quarter.

13:23 And like I highlighted previously, adjusted EBITDA, 8.7 million euros for the quarter and 6.6 million euros in the compatible period. So roughly more than 30% up in earnings when looking at the adjusted EBITDA line. and then let's move to cash flow. Operating cash flow turned positive for the quarter 3, 5.5 million euros and improved from the last year reported numbers in quarter 3, 3 million euros and that was driven by the Prime Empire's strong working capital development during the quarter and even though it included around 2 million and one of payment regarding our integration which is of course ongoing.

14:15 And then when looking more in details the balance sheet and of course the balance sheet metrics is reflected by the Visionix acquisition and when looking the Quad 3N situation term loan of 130 million, vendor loan of 17 million and at that moment we still had the bridge to equity facility 80 million euros. Around 232 million net debt at the end of the quarter three. But still, our net gearing improved from 159% end of quarter two to 149%. And also equity ratio went up from the 31% end of quarter two to 32%. Cash, we had cash balances 17 million. Thank you very much.

15:25 Jukka Kainulainen Overall, we of course continue our profitable growth. We improve also our cash flow, which will improve the leverage metrics also for the coming quarters and going forward. Then we are beginning our saleholders register at the end of the September. Maybe a few highlights here regarding also the vision acquisition.

16:11 There is a few new names in the table coming from the France. Caravelle Capital, a new owner, owning more than 5% of the company. Also Mark Abitbol became the owner. Only 1.5% of the company regarding the VisionX acquisition and of course overall we have almost 50% of our owners outside Finland which is quite a good number for the listed company overall. and then let's go to our financial guidance. We have specified our financial guidance regarding the net sales and we have narrowed down our top end of the guidance. Our previous financial guidance for the net sales was between 190 million up to 205 million.

17:00 Our specified guidance is between 190 million up to 200 million and regarding profitability guidance that is unchanged and the changes are coming from the regional impacts like we commented strong performance in EMEA and LATAM but we had the reorganization in the North America impacting our sales in quarter three and the challenging market environments continues in the APAC region so all these are reflected in our new guidance. Thank you.

17:35 Thank you, Jukka. Let's move to the questions, please. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Niko Ruokingas from SEB. Please go ahead.

17:59 Hello, this is Niko Ruokingas. from SAB, thank you for the presentation. I have a couple of questions. And first of all, I wonder if you can give us a bit more color on organic growth. So was or were sales flat both in old Revenio and Visianix or was there big differences At least you hinted in Q2, Paul, which was quite late already in Q3, that revenue organic growth had started to pick up. So can you give a bit more color on that, please?

18:43 As you actually said, Nikko, so both flatties. And here I want to emphasize the logic. So we did a fundamental change in the USA, like Jukka said, so strong growth in Europe, Middle East, Africa, Latam. So strong growth there. Then the APAC remained a bit more softer. And then we reorganized the whole US sales and marketing. So we changed We changed even the scope of the area for the sales teams.

19:29 We introduced the combined product portfolio. We cross-trained the U.S. sales and marketing team to sell and market the full new combined company product portfolio. So that's a lot. I'm happy to see that it was only minor slice and we prioritized this activity right away after the 60 days so the new organization setup was in place beginning of August and the reason why we prioritized this one was all the other US specific activities to guarantee successful start For the integration, getting the 5 million run rate EPIDA uplift in terms of the OPEX and then gearing for the future growth.

20:26 So we would have been able to perform better in the USA from the sales perspective. We wouldn't have changed anything, but that wouldn't be positive for the long-term sustainable growth in the USA. Sorry for the long answer, Nikko, but I think this is a crucial to understand and still building what I was saying, that the revenue is now totally different than it used to be. and before or kind of during the big part of the Q1 and almost the whole Q2. So we are totally different company. So the focus for Q3 hasn't only been how do we maximize the organic growth for tonometers, how do we maximize the organic growth for imaging, and Perimetry. The focus has been that how do we create a combined company strategy, how do we create and specify new organization, organizational and operative model, how do we take care that the right issue is going to be successful and how we kick off the promised 20 million synergy activities in.

21:52 and happy to see that in this big shift and the big integration what we started so we are on in a way flat and the benefit is that then we have been able to get the first five million in in terms of the synergies. Sorry Nikko for the long answer but I think this is a big picture how we see this one internally at revenue.

22:21 Thanks, this was very good. I see it's reasonable. So does it mean that the negative impact came quite late in Q3 and then should we kind of expect that to still continue in Q4 or how have you kind of...

22:40 Yeah, I would say so in terms of the USA, so that we planned kind of during the Q2, then we started to execute during the June, July, and then your new team was in place, so meaning sales and marketing, finance control, HR, so the whole new US team was in place then starting first July. of August and then the team so the team has been then working working to to to of course build the plans and and and continue on sales continue on customers etc so so this is this has been the timing okay uh understand thanks then then on the uh larger customers you have mentioned you have in pipeline so uh have you kind of been uh

23:36 Recognizing any of those as sales yet and was this NHS you mentioned in the report one of those that were in the pipeline and can you give a bit more color and update on the large customer pipeline?

23:51 yeah so so so uh yeah so that was that that deal was in a pipeline then of course we had the couple of other deals so so those have been moving forward and then bit by bit uh starting the rollout uh then uh towards the early 27. okay so the nhs deal so has have you

24:18 Do you recognize sales from that in Q3? And if not, can you give a bit color on when?

24:27 No, we haven't recognized the revenue from the NHS deal for Q3.

24:34 Okay. And can you give any color on the size or timeline?

24:41 No. No on the size, but bit by bit starting to receive the orders.

24:48 Okay, thank you. Then last from me at this point. On tariff refunds, you indicated, I guess, some 2 million euros you received in Q3. So can you open a bit more from which period did you receive those? Were they tariff payments from early 26 or do these include also tariff payments from 25? Have you received all the direct repayments you will receive overall as of end of Q3 or should we expect more still in Q4?

25:28 What I can comment is that it was earlier periods, tariff refunds, and then we, of course, work constantly to get more of those refunds. But there's always big uncertainty regarding those. So we don't plan, we don't forecast it internally when we kind of achieve it or when we succeed in it. So this is the level we can comment on. But it was really great to get it during the quarter three.

25:59 All right, great. Thank you. That's all from me at this point.

26:02 Thank you, Nikko.

26:03 Thank you. The next question comes from Daniel Lapisto from Danske Bank. Please go ahead.

26:14 Hi, it's Daniel Lapisto from Danske Bank. I also have a couple of questions. Maybe starting off with the guidance, which, you know, you've cut the top line a little bit. I'm a bit curious about where the negative delta came from. Was it this reorganization that happened in North America? Did it go as you planned? Or was it about these larger deals slipping forward? So can you dissect this guidance top line cut a little bit?

26:43 Maybe Jukka comments a bit more further, but I think what we have been now trying also to... Jukka Kainulainen, Jukka Kainulainen, Jukka Kainulainen and also now trying to be more specific when the year code goes towards the end so that the transparency increases. So I think this is an underlying logic why now having a bit more narrower and maybe you, Jukka, comment on that.

27:31 More on this one. Yeah, and like we commented, the APAC region continuing challenging situation impacting the sales also in the quarter three and also this North America reorganization and that impacts on our sales in H2. So those were the impacts driving down the top end of the sales guidance.

27:59 Okay they may be still on this reorganization so just to clarify so are you seeing any risks what comes to this you know seasonally very important Q4 so are you seeing any risks with this reorganization impacting maybe the Q4 number still?

28:15 And not from the reorganization point of view, and that was also the reason that why we moved really fast by reorganization or by reorganization the teams globally also in the USA and putting everything in place in order to be efficient and ski straight for Q4. and I have to say and emphasize here that the organization change in the USA and in other parts, it has been going extremely well, extremely smoothly. No key people has left and we have a US team fully functional already now almost two months. So no worries on that one. So everything has went well, but of course it has an impact.

29:06 to the activities. But to sum up still and emphasize that from the reorganization point of view, house is in very good order for the Q4.

29:22 Okay, that's good. Then on the cross-margin, on this component, it impacted the cross-margin. So is this going to roll over or has the situation worsened or is this going... Remain Intense. How would you characterize this component issue?

29:41 Yeah, so far, of course, it will impact also during the quarter four at least. So next year, we cannot, of course, comment, but we'll continue also during the end of the year.

29:58 Okay, that's clear. Then final question on this capital expenditure. So can you give us a little bit of help with the What kind of underlying capital expenditure run rate should we think for this, you know, combined entity going forward? And then on this, you know, one of IT costs that will be capex items. So when are these going to materialize?

30:21 Yeah, so of course the capex is now slightly higher, even though on the reasonable level, but you know, due to VisionX, we have also the real manufacturing, so that is driving the level up, but you can use the quarter three as a baseline in your planning overall. What was the other question?

30:48 On this one of IT costs?

30:50 Yeah, so at the moment we are not planning to capitalize the kind of the one of costs or integration related IT costs.

31:01 So it's something for maybe 27?

31:05 Yeah, 27 that will be part of our integration, the IT related OPEX investments we do. Okay, that's all from me.

31:16 Thank you.

31:17 Thanks, Daniel. The next question comes from Pia Rosquist from DNB Carnegie. Please go ahead.

31:28 Hello, this is Pia Rosquist from DNB Carnegie. Thank you for taking my questions and thank you for the presentation and really good questions from my analyst colleagues. So I have a few follow ups just to clarify. So As of now do you see a risk of that your reorganization elsewhere will impact sales as negatively as it did in the US now in Q3?

32:00 No, so I think we have to remember the slight differences now, if you think the USA and remaining part of the geography. So we had at old revenue, we had a direct sales force plus the reps, which are on our control. Same for VisionX. So that... needed to be reorganized right away in order to be fit for long-term growth in the USA. And in order to sell the combined portfolio, we needed to do the cross-training in order to enable and do the cross-training and have a combined company approach right away to address these big customer accounts.

32:53 Then if you go for the other parts of the region, so Europe, Middle East, Africa, Latam, we go for APAC. So that's a combination of distributors both from Visionix, both from and then also these direct countries. So in a way from the sales perspective, it's a way more natural setup and it's not as... Thank you very much. Then I think it's good to understand it's a bit more different setup in other parts of the world compared to the USA.

34:02 So in one sentence, we have good plans now also in other parts of the world and those are on the execution.

34:14 All right. Thank you. Then regarding your Have you started to see some kind of cross-selling wins now already in Q3?

34:32 Not yet too much on Q3, but the pipeline building, yes. So I think that's a key to understand that We started to build the pipeline and then doing the cross-training in the areas where it's needed. And of course planning the cross-sales activities.

35:05 All right, thank you. And then in the report you shared some rough numbers or sales split on on pro forma sales for 25 by product line. And regarding that, I would like to understand the OCT sales you refer to. What does that contain and are there any overlaps in that OCT category with, for example, the imaging devices?

35:41 Yeah, so that's the OCT sales and the product line we got in connection to VisionX acquisition and maybe you know, Jouni can comment regarding the overlaps with our old eye care imaging product.

35:56 Yeah, no, so that's a pure OCT business, no overlap with the X eye care imaging business.

36:08 All right, thank you. And then I think in conjunction with the acquisition, you also explained that part of Vision Mix's sales were OEM sales, right? So how does that fit? Can you share some more information about the OEM sales? What kind of products does that involve?

36:32 Yeah, so that's the big part on that front is the VX, as an example, VX650, the multimodal devices and that The OM business is going to continue to be in our focus and really the reason is that the clients are extremely big players who are bundling the multimodal devices as an example with IOLs or so forth. So that's still going to be good and significant business for us also in the long run.

37:17 and those are the customers that we are not able to get in. So quite a lot of bundle deals with the IOLs, as I said, and links to the multimodal side of the business.

37:34 All right. That's all for now. Thank you.

37:36 Thank you, Pia. Thank you. The next question comes from Jouni Sandvall from Nordia. Please go ahead.

37:48 A couple of questions also from my side. Any update on your Ilium FDA approval process and related costs? When should we expect this to happen?

37:59 Pivotal studies, we have done a bit fine-tuning. Now the algorithm looking to start the clinical studies on that front costs 27. I think we are sliding towards the Q3. Q4 2027 with the approval so timing slightly sliding forward on the positive node now we have a DRS plus approved together with the eye health screen algorithm so in a way we are good to go in the USA what comes to DR screening but then of course the software partner is different compared to our own because it's an eye-held screen but that's currently the status on that side.

38:57 Okay, thanks. Then maybe a couple of technical questions for Jukka. Net financials were at break even. Could you open up a little bit logic behind this and what is actually your current average interest rate on the loan portfolio?

39:13 Yeah, so real interest cost quarter three was 1.8 million, but then we also have this interest rate swap for the term loan, so half of that has been hedged. So that has quite a big positive impact now in quarter three. and more than actually 1.4 million positive impact. And then also we have an intercompany loan in USD dollars from our entity in Europe to US, around 30 million, so that had a positive impact as well. So that's why it looked quite good when looking at the finance income and expenses.

39:54 Okay, that's clear. And second technical, on the deferred tax assets, what you have in the balance sheet, Should we expect the effective tax rate to remain low in Q4 and how you expect this to evolve in 27?

40:09 Yeah, so this is something we work at the moment overall, the transfer pricing, which is impacting on the tax rate. But of course, overall, we will, of course, try to keep it competitive also for the next year. So I cannot foresee any changes for quarter four or next year, but this is something we work constantly in a company level. Okay, thanks. That's all from me. Thank you, Jouni. Thank you. There are no more questions at this time. So I hand the conference back to the speakers. The next question comes from Niko Ruokingas from SEB.

40:54 Please go ahead.

40:57 Hello, thank you. This is Nikka Rangas again. One more additional question on the cybersecurity issue. You reported this earlier this week. So just if you can give comments on what are the kind of implications? Does it have any kind of financial or operational impacts to you? Do you see any kind of a need for further investments into VisionX cyber security in the software platform? Thanks.

41:38 So yes, so entry to one internal server which was not including any IP or any that kind of a level thing, no Thank you very much. Division X cybersecurity and IT infrastructure. So those costs are kind of already baked into the original plan. So in a one sentence, yes, someone got in. Jouni Toijala, Jukka Kainulainen Why we put the press release out and of course why it was not the stock exchange release because we don't see big impact on this one.

43:04 That's the background and that's the logic for the press release.

43:08 And Nikko, like all the companies, we also definitely have a cybersecurity really critical point and high on the agenda. And of course, we'll continue investing on that to have a strong environment over there and good processes as well.

43:25 Thank you. That was a good answer opening it and sounds reasonable. There are no more questions at this time so I hand the conference back to the speakers.

43:41 Thank you very much for your time. Thank you for the excellent questions. And have a nice autumn. And we come back after the Q4 is ready. I think you are right. So it's the beginning of or kind of the middle of February.

43:59 Mid or end of February. Yes. But we will communicate it out through the stock exchange release.

44:04 Thank you all. Have a good rest of the day.